TBS
INTERNATIONAL LIMITED & SUBSIDIARIES
EXHIBIT 10.4
SUPPLEMENTAL LETTER TO THE LOAN
AGREEMENT
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Claremont
Shipping Corp. ,
Yorkshire Shipping Corp.
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and TBS
International Limited
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TBS Shipping
Services Inc.
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612 East Grassy
Sprain Road
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Attn: Ferdinand V. Lepere
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24 March 2009
Loan
Agreement dated 7 December 2007 made between (i) Claremont Shipping
Corp. and Yorkshire Shipping Corp. as joint and several Borrowers
and (ii) Credit Suisse as Lender and Swap Bank relating to a term
loan facility of US$40,000,000 as supplemented by an amendment
letter dated 19 March 2008 (together the “Loan
Agreement”)
We refer to the
Loan Agreement. Words and expressions defined therein
shall have the same meaning when used herein except as expressly
provided in this supplemental letter.
We refer to
your request to make a voluntary prepayment under the Loan
Agreement in an amount of US$3,000,000 (plus any breakage accrued
interest and breakage costs applicable
thereto). Notwithstanding the terms of Clause 7.9 of the
Loan Agreement, we agree that such prepayment shall be applied in
order of maturity and pro rata against each Advance as
follows:
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in respect of
the Ship A Advance such prepayment shall be applied against the two
instalments each of US$750,000 due on 12 September 2009 and 12
December 2009; for the avoidance of doubt the repayment of
instalments for this Advance shall continue thereafter in the
manner described in the Loan Agreement and the next repayment of
US$437,000 shall be paid on 12 March 2010; and
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in respect of
Ship B Advance such prepayment shall applied against the two
instalments each of US$750,000 due on 19 August 2009 and 19
November 2009; for the avoidance of doubt the repayment of
instalments for this Advance shall continue thereafter in the
manner described in the Loan Agreement and the next repayment of
US$750,000 shall be paid on 19 February 2010.
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In addition we
refer to your request that we agree to waive your compliance with
certain financial covenants under the Loan Agreement for the period
commencing from the date of signing of this letter up to 1 January
2010 at 12:00a.m. Eastern time (the “ Waiver Period
”). We hereby give our consent to such request
subject to the following conditions:
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receipt by us
from the Borrowers of a (non-refundable) fee in an amount of
US$143,750 no later than 12 March 2009;
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receipt by us
of satisfactory evidence in such form as we may in our sole
discretion require that the lenders under the Bank of America
Facilities and the RBS Facilities have agreed to similar waivers;
and
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no Event of
Default or Potential Event of Default has occurred or is continuing
or would result from the waivers being made.
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Upon
satisfaction of such conditions, the following amendments to the
Loan Agreement temporarily apply for the duration of the Waiver
Period:
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Notwithstanding
the provisions of Clause 4.12 of the Loan Agreement, the applicable
rate of Margin shall be 2.75%.
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Any breach by
the Borrowers of the requirement set out at Clause 14.1 of the Loan
Agreement shall not be an Event of Default pursuant to Clause
18.1(b) of the Loan Agreement.
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Any breach of
the requirements of the financial covenants set out at paragraphs
(a) and (c) of Schedule 3 of the Loan Agreement shall not be an
Event of Default pursuant to Clause 18.1(c) of the Loan
Agreement.
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The following
amendments shall apply to the financial covenants set out at
Schedule 3 of the Loan Agreement:
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the Minimum
Cash Liquidity requirement for each calendar month shall be
increased from US$15,000,000 to US$40,000,000; and
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paragraph (d)
(Minimum Consolidated Fixed Charge Coverage Ratio) shall be amended
to read:
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“
Minimum Consolidated Interest Charge Coverage
Ratio Permit
