PRELIMINARY CLOSING FUNDS FLOW MEMORANDUM
DRAFT — FOR DISCUSSION PURPOSES ONLY — NOT FINALIZED
Date: July 6, 2023
Prepared by: Daniel Obi, Associate, Calderwood & Harkness LLP
Reviewed by: Sophie Tremblay, Senior Associate, Calderwood & Harkness LLP
Matter: Thalassa Shipping & Logistics SA — Senior Secured Revolving Credit Facility Refinancing
Matter Number: 1044-00002
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — ATTORNEY-CLIENT PRIVILEGE This memorandum is protected by the attorney-client privilege and the work product doctrine. It is intended solely for the use of the addressees and authorized recipients identified in Section XI hereof. Any unauthorized review, use, disclosure, or distribution of this memorandum is strictly prohibited. If you have received this memorandum in error, please notify Calderwood & Harkness LLP immediately and destroy all copies.
I. Introduction and Purpose
This memorandum sets forth the preliminary closing funds flow in connection with the proposed $150,000,000 senior secured revolving credit facility (the "Facility") among Thalassa Shipping & Logistics SA, a Société Anonyme organized under the laws of the Hellenic Republic ("Thalassa" or the "Borrower"), the Guarantors party thereto, Meridian Atlantic Bank, National Association, as Administrative Agent and Sole Lead Arranger ("Meridian Atlantic" or "MAB"), and the Lenders party thereto (collectively, the "Lenders").
The purpose of this memorandum is to illustrate the anticipated application of funds on the Closing Date (as defined in the Credit Agreement), including the initial borrowing under the Facility, the payoff and retirement of the existing revolving credit facility maintained with Harborstone National Bank ("Harborstone"), the payment of transaction fees due and payable on the Closing Date, and the reconciliation of net proceeds, if any, to the Borrower. This memorandum is intended to serve as a working document to facilitate coordination among the parties and their respective counsel in advance of the Closing Date.
This memorandum has been prepared by reference to the near-final draft of the Credit Agreement dated July 3, 2023 (the "Credit Agreement"), which remains subject to final negotiation, execution, and delivery. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement unless the context otherwise requires.
This memorandum is preliminary in all respects. All figures set forth herein are estimates as of the date hereof and are subject to final confirmation of, among other things, (i) the precise payoff amount under the Existing RCF (as defined below), including accrued and unpaid interest thereon, (ii) per diem interest accrual calculations to be provided by Harborstone in its payoff letter, (iii) wiring instructions from all relevant parties, and (iv) the final determination of the Closing Date. The amounts, calculations, and mechanics described herein will be updated and finalized prior to the Closing Date, and a revised version of this memorandum will be circulated once all open items have been resolved.
The anticipated Closing Date has not yet been finally determined. The original target was Q2/Q3 2023, and the parties are working toward a closing in mid-to-late July 2023, subject to the satisfaction or waiver of all conditions precedent set forth in Article IV of the Credit Agreement and the completion of all closing deliverables.
II. Transaction Summary
Set forth below is a summary of the principal terms of the transaction for reference purposes.
Facility: $150,000,000 senior secured revolving credit facility, as more fully described in the Credit Agreement.
Borrower: Thalassa Shipping & Logistics SA, a Société Anonyme organized under the laws of the Hellenic Republic, with its registered office at 14 Akti Miaouli, Piraeus 185 35, Greece.
Administrative Agent: Meridian Atlantic Bank, National Association, 600 Lexington Avenue, 38th Floor, New York, NY 10022.
Collateral Agent: Pinnacle Trust & Agency Services Inc., One Liberty Plaza, 44th Floor, New York, NY 10006.
Lender Commitments: The commitments of the Lenders under the Facility are as follows:
Purpose of Initial Borrowing: The proceeds of the initial borrowing under the Facility will be used to refinance the existing $125,000,000 revolving credit facility maintained with Harborstone National Bank (as described below) and to pay transaction fees and expenses incurred in connection with the Facility. The Facility also provides incremental borrowing capacity of $25,000,000 over the existing facility size, which will be available for general corporate purposes and working capital needs of the Borrower and its Restricted Subsidiaries. The initial draw on the Closing Date is expected to be $125,000,000, which is the amount necessary to fund the Harborstone payoff and the transaction fees described in Section IV.B below.
