MEMORANDUM
PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
August 18, 2023
TO: Ian Blackwood, Partner, Banking & Finance Stephanie Okafor, Partner, Banking & Finance
FROM: Sophie Tremblay, Senior Associate, Banking & Finance Daniel Obi, Associate, Banking & Finance
RE: Final Status Report & Document Inventory — Thalassa Shipping & Logistics SA — $150,000,000 Senior Secured Revolving Credit Facility Refinancing
MATTER NO.: 1044-00002
FIRM: Calderwood & Harkness LLP, 425 Park Avenue, New York, NY 10022
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I. Executive Summary
The purpose of this memorandum is to provide a comprehensive final status report cataloguing all work product generated during the firm's representation of Thalassa Shipping & Logistics SA ("Thalassa" or "TSL"), a Société Anonyme organized under the laws of the Hellenic Republic, headquartered at 14 Akti Miaouli, Piraeus 185 35, Greece, in connection with the proposed $150,000,000 senior secured revolving credit facility (the "Proposed Facility"). This memorandum is intended to serve as a definitive record of the engagement for purposes of internal file management, client communication, and compliance with Calderwood & Harkness LLP's ("C&H") file closure and document retention procedures.
The Proposed Facility was to be arranged by Meridian Atlantic Bank, National Association ("Meridian Atlantic" or "MAB"), acting as Sole Lead Arranger, Sole Bookrunner, and Administrative Agent. Syndication of the Proposed Facility was planned to include Nordkapp Maritime Finance AG ("Nordkapp"), Clearwater Commercial Lending LLC ("Clearwater"), and Eastbourne Capital Partners LLP ("Eastbourne"), with proposed commitments of $45,000,000 (MAB), $40,000,000 (Nordkapp), $35,000,000 (Clearwater), and $30,000,000 (Eastbourne), totaling the full $150,000,000 facility amount.
The purpose of the refinancing was twofold: first, to refinance TSL's existing $125,000,000 revolving credit facility with Harborstone National Bank (the "Existing Harborstone RCF," originally dated November 15, 2018, as amended by the First Amendment dated June 30, 2020 and the Second Amendment dated March 1, 2022, with a scheduled maturity date of November 15, 2023); and second, to provide an incremental $25,000,000 of liquidity for general corporate purposes and working capital needs. The refinancing was intended to replace the legacy LIBOR-based pricing of the Existing Harborstone RCF with a SOFR-based structure, extend the maturity profile, and expand TSL's borrowing capacity to support the company's ongoing fleet operations and growth initiatives.
C&H was engaged by TSL to act as borrower's counsel in connection with the negotiation, documentation, and closing of the Proposed Facility. The matter was opened on March 13, 2023, following the execution of an engagement letter dated March 10, 2023 between C&H and TSL. The engagement team consisted of Ian Blackwood (Responsible Partner), Stephanie Okafor (Billing Partner), Sophie Tremblay (Lead Associate), and Daniel Obi (Working Associate). Lender's counsel in the transaction was Whitmore, Jennings & Alcott LLP ("WJA"), represented primarily by Harrison Caldwell (Partner) and Priya Subramanian (Senior Associate).
Over the course of approximately four months of active work, the engagement progressed through term sheet analysis, three rounds of credit agreement markups, negotiation of security documents (including first preferred ship mortgages, share pledge agreements, assignments of earnings, and assignments of insurances), preparation of closing deliverables, and substantial advisory memoranda to TSL management. By early July 2023, the parties had reached a near-final credit agreement with only limited open points remaining, and syndication commitments had been confirmed by all participating lenders.
However, on July 18, 2023, Meridian Atlantic announced a strategic decision to exit its Shipping & Maritime Finance Division globally, effective across all markets and jurisdictions. The following day, July 19, 2023, Meridian Atlantic formally notified Thalassa of its withdrawal from the mandate. This development, which was unanticipated by all parties, effectively halted the transaction.
Following Meridian Atlantic's withdrawal, C&H, at TSL's direction, undertook efforts to identify a replacement arranger that could step into the mandate on comparable terms and within a timeline that would permit the refinancing to close prior to the November 15, 2023 maturity of the Existing Harborstone RCF. These efforts were ultimately unsuccessful. On August 7, 2023, Nordkapp and Clearwater each formally declined to assume the lead arranger role. Outreach to iniaia Merchant Bank SA yielded an indicative proposal on materially inferior pricing and a reduced facility size, which was deemed unacceptable by TSL. Baltic Strait Capital GmbH also declined due to internal credit limits. On August 7, 2023, C&H provided TSL with a comprehensive summary letter detailing the results of the replacement arranger search.
On August 14, 2023, TSL instructed C&H to wind down the matter. This memorandum accompanies the final invoice issued on this date, August 18, 2023, and precedes the file closure letter to be sent to TSL's General Counsel, Aris Komnenidis, on August 25, 2023.
No documents in this engagement were executed. The sole executed document in the matter file is the C&H engagement letter. All transaction documents — including the credit agreement, security documents, corporate authorizations, and legal opinions — remain in draft or near-final form and were never signed by any party. This memorandum inventories a total of 35 documents generated or received during the course of the engagement, together with certain third-party materials retained in the matter file.
II. Engagement Timeline Summary
The following table sets forth a chronological summary of all key milestones, events, and deliverables during the engagement, from the initial request for proposals through the wind-down of the matter. The "Status" column reflects the current status of each item as of the date of this memorandum.
As the foregoing timeline reflects, the engagement advanced through all major phases of a syndicated lending transaction — from term sheet negotiation through documentation, security document review, closing preparation, and syndication confirmation — before being interrupted by an event entirely outside the control of the borrower or its counsel. The total elapsed time of active engagement was approximately four months and five days (March 13, 2023 through July 18, 2023), with an additional one month of post-withdrawal advisory and wind-down activity (July 19, 2023 through August 18, 2023).
III. Document Inventory
The following sections provide a detailed inventory of all documents generated by C&H during the course of this engagement, organized by functional category. For each document, the inventory sets forth the date, author(s), addressee(s) (where applicable), a description of the document's content and purpose, its current status, and its file reference within the firm's document management system. Third-party documents received and retained in the matter file are separately catalogued in Section V below.
A. Engagement & Client Management Documents
This category encompasses the core engagement documents governing the attorney-client relationship, internal intake and conflicts materials, and the anticipated disengagement letter.
Document 1: Engagement Letter — Calderwood & Harkness LLP to Thalassa Shipping & Logistics SA
• Date: March 10, 2023
• Author(s): Ian Blackwood
• Addressee: Aris Komnenidis, General Counsel, Thalassa Shipping & Logistics SA
• Description: This engagement letter sets forth the scope of C&H's representation of TSL as the borrower in connection with the proposed $150,000,000 senior secured revolving credit facility refinancing. The letter defines the scope of the engagement as encompassing the negotiation, documentation, and closing of the credit agreement and related security documents, ancillary agreements, and legal opinions, together with advice on the terms and conditions of the Proposed Facility. The engagement letter establishes a fee cap of $650,000 (exclusive of disbursements and out-of-pocket expenses), with the following rate structure: Partners — $1,350 per hour; Senior Associates — $950 per hour; Associates — $750 per hour. TSL agreed to pay an initial retainer of $75,000, to be credited against the final invoice. The engagement letter specifies New York as the governing law jurisdiction for the engagement terms. The engagement team is identified as Ian Blackwood (Responsible Partner), Stephanie Okafor (Billing Partner), Sophie Tremblay (Lead Associate), and Daniel Obi (Working Associate). The letter also includes standard provisions regarding the scope of the engagement, conflicts of interest, termination of the engagement, and document retention.
• Status: Executed (signed by Ian Blackwood on behalf of C&H and Aris Komnenidis on behalf of TSL)
• File Reference: engagement-letter-thalassa.docx
Document 2: Conflicts Clearance Memorandum
• Date: March 9, 2023
• Author(s): Ian Blackwood
• Description: This internal C&H memorandum documents the results of the firm's conflicts clearance process conducted prior to the opening of the matter. The memorandum confirms that clearance was obtained with respect to the following parties: Meridian Atlantic Bank, National Association (as Sole Lead Arranger, Sole Bookrunner, and Administrative Agent); Nordkapp Maritime Finance AG (as proposed syndication participant); Clearwater Commercial Lending LLC (as proposed syndication participant); Eastbourne Capital Partners LLP (as proposed syndication participant); Harborstone National Bank (as existing lender under the Existing Harborstone RCF); Pinnacle Trust & Agency Services Inc. (as proposed Collateral Agent / Security Trustee under the Proposed Facility); and Whitmore, Jennings & Alcott LLP (as lender's counsel). The memorandum notes the nature of any prior or existing representations involving these parties and concludes that no disqualifying conflict of interest exists. The memorandum was reviewed and approved by Ian Blackwood as Responsible Partner.
• Status: Completed (internal document; no execution required)
• File Reference: conflicts-clearance-memo.docx
Document 3: New Matter Intake Memorandum
• Date: March 13, 2023
• Author(s): Daniel Obi
• Description: This internal intake memorandum was prepared in connection with the opening of Matter No. 1044-00002 in the firm's matter management and billing systems. The memorandum identifies Ian Blackwood as the responsible partner and Stephanie Okafor as the billing partner for the matter. It includes KYC and anti-money laundering compliance notes on TSL, recording the company's Greek AFM (tax identification number) as 094728361 and its GEMI (General Electronic Commercial Registry) registration number as 143209501000. The memorandum records TSL's headquarters address at 14 Akti Miaouli, Piraeus 185 35, Greece, and identifies the following key principals: Nikolaos Karadimitriou (Founder and Chairman of the Board of Directors), Elena Vassiliou (Chief Executive Officer), Dimitrios Pantazis (Chief Financial Officer), and Aris Komnenidis (General Counsel). The memorandum also includes a brief description of the matter scope and billing arrangements, consistent with the terms of the executed engagement letter.
• Status: Completed (internal document)
• File Reference: new-matter-intake-memo.docx
Document 4: Engagement Modification Letter — Fee Cap Extension Request
• Date: June 12, 2023
• Author(s): Ian Blackwood
• Addressee: Aris Komnenidis, General Counsel, Thalassa Shipping & Logistics SA
• Description: This letter was prepared and transmitted to TSL to discuss a potential increase to the $650,000 fee cap established in the engagement letter dated March 10, 2023. The request was prompted by the increased documentation complexity encountered during the engagement, particularly in connection with the preparation of security documents for the 18 Mortgaged Vessels constituting the primary collateral for the Proposed Facility, as well as the multi-jurisdictional guarantor analysis required for the three guarantor subsidiaries organized in Greece, Cyprus, and the Republic of the marshall Islands. The letter outlined the additional work required in each area, provided an estimate of the anticipated fee overrun, and proposed an increase in the fee cap to $850,000, with all other terms of the engagement letter remaining unchanged. The letter was sent to Aris Komnenidis but was never countersigned by TSL. Accordingly, the fee cap remained at $650,000 throughout the engagement. As discussed in Section VI below, total professional fees billed during the engagement amounted to $412,850, well within the $650,000 cap.
• Status: Not executed by TSL — sent but never countersigned; fee cap remained at $650,000
• File Reference: fee-cap-extension-letter.docx
Document 5: Disengagement / File Closure Letter
• Date: To be dated August 25, 2023
• Author(s): Ian Blackwood
• Addressee: Aris Komnenidis, General Counsel, Thalassa Shipping & Logistics SA
• Description: This letter will confirm the formal closure of Matter No. 1044-00002 following Meridian Atlantic's withdrawal from the mandate and TSL's instruction to wind down the matter on August 14, 2023. The letter will confirm that no transaction documents were executed during the engagement, summarize C&H's standard document retention procedures (including the duration of retention of electronic and hard-copy files), provide the final billing summary, and offer to make available copies of all client-deliverable work product for TSL's records. The letter will also include customary language regarding the cessation of the attorney-client relationship with respect to this matter, while noting C&H's willingness to be re-engaged if TSL pursues a replacement financing.
• Status: Pending — to be sent on August 25, 2023
• File Reference: disengagement-file-closure-letter.docx
B. Term Sheet & Mandate Analysis Documents
This category includes the memoranda and analytical documents prepared in connection with C&H's review and markup of the initial term sheet and mandate letter circulated by Meridian Atlantic, as well as the comparative analysis of the Proposed Facility against the Existing Harborstone RCF.
Document 6: Memorandum — Review of Meridian Atlantic Mandate Letter
• Date: March 15, 2023
• Author(s): Sophie Tremblay, Daniel Obi
• Addressee: Aris Komnenidis, General Counsel, Thalassa Shipping & Logistics SA; Dimitrios Pantazis, Chief Financial Officer, Thalassa Shipping & Logistics SA
• Description: This memorandum provides a detailed analysis of the Meridian Atlantic Mandate and Fee Letter dated February 14, 2023, which was executed between TSL and MAB prior to C&H's engagement. The analysis addresses the following key provisions: (a) the scope of the mandate and MAB's role as Sole Lead Arranger, Sole Bookrunner, and Administrative Agent; (b) the market flex provisions, including MAB's rights to modify pricing, structure, and other terms in connection with syndication; (c) the proposed syndication strategy and allocation of commitments among the syndication participants (MAB — $45,000,000; Nordkapp — $40,000,000; Clearwater — $35,000,000; Eastbourne — $30,000,000, for a total of $150,000,000); (d) the upfront fee of $750,000, representing 0.50% of the $150,000,000 facility amount, payable at closing; and (e) the administrative agent fee of $75,000 per annum, payable annually in advance. The memorandum identifies certain provisions that warranted attention, including the breadth of the market flex language and the allocation of syndication risk, and recommends that TSL be aware of these provisions as negotiation of the credit agreement proceeds. The memorandum was delivered to Aris Komnenidis and Dimitrios Pantazis for their review and consideration.
• Status: Completed (delivered to client)
• File Reference: mandate-letter-review-memo.docx
Document 7: Annotated Term Sheet Markup
• Date: March 27, 2023
• Author(s): Sophie Tremblay, Daniel Obi
• Description: This document is C&H's redline markup of the initial term sheet circulated by Meridian Atlantic on March 20, 2023 to TSL and C&H. The redline includes substantive comments and proposed revisions addressing the following principal areas: (a) the proposed financial covenant package, consisting of a maximum consolidated net leverage ratio of 4.50:1.00, stepping down to 4.00:1.00 in Year 3 of the facility, a minimum interest coverage ratio of 3.00:1.00, a minimum liquidity requirement of $30,000,000, and a maximum capital expenditure limit of $80,000,000 per fiscal year; (b) the collateral package, including the 18 Mortgaged Vessels and the associated security instruments; (c) the interest rate mechanics, based on Term SOFR plus a margin of 225 to 325 basis points, depending on the applicable pricing grid; (d) mandatory prepayment triggers, including excess cash flow sweeps, asset sale proceeds, and vessel casualty and condemnation events; (e) the letter of credit sublimit of $20,000,000; and (f) the swingline sublimit of $15,000,000. The markup was delivered to WJA, directed to the attention of Harrison Caldwell (Partner) and Priya Subramanian (Senior Associate), and formed the basis for the initial credit agreement drafting process.
• Status: Completed (redline delivered to WJA)
• File Reference: term-sheet-markup.docx
Document 8: Term Sheet Comparison Chart — Existing Harborstone RCF vs. Proposed Meridian Atlantic RCF
• Date: March 24, 2023
• Author(s): Daniel Obi
• Description: This document is a side-by-side comparison chart setting forth the key terms and conditions of the Existing Harborstone RCF against those of the Proposed Facility. The comparison covers the following principal terms: (a) facility size ($125,000,000 under the existing facility vs. $150,000,000 under the Proposed Facility); (b) pricing (LIBOR + 250 basis points under the existing facility vs. Term SOFR + 225 to 325 basis points under the Proposed Facility, reflecting both the transition from LIBOR to SOFR and a margin grid tied to the borrower's consolidated net leverage ratio); (c) maturity date (November 15, 2023 under the existing facility vs. five years from closing under