SECOND AMENDMENT TO LOAN AGREEMENT by and among AMOROS MARITIME CORP., LANCASTER MARITIME CORP. AND CHATHAM MARITIME CORP., as Borrowers, SHERWOOD SHIPPING CORP. TBS INTERNATIONAL LIMITED TBS HOLDINGS LIMITED as Guarantors, and AIG COMMERCIAL...
TBS
INTERNATIONAL PLC & SUBSIDIARIES EXHIBIT
10.19
SECOND
AMENDMENT TO LOAN AGREEMENT
by
and among
AMOROS
MARITIME CORP.,
LANCASTER
MARITIME CORP.
AND
CHATHAM
MARITIME CORP.,
as
Borrowers,
SHERWOOD
SHIPPING CORP.
TBS
INTERNATIONAL LIMITED
TBS
HOLDINGS LIMITED
as
Guarantors, and
AIG
COMMERCIAL EQUIPMENT FINANCE, INC.,
as
Lender
December
30, 2009
SECOND AMENDMENT TO LOAN
AGREEMENT
THIS SECOND AMENDMENT TO LOAN
AGREEMENT (this “Second Amendment”) is made and entered into this ___ day
of December, 2009, by and among Amoros Maritime Corp., Lancaster Maritime Corp.
and Chatham Maritime Corp., each a Xxxxxxxx Islands corporation having a mailing
address of X.X. Xxx XX 0000, Xxxxxxxx XXXX, Xxxxxxx and a registered address of
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Islands
MH96960 (the “Borrowers”; each, a “Borrower”), TBS International Limited, a
Bermuda corporation whose tax domicile is in Ireland (“TBSIL Guarantor”),
Sherwood Shipping Corp. (“Sherwood”), TBS Holdings Limited, a Bermuda company
(“Bermuda Holdco”) and AIG Commercial Equipment Finance, Inc., a Delaware
corporation (together with its successors and assigns, “Lender”). Unless
specifically defined in this Second Amendment, capitalized terms not used in
this Second Amendment shall have the meanings assigned in the Original Loan
Agreement, as amended.
WHEREAS, Borrowers, TBSIL
Guarantor and Lender are parties to that certain Loan Agreement dated February
29, 2008 (the “Original Loan Agreement,” as amended by the First Amendment (as
defined below), this Second Amendment and any future amendments, the “Loan
Agreement”); and
WHEREAS, Borrowers delivered
the Notes to evidence their Loan under the Loan Agreement, including that
certain US$13,000,000 Promissory Note by Lancaster Maritime Corp., that certain
US$9,000,000 Promissory Note by Amoros Maritime Corp., and that certain
$13,000,000.00 Promissory Note by Chatham Maritime Crop., each payable to the
order of Lender and dated February 29, 2008 (the “Original Notes”);
and
WHEREAS, the Original Loan
Agreement was amended by that certain First Amendment to Loan Agreement dated as
of March 27, 2009 (the “First Amendment”). In connection with the
First Amendment, each of the Original Notes was amended by an Addendum dated as
of March 27, 2009; and
WHEREAS, TBSIL Guarantor is in
the process of reorganizing to become a corporation whose tax domicile is in
Ireland, and is the sole owner of Bermuda Holdco, which is the sole owner of
Xxxxxxxxx Holdings Ltd. By the Reorganization Date, TBSIL Guarantor
will become solely owned by TBS International Public Limited Company, an Irish
public limited company (“Parent Guarantor”). As a consequence of such
pending changes in capacity and ownership, TBSIL Guarantor should no longer be
referenced under the defined term “Parent Guarantor”, which should be the entity
possessing ultimate ownership and which is the public reporting
entity. Accordingly, effective as of the Reorganization Date (as
hereinafter defined) references to “Parent Guarantor” under the Loan Agreement
should be to the Parent Guarantor under this Second Amendment, with the
exceptions noted below; and
WHEREAS, the parties wish to
further amend the Loan Agreement and Notes in various respects, including (i) a
modification of the Interest Rate to change the floor or minimum rate from 7.0%
to 10.00% (ii) a change in the Margin from 3.50% to 5.00%,; (iii) a
modification of the applicable Prepayment Fees to (x) three percent (3.0%) for
any prepayments occurring on or prior to May 15, 2010, (y) two percent (2.0%)
for any prepayment occurring after May 15, 2010 but on or prior to May 15, 2011,
and (z) one percent (1.0%) for any prepayments occurring after May 15, 2011 (iv)
a modification of the Minimum Cash Liquidity covenant in Section 6.10 (b) for
the period from November 30, 2009 through April 2, 2010, among other matters
more fully addressed below.