Existing Facility Being Refinanced: The Borrower is currently party to that certain Credit Agreement dated as of November 15, 2018, as amended by the First Amendment to Credit Agreement dated as of June 30, 2020 and the Second Amendment to Credit Agreement dated as of March 1, 2022, in each case among Thalassa as Borrower and Harborstone National Bank as Administrative Agent and Sole Lender (as so amended, the "Existing RCF"). The Existing RCF provides for a revolving credit facility in an aggregate principal amount of $125,000,000. The stated maturity date of the Existing RCF is November 15, 2023. As of the date hereof, the outstanding principal balance under the Existing RCF is approximately $124,375,000, with accrued and unpaid interest estimated at approximately $312,500 (subject to adjustment to the actual Closing Date). The Existing RCF is secured by first-priority liens on substantially all of the assets of the Borrower and the Guarantors, including vessel mortgages, assignments of earnings and insurances, and pledges of equity interests in vessel-owning subsidiaries. Upon payoff of the Existing RCF, Harborstone will be required to deliver all lien releases, UCC-3 termination statements, mortgage discharges, and other release documentation as contemplated by the payoff letter.
Governing Law: The Credit Agreement and the other Loan Documents (other than certain collateral documents governed by local law) are governed by and construed in accordance with the laws of the State of New York.
III. Sources of Funds
A. Initial Borrowing Under the New Facility
On the Closing Date, the Borrower intends to make an initial revolving credit borrowing under the Facility in the aggregate principal amount of $125,000,000.00. Such borrowing will be made pursuant to Section 2.03 of the Credit Agreement upon the Borrower's delivery of a duly completed Borrowing Request (in the form attached to the Credit Agreement as Exhibit A) to the Administrative Agent, specifying the requested borrowing date, the aggregate principal amount of the requested borrowing, the Type of Loan (SOFR Loan), and the initial Interest Period applicable thereto.
The interest rate applicable to the initial borrowing will be Term SOFR for the applicable Interest Period plus the Applicable Margin, which ranges from 225 basis points to 325 basis points per annum based on the Borrower's Consolidated Net Leverage Ratio as set forth in the pricing grid in the Credit Agreement. The exact interest rate will be determined based on the Term SOFR rate in effect on the borrowing date and the initial leverage calculation as certified by the Borrower in the Closing Date compliance certificate. Based on current indicative SOFR rates and the anticipated initial leverage ratio, the all-in rate is expected to be in the range of approximately 7.50% to 8.50% per annum, although the actual rate will be confirmed on or immediately prior to the Closing Date.
The initial borrowing of $125,000,000 represents approximately 83.3% of total Facility commitments of $150,000,000. Following the initial borrowing and assuming no repayments or additional borrowings, the remaining $25,000,000 of Facility availability will remain undrawn and available for future revolving credit borrowings, the issuance of letters of credit (subject to the letter of credit sublimit of $20,000,000), and swingline loans (subject to the swingline sublimit of $15,000,000), in each case subject to the terms and conditions of the Credit Agreement.
B. Borrower's Own Funds
In addition to the proceeds of the initial borrowing, Thalassa will contribute $512,500.00 from its own cash on hand to fund the shortfall between the initial borrowing amount and the aggregate uses of funds described in Section IV below. The source of such contribution will be unrestricted cash held in Thalassa's operating accounts. The Borrower's own funds contribution is required because the initial borrowing of $125,000,000, while sufficient to pay the Harborstone payoff amount, is not sufficient to also cover the transaction fees payable on the Closing Date when combined with the full payoff amount. See Section V below for a detailed reconciliation and discussion of alternative approaches to addressing this shortfall.
C. Total Sources
The total sources of funds available on the Closing Date are summarized in the table below:
IV. Uses of Funds
A. Payoff of Existing Harborstone RCF
The primary use of proceeds on the Closing Date is the payoff in full of all obligations outstanding under the Existing RCF with Harborstone National Bank. The components of the estimated Harborstone payoff amount are set forth below.
1. Principal Payoff. The outstanding principal balance under the Existing RCF as of the anticipated Closing Date is estimated to be $124,375,000.00. This amount reflects the aggregate principal amount of revolving loans currently outstanding under the Existing RCF. It is anticipated that there will be no additional borrowings or repayments under the Existing RCF between the date of this memorandum and the Closing Date, but any such changes would require a corresponding adjustment to the payoff amount.
