Document:

ex-10_1.htm

    TBS INTERNATIONAL LIMITED
& SUBSIDIARIES                EXHIBIT
10.1 

     

    

    

    AMENDMENT NO. 1 AND WAIVER
TO CREDIT AGREEMENT

    

    This
AMENDMENT NO. 1 AND WAIVER TO
CREDIT AGREEMENT (this “Amendment”) dated as
of March 27, 2009, is by and among (i) ALBEMARLE MARITIME CORP., ARDEN MARITIME
CORP., AVON MARITIME CORP., BIRNHAM 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. and WINDSOR MARITIME CORP., each a
corporation organized under the laws of the Republic of the Marshall Islands
(collectively, the “Borrowers” and, each
individually, a “Borrower”), (ii) TBS
INTERNATIONAL LIMITED, a corporation formed under the laws of Bermuda (“Holdings”), (iii) TBS
SHIPPING SERVICES INC., a New York corporation, as administrative borrower (the
“Administrative
Borrower”), (iv) each lender from time to time party hereto
(collectively, the “Lenders” and
individually, a “Lender”), and (v)
BANK OF AMERICA, N.A., as administrative agent (in such capacity, the “Administrative
Agent”), Swing Line Lender and L/C Issuer.

    

    WHEREAS, the Borrowers,
Holdings, the Administrative Borrower, the Lenders and the Administrative Agent
are parties to that certain Amended and Restated Credit Agreement dated as of
March 26, 2008 (as amended and in effect from time to time, the “Credit Agreement”), pursuant
to which the Lenders have agreed, upon certain terms and conditions, to make
loans and otherwise extend credit to the Borrowers;

    

    WHEREAS, (i) Events of Default
have occurred and continue in connection with the Administrative Agent’s receipt
of a Valuation of the Vessels, dated on or about February 20, 2009, and as a
result of the Borrowers’ failure to prepay the Loans and other Credit Extensions
in an amount so that the Total Outstandings do not exceed the Maximum Available
Amount, in accordance with the requirements contained in Section 2.05(b)(iii) of
the Credit Agreement, and (ii) Events of Default are anticipated to occur as a
result of the Loan Parties’ failure to comply with the financial covenants set
forth in Section
7.13 of the Credit Agreement (the Events of Default described in clause
(i) and the anticipated Events of Default described in clause (ii),
collectively, the “Specified Events of
Default”);

    

    WHEREAS, Events of Default
have occurred in connection with the Borrowers’ failure to, within 30 days after
the fiscal year of Holdings ending December 31, 2008, (i) deliver the report
summarizing insurance coverage required pursuant to Section 6.02(g) of
the Credit Agreement and (ii) deliver supplemental Schedules to the Credit
Agreement required pursuant to Section 6.02(k) (the
Events of Default described in clauses (i) and (ii), collectively, the “Other Events of
Default” and the report and supplemental Schedules described in clauses
(i) and (ii), collectively, the “Annual
Deliverables”).

    

    WHEREAS, the Borrowers have
requested  and the Lenders and the Administrative Agent are willing
(a) to waive the Specified Events of Default and the Other Events of Default,
subject to the terms, conditions and other provisions hereof, and (b) to amend
certain provisions of the Credit Agreement as more fully provided
herein;

    

    WHEREAS, capitalized terms
which are used herein without definition and which are defined in the Credit
Agreement shall have the same meanings herein as in the Credit Agreement (as
amended hereby).

    

    NOW, THEREFORE, in
consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrowers, the Lenders and the Administrative Agent hereby agree as
follows:

    

    Section 1. Waiver.  Subject to the
terms and conditions set forth herein, the Lenders and the Administrative Agent
hereby agree to waive (i) the Specified Events of Default but only during the
Waiver Period and (ii) the Other Events of Default.  Such limited
waiver of the Specified Events of Default shall automatically, and without
action, notice, demand or any other occurrence, expire on and as of the end of
the Waiver Period.  Upon the expiration or termination of the Waiver
Period, and from and after such time, (i) the Lenders and the Administrative
Agent shall retain all of the rights and remedies relating to the Specified
Events of Default (unless the Pre-Waiver Covenant Compliance Date has occurred
as of the expiration of the Waiver Period) and any other Default or Event of
Default (other than the Other Events of Default), (ii) the Specified Events of
Default shall be reinstated and shall be in full force and effect for all
periods including periods after the Waiver Period (unless the Pre-Waiver
Covenant Compliance Date has occurred as of the expiration of the Waiver
Period), and (iii) any obligation of the Lenders under the Credit Agreement
shall be subject to the terms and conditions set forth in the Credit
Agreement.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 2.                      Affirmation and Acknowledgment of the Borrower.  Each Borrower
hereby ratifies and confirms all of its Obligations to the Lenders, the L/C
Issuer and the Administrative Agent, including, without limitation, the Loans,
and each Borrower hereby affirms its absolute and unconditional promise to pay
to the Lenders, the L/C Issuer and the Administrative Agent the Loans and all
other amounts due under the Credit Agreement as amended hereby.  Each
Borrower hereby confirms that the Obligations are secured pursuant to the
Collateral Documents and pursuant to all other instruments and documents
executed and delivered by the Borrowers and as security for the
Obligations.

    

    Section 3.                      Release.  In order to
induce the Administrative Agent and the Lenders to enter into this Amendment,
each Loan Party acknowledges and agrees that: (a) such Loan Party does not have
any claim or cause of action against the Administrative Agent, the L/C issuer or
any Lender (or any of its respective directors, officers, employees or agents);
(b) such Loan Party does not have any offset right, counterclaim or defense of
any kind against any of its respective obligations, indebtedness or liabilities
to the Administrative Agent, the L/C Issuer or any Lender; and (c) each of the
Administrative Agent, the L/C Issuer and each Lender has heretofore properly
performed and satisfied in a timely manner all of its obligations to the Loan
Parties.  Each Loan Party wishes to eliminate any possibility that any
past conditions, acts, omissions, events, circumstances or matters would impair
or otherwise adversely affect the Administrative Agent’s, the L/C Issuer’s or
any Lender’s rights, interests, contracts, collateral security or
remedies.  Therefore, each Loan Party unconditionally releases, waives
and forever discharges (i) any and all liabilities, obligations, duties,
promises or indebtedness of any kind of the Administrative Agent, the L/C Issuer
or any Lender to such Loan Party, except the obligations to be performed by any
Administrative Agent, the L/C Issuer or any Lender on or after the date hereof
as expressly stated in this Amendment, the Credit Agreement and the other Loan
Documents, and (ii) all claims, offsets, causes of action, suits or defenses of
any kind whatsoever (if any), whether arising at law or in equity, whether known
or unknown, which such Loan Party might otherwise have against the
Administrative Agent, the L/C Issuer, any Lender or any of its directors,
officers, employees or agents, in either case (i) or (ii), on account of any
past or presently existing condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind.

     

    Section 4.                      Amendment
to Schedules
to the Credit Agreement.   Schedules
2.01(a), 5.05, 5.08(b), (c), (d)(i), (d)(ii) and (e), 5.13, 5.17, 5.27, 5.29,
6.12,  7.02 and 7.11 to the Credit Agreement are hereby amended and
restated in their entirety with Schedules 2.01(a), 5.05, 5.08(b), (c), (d)(i),
(d)(ii) and (e), 5.13, 5.17, 5.27, 5.29, 6.12, 7.02 and 7.11 attached hereto as
Exhibit
A.

    

    Section 5.                      Amendment
to Exhibits
to the Credit Agreement.   Exhibits D-1 and
D-2 to the Credit Agreement are hereby amended and restated in their entirety
with Exhibits D-1 and D-2 attached hereto as Exhibit
B.

    

    Section 6.                      Amendments to Section 1.01 of the Credit Agreement.

    

    (a) Section
1.01 of the Credit Agreement is hereby amended by adding the following new
defined terms in the appropriate alphabetical order:

    

    “Amendment No. 1”
means Amendment No. 1 and Waiver to Credit Agreement, dated as of March 27,
2009, among the Borrowers, Holdings, the Administrative Borrower, the Lenders
and the Administrative Agent.

    

    “Amendment No. 1 Effective
Date” means the date on which the conditions precedent to Amendment No. 1
have been satisfied.