NOW, THEREFORE, in
consideration of the foregoing and other good and valuable consideration, the
receipt of which is hereby acknowledged, Borrowers and Lender hereby agree as
follows:
1. The
following definitions in the Original Loan Agreement, as previously amended by
the First Amendment, are amended and restated, effective as of the date of this
Second Amendment.
“Interest Rate” means, for
each Loan, a rate over each Adjustment Period equal to the greater of (a) ten
percent (10.00%) per annum, or (b) LIBOR Rate PLUS the Margin per annum,
adjusted for each Adjustment Period effective as of the first day of each
Adjustment Period. The Interest Rate is subject to the default rate
of interest now or hereafter set forth in each Note, which default rate shall be
equal to the lesser of (i) the Interest Rate plus 2.0%, or (ii) the maximum rate
of interest permitted by Applicable Law. At no time will the
Interest Rate ever be less than ten percent (10.00%) per annum.
As a
result of such change, the floor or minimum Interest Rate will be 10.00% per
annum, effective as of the date of this Second Amendment.
“Margin” means five percent
(5.00%), unless the sum of the Margin and the LIBOR Rate on the first day of an
Adjustment Period is less than ten percent per annum, in which case the Margin
shall equal the difference between ten percent per annum and the LIBOR Rate in
effect on such date, resulting in an Interest Rate of at least ten percent per
annum at all times during the term of this Agreement.
The following new definition is added
to the Loan Agreement:
“Reorganization Date” means
the date on which all of the following have been accomplished: (i) the change of
the tax domicile of TBSIL Guarantor to Ireland, (2) the capitalization of Parent
Guarantor, and the transfers of stock ownership among the various holding
companies as provided in the revised restatements to Section 4.16 and Section 5.
10 of the Loan Agreement under Paragraph 3 below.
2. Section
2.03 of the Original Loan Agreement, as previously amended by the First
Amendment, is amended and restated to read as follows:
Section 2.03. The
Notes. Each Loan and
each Borrower’s obligation to repay its Loan shall be evidenced by and repayable
with interest in accordance with the terms of such Borrower’s Note in the form
attached to the Original Loan Agreement as Schedule 2.03, as amended by an
addendum (the “First Addendum”) in the form attached to the First Amendment to
Loan Agreement dated as of March 27, 2009, which Note and First Addendum have
been further revised by a second addendum (the “Second Addendum”) in the form
attached to the Second Amendment to Loan Agreement dated December __, 2009 as
Schedule 2.03A2. Principal and interest payable under each Note shall
be repaid in accordance with the repayment terms set forth in the Note, as
amended by the applicable First Addendum, as such Note and First Addendum are
further amended by the applicable Second Addendum. Each Note provides
for a default rate of interest.
3. Section
4.16 of the Original Loan Agreement and Section 5.10 of the Original Loan
Agreement, as previously amended by the First Amendment, are further amended and
restated as follows:
Section 4.16. Ownership
of Borrower and Xxxxxxxxx Holdings Ltd. Each Borrower is
a wholly owned subsidiary of Xxxxxxxxx Holdings Ltd., a Xxxxxxxx Islands
corporation. Xxxxxxxxx Holdings Ltd is a wholly owned subsidiary of
TBS Holdings Limited (“Bermuda Holdco”).