The payoff amount is subject to confirmation by Harborstone National Bank via a formal payoff letter to be delivered to the Borrower and its counsel no later than three (3) business days prior to the Closing Date. The payoff letter will set forth the definitive payoff amount, including all accrued interest, fees, and other amounts owing under the Existing RCF, together with a per diem interest accrual figure for adjustment purposes and wire instructions for the payoff payment.
The contact person at Harborstone responsible for the issuance of the payoff letter is Philip Rennert, Director, Structured Shipping Finance, Harborstone National Bank, 350 Park Avenue, 20th Floor, New York, NY 10022. Mr. Rennert should be contacted promptly following confirmation of the Closing Date to initiate the payoff letter process.
2. Accrued and Unpaid Interest. The estimated accrued and unpaid interest on the Existing RCF through the anticipated Closing Date is $312,500.00. This figure is an estimate based on the current outstanding principal balance, the applicable interest rate under the Existing RCF, and an assumed number of accrual days through a mid-to-late July closing. The accrued interest figure will be adjusted to the actual Closing Date based on the per diem interest calculation to be provided in Harborstone's payoff letter. The per diem interest amount is expected to be approximately $17,361.11 per day (based on the current outstanding principal balance and applicable interest rate), and the final accrued interest amount will be recalculated on the basis of the actual number of days from the most recent interest payment date under the Existing RCF through and including the Closing Date.
3. Total Harborstone Payoff Amount. The total estimated payoff amount for the Existing RCF is summarized below:
Upon receipt by Harborstone of the full payoff amount in immediately available funds, Harborstone has agreed (and will be required pursuant to the terms of the payoff letter) to deliver to the Borrower and the Collateral Agent the following: (a) a written payoff confirmation acknowledging receipt of payment in full satisfaction of all obligations under the Existing RCF, (b) UCC-3 termination statements terminating all UCC-1 financing statements filed by or on behalf of Harborstone in connection with the Existing RCF, (c) mortgage discharge documents and releases for each vessel mortgage granted in favor of Harborstone, (d) releases of all liens and security interests securing the obligations under the Existing RCF, and (e) such other termination and release documentation as may be reasonably requested by the Borrower, the Administrative Agent, or the Collateral Agent. Timely delivery of such release documentation is a condition precedent to the initial borrowing under the Credit Agreement, as set forth in Section 4.01 thereof.
B. Transaction Fees
The transaction fees payable on the Closing Date in connection with the establishment of the Facility are described below.
1. Upfront / Arranging Fee. An upfront fee (also referred to as the arranging fee) is payable to Meridian Atlantic Bank, N.A. in its capacity as Sole Lead Arranger and Sole Bookrunner for the Facility. The upfront fee is equal to 0.50% of total commitments under the Facility, calculated as follows:
0.50% × $150,000,000.00 = $750,000.00
The upfront fee is payable in full on the Closing Date in immediately available funds, pursuant to the terms of the Mandate and Fee Letter dated February 14, 2023, between Thalassa and Meridian Atlantic Bank, N.A. (the "Fee Letter"). The upfront fee is fully earned and non-refundable upon payment.
2. Administrative Agent Fee. An annual administrative agent fee is payable to Meridian Atlantic Bank, N.A. in its capacity as Administrative Agent under the Credit Agreement. The annual administrative agent fee is $75,000.00 per annum. The first annual payment of the administrative agent fee is due and payable on the Closing Date, covering the period from the Closing Date through the first anniversary thereof. Subsequent annual payments will be due on each anniversary of the Closing Date during the term of the Facility.
3. Total Transaction Fees. The total transaction fees payable on the Closing Date are summarized in the table below:
Note regarding excluded fees and expenses: The following fees and expenses are not included in this funds flow memorandum and will be invoiced and paid separately by the Borrower:
(a) Legal fees and disbursements of Calderwood & Harkness LLP, counsel to the Borrower, which will be invoiced to Thalassa directly upon or following the Closing Date;
(b) Legal fees and disbursements of Whitmore, Jennings & Alcott LLP, counsel to the Administrative Agent and the Lenders, which are payable by the Borrower pursuant to Section 9.03(a) of the Credit Agreement and will be invoiced separately;
(c) Legal fees and disbursements of Pavlopoulos & Drakos Law Firm, Greek counsel to the Borrower, which will be invoiced to Thalassa directly;
(d) Collateral Agent fees payable to Pinnacle Trust & Agency Services Inc. pursuant to the Collateral Agent Fee Letter, which will be paid separately and are not part of the Closing Date funds flow; and
(e) Any filing fees, recording charges, or other governmental fees incurred in connection with the perfection of security interests and the filing of mortgages and other collateral documentation.