     

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

    

    “Lenders’ Allocated
Percentage” means, in respect of a sale or issuance by any Loan Party of
its Equity Interests as provided in Section 2.05(b)(vi),
a fraction, expressed as a percentage, (a) the numerator of which is the amount
equal to the sum of the Revolving Credit Facility, plus the outstanding
principal amount of the Term Facility at the time of such sale or issuance of
Equity Interests, and (b) the denominator of which is the amount equal to the
sum of the Revolving Credit Facility, plus the outstanding
principal amount of the Term Facility, plus the sum of the
Loan Parties’ Indebtedness set forth on Schedule 7.02, in
each case, outstanding and in effect at the time of such sale or issuance of
Equity Interests.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Pre-Waiver Covenant
Compliance Conditions” means, at any date of determination following the
commencement of the Waiver Period, the following conditions, (a) the Loan
Parties’ and their Subsidiaries shall be in full compliance with the financial
covenants provided in Section 7.13 for the
most recent fiscal quarter or month ended, as applicable, of Holdings and its
Subsidiaries, as such covenants were in effect immediately prior to the
commencement of the Waiver Period; provided that for the
purposes of determining compliance with such financial covenants, the
definitions of “Consolidated EBITDA” and “Consolidated Interest Charges” shall
respectively have the meaning assigned to such term after the Amendment No. 1
Effective Date, (b) the Total Outstandings shall not exceed the Maximum
Available Amount, and (c) no Default or Event of Default shall have occurred or
be continuing.

    

    “Pre-Waiver Covenant
Compliance Date” means, as determined by the Administrative Agent based
on evidence provided by the Borrowers, the date on which the Borrowers shall
have demonstrated to the Administrative Agent’s satisfaction that each of the
Pre-Waiver Covenant Compliance Conditions have been satisfied.

    

    “Waiver Period” means
the period commencing on March 2, 2009 and ending on the earliest to occur of
(a) January 1, 2010 at 12:00 a.m. Eastern Time and (b) the occurrence after the
commencement of the Waiver Period of any Default or Event of Default (other than
the Specified Events of Default and the Other Events of Default (each as defined
in the Amendment No. 1)) including, without limitation, any failure to comply
with the provisions of Amendment No. 1.

    

    (b) Section
1.01 of the Credit Agreement is hereby amended by amending and restating the
following definitions in their entirety:

     

    “Base Rate” means for
any day a fluctuating rate per annum equal to the highest of (a) the Federal
Funds Rate plus
1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced
from time to time by Bank of America as its “prime rate” and (c) the Eurodollar
Rate in effect for such day for a one (1) month Interest Period plus
1%.  The “prime rate” is a rate set by Bank of America based upon
various factors including Bank of America’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate.  Any change in such rate announced by Bank of America shall take
effect at the opening of business on the day specified in the public
announcement of such change.

     

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

     

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

     

    “Net Present Rental
Value” means, as of any date, the aggregate net present value of all
Rentals payable by Holdings or any of its Subsidiaries to any Person (other than
Holdings or any of its other Subsidiaries) pursuant to any Operating Lease or,
without duplication, any charter of any vessel that, in each case, after giving
effect to any renewals or other extensions provided therein and in the absence
of any early termination, shall or would have a fixed remaining term of (a)
prior to the Pre-Waiver Covenant Compliance Date, eighteen months or more and
(b) commencing with the Pre-Waiver Covenant Compliance Date, twenty-three months
or more, in each case discounted to such date at a rate of 8.00% per
annum.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Philippine Charterer”
means, with respect to any Vessel, one of CFS Bareboat Corp., Filscan Shipping,
Inc., General Charterer, Inc., Intermodal Shipping, Inc., Overseas Bulk
Transport, Inc., Sea Star Shipping Corp., Viking International Carriers, Inc.,
and each other bareboat charterer organized under the laws of the Philippines
acceptable to the Administrative Agent, as applicable.

     

    (c) Effective
as of March 13, 2009, Section 1.01 of the Credit Agreement is hereby amended by
deleting the table set forth in the definition of “Applicable Rate” in its
entirety and substituting in lieu thereof the following new table:

    

    
      
        
          	
                  Pricing
      Level

                	
                  Consolidated
      Leverage Ratio

                	
                  Eurodollar
      Rate

                  (Letter
      of Credit Fee)

                	
                  Base
      Rate

                
	
                  I

                	
                  > 6.00:1.00

                	
                  525.00

                	
                  425.00

                
	
                  II

                	
                  <
      6.00:1.00

                	
                  400.00

                	
                  300.00

                

        

      

    

    

    (d) Effective
as of March 13, 2009, Section 1.01 of the Credit Agreement is hereby amended by
deleting the table set forth in the definition of “Applicable Commitment Fee
Percentage” in its entirety and substituting in lieu thereof the following new
table:

    

    
      
        
          	
                  Pricing
      Level

                	
                  Consolidated
      Leverage Ratio

                	
                  Commitment
      Fee

                
	
                  I

                	
                  > 6.00:1.00

                	
                  100.00

                
	
                  II

                	
                  <
      6.00:1.00

                	
                  75.00

                

        

      

    

    

    Section 7.                      Amendments
to Section 2.05 of the Credit Agreement.

    

    (a) Section
2.05(a)(i) of the Credit Agreement is hereby amended by deleting the words
“inverse order of maturity” in the last sentence contained therein and
substituting in lieu thereof the words “direct order of maturity”.

    

    (b) Section
2.05(b)(iv) of the Credit Agreement is hereby amended by deleting the words “to
the Revolving Credit Facility in the manner set forth in clause (v), third of this Section 2.05(b)”
contained therein.

    

    (c) Section
2.05(b) of the Credit Agreement is hereby amended by inserting the following new
paragraphs (vi) and (vii) in the appropriate numerical order:

    

    (vi) Upon the sale or issuance by any
Loan Party or any of its Subsidiaries of any of its Equity Interests (other than
any sales or issuances of Equity Interests to a Loan Party), the Borrowers shall
prepay an aggregate principal amount of the Loans equal to the Lenders’
Allocated Percentage of all Net Cash Proceeds received therefrom immediately
upon receipt thereof by such Loan Party or such Subsidiary (such prepayments to
be applied as set forth in clause (vii) below).

    (vii) Each prepayment of Loans pursuant
to the foregoing clause (vi), of this
Section 2.05(b)
shall be applied, first, to the Term
Facility to the principal repayment installments thereof on a pro rata basis,
second, to the
Revolving Credit Facility in the manner set forth in clause (v) of this
Section 2.05(b)
(other than to Cash Collateralize the remaining L/C Obligations) and, third to Cash
Collateralize the remaining L/C Obligations.

    

    Section 8.                      Amendment
to Section 4.02 of the Credit Agreement.  Section 4.02 of
the Credit Agreement is hereby amended by inserting the following new paragraph
(g) in the appropriate alphabetical order:

    

    (g)           If
any Valuation (including, without limitation, any Initial Valuation or
Subsequent Valuation) of any Vessel (i) has been requested from an Appraiser,
(ii) is in the process of being conducted or prepared by an Appraiser, or (iii)
has been received by the Administrative Agent in draft form, but a final
Valuation has not been delivered to the Administrative Agent, five (5) Business
Days have elapsed following the Administrative Agent’s receipt of a final
Valuation, in form and substance satisfactory to the Administrative
Agent.

    

    Section 9.                      Amendment to Article V of the Credit Agreement.  Article
V of the Credit Agreement is hereby amended by inserting the following new
Section 5.29 in the appropriate numerical order:

    

    5.29           Deposit Accounts; Securities
Accounts; Other
Accounts.  Schedule 5.29 sets
forth all banks and other financial institutions at which any Loan Party or its
Subsidiaries maintains deposit accounts, securities account or other accounts
and such Schedule
5.29 correctly identifies the name, address and telephone number of each
depository, the name in which each account is held, a description of the purpose
of each account and the complete account number therefor.

    

    Section 10.                                Amendments
to Section 6.02 of the Credit Agreement.  Section
6.02(k)(ii)(C) of the Credit Agreement is hereby amended by deleting the words
“Schedules
5.08(e) and 5.13” and
substituting in lieu thereof the following words: “Schedules 5.08(e),
5.13 and 5.29”.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Section 11.                                Amendments
to Section 6.12 of the Credit Agreement.  

      

      (a) Section
6.12(a) of the Credit Agreement is hereby amended by deleting the first
parenthetical contained therein and substituting in lieu thereof the following
new parenthetical: “(other than any Excluded Subsidiary which is addressed in
clause
(c) below so long as the Pre-Waiver Covenant Compliance Date has occurred
but subject to Section
2.14 hereof).”