Section 5.10. Ownership
of Borrower, Sherwood and Parent Guarantor. Effective as of
the Reorganization Date, Parent Guarantor shall own 100% of all the issued and
outstanding shares of TBS International Limited (“TBSIL Guarantor”). TBSIL
Guarantor owns 100% of all the issued and outstanding shares of Bermuda
Holdco. Bermuda Holdco owns 100% of all of the issued and outstanding
shares of Xxxxxxxxx Holdings Ltd. (“Xxxxxxxxx”). Xxxxxxxxx owns 100%
of all of the issued and outstanding shares of Sherwood Shipping Corp.
(“Sherwood”) and each Borrower. There shall be no sale, transfer,
pledge, donation, hypothecation, alienation or other encumbrance of any of the
outstanding shares of any Borrower or Sherwood.
4. Section
5.12 of the Original Loan Agreement, as previously amended by the First
Amendment, is further amended and restated as follows:
Section
5.12 Valuation. Commencing with
the 2009 fiscal year, Borrowers will deliver to Lender as soon as available, but
in any event within 30 days after the end of each fiscal year (or, in the case
of the fiscal year ending December 31, 2009, by April 2, 2010) a certificate
executed by an Officer setting forth the Fair Market Value of the Vessels as of
such fiscal year end and attaching the most recent Valuation of the Vessels as
of such date.
If for
any reason at any time the Total Outstanding shall exceed the Loan Value, the
Borrowers shall immediately prepay the Loans in an aggregate amount equal to
such excess; provided that, the Borrowers shall not be required to make such
prepayment of the Loans so long as (A) no Default or Event of Default shall have
occurred or then be continuing and (B) within 10 days of any such event (or, in
the case of any Disposition of a Vessel, prior to any such Disposition), (x) the
Borrowers pledge additional vessels for inclusion in the Vessels (to be accepted
by Lender in its sole discretion) having an appraised Fair Market Value
sufficient to eliminate such deficiency or (y) the Borrowers cause another
Subsidiary of Parent Guarantor (which may be an Excluded Subsidiary) to join
this agreement and such Person pledges additional vessels having an appraised
Fair Market Value sufficient to eliminate such deficiency, in each case, such
pledge to be in a manner and pursuant to documentation satisfactory in all
respects to the Lender, and to include a Valuation of such additional vessels
and documentation and information acceptable to Lender.
5. Section
6.10 (b) of the Original Loan Agreement, as previously amended by the First
Amendment, is further amended and restated to read as follows:
Section
6.10 Financial
Covenants. Borrowers
covenant and agree that for the term of this Agreement that Parent Guarantor and
its consolidated Affiliates and Subsidiaries shall not violate, on a
consolidated basis, the following financial covenants:
|
1.
|
* * *
(b) Minimum Cash
Liquidity. Qualified Cash, plus Availability in
an average daily amount during such calendar month shall not be less than (a)
for the calendar months during 2008, $15,000,000.00, (b) for the months of
January 2009 through October 2009, $40,000,000.00, (c) for the period from
November 1, 2009 through April 2, 2010, $25,000,000.00, and (d) commencing on
April 3, 2010 through April 30, 2010, and for each calendar month ending on or
after May 31, 2010, $15,000,000.00.
* *
*
6. The
agreement of Lender to enter into this Second Amendment is subject to the
condition precedent that Lender shall have received all of the following, in
form and substance acceptable to Lender in its sole discretion:
(a)
executed Second Addenda to the Notes, and the Unsecured Guaranties of Bermuda
Holdco covering the Obligations;
(b)
opinions of counsel of Borrowers, TBSIL Guarantor and Bermuda Holdco with
respect to this Second Amendment and the Unsecured Guaranties of Parent
Guarantor and Bermuda Holdco;
(c)
copies of the Articles of Incorporation and Bylaws or other organizational
documents for each of TBSIL Guarantor and Bermuda Holdco, certified by an
authorized officer of such entity as being true and correct copies
thereof;
(d)
signed copies of a certificate of an authorized officer of Borrowers, TBSIL
Guarantor and Bermuda Holdco which shall certify the names of the officers of
such entities authorized to execute and deliver this Second Amendment and the
other Loan Documents to which such entities are a party, and other documents or
certificates to be delivered pursuant to this Second Amendment or the related
Security Documents, together with the true signatures of such
officers;
(e)
copies of the appropriate resolutions and consents of Borrowers, TBSIL Guarantor
and Bermuda Holdco approving the Second Amendment and related Loan Documents,
certified by the Secretary (or other appropriate official) of such party as
being a true and correct copy thereof;
(g) a
good standing certificate with respect to Bermuda Holdco, issued as of a recent
date by the Secretary of State or other appropriate and authorized official
of Bermuda Holdco’s respective jurisdiction of
incorporation;
(h) such
other documents, certifications and acknowledgments respecting the Loan
Documents or the Security Documents as Lender shall reasonably
request;
(i) the
continuing compliance by Borrowers and Guarantors of their obligations under the
Loan Agreement as modified by the First Amendment and as both the Original Loan
Agreement and First Amendment have been modified by this Second
Amendment;
(j)
evidence satisfactory to Lender that no Loan Party is in default under the Loan
or any other indenture or loan or credit agreement or any other agreement, lease
or instrument to which it is a party or by which it or its properties may be
bound or affected; or, if such default exists, that it has been waived by the
applicable creditor; and
(k)
Lender’s receipt of all fees and costs of Lender in connection with this Second
Amendment and the transactions contemplated hereby.