C. Total Uses
The total uses of funds on the Closing Date are summarized in the table below:
V. Reconciliation of Sources and Uses / Net Proceeds Analysis
The following table provides a summary reconciliation of total sources and total uses of funds on the Closing Date:
As reflected above, total sources and total uses are in balance, resulting in zero net proceeds to the Borrower after giving effect to the Harborstone payoff and the payment of transaction fees. However, this balance is achieved only by virtue of the Borrower's own-cash contribution of $512,500, as described in Section III.B above.
Detailed Calculation of Shortfall. The shortfall between the initial borrowing amount and total uses is calculated as follows:
Initial Borrowing under New Facility: $125,000,000.00
Less: Harborstone Payoff (Principal + Accrued Interest): ($124,687,500.00)
Less: Transaction Fees (Upfront Fee + Agent Fee): ($825,000.00)
Net Shortfall: ($512,500.00)
The initial borrowing of $125,000,000 is insufficient to cover total uses of $125,512,500 by an amount equal to $512,500. Accordingly, under the current funds flow structure, Thalassa will need to fund $512,500 from its own unrestricted cash on or prior to the Closing Date to ensure that all Closing Date payments can be made in full.
Alternative Approach. As an alternative to the Borrower's own-cash contribution, the initial borrowing amount under the Facility could be increased from $125,000,000 to $125,512,500 (or, for administrative convenience, rounded upward to $125,525,000 or $126,000,000) to eliminate the need for the Borrower to fund the shortfall from its own cash on hand. Any such increase in the initial borrowing amount would need to be reflected in the Borrowing Request delivered to the Administrative Agent, and the adjusted amount would need to be confirmed with Meridian Atlantic in its capacity as Administrative Agent prior to the Closing Date. Such an increase would remain well within the $150,000,000 aggregate commitment amount under the Facility and would not require any amendment to the Credit Agreement or the consent of any Lender. If the initial borrowing were rounded to $126,000,000, the Borrower would receive net proceeds of approximately $487,500 after payment of all Closing Date obligations, which could be retained as additional working capital.
Note for Thalassa Management Consideration: Dimitrios Pantazis (Chief Financial Officer) and Aris Komnenidis (General Counsel) are requested to confirm the Borrower's preferred approach regarding the funding of the shortfall — i.e., whether Thalassa prefers (i) to fund the $512,500 shortfall from its own cash, or (ii) to increase the initial borrowing amount to eliminate the shortfall. Please advise Calderwood & Harkness at your earliest convenience so that the Borrowing Request can be prepared accordingly.
VI. Flow of Funds — Step-by-Step Closing Day Mechanics
Set forth below is a description of the anticipated step-by-step flow of funds on the Closing Date. All steps are expected to occur on the same business day, in the sequence described below, and all payments are to be made by wire transfer of immediately available funds in United States dollars.
Step 1: Lender Fundings to Administrative Agent
Each Lender shall fund its pro rata share of the initial borrowing of $125,000,000 to the Administrative Agent's designated agency services account (see Section VII.A below for wire instructions). The pro rata funding amounts for each Lender are calculated based on each Lender's proportionate share of total commitments, applied to the $125,000,000 initial borrowing amount, as follows:
Each Lender is required to fund its pro rata share of the initial borrowing to the Administrative Agent's account no later than the funding deadline specified in the Credit Agreement, which is expected to be 12:00 noon (New York City time) on the Closing Date, or such other time as may be specified by the Administrative Agent in the funding notice delivered to the Lenders. Pursuant to Section 2.04 of the Credit Agreement, unless the Administrative Agent has been notified by a Lender prior to 11:00 a.m. (New York City time) on the date of funding that such Lender does not intend to make its pro rata share of the requested borrowing available, the Administrative Agent may assume that such Lender has made its share available and may, in its discretion, make a corresponding amount available to the Borrower.