    

     

    (b) Section
6.12(a)(i) of the Credit Agreement is hereby amended by deleting the words
“Section
4.01(a)(viii) and (ix)” and
substituting in lieu thereof “Section 4.01(a)(xvi)
and (xvii)”

    

    (c) Section
6.12(c) of the Credit Agreement is hereby amended by deleting the first
paragraph contained therein and substituting in lieu thereof the following new
paragraph: “Commencing on the Pre-Waiver Covenant Compliance Date, subsequent to
the formation or acquisition of any direct or indirect Subsidiary that is an
Excluded Subsidiary by any Loan Party, then the Borrowers shall, at the
Borrowers’ expense:”

    

    Section 12.                                Amendments
to Section 6.19 of the Credit Agreement.

    

    (a) Section
6.19(a) of the Credit Agreement is hereby amended by inserting the following
sentence immediately after the last sentence contained therein: “Notwithstanding
the foregoing, the Borrowers shall cause the Appraiser to deliver to the
Administrative Agent, no later than fifteen (15) Business Days prior to the
expiration of the Waiver Period in lieu of the Valuation otherwise due on or
before March 31, 2010, a Valuation of each Vessel, dated and accurate as of no
earlier than thirty (30) days prior to the expiration of the Waiver
Period.”

    

    (b) Section
6.19 of the Credit Agreement is hereby amended by inserting the following new
paragraph (d) in the appropriate alphabetical order:

    

    “(d)  Notwithstanding
anything contained in this Section 6.19 and for
the avoidance of doubt, in the event that a Valuation (including, without
limitation, any Initial Valuation or Subsequent Valuation) of any Vessel (i) has
been requested from an Appraiser, (ii) is in the process of being conducted or
prepared by an Appraiser, or (iii) has been received by the Administrative Agent
in draft form, pursuant to Section 4.02, no
Lender is required to honor any Request for Credit Extension (other than a
Committed Loan Notice requesting only a conversion of Loans to the other Type or
a continuation of Eurodollar Rate Loans) until five (5) Business Days following
the Administrative Agent’s receipt of a final Valuation, in form and substance
satisfactory to the Administrative Agent.”

    

    Section 13.                                Amendment
to Section 7.02 of the Credit Agreement.

    

    (a) Section
7.02(d) of the Credit Agreement is hereby amended and restated in its entirely
with the following new Section 7.02(d):

    

    “(d)           Indebtedness
outstanding on the date hereof and listed on Schedule 7.02
and any refinancings, refundings, renewals or extensions thereof; provided that (i) the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension except by an amount equal to a reasonable
premium or other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder and the direct or any contingent
obligor with respect thereto is not changed, as a result of or in connection
with such refinancing, refunding, renewal or extension; (ii)  that the
terms relating to principal amount, amortization, maturity, collateral (if any)
and subordination (if any), and other material terms taken as a whole, in any
such refinancing, refunding, renewing or extending Indebtedness, and of any
agreement entered into and of any instrument issued in connection therewith, are
no less favorable in any material respect to the Loan Parties or the Lenders
than the terms of any agreement or instrument governing the Indebtedness being
refinanced, refunded, renewed or extended and the interest rate applicable to
any such refinancing, refunding, renewing or extending Indebtedness does not
exceed the then applicable market interest rate; (iii) that the terms relating
to amortization in any such refinancing, refunding, renewing or extending of
Indebtedness, and of any agreement entered into and of any instrument issued in
connection therewith, shall not require the prepayment of any amortization
payments previously to be due after January 31, 2010; and (iv) that, in respect
of the Indebtedness owed by certain Subsidiaries of the Loan Parties to The
Royal Bank of Scotland plc, as lender under the loan agreement described on
Schedule
7.02,  the terms relating to advances in any such refinancing,
refunding, renewing or extending of Indebtedness, and of any agreement entered
into and of any instrument issued in connection therewith shall not have the
effect of accelerating the timing of, or triggers for, advances under such
credit facility or permit such Subsidiaries to borrow under such credit facility
at any other times and in any other amounts other than the times and amounts set
forth in such loan agreement as in effect on the Amendment No. 1 Effective
Date.

     

    (b) Sections
7.02(f), (g) and (h) of the Credit Agreement are each hereby amended by
inserting the following clause immediately before each such paragraph,
“Commencing on the Pre-Waiver Covenant Compliance Date,”

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
      (c) Section
7.02 of the Credit Agreement is hereby amended by inserting the following new
paragraph (i) in the appropriate alphabetical
order:

    

    
       

      “(i)           Indebtedness
otherwise permitted under Sections
7.02(f), (g)
and (h)
but incurred and existing prior to the Amendment No. 1 Effective Date but no
refinancings, refundings, renewals or extensions
thereof.”

    

     

    Section 14.                                Amendments
to Section 7.03 of the Credit Agreement.

    

    (a) Sections
7.03(i) and (j) of the Credit Agreement are each hereby amended by inserting the
following clause immediately before each such paragraph:  “Commencing
on the Pre-Waiver Covenant Compliance Date,”

    

    (b) Sections
7.03(h) is hereby amended restated in its entirety with the following new
Section 7.03(h):

    

    (h)           Investments
by Holdings and its Subsidiaries in Joint Ventures or in other Persons hereunder
in an aggregate amount invested since March 26, 2008 not to exceed (a) if the
Pre-Waiver Covenant Compliance Date has not occurred, $10,000,000 and (b)
commencing on the Pre-Waiver Covenant Compliance Date, the sum of (i)
$30,000,000 plus (ii) 25% of the
Consolidated Net Income earned in each full fiscal year ending after December
31, 2007 (with no deduction for a net loss in any such fiscal year) minus (iii) the
aggregate amount of dividends or other distributions made in each full fiscal
year ending after December 31, 2007 pursuant to Section 7.06;
provided, that
no Default or Event of Default has occurred and is continuing at the time any
such Investment is made.

    

    (c) Section
7.03 of the Credit Agreement is hereby amended by inserting the following new
paragraph (k) in the appropriate alphabetical order:

    

    “(k)           Investments
otherwise permitted under Sections 7.03(i) and
(j) but made or
held and existing prior to the Amendment No. 1 Effective Date.”

    

    Section 15.                                Amendment
to Section 7.05 of the Credit Agreement. Section 7.05(g)
of the Credit Agreement is hereby amended by inserting the following clause
immediately before such paragraph: “Commencing on the Pre-Waiver Covenant
Compliance Date,”

    

    Section 16.                                Amendment
to Section 7.06 of the Credit Agreement. Section 7.06(d)
of the Credit Agreement is hereby amended by inserting the following clause
immediately before such paragraph: “Commencing on the Pre-Waiver Covenant
Compliance Date,”

    

    Section 17.                                Amendment
to Section 7.19 of the Credit Agreement. Section 7.19 of
the Credit Agreement is hereby amended and restated in its entirety with the
following new Section 7.19:

    

    7.19                     Net Present Rental
Value.  Permit Net Present Rental Value to exceed (a) if the
Pre-Waiver Covenant Compliance Date has not occurred, $45,000,000 and (b)
commencing on the Pre-Waiver Covenant Compliance Date, $60,000,000 in each case
calculated at the end of each fiscal quarter of Holdings.

    

    Section 18.                                Covenants.  Until the
expiration of the Waiver Period, so long as any Lender shall have any Commitment
hereunder, any Loan or Obligation shall remain unpaid or unsatisfied, each of
Holdings and the Borrowers shall not, nor shall it permit any Subsidiary to,
directly or indirectly:

    

    (a) Minimum Cash
Liquidity. For each calendar month ending on or after the Amendment No. 1
Effective Date, permit Qualified Cash of the Loan Parties (other than the
Limited Guarantors), to be less than $40,000,000, of which a minimum average
balance of $15,000,000 in any such calendar month shall be deposited with Bank
of America, N.A.

    

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

    

    
      
        
          
            	
                    Period
      of Determination

                  	
                    Minimum
      Consolidated Interest Charges Coverage Ratio

                  
	
                    Two
      fiscal quarters ending June 30, 2009

                  	
                    1.10:1.00

                  
	
                    Three
      fiscal quarters ending September 30, 2009

                  	
                    1.35:1.00

                  
	
                    Four
      fiscal quarters ending December 31, 2009

                  	
                    1.75:1.00

                  

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
        Section 19.                                Representations and Warranties.  Holdings and the
Borrowers hereby represent and warrant to the Administrative Agent as
follows:

        

        (a) Representation
and Warranties in the Credit Agreement.  The representations
and warranties of Holdings and the Borrowers contained in the Credit Agreement
were true and correct in all material respects as of the date when made and
continue to be true and correct in all material respects on the date hereof
except for (a) representations or warranties which expressly relate to an
earlier date in which case such representations and warranties shall be true and
correct, in all material respects, as of such earlier date, or (b)
representations or warranties which are no longer true as a result of a
transaction expressly permitted by the Credit Agreement.