In
addition, on or before the Reorganization Date, Lender shall receive the
following documents with respect to TBS International Public Limited
Company:
(l) the
Unsecured Guaranties of such entity with respect to each Borrower, as well as
such entity’s intervention to this Second Amendment, in which it agrees to be
bound hereunder, in substantially the form of Intervention attached hereto (the
“Intervention”);
(m)
signed copies of a certificates of an authorized officer of such entity which
shall certify the names of the officers of such entities authorized to execute
and deliver the Intervention and the other Loan Documents to which such entity
is a party, and other documents or certificates to be delivered pursuant to this
Second Amendment or the related Loan Documents, together with the true
signatures of such officers;
(n)
copies of the Articles of Incorporation and Bylaws or other organizational
documents for Parent Guarantor, certified by an authorized officer of such
entity as being true and correct copies thereof;
(o) opinions
of counsel of such entity with respect to its Unsecured Guaranties and the
Intervention; and
(p) a
good standing certificate with respect to such entity, issued as of a recent
date by the Secretary of State or other appropriate and authorized official of
its jurisdiction of incorporation.
Lender’s
waiver of any condition with respect to this Second Amendment for a particular
Borrower shall not be deemed absent express written agreement to constitute a
waiver of such condition as it may apply to any other Borrower.
7. All
references in the Original Loan Agreement and other Loan Documents to
“Guarantor” and “Loan Parties” shall include, without limitation, Bermuda
Holdco, and effective as of the Reorganization Date, Parent
Guarantor. Bermuda Holdco shall observe all of the obligations
imposed on each Guarantor under the Loan Document. Effective as of the
Reorganization Date, with the exception of the references contained in the
definition of “B of A Credit Agreement” and “Availability”, all references to
“Parent Guarantor” in the Loan Agreement and all other Loan Documents shall be
to the new Parent Guarantor, the ultimate parent holding company and public
reporting entity, TBS International Public Limited Company. The
reference to “Parent Guarantor” in the definitions of “B of A Credit Agreement”
and “Availability” is hereby changed to TBSIL Guarantor. Until the
Reorganization Date, all other references in the Loan Agreement and other Loan
Documents to “Parent Guarantor” shall be to TBSIL Guarantor. TBSIL
Guarantor confirms and acknowledges that its Unsecured Guaranties dated February
29, 2008 remain the valid and binding obligations of TBSIL Guarantor and in full
force and effect.
8. Borrowers
agree to pay all costs and expenses in connection with the execution and
recordation of this Second Amendment and all other Loan Documents executed in
connection herewith. In addition, Borrowers shall reimburse Lender
for all costs incurred by Lender in connection with this Second Amendment and
the transactions contemplated hereby, including without limitation, the costs of
Lender’s counsel, and the costs of Panamanian and other foreign
counsel. Nothing herein shall be deemed to waive or limit Borrowers’
obligation to reimburse and indemnify Lender as provided in Section 8.05 of the
Original Loan Agreement. Borrowers agree to pay Lender a modification
fee of $83,125.00 in connection with this Second Amendment within thirty (30)
days of receipt of Lender’s invoice, which shall be fully earned and
non-refundable.