Step 2: Borrower's Own Funds Contribution
Thalassa shall wire $512,500.00 from its operating account to the Administrative Agent's designated account set forth in Section VII.A below (or, if directed by the Administrative Agent, directly to the applicable disbursement or payoff account) prior to or simultaneously with Step 1. The Borrower's own funds contribution should be transmitted with sufficient lead time to ensure receipt in the Administrative Agent's account in immediately available funds prior to the commencement of the disbursement steps described below.
Step 3: Payoff of Harborstone RCF
Following receipt and confirmation of all Lender fundings and the Borrower's own funds contribution, the Administrative Agent (or the Borrower, as may be directed by the Administrative Agent) shall wire $124,687,500.00 (subject to adjustment based on the final payoff amount set forth in the Harborstone payoff letter) to Harborstone National Bank in full satisfaction of all obligations outstanding under the Existing RCF. The wire transfer shall be made to the account designated by Harborstone in its payoff letter, per the wire instructions set forth in Section VII.B below.
Upon confirmation of receipt of the full payoff amount by Harborstone, Harborstone shall promptly deliver to the Borrower, the Administrative Agent, and the Collateral Agent (i) written payoff confirmation, (ii) UCC-3 termination statements, (iii) mortgage discharge documents and releases for each vessel mortgage, and (iv) releases of all other liens and security interests securing the Existing RCF, in each case in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent.
Step 4: Payment of Transaction Fees
The Administrative Agent shall retain from the funded amounts the following transaction fees, which shall be deemed paid and earned as of the Closing Date:
(a) Upfront / Arranging Fee: $750,000.00, payable to Meridian Atlantic Bank, N.A. in its capacity as Sole Lead Arranger and Sole Bookrunner, pursuant to the Fee Letter.
(b) Administrative Agent Fee (Year 1): $75,000.00, payable to Meridian Atlantic Bank, N.A. in its capacity as Administrative Agent, pursuant to the Credit Agreement.
Total retained by MAB: $825,000.00
As a practical matter, the Administrative Agent will retain the fee amounts from the aggregate funds held in its agency services account prior to disbursing the Harborstone payoff amount, or simultaneously therewith, such that the fee amounts are netted against the funded proceeds. The specific netting mechanics will be coordinated with the Administrative Agent's operations team prior to the Closing Date.
Step 5: Confirmation
Following completion of all wire transfers described in Steps 1 through 4 above, the Administrative Agent shall confirm the completion of all Closing Date fund flows and provide written closing confirmation to the Borrower, each Lender, the Collateral Agent, and their respective counsel. Such confirmation shall include verification that (i) all Lender fundings have been received, (ii) the Harborstone payoff has been transmitted and confirmed, and (iii) all transaction fees have been paid or retained. The Administrative Agent's closing confirmation, together with the Harborstone payoff confirmation and lien release documentation, shall be included in the closing binder to be assembled by Calderwood & Harkness following the Closing Date.
VII. Wire Instructions
Set forth below are the wire instructions for each relevant account. All wire instructions are preliminary and must be confirmed by each party prior to the Closing Date. Placeholder entries are indicated by bracketed notations and must be completed before this memorandum can be finalized.
A. Administrative Agent Account (Meridian Atlantic Bank, N.A.)
Bank Name: Meridian Atlantic Bank, National Association
Bank Address: 600 Lexington Avenue, 38th Floor, New York, NY 10022
ABA Routing Number: [TO BE PROVIDED]
Account Number: [TO BE PROVIDED]
Account Name: [TO BE PROVIDED — MAB Agency Services Account]
Reference: Thalassa Shipping — RCF Closing / [Closing Date]
Contact: Catherine Hsiang, Relationship Manager, Meridian Atlantic Bank, N.A.
B. Harborstone National Bank (Payoff Account)
Bank Name: Harborstone National Bank
Bank Address: 350 Park Avenue, 20th Floor, New York, NY 10022
ABA Routing Number: [TO BE PROVIDED — per payoff letter]
Account Number: [TO BE PROVIDED — per payoff letter]
Account Name: [TO BE PROVIDED — per payoff letter]
Reference: Thalassa Shipping & Logistics SA — Payoff of Revolving Credit Facility dated November 15, 2018
Contact: Philip Rennert, Director, Structured Shipping Finance, Harborstone National Bank
C. Borrower's Account (Thalassa Shipping & Logistics SA)
Bank Name: [TO BE PROVIDED]
Bank Address: [TO BE PROVIDED]
SWIFT Code: [TO BE PROVIDED]
Account Number: [TO BE PROVIDED]
Account Name: Thalassa Shipping & Logistics SA
Reference: RCF Refinancing — Own Funds Contribution
Contact: Dimitrios Pantazis, Chief Financial Officer, Thalassa Shipping & Logistics SA, 14 Akti Miaouli, Piraeus 185 35, Greece
D. Lender Funding Accounts
Each Lender shall fund its pro rata share of the initial borrowing to the Administrative Agent's account set forth in Section VII.A above. No separate disbursement accounts are required for the Lenders in connection with the initial borrowing. However, individual Lender account details for potential return wires (in the event of a failed closing, excess funding, or other circumstance requiring the return of funds) are to be confirmed separately by each Lender and are set forth below on a preliminary basis:
Nordkapp Maritime Finance AG
• Address: Brandschenkestrasse 44, 8002 Zürich, Switzerland
• Contact: Anders Dalmqvist, Vice President, Shipping Finance
• Account Details: [TO BE PROVIDED]
Clearwater Commercial Lending LLC
• Address: 200 South Biscayne Boulevard, Suite 3100, Miami, FL 33131
• Contact: Rosa Menendez, Managing Director, Maritime Lending
• Account Details: [TO BE PROVIDED]
Eastbourne Capital Partners LLP
• Address: 20 Moorgate, London EC2R 6DA, United Kingdom
• Contact: Gavin Holt, Partner, Transportation Finance
• Account Details: [TO BE PROVIDED]
Note: Meridian Atlantic Bank, N.A.'s Lender funding will be an internal transfer within MAB and does not require separate external wire instructions.
VIII. Conditions and Assumptions
This funds flow memorandum has been prepared on the basis of the following conditions and assumptions, each of which is subject to change and must be verified prior to the Closing Date:
1. Estimated Figures. All amounts set forth in this memorandum are estimates as of July 6, 2023 and are subject to change. Final amounts will be confirmed prior to the Closing Date, and a revised funds flow memorandum will be circulated reflecting any changes.
2. Harborstone Payoff Amount. The Harborstone payoff amount (both principal and accrued interest) is estimated and subject to final confirmation via a formal payoff letter to be delivered by Harborstone National Bank. The payoff letter will include a per diem interest accrual amount to be applied for each day from the date of the payoff letter estimate through the actual Closing Date. Any variance between the estimated and actual payoff amount will result in a corresponding adjustment to the Borrower's own-cash contribution or the initial borrowing amount, as applicable.
3. Wire Instructions. The wire instructions set forth in Section VII above are placeholders and must be confirmed in writing by each party prior to the Closing Date. No funds should be transferred until all wire instructions have been verified and confirmed.
4. Conditions Precedent. The funds flow described herein assumes the satisfaction (or waiver by the requisite parties) of all conditions precedent to the initial borrowing under Article IV of the Credit Agreement, including, without limitation, the delivery of all closing deliverables identified in the Closing Checklist dated July 3, 2023, which currently lists seventy-eight (78) items. A failure to satisfy any such condition precedent could delay or prevent the Closing.
5. Loan Type and Interest Period. The funds flow assumes that the Closing Date borrowing will be a SOFR Loan with an initial Interest Period to be specified by the Borrower in the Borrowing Request. The Borrower should consult with the Administrative Agent regarding the selection of the appropriate initial Interest Period.
6. Commitment Fees. This memorandum does not reflect any commitment fees payable under the Facility. Pursuant to Section 2.08(a) of the Credit Agreement, commitment fees accrue at a rate of 0.375% per annum on unused commitments (stepping down to 0.25% per annum when aggregate utilization exceeds $75,000,000) and are payable quarterly in arrears commencing on the last business day of the first full fiscal quarter following the Closing Date. Commitment fees will begin to accrue on the Closing Date on the undrawn portion of the commitments ($25,000,000 based on the assumed initial borrowing of $125,000,000) but are not payable on the Closing Date itself.