      

       

      (b) Ratification, Etc.  Except as
expressly amended hereby, the Credit Agreement is hereby ratified and confirmed
in all respects and shall continue in full force and effect.  The
Credit Agreement shall, together with this Amendment, be read and construed as a
single agreement.  All references in the Credit Agreement or any
related agreement or instrument shall hereafter refer to the Credit Agreement as
amended hereby.

       
(c) Authority,
Etc.  The execution and
delivery by Holdings and the Borrowers of this Amendment and the performance by
Holdings and the Borrowers of all of its agreements and obligations under the
Credit Agreement, as amended hereby, are within Holdings and each Borrower’s
corporate authority and have been duly authorized by all necessary corporate
action on the part of Holdings and such Borrower.

    

    (d) Enforceability.  This Amendment
and the Credit Agreement, as amended hereby, constitute the legal, valid and
binding obligations of Holdings and the Borrowers and are enforceable against
Holdings and the Borrowers in accordance with their terms, except as
enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting generally the enforcement of, creditors’
rights and except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought.

    

    Section 20.                                Effectiveness of Amendment.  The provisions of
this Amendment shall become effective as of the date first set forth above upon
the satisfaction of each of the following conditions, in each case in a manner
and in form and substance satisfactory to the Administrative Agent (unless
otherwise agreed to in writing by the Administrative Agent):

    

    (a) The
Borrowers shall have made a prepayment of the Term Loan in an aggregate amount
equal to $19,000,000 where such prepayment shall be applied against the
September 30, 2009 and the December 31, 2009 amortization payments required
under Section
2.07 of the Credit Agreement; and

    

    (b) Total
Revolving Credit Outstanding shall not exceed the Revolving Credit Facility;
and

    

    (c) This
Amendment shall have been duly executed and delivered by each of the Borrowers,
Holdings, the Administrative Borrower, the Guarantors, the Administrative Agent
and the Required Lenders and shall be in full force and effect; and

    

    (d) The
Administrative Agent shall have received a fully executed and effective
Accession Agreement, dated as of the date hereof, by Cumberland Navigation Corp,
Jessup Maritime Corp., Vedado Maritime Corp. and the Administrative Borrower in
favor of the Administrative Agent and the Secured Parties; and

    

    (e) The
Administrative Agent shall have received favorable legal opinions (including,
without limitation, local opinions), addressed to the Administrative Agent and
the other Secured Parties, of counsel to the Loan Parties, as to matters
requested by the Administrative Agent; and

    

    (f) The
Administrative Agent shall have received signed Officer’s Certificates,
certified by a duly authorized officer of each Borrower and each Guarantor to be
true and complete, (a) of the records of all corporate (or equivalent) action
taken by such Borrower or such Guarantor to authorize (i) such Borrower’s or
such Guarantor’s execution and delivery of this Amendment, and (ii) such
Borrower’s and such Guarantor’s entry into and carrying out the terms of this
Amendment and the Credit Agreement, as amended hereby, and (b) of the
Organization Documents; and

    

    (g) 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 amendment,
waiver and modification of each loan agreement evidencing the existing
Indebtedness of certain Subsidiaries of the Loan Parties described on Schedule 7.02 of the
Credit Agreement (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.), together with each such loan
agreement, as in effect immediately prior to the Amendment No. 1 Effective
Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
                (h) The
Administrative Agent shall have received a Valuation for each Vessel, dated on
or about February 20, 2009 indicating the Fair Market Value for such Vessel as
of January 22, 2009 and issued by an Appraiser, at the expense of the Borrowers
and any other vessel appraisals, audits or certifications reasonably requested
by the Administrative Agent; and

      (i) The
Borrowers shall have paid all fees set forth in the Fee Letter, dated as of
February 13, 2009, to the Administrative Agent for its own account and for the
account of the Required Lenders as provided therein; and

      

      (j) The
Borrowers shall have paid all reasonable unpaid fees and expenses of the
Administrative Agent’s counsel, Bingham McCutchen LLP, to the extent that copies
of invoices for such fees and expenses have been delivered to the Borrowers;
and

       

      (k) Since the
Administrative Agent’s receipt of forecasts of the consolidated balance sheets
and statements of income or operations and cash flows of Holdings and its
Subsidiaries (the “Projections”) on
February 17, 2009, there shall have been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect (other than the effect of any noncash
impairment charges incurred during each fiscal year of Holdings and its
Subsidiaries ending December 31, 2008 and December 31, 2009 in respect of any of
Holdings’ or its Subsidiaries’ goodwill and Vessels), and there shall have been
no material adverse change in the facts and information regarding the Loan
Parties as presented to the Administrative Agent.

    

    

    (l) The
Projections continue to fairly present the projected results of the financial
condition of TBS and its Subsidiaries during the periods provided
therein.

    

    (m) The
Lenders shall have received satisfactory evidence that the Administrative Agent
(for itself and the other Secured Parties) shall have a valid and perfected
first priority Lien on all of the Collateral and other assets of the Loan
Parties (including, without limitation, each of the Vessels).

    

    (n) The
Administrative Agent shall have received the Annual Deliverables.

    

    (o) The
Administrative Agent shall have received such other items, documents, agreements
or actions as the Administrative Agent may reasonably request in order to
effectuate the transactions contemplated hereby.

    

    Section 21.                                No Other Amendments.  Except as
expressly provided in this Amendment, all of the terms and conditions of the
Credit Agreement remain in full force and effect.

    

    Section 22.                                Execution in Counterparts.  This
Amendment may be executed in any number of counterparts, but all such
counterparts shall together constitute but one instrument.  In making
proof of this Amendment it shall not be necessary to produce or account for more
than one counterpart signed by each party hereto by and against which
enforcement hereof is sought.

    

    Section 23.                                Expenses.  
Pursuant to 11.04 of the Credit Agreement, all costs and expenses incurred or
sustained by the Administrative Agent in connection with this Amendment,
including the fees and disbursements of legal counsel for the Administrative
Agent in producing, reproducing and negotiating the Amendment, will be for the
account of the Borrowers whether or not the transactions contemplated by this
Amendment are consummated.

    

    Section 24.                                Miscellaneous.  THIS AMENDMENT 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). The captions in this Amendment are
for convenience of reference only and shall not define or limit the provisions
hereof.  This Amendment shall constitute one of the Loan Documents
referred to in the Credit Agreement and any failure by any Loan Party to comply
with the terms contained herein shall constitute an immediate Event of
Default.

    

    [Remainder
of page intentionally left blank]

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN WITNESS WHEREOF, the
undersigned have duly executed this Amendment as of the date first set forth
above.

    

    
      
        	
                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
      MARITIME 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

                                            
	 
      
	 
	 
	
                                              The Administrative Borrower:

                                              TBS SHIPPING SERVICES
      INC.

                                              By:
      /s/ Tara
      DeMakes

                                              Name:
      Tara DeMakes

                                              Title:
      Secretary

                                            
	 
      
	 
	 
	 
	 
	 
	 
	
                                              The Administrative Agent:

                                              BANK
      OF AMERICA, N.A.