9. This
Second Amendment may be executed separately by the Loan Parties and Lender in
any number of counterparts, each of which, when so executed and delivered, shall
be deemed to be an original and all of which, taken together, shall constitute
but one and the same instrument.
10. THE
VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS SECOND AMENDMENT AND THE LOAN
DOCUMENTS EXECUTED IN CONNECTION THEREWITH SHALL IN ALL RESPECTS BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
11. Borrowers,
TBSIL Guarantor, Sherwood and Bermuda Holdco, by executing this Second
Amendment, hereby confirm and acknowledgment that the amounts owed by them under
the Loan Agreement are free and clear of any deductions, offsets, counterclaims
or other reductions. Borrowers, TBSIL Guarantor, Sherwood and Bermuda
Holdco further acknowledge that Lender has fully complied with all of its
obligations under the Loan Agreement and the Loan Documents, and hereby waive,
release and discharge Lender from and against any claim, right, demand or cause
of action arising on or before the date of this Second Amendment out of any act
or failure to act by Lender or any breach by Lender of any obligation under or
in connection with the Loan Agreement or the Loan Documents, whether arising
under theories of contract, tort, lender liability or otherwise.
{signature page
follows}
BORROWERS:
AMOROS
MARITIME CORP.
/s/ Christophil X.
Xxxxxx
By: Christophil
X. Xxxxxx
Title: Attorney
in Fact
LANCASTER
MARITIME CORP.
/s/ Christophil X.
Xxxxxx
By: Christophil
X. Xxxxxx
Title: Attorney
in Fact
CHATHAM
MARITIME CORP.
/s/ Christophil X.
Xxxxxx
By: Christophil
X. Xxxxxx
Title: Attorney
in Fact
GUARANTORS:
TBSIL
GUARANTOR:
TBS
INTERNATIONAL LIMITED
/s/ Christophil X.
Xxxxxx
By: Christophil
X. Xxxxxx
Title: Attorney
in Fact
[SIGNATURES
CONTINUED ON NEXT PAGE]
BERMUDA
HOLDCO:
TBS
HOLDINGS LIMITED, a Bermuda company
/s/ Christophil X.
Xxxxxx
By: Christophil
X. Xxxxxx
Title: Attorney
in Fact
SHERWOOD:
SHERWOOD
SHIPPING CORP.
/s/ Christophil X.
Xxxxxx
By: Christophil
X. Xxxxxx
Title: Attorney
in Fact
LENDER:
AIG
COMMERCIAL EQUIPMENT FINANCE, INC.
By:
/s/ Xxx
Xxxxxx
Name: Xxx
Xxxxxx
Title: Vice
President
Form of
Intervention
INTERVENTION
AND NOW, INTO THE PRESENTS OF THAT
CERTAIN SECONDAMENDMENT TO LOAN AGREEMENT DATED AS OF DECEMBER __, 2009 (“THE
SECOND AMENDMENT”) by and among Amoros Maritime Corp., Lancaster Maritime Corp.
and Chatham Maritime Corp., each a Xxxxxxxx Islands corporation having a mailing
address of X.X. Xxx XX 0000, Xxxxxxxx XXXX, Xxxxxxx and a registered address of
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Islands
MH96960 (the “Borrowers”; each, a “Borrower”), TBS International Limited, a
Bermuda corporation whose tax domicile is in Ireland (“TBSIL Guarantor”),
Sherwood Shipping Corp. (“Sherwood”), TBS Holdings Limited, a Bermuda company
(“Bermuda Holdco”) and AIG Commercial Equipment Finance, Inc., a Delaware
corporation (together with its successors and assigns, “Lender”),
COMES AND INTERVENES TBS
INTERNATIONAL PUBLIC LIMITED COMPANY, an Irish public limited company (“Parent
Guarantor”), who agrees to become bound under the Second Amendment, the Loan
Agreement and all other Loan Documents as a “Guarantor” under such documents,
and in connection therewith, has executed its Unsecured Guaranties with respect
to the Obligations of the Borrowers. Parent Guarantor
represents that the “Reorganization Date” under the Second Amendment shall be
deemed to have occurred, effective as of the date of this
Intervention. Following the date of this Intervention, all
references in the Loan Documents to “Guarantor” and “Loan Party” shall include,
without limitation, Parent Guarantor.