7. Legal Fees and Expenses. Legal fees and expenses of Calderwood & Harkness LLP (Borrower's counsel), Whitmore, Jennings & Alcott LLP (Lender's counsel), and Pavlopoulos & Drakos Law Firm (Greek counsel to the Borrower) are excluded from this funds flow and will be invoiced and paid separately. The Borrower's obligation to pay or reimburse the reasonable and documented out-of-pocket fees and expenses of the Administrative Agent's counsel is set forth in Section 9.03(a) of the Credit Agreement.
8. Collateral Agent Fees. Fees payable to Pinnacle Trust & Agency Services Inc. in its capacity as Collateral Agent are excluded from this funds flow memorandum and are subject to a separate fee letter between Pinnacle and the Borrower. Such fees will be paid separately by the Borrower.
IX. Open Items / Action Items
The following open items must be resolved prior to finalization of this funds flow memorandum and the Closing Date. Responsible parties are indicated for each item.
All parties are requested to provide the information and confirmations described above at the earliest practicable date to facilitate finalization of this memorandum and preparation for closing. Please direct all responses and inquiries to Daniel Obi (dobi@calderwoodharkness.com) and Sophie Tremblay (stremblay@calderwoodharkness.com) at Calderwood & Harkness LLP.
X. Summary Funds Flow Table (Consolidated)
The following consolidated table summarizes the complete flow of funds on the Closing Date, incorporating all steps described in Section VI above:
XI. Document Status and Disclaimer
This memorandum is a preliminary draft prepared by Calderwood & Harkness LLP for internal discussion purposes only in connection with the above-referenced matter (Matter No. 1044-00002). It is not intended to be, and should not be construed as, a final or definitive statement of the closing funds flow or a binding commitment by any party.
All amounts, wire instructions, account details, and other information set forth herein are subject to final confirmation and may be revised in subsequent drafts of this memorandum. No party should rely on the figures or information contained herein for any purpose without independent verification and confirmation.
This memorandum does not constitute legal advice regarding the enforceability, validity, or binding effect of any payments, obligations, or transactions described herein. Recipients should consult with their own legal and financial advisors regarding any matters arising in connection with the closing funds flow.
Distribution. This memorandum is being distributed to the following individuals and should not be further disseminated without the prior written consent of Calderwood & Harkness LLP:
Thalassa Shipping & Logistics SA:
Elena Vassiliou, Chief Executive Officer
Dimitrios Pantazis, Chief Financial Officer
Aris Komnenidis, General Counsel
Calderwood & Harkness LLP:
Ian Blackwood, Partner
Stephanie Okafor, Counsel
Sophie Tremblay, Senior Associate
Daniel Obi, Associate
NOTE REGARDING DOCUMENT STATUS: A revised and final funds flow memorandum was to be circulated upon confirmation of all open items identified in Section IX above and the determination of a definitive Closing Date. This memorandum was never finalized. On July 19, 2023, Meridian Atlantic Bank, N.A. notified Thalassa and Calderwood & Harkness of its decision to withdraw from the mandate as Sole Lead Arranger and Administrative Agent for the Facility, citing internal credit committee concerns regarding the Borrower's vessel portfolio valuation and updated market conditions in the dry bulk shipping sector. As a result of Meridian Atlantic's withdrawal, the proposed refinancing transaction did not proceed to closing, and this preliminary funds flow memorandum remains in draft form. This document has been preserved in the matter file for record-keeping purposes.