                                               

                                              By:
      /s/ Judith A.
      Huckins

                                              Name:
      Judith A. Huckins

                                              Title:
      Vice President

                                            
	 
      
	 
	 
	
                                              The Lenders:

                                              BANK OF AMERICA, N.A.,
      as a Lender, L/C Issuer and Swing Line Lender

                                               

                                              By: /s/
      Judith A. Huckins

                                              Name:
      Judith A. Huckins

                                              Title:
      Vice
President

                                            

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    The Lenders
(cont):

    

    

     

    DVB GROUP MERCHANT BANK (ASIA)
LTD.,

    as
co-Syndication Agent and a Lender

    By: /s/ Evan D.
Cohen        /s/ Martijn van
Tuyl

    Name:
Evan D. Cohen    Martijn van
Tuyl

    Title:
Senior Vice President

     

    

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

    By: /s/ Gilbert
Torres

    Name:
Gilbert Torres

    Title:
Vice President

     

     

     

    TD BANKNORTH, N.A., as
Documentation Agent and a Lender

    By: /s/ John
Mercier

    Name:
John Mercier

    Title:
Senior Vice President

     

    

    KEYBANK NATIONAL ASSOCIATION,
as a Lender

    By: /s/ Steven B.
Vitale

    Name:
Steven B. Vitale

    Title:
Director

     

    

    CAPITAL ONE LEVERAGE FINANCE
CORP., as a Lender

    By: /s/ Thomas F
Furst

    Name:
Thomas F. Furst

    Title:
Vice President

     

    

    GUARANTY BANK, as a
Lender

    By: /s Jeremy
Jackson

    Name:
Jeremy Jackson

    Title:
Vice President

    

 

    MERRILL LYNCH COMMERCIAL FINANCE
CORP., as a Lender

    By: /s/ Phillip J.
Salter

    Name:
Phillip J. Salter

    Title:
Vice President

     

    
 

    WEBSTER BANK NATIONAL
ASSOCIATION, as a Lender

    By: /s/ Michael P.
McGovern

    Name:
Michael P. McGovern

    Title:
Vice President

     

     

     

    

    COMERICA BANK, as a
Lender

    By: /s/ Sarune
Baer

    Name:
Sarune Baer

    Title:
Vice President

     

     

     

     

    

    TRISTATE CAPITAL BANK, as a
Lender

    By: /s/ Timothy A.
Merriman

    Name:
Timothy A. Merriman

    Title:
Senior Vice President

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    GUARANTORS’
ACKNOWLEDGMENT

    

    Each of
the undersigned Guarantors hereby (a) acknowledges and consents to the foregoing
Amendment and the Borrowers’ execution thereof; (b) ratifies and confirms all of
their respective obligations and liabilities under the Loan Documents to which
any of them is a party and ratifies and confirms that such obligations and
liabilities extend to and continue in effect with respect to, and continue to
guarantee and secure, as applicable, the Obligations of the Borrowers under the
Credit Agreement as amended; (c) acknowledge and confirm that the liens and
security interests granted pursuant to the Loan Documents are and continue to be
valid and perfected first priority liens and security interests (subject only to
Permitted Encumbrances) that secure all of the Obligations on and after the date
hereof; (d) acknowledges and agrees that, as of the date hereof, such Guarantor
does not have any claim or cause of action against the Administrative Agent or
any Lender (or any of its respective directors, officers, employees or agents);
and (e) acknowledges, affirms and agrees that, as of the date hereof, such
Guarantor does not have any defense, claim, cause of action, counterclaim,
offset or right of recoupment of any kind or nature against any of their
respective obligations, indebtedness or liabilities to any Administrative Agent
or any Lender.

    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:

    

    
      	
               
      

            	
              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 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
      EUROLINES, LTD.

            

    

    
      	
               
      

            	
              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

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
A

    SCHEDULE
2.01(a)

     

    COMMITMENTS

    AND
APPLICABLE PERCENTAGES

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      Lender

                                    	
                                      Term
      Commitment

                                    	
                                      Revolving
      Credit Commitment

                                    	
                                      Term
      Applicable Percentage

                                    	
                                      Revolving
      Credit

                                      Applicable
      Percentage

                                    
	
                                      Bank
      of America, N.A.

                                    	
                                      $11,364,485.98

                                    	
                                      $12,710,281.20

                                    	
                                      14.953271025%

                                    	
                                      14.953272000%

                                    
	
                                      DVB
      Group Merchant Bank (Asia) Ltd.

                                    	
                                      $11,364,485.98

                                    	
                                      $12,710,280.52

                                    	
                                      14.953271025%

                                    	
                                      14.953271200%

                                    
	
                                       

                                      Citibank,
      N.A.

                                    	
                                      $9,943,925.23

                                    	
                                      $11,121,495.20

                                    	
                                      13.084112147%

                                    	
                                      13.084112000%

                                    
	
                                      TD
      Banknorth N.A.

                                    	
                                      $9,943,925.23

                                    	
                                      $11,121,495.20

                                    	
                                      13.084112147%

                                    	
                                      13.084112000%

                                    
	
                                      Keybank
      National Association

                                    	
                                      $8,523,364.49

                                    	
                                      $9,532,710.56

                                    	
                                      11.214953270%

                                    	
                                      11.214953600%

                                    
	
                                      Capital
      One Leverage Finance Corp.

                                    	
                                      $5,682,242.99

                                    	
                                      $6,355,139.92

                                    	
                                      7.476635516%

                                    	
                                      7.476635200%

                                    
	
                                      Guaranty
      Bank

                                    	
                                      $5,682,242.99

                                    	
                                      $6,355,139.92

                                    	
                                      7.476635516%

                                    	
                                      7.476635200%

                                    
	
                                      Merrill
      Lynch Commercial Finance Corp.

                                    	
                                      $4,261,682.26

                                    	
                                      $4,766,355.28

                                    	
                                      5.607476653%

                                    	
                                      5.607476800%

                                    
	
                                      Webster
      Bank National Association

                                    	
                                      $3,551,401.87

                                    	
                                      $3,971,962.28

                                    	
                                      4.672897193%

                                    	
                                      4.672896800%

                                    
	
                                      Comerica
      Bank

                                    	
                                      $2,841,121.49

                                    	
                                      $3,177,569.96

                                    	
                                      3.738317754%

                                    	
                                      3.738317600%

                                    
	
                                      Tristate
      Capital Bank

                                    	
                                      $2,841,121.49

                                    	
                                      $3,177,569.96

                                    	
                                      3.738317754%

                                    	
                                      3.738317600%

                                    
	
                                      Total

                                    	
                                      $76,000,000.00*

                                    	
                                      $85,000,000.00*

                                    	
                                      100.000000000%

                                    	
                                      100.000000000%

                                    

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    

    *After
the Amendment No. 1 Effective Date

    
 

     

        EXHIBIT B

     

        See
attachedex-10_2.htm

    TBS INTERNATIONAL LIMITED
& SUBSIDIARIES                EXHIBIT
10.2 

     

     

    
      

      

      Date: as
of March 23, 2009

       

      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

       

      DVB
GROUP MERCHANT BANK (ASIA) LTD.,

      as
Lender

       

      DVB
GROUP MERCHANT BANK (ASIA) LTD.,

      as
Facility Agent and Security Trustee

       

      -and-

       

      DVB
BANK SE

      THE
GOVERNOR AND COMPANY OF THE BANK OF IRELAND

      and

      NATIXIS,

      as Swap
Banks

      

      _______________________________________________________

      

      FIRST
AMENDATORY AGREEMENT

      ______________________________________________________

      

      Amending
and Supplementing the Loan Agreement dated as of January 16, 2008

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      FIRST
AMENDATORY AGREEMENT dated as of March 23, 2009 (this “Agreement”)

      

      AMONG

      

      
        	
                (1)  

              	
                BEDFORD
      MARITIME CORP., BRIGHTON MARITIME CORP., HARI MARITIME CORP., PROSPECT
      NAVIGATION CORP., HANCOCK NAVIGATION CORP., COLUMBUS MARITIME CORP. and
      WHITEHALL MARINE TRANSPORT CORP., each a corporation organized and
      existing under the law of the Republic of The Marshall Islands, as joint
      and several borrowers (each, a “Borrower” and together,
      the “Borrowers”);

              

      

       

      
        	
                (2)  

              	
                TBS
      INTERNATIONAL LIMITED, a company organized and existing under the law of
      Bermuda, as guarantor (the “Guarantor”);

              

      

       

      
        	
                (3)  

              	
                DVB
      GROUP MERCHANT BANK (ASIA) LTD., acting through its office at 77 Robinson
      Road 30-02, Singapore, as lender (in such capacity, the “Lender”);

              

      

       

      
        	
                (4)  

              	
                DVB
      GROUP MERCHANT BANK (ASIA) LTD., acting through its office at 77 Robinson
      Road 30-02, Singapore, as facility agent (in such capacity, the “Facility Agent”) for the
      Lender and as security trustee (in such capacity, the “Security Trustee”) for
      the Lender and the Swap Banks; and

              

      

       

      
        	
                (5)  

              	
                DVB
      BANK SE (formerly DVB Bank AG), acting through its office at
      Friedrich-Ebert-Anlage 2-14, 600325 Frankfurt am Main, Federal Republic of
      Germany, THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND, acting through
      its office at Head Office, Building A3, Lower Baggot Street, Dublin 2,
      Ireland, and NATIXIS, acting through its office at BP 4 - F-75060, Paris
      Cedex 02, France, as swap banks (each, a “Swap Bank” and together,
      the “Swap
      Banks”).

              

      

       

      WITNESSETH
THAT:

      

      WHEREAS, the Borrowers, the
Guarantors, the Lender, the Facility Agent, the Security Trustee, the Swap Banks
and others are parties to a loan agreement dated as of January 16, 2008 (the
“Loan
Agreement”);

      

      WHEREAS, as of the date hereof
the Borrowers are in breach of the Collateral Maintenance Ratio required by
Clause 10.3(a) of the Loan Agreement; and

      

      WHEREAS, upon the terms and
conditions stated herein, the parties hereto have agreed pursuant to Clause
19.1(b) of the Loan Agreement to:

      

      
        	
                (a)

              	
                waive
      the Borrowers’ breach of the Collateral Maintenance Ratio required by
      Clause 10.3(a) of the Loan
Agreement;

              

      

      

      
        	
                (b)  

              	
                amend
      certain terms of the Loan Agreement;
and

              

      

      

      
        	
                (c)  

              	
                waive
      the requirements of Clauses 10.1(x) and 10.3(a) of the Loan Agreement with
      effect on and from the Effective Date (as defined below) until 12:00 am on
      January 1, 2010.

              

      

      

      NOW, THEREFORE, in
consideration of the premises set forth above, the covenants and agreements
hereinafter set forth, and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:

      

      
        	
                1  

              	
                DEFINITIONS

              

      

      

      
        	
                1.1  

              	
                Defined
      terms.  Capitalized terms used but not defined herein
      shall have the meaning assigned such terms in the Loan
      Agreement.  In addition:

              

      

      

      “Effective Date” means the
first date on which all of the conditions precedent set forth in Clause 4.1
below have been satisfied or waived by the Facility Agent; and

      

      “Extraordinary Prepayment”
means a prepayment by the Borrower in the amount of $9,784,000 to be applied
solely to the prepayment in full of the repayment installments due on October
23, 2009 and January 23, 2010 under Clause 7.1 of the Loan Agreement, which
Extraordinary Prepayment shall not effect the amount or timing of the remaining
repayment installments due under Clause 7.1 of the Loan Agreement.

      

      
        	
                2  

              	
                BREACH
      AND WAIVER; EXTRAORDINARY
PREPAYMENT

              

      

       

      
        	
                2.1  

              	
                Breach of Clause
      10.3(a).  The Obligors acknowledge and agree that, since
      February 20, 2009 and as of the date of this Agreement, the Borrowers have
      been and are in breach of the Collateral Maintenance Ratio required by
      Clause 10.3(a) of the Loan
Agreement.

              

      

       

      
        	
                2.2  

              	
                Waiver of
      breach.  Pursuant to Clause 19.1(b) of the Loan
      Agreement, subject to the terms and conditions of Clauses 2.3 and 2.4
      hereof the Credit Parties waive, as of the Effective Date but with effect
      from February 20, 2009, the Obligors’ breach of the Collateral Maintenance
      Ratio required by Clause 10.3(a) of the Loan
  Agreement.

              

      

       

      
        	
                2.3  

              	
                Extraordinary
      Prepayment.  In consideration of the waiver granted in
      Clause 2.2 above, the Borrowers hereby agree to make the Extraordinary
      Prepayment on or before March 31, 2009.  In connection with such
      Extraordinary Prepayment, it shall not be necessary for the Borrowers to
      comply with Clauses 7.4(a), 7.4(b), 7.8(c) and 7.9 of the Loan
      Agreement.

              

      

       

      
        	
                2.4  

              	
                Failure to make Extraordinary
      Prepayment.  If the Borrowers fail to make the
      Extraordinary Prepayment as required by Clause 2.3 above, the Obligors
      acknowledge and agree that the waiver made in Clause 2.2 hereof and the
      amendments made in Clause 3 hereof shall be null, void and of no effect
      whatsoever and that the Credit Parties shall be entitled to all rights and
      to exercise all remedies afforded to them under the terms of the Loan
      Agreement (all of which are expressly reserved) as if (a) such waiver had
      not been made and (b) the Loan Agreement had not been amended by this
      Agreement.

              

      

       

      
        	
                3  

              	
                AMENDMENTS
      AND WAIVERS

              

      

       

      
        	
                3.1  

              	
                Amendments.  Pursuant
      to Clause 19.1(b) of the Loan Agreement, the parties hereto agree to amend
      the Loan Agreement as follows with effect on and from the Effective
      Date:

              

      

      

      
        	
                (a)  

              	
                The
      definition of “Margin” in Clause 1.1 is amended and restated to read as
      follows:

              

      

      

      ““Margin” means 4.00 percent per
annum;”

      

      
        	
                (b)  

              	
                The
      definition of “TBS Credit Facility” in Clause 1.1 is amended and restated
      to read as follows:

              

      

      

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

      

      
        	
                (c)  

              	
                The
      definition of “TBS Credit Facility Financial Covenants” in Clause 1.1 is
      amended and restated to read as
follows:

              

      

      

      ““Bank of America Credit Facility
Financial Covenants” means the covenants stated in Section 7.13 of the
Bank of America Credit Agreement;”

      

      
        	
                (d)  

              	
                The
      following definition is added to Clause
1.1:

              

      

      

      “RBS Credit Facility” means the
Loan Agreement dated March 29, 2007, as amended or supplemented from time to
time, among Argyle Maritime Corp., Caton Maritime Corp., Dorchester Maritime
Corp., Longwoods Maritime Corp., McHenry Maritime Corp. and Sunswyck Maritime
Corp. as Borrowers, the Banks and Financial Institutions listed in Schedule 1
thereto as Lenders, The Royal Bank of Scotland plc as Mandated Lead Arranger and
The Royal Bank of Scotland plc as Bookrunner, Agent, Security Trustee and Swap
Bank, upon the terms and conditions of which a $150.0 million credit facility
was made available to such Borrowers;”

      

      
        	
                (e)  

              	
                Clause
      5.1 is amended and restated to read as
follows:

              

      

      

      “Duration of normal Interest
Periods.  Each Interest Period in relation to the Outstanding
Indebtedness shall be 3 months.”

       

      
        	
                (f)  

              	
                Clause
      10.2(h) is amended and restated to read as
  follows:

              

      

      

      
        	
                 
      

              	
                “(i)

              	
                none
      of the Borrowers shall incur any Financial Indebtedness other than (A) the
      Loan, (B) in the usual course of business, (C) as permitted by the Finance
      Documents and (D) Financial Indebtedness that is fully subordinated to the
      Loan;

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                from
      March 23, 2009 until 12:00 am on January 1, 2010, the Guarantor shall not,
      on a consolidated basis, incur any Financial Indebtedness other than (1)
      the Loan, (2) in the usual course of business, (3) pursuant to the Bank of
      America Credit Facility, (4) pursuant to the RBS Credit Facility and (5)
      Financial Indebtedness that is fully subordinated to the Guarantor’s
      obligations under Clause 21 of the Loan
  Agreement;”

              

      

      

      
        	
                (g)  

              	
                Clause
      10.2(i) is amended and restated to read as
  follows:

              

      

      

      
        	
                 
      

              	
                “(i)

              	
                (A)
      from March 23, 2009 until 12:00 am on January 1, 2010 or (B) at any time
      thereafter if an Event of Default shall have occurred and so long as such
      Event of Default shall be continuing, the Guarantor shall not declare or
      pay any dividends or return any capital to any equity holder or authorize
      or make any other distribution, payment or delivery of property or cash to
      any equity holder as such, or redeem, retire, purchase or otherwise
      acquire, directly or indirectly, for value, any share of any class of its
      capital stock or other form of equity interest (or require any rights,
      options or warrants relating thereto but not including convertible debt)
      now or hereafter outstanding or set aside any funds for any of the
      foregoing purposes; and as of the date immediately preceding the date on
      which the Guarantor is able to declare, pay, return, authorize, make,
      redeem, retire, purchase, acquire or otherwise do any of the foregoing,
      the Guarantor shall establish to the satisfaction of the Facility Agent
      that no Event of Default has occurred and is continuing or would occur
      from declaring, paying, returning, authorizing, making, redeeming,
      retiring, purchasing, acquiring or otherwise doing any of the
      foregoing;

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                if
      an Event of Default shall have occurred and so long as such Event of
      Default shall be continuing, none of the Borrowers shall declare or pay
      any dividends or return any capital to any equity holder or authorize or
      make any other distribution, payment or delivery of property or cash to
      any equity holder as such, or redeem, retire, purchase or otherwise
      acquire, directly or indirectly, for value, any share of any class of its
      capital stock or other form of equity interest (or require any rights,
      options or warrants relating thereto but not including convertible debt)
      now or hereafter outstanding, or repay any subordinated loans or set aside
      any funds for any of the foregoing
purposes;”

              

      

      

      
        	
                3.2  

              	
                Waivers.  Pursuant
      to Clause 19.1(b) of the Loan Agreement, the Credit Parties agree to waive
      the requirements of Clauses 10.1(x) and 10.3(a) of the Loan Agreement with
      effect on and from the Effective Date until 12:00 am on January 1, 2010,
      provided that the
      Guarantor shall maintain the following between the Effective Date and
      12:00 am on January 1, 2010 (and for the avoidance of doubt the
      requirements of Clauses 10.1(x) and 10.3(a) of the Loan Agreement shall be
      reinstated at 12:01 am on January 1, 2010 and shall be effective at all
      times thereafter):

              

      

      

      
        	
                (a)  

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

              

      

      

      
        	
                (b)  

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

              

      

      

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

      

      “Attributable Indebtedness”
means, on any date:

      

      
        	
                (i)  

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

              

      

      

      
        	
                (ii)  

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

              

      

      

      
        	
                (iii)  

              	
                all
      Synthetic Debt of such person.

              

      

      

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

      

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

       

      
        	
                (i)  

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

              

      

       

      
        	
                (ii)  

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

              

      

       

      
        	
                (iii)  

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

              

      

       

      
        	
                (iv)  

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

              

      

       

      “Consolidated EBITDA” means, at
any date of determination, an amount equal to Consolidated Net Income of the
Guarantor and its Subsidiaries on a consolidated basis for the most recently
completed Measurement Period, plus the following to the
extent deducted in calculating such Consolidated Net Income (and without
duplication):

      

      
        	
                (i)  

              	
                Consolidated
      Interest Charges;

              

      

      

      
        	
                (ii)  

              	
                the
      provision for Federal, state, local and foreign income taxes
      payable;

              

      

      

      
        	
                (iii)  

              	
                depreciation
      and amortization expense;

              

      

      

      
        	
                (iv)  

              	
                net
      losses from the sales of Ships as permitted under this Agreement or
      vessels as permitted under the Bank of America Credit Facility;
      and

              

      

      

      
        	
                (v)  

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

              

      

      

      minus, to the extent included
in calculating such Consolidated Net Income, all net gains from the sales of
Ships as permitted under this Agreement or vessels as permitted under the Bank
of America Credit Facility (in each case of or by the Guarantor and its
Subsidiaries for such Measurement Period), provided that, to the extent
characterized as interest on the income statements of the Guarantor and its
Subsidiaries for such Measurement Period pursuant to FASB Interpretation No. 133
– Accounting for Derivative Instruments and Hedging Activities (June 1998),
noncash adjustments in connection with any interest rate Swap Contract entered
into by the Guarantor or any of its Subsidiaries, shall be
excluded.

      

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

      

      
        	
                (i)  

              	
                all
      interest, premium payments, debt discount, fees, charges and related
      expenses in connection with borrowed money (including capitalized interest
      but excluding capitalized interest on Permitted New Vessel Construction
      Indebtedness) or in connection with the deferred purchase price of assets,
      in each case to the extent treated as interest in accordance with
      GAAP;

              

      

       

      
        	
                (ii)  

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

              

      

       

      
        	
                (iii)  

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

              

      

       

      in each
case, of or by the Guarantor and its Subsidiaries on a consolidated basis for
the most recently completed Measurement Period; provided that, to the extent
characterized as interest on the income statements of the Guarantor and its
Subsidiaries for such Measurement Period pursuant to FASB Interpretation No. 133
– Accounting for Derivative Instruments and Hedging Activities (June 1998),
noncash adjustments in connection with any interest rate Swap Contract entered
into by the Guarantor or any of its Subsidiaries, shall be
excluded.

       

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

       

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

      

      
        	
                (i)  

              	
                extraordinary
      gains and extraordinary losses for such Measurement
  Period;

              

      

       

      
        	
                (ii)  

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

              

      

       

      
        	
                (iii)  

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

              

      

       

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

      

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

      

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

      

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

      

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

      

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

      

      
        	
                (i)  

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

              

      

      

      
        	
                (A)  

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

              

      

      

      
        	
                (B)  

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

              

      

      

      
        	
                (C)  

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

              

      

      

      
        	
                (D)  

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

              

      

      

      
        	
                (ii)  

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

              

      

      

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

      

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

      

      
        	
                (i)  

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

              

      

      

      
        	
                (ii)  

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

              

      

      

      
        	
                (iii)  

              	
                net
      obligations of such person under any Swap
  Contract;

              

      

      

      
        	
                (iv)  

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

              

      

      

      
        	
                (v)  

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

              

      

      

      
        	
                (vi)  

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

              

      

      

      
        	
                (vii)  

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

              

      

      

      
        	
                (viii)  

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

              

      

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

      
        	
                3.3  

              	
                References.  Each
      reference in the Loan Agreement to “this Agreement”, “hereunder”,
      “hereof”, “herein” or words of like import, and each reference to the
      “Loan Agreement” in any of the other Finance Documents, shall mean and
      refer to the Loan Agreement as amended
hereby.

              

      

      

      
        	
                3.4  

              	
                Effect of
      amendments.  Subject to the terms of this Agreement, with
      effect on and from the Effective Date, the Loan Agreement shall be, and
      shall be deemed by this Agreement to have been, amended upon the terms and
      conditions stated herein and, as so amended, the Loan Agreement shall
      continue to be binding on each of the parties to it in accordance with its
      terms as so amended.  In addition, each of the Finance Documents
      shall be, and shall be deemed by this Agreement to have been, amended as
      follows:

              

      

      

      
        	
                (a)

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

              

      

       

      
        	
                (b)

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

              

      

      

      
        	
                3.5  

              	
                Finance Documents to remain in
      full force and effect.  Except as amended hereby, all
      terms and conditions of each of the Finance Documents shall remain in full
      force and effect and are hereby ratified and confirmed in all
      respects.  Without limiting the foregoing, the Guarantor
      acknowledges and agrees that the Guaranty remains in full force and
      effect.

              

      

      

      
        	
                3.6  

              	
                No other
      amendments.  Except as amended hereby, all other terms
      and conditions of the Loan Agreement remain unchanged and the Loan
      Agreement is hereby ratified and
confirmed.

              

      

      

      
        	
                4  

              	
                CONDITIONS
      PRECEDENT

              

      

       

      
        	
                4.1  

              	
                Conditions
      precedent.  The conditions precedent are
      that:

              

      

       

      (a)           The
Facility Agent shall have received:

       

      
        	
                (i)  

              	
                an
      original of this Agreement, duly executed by the parties
      hereto;

              

      

       

      
        	
                (ii)  

              	
                a
      copy of any amendment to the Bank of America Credit Facility duly executed
      by the parties thereto, certified as of a date reasonably near the date of
      this Agreement by the president or the secretary (or equivalent officer)
      of the Guarantor as being a true and correct copy
  thereof;

              

      

       

      
        	
                (iii)  

              	
                copies
      of the constitutional documents, and each amendment thereto, of each
      Obligor, certified as of a date reasonably near the date of this Agreement
      by the president or the secretary (or equivalent officer) of such party as
      being a true and correct copy
thereof;

              

      

       

      
        	
                (iv)  

              	
                copies
      of certificates dated as of a date reasonably near the date of this
      Agreement, certifying that each Obligor is duly incorporated (or formed)
      and in goodstanding under the laws of such party’s jurisdiction of
      incorporation (or formation) and, in respect of each Borrower, that such
      Borrower is duly qualified and in goodstanding as a foreign maritime
      entity under the law of the Republic of
Liberia;

              

      

       

      
        	
                (v)  

              	
                copies
      of resolutions of the directors (or equivalent governing body) (and where
      required, the shareholders or equivalent equity holders) of each Obligor
      authorizing the execution of each of this Agreement and any documents to
      be executed pursuant to this Agreement to which such Obligor is or is to
      be a party and authorizing named officers or attorneys-in-fact to execute
      such documents, certified as of a date reasonably near the date of this
      Agreement by the president or the secretary (or equivalent officer) of
      such party as being a true and correct copy
  thereof;

              

      

       

      
        	
                (vi)  

              	
                the
      original of any power of attorney under which this Agreement and any
      documents to be executed pursuant to this Agreement is to be executed on
      behalf of an Obligor;

              

      

       

      
        	
                (vii)  

              	
                copies
      of all consents which any of the Obligors requires to enter into, or make
      any payment or perform any of its obligations under or in connection with
      the transactions contemplated by this Agreement, each certified as of a
      date reasonably near the date of the relevant Drawdown Notice by the
      president or the secretary (or equivalent officer) of such party as being
      a true and correct copy thereof, or
      certification by such president or secretary (or equivalent officer) that
      no such consents are required;

              

      

       

      
        	
                (viii)  

              	
                a
      certificate of each Obligor, signed on behalf of such party by the
      president or the secretary (or equivalent officer) of the Guarantor, dated
      as of a date reasonably near the date of this Agreement, certifying as
      to:

              

      

       

      
        	
                1.  

              	
                the
      absence of any proceeding for the dissolution or liquidation of such
      party;

              

      

       

      
        	
                2.  

              	
                the
      veracity in all material respects of the representations and warranties
      contained in the Loan Agreement as though made on and as of the date of
      this Agreement;

              

      

       

      
        	
                3.  

              	
                the
      absence of any material misstatement of fact in any information provided
      by the Borrowers to the Facility Agent or the Lender or the Swap Banks
      since the date of the Loan Agreement and that such information did not
      omit to state any material fact necessary to make the statements therein,
      in the light of the circumstances under which they were made, not
      misleading; and

              

      

       

      
        	
                4.  

              	
                the
      absence of any event occurring and continuing, or resulting from this
      Agreement, that constitutes a Potential Event of Default or an Event of
      Default.

              

      

       

      
        	
                (ix)  

              	
                a
      duly executed original of an addendum to the Mortgage in respect of each
      of the Liberian registered APACHE MAIDEN, Official Number 12146, CHEROKEE
      PRINCESS, Official Number 12145, INCA MAIDEN, Official Number 12149,
      KICKAPOO BELLE, Official Number 12147, KIOWA PRINCESS, Official Number
      12150, NAVAJO PRINCESS, Official Number 12148, and SENECA MAIDEN, Official
      Number 12151, each such addendum to be in form and substance satisfactory
      to the Facility Agent;

              

      

       

      
        	
                (x)  

              	
                documentary
      evidence that the relevant Mortgage addendum has been duly recorded
      according to the laws of the Republic of Liberia and, if required by
      Philippine law, that a cautionary notice with respect to such Mortgage
      addendum has been filed in the Philippine Bareboat
    Registry;

              

      

       

      
        	
                (xi)  

              	
                a
      favorable opinion of Cardillo & Corbett, New York, Liberian and
      Marshall Islands counsel to the Borrowers, in form, scope and substance
      satisfactory to the Credit Parties;

              

      

       

      
        	
                (xii)  

              	
                a
      favorable opinion of Conyers Dill & Pearman, Bermuda counsel to the
      Guarantor, in form, scope and substance satisfactory to the Credit
      Parties; and

              

      

       

      
        	
                (xiii)  

              	
                if
      a cautionary notice with respect to each Mortgage addendum must be filed
      in the Philippine Bareboat Registry, a favorable opinion of Sycip,
      Salazar, Hernandez & Gatmaitman, Philippine counsel to the Credit
      Parties, in form, scope and substance satisfactory to the Credit
      Parties;

              

      

       

      
        	
                (b)  

              	
                No
      Event of Default or Potential Event of Default shall have occurred and be
      continuing and there shall have been no material adverse change in the
      financial condition, operations or business prospects of the Obligors
      since the date of the Loan Agreement;
and

              

      

      

      
        	
                (c)  

              	
                On
      or before the Effective Date, the Obligors shall have paid to the Facility
      Agent an amendment fee of
$179,320.00.

              

      

      

      
        	
                4.2

              	
                Waiver.  The
      Facility Agent, with the consent of the Lender and the Swap Banks, may
      waive one or more of the conditions referred to in Clause 4.1 provided that the
      Obligors deliver to the Facility Agent a written undertaking to satisfy
      such conditions within ten (10) Business Days after the Facility Agent
      grants such waiver (or such longer period as the Facility Agent may
      specify).

              

      

      

      
        	
                5  

              	
                MISCELLANEOUS

              

      

       

      
        	
                5.1  

              	
                Governing
      Law.  This Agreement and the rights and obligations of
      the parties hereunder shall be governed by, and construed in accordance
      with, the laws of the State of New
York.

              

      

       

      
        	
                5.2  

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

              

      

       

      
        	
                5.3  

              	
                Severability.  Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent
      of such prohibition or unenforceability without invalidating or affecting
      the validity or enforceability of such provision in any other
      jurisdiction.

              

      

       

      
        	
                5.4  

              	
                Payment of
      Expenses.  The Obligors agree to pay or reimburse each of
      the Credit Parties for all reasonable expenses in connection with the
      preparation, execution and carrying out of this Agreement and any other
      document in connection herewith or therewith, including but not limited
      to, reasonable fees and expenses of any counsel whom the Credit Parties
      may deem necessary or appropriate to retain, any duties, registration fees
      and other charges and all other reasonable out-of-pocket expenses incurred
      by any of the Credit Parties in connection with the
    foregoing.

              

      

       

      

      [SIGNATURE
PAGES FOLLOW]

      
        
           

        

        
           

          
            

          

        

        
           

        

      

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

      

      
        	
                BEDFORD
      MARITIME CORP., as Borrower

                 

                 

                 

                By:     /s/Tara DeMakes

                Tara DeMakes

                Attorney-in-Fact

                 

              	
                DVB
      GROUP MERCHANT BANK (ASIA) LTD., as Lender

                 

                 

                By:
      /s/ Martijn van
      Tuyl

                    Martijn
      van Tuyl

                    Attorney-in-Fact

                 

              
	
                BRIGHTON
      MARITIME CORP., as Borrower

                 

                 

                 

                By:      /s/Tara DeMakes

                Tara DeMakes

                Attorney-in-Fact

              	
                DVB
      GROUP MERCHANT BANK (ASIA) LTD., as Facility Agent and Security
      Trustee

                 

                 

                By:   /s/
      Martijn van Tuyl 

                Martijn van Tuyl

                Attorney-in-Fact

                 

              
	
                HARI
      MARITIME CORP., as Borrower

                 

                 

                By:   /s/Tara DeMakes    

                Tara DeMakes

                Attorney-in-Fact

                 

                PROSPECT
      NAVIGATION CORP., as Borrower

                 

                 

                By:   /s/Tara DeMakes

                Tara DeMakes

                Attorney-in-Fact

                 

              	
                THE
      GOVERNOR AND COMPANY OF THE BANK OF IRELAND, as Swap Bank

                 

                 

                By:     /s/ Paul
      Packard       

                Paul Packard

                Head of Maritime
      Industries

                 

                 

                By:
      /s/ Kimberly
      Jones

                    Kimberly
Jones

                Manager

                 

              
	
                HANCOCK
      NAVIGATION CORP., as Borrower

                 

                 

                By:   /s/Tara DeMakes

                Tara DeMakes

                Attorney-in-Fact

                 

                COLUMBUS
      MARITIME CORP., as Borrower

                 

                 

                By:   /s/Tara DeMakes

                Tara DeMakes

                Attorney-in-Fact

                 

                 

              	
                NATIXIS,
      as Swap Bank

                 

                 

                By: 
      /s/ Michel
      Degermann

                Michel Degermann

                Authorized Signatory

                 

                 

                By: 
      /s/ Franck
      Chambras

                Franck Chambras

                Authorized Signatory

                 

              
	
                WHITEHALL
      MARINE TRANSPORT CORP.,

                as
      Borrower

                 

                 

                By:   /s/Tara DeMakes

                Tara DeMakes

                Attorney-in-Fact

                 

              	
                DVB
      BANK SE, as Swap Bank

                 

                 

                 

                By:
      /s/ Daniel C.
      Rodgers

                Daniel C. Rodgers

                Attorney-in-Fact

                 

              
	
                TBS
      INTERNATIONAL LIMITED, as Guarantor

                 

                 

                By:    /s/Tara DeMakes

                Tara DeMakes

                Attorney-in-Fact:

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