Date: January
___, 2010.
PARENT
GUARANTOR:
PRESENT
WHEN THE COMMON SEAL OF
TBS
INTERNATIONAL PUBLIC LIMITED COMPANY,
an
Irish public limited company, was affixed hereto
_____________________________
By: Christophil
X. Xxxxxx
Title: Attorney
in Fact
LENDER:
AIG
COMMERCIAL EQUIPMENT FINANCE, INC.
By:
__________________________
Name: Xxx
Xxxxxx
Title: Vice
President
SCHEDULE
2.03A2
Form
of Second Addendum
SECOND
ADDENDUM TO PROMISSORY NOTE
This
Second Addendum to Promissory Note is made as of December __, 2009 with respect
to the Promissory Note dated February 29, 2008 by
[ ] CORP. in the original stated
principal amount of $[ ] (the “Note”) to the order of AIG
COMMERCIAL EQUIPMENT FINANCE, INC.
The last two sentences of the first
paragraph on Page 1 of the Note, commencing “The Interest Rate shall be…” and
“Beginning on the first day..,” respectively, are deleted, and the following
sentences are inserted in replacement thereof:
“The
Interest Rate shall be equal to the greater of (a) ten percent per annum or (b)
LIBOR Rate (as defined in the Loan Agreement) plus 5.0%. Payee shall
have the right to prospectively increase the interest rate hereunder following
an Event of Default to the Default Rate, as provided below. Beginning
on the first day of the Adjustment Period (as defined in the Loan Agreement)
following the date hereof, the Interest Rate hereunder shall be adjusted each
Adjustment Period and such adjustment shall be effective throughout such
Adjustment Period.”
The final paragraph of the first page
of the Note, which is continued and completed on the second page of the Note, is
amended and restated to read as follows:
“In addition to the required payments
set forth above, the undersigned shall have the right to prepay this Note, in
whole or in part, at any time following the first anniversary date of this Note
on fifteen (15) days prior written notice to the Payee, provided,
that the amount of the prepayment is at least $500,000.00 and the prepayment is
made in multiples of $500,000.00, and further provided
that on the date of such prepayment, the undersigned shall pay the principal
amount of this Note being so prepaid (the “Prepayment Amount”),
together with all interest, fees and other amounts payable on the amount so
prepaid or in connection therewith to the date of such prepayment and, the
Prepayment Fee set forth below. If the undersigned prepays this Note
in full or in part, the undersigned shall pay, on the date of such prepayment, a
fee (the “Prepayment Fee”) to
the Payee in an amount equal to (a) 3% of the amount of the principal
prepayment, if prepayment is made before May 15, 2010; (b) 2% of the amount of
the principal prepayment, if prepayment is made on or after May 15, 2010 but
before May 15, 2011; or (c) 1% of the amount of the principal prepayment, if
prepayment is made on or after May 15, 2011, provided that the
Prepayment Fee shall be charged and paid only to the extent permitted by
Applicable Law. No prepayments will be permitted prior to the first
anniversary date of this Note. Any prepayment pursuant to this
paragraph shall be applied to the installments hereof in the inverse order of
maturity. In addition, at the time of any prepayment, the undersigned shall pay
to Payee such amount as will compensate Payee for any loss, cost, expense,
penalty, claim or liability incurred by Payee as a result of such prepayment
which requires the Payee to prematurely break any related swap, interest rate
hedge or other derivative arrangement. The Payee shall have no obligation
to purchase or enter into any swap or other derivative arrangement in connection
with funding or maintaining the loan evidenced by this Note.”
[ ] CORP.
By:
Name:
Title: Attorney
in Fact
ACCEPTED
BY LENDER:
AIG
COMMERCIAL EQUIPMENT FINANCE, INC.
By:
Name:
Title:
