TBS INTERNATIONAL LIMITED &
SUBSIDIARIES
EXHIBIT 10.4
Pursuant to 17 CFR 240.24b-2, confidential
information (indicated by [****]) has been omitted and has been
filed separately with the Securities and Exchange Commission
Pursuant to a Confidential Treatment Application filed with the
commission.
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
“ CreditAgreement ”), 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);
providedthat , 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; providedthat ,
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:
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Period of
Determination
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Minimum
Consolidated Interest Charges Coverage Ratio
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Two fiscal
quarters ending June 30, 2009
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1.10:1.00
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Three fiscal
quarters ending September 30, 2009
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1.35:1.00
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Four fiscal
quarters ending December 31, 2009
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1.75:1.00
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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.
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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
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Holdings:
TBS
INTERNATIONAL LIMITED
By: /s/ Tara
DeMakes
Name: Tara
DeMakes
Title:
Attorney-in-Fact
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The
Administrative Borrower:
TBS SHIPPING
SERVICES INC .
By: /s/ Tara
DeMakes
Name: Tara
DeMakes
Title:
Secretary
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The
Administrative Agent:
BANK OF
AMERICA, N.A.
By: /s/
Judith A. Huckins
Name: Judith A.
Huckins
Title: Vice
President
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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
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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
TD
BANKNORTH, N.A. , as
Documentation Agent and a Lender
Title: Senior
Vice President
KEYBANK
NATIONAL ASSOCIATION , as
a Lender
CAPITAL ONE
LEVERAGE FINANCE CORP. ,
as a Lender
GUARANTY
BANK , as a
Lender
MERRILL
LYNCH COMMERCIAL FINANCE CORP., as a Lender
By: /s/
Phillip J. Salter
WEBSTER BANK
NATIONAL ASSOCIATION , as
a Lender
By: /s/
Michael P. McGovern
Name: Michael
P. McGovern
COMERICA
BANK , as a
Lender
TRISTATE
CAPITAL BANK , as a
Lender