— End of Memorandum —
| Lender | Commitment Amount | Pro Rata Share |
| Meridian Atlantic Bank, N.A. | $45,000,000.00 | 30.00% |
| Nordkapp Maritime Finance AG | $40,000,000.00 | 26.67% |
| Clearwater Commercial Lending LLC | $35,000,000.00 | 23.33% |
| Eastbourne Capital Partners LLP | $30,000,000.00 | 20.00% |
| Total Commitments | $150,000,000.00 | 100.00% |
| Source | Amount | |
| Initial Borrowing under New Facility | $125,000,000.00 | |
| Borrower's Own Funds | $512,500.00 | |
| Total Sources | $125,512,500.00 | |
| Component | Amount | |
| Outstanding Principal | $124,375,000.00 | |
| Accrued and Unpaid Interest (estimated) | $312,500.00 | |
| Total Harborstone Payoff | $124,687,500.00 | |
| Fee | Payee | Amount |
| Upfront / Arranging Fee | Meridian Atlantic Bank, N.A. (as Sole Lead Arranger and Sole Bookrunner) | $750,000.00 |
| Administrative Agent Fee (Year 1) | Meridian Atlantic Bank, N.A. (as Administrative Agent) | $75,000.00 |
| Total Fees | $825,000.00 | |
| Use | Amount | |
| Harborstone Payoff — Outstanding Principal | $124,375,000.00 | |
| Harborstone Payoff — Accrued and Unpaid Interest (estimated) | $312,500.00 | |
| Upfront / Arranging Fee (Meridian Atlantic) | $750,000.00 | |
| Administrative Agent Fee, Year 1 (Meridian Atlantic) | $75,000.00 | |
| Total Uses | $125,512,500.00 |
Amount
| Total Sources | $125,512,500.00 | |||
| Total Uses | $125,512,500.00 | |||
| Net Proceeds to Borrower | $0.00 | |||
| Lender | Commitment | Pro Rata Share | Funding Amount | |
| Meridian Atlantic Bank, N.A. | $45,000,000.00 | 30.00% | $37,500,000.00 | |
| Nordkapp Maritime Finance AG | $40,000,000.00 | 26.67% | $33,333,333.33 | |
| Clearwater Commercial Lending LLC | $35,000,000.00 | 23.33% | $29,166,666.67 | |
| Eastbourne Capital Partners LLP | $30,000,000.00 | 20.00% | $25,000,000.00 | |
| Total Lender Fundings | $125,000,000.00 | |||
| No. | Action Item | Responsible Party | Status | |
| 1 | Confirm Harborstone payoff amount and obtain executed payoff letter | Thalassa (D. Pantazis) / Harborstone (P. Rennert) | Pending | |
| 2 | Confirm accrued interest calculation and per diem interest amount | Harborstone (P. Rennert) | Pending | |
| 3 | Provide confirmed wire instructions — Administrative Agent account | Meridian Atlantic (C. Hsiang) | Pending | |
| 4 | Provide confirmed wire instructions — Harborstone payoff account | Harborstone (P. Rennert) | Pending | |
| 5 | Provide confirmed wire instructions — Borrower's account | Thalassa (D. Pantazis) | Pending | |
| 6 | Provide confirmed wire instructions — each Lender (return wire accounts) | Nordkapp (A. Dalmqvist) / Clearwater (R. Menendez) / Eastbourne (G. Holt) | Pending | |
| 7 | Confirm initial borrowing amount ($125,000,000 or adjusted amount) and preferred approach to shortfall funding | Thalassa (D. Pantazis / A. Komnenidis) | Pending — see Section V discussion regarding shortfall | |
| 8 | Finalize Borrowing Request form with confirmed amounts, loan type, and Interest Period | Calderwood & Harkness (D. Obi / S. Tremblay) | Pending | |
| 9 | Confirm Closing Date | All parties | TBD | |
| Step | Description | Payor | Payee | Amount |
| 1a | Lender Funding — Meridian Atlantic Bank, N.A. | Meridian Atlantic Bank, N.A. | Administrative Agent Account | $37,500,000.00 |
| 1b | Lender Funding — Nordkapp Maritime Finance AG | Nordkapp Maritime Finance AG | Administrative Agent Account | $33,333,333.33 |
| 1c | Lender Funding — Clearwater Commercial Lending LLC | Clearwater Commercial Lending LLC | Administrative Agent Account | $29,166,666.67 |
| 1d | Lender Funding — Eastbourne Capital Partners LLP | Eastbourne Capital Partners LLP | Administrative Agent Account | $25,000,000.00 |
| 2 | Borrower Own Funds Contribution | Thalassa Shipping & Logistics SA | Administrative Agent Account | $512,500.00 |
| 3 | Payoff of Existing Harborstone RCF | Administrative Agent Account | Harborstone National Bank | $124,687,500.00 |
| 4a | Upfront / Arranging Fee | Administrative Agent Account (retained) | Meridian Atlantic Bank, N.A. | $750,000.00 |
| 4b | Administrative Agent Fee (Year 1) | Administrative Agent Account (retained) | Meridian Atlantic Bank, N.A. | $75,000.00 |
| Total Funds Flow | $125,512,500.00 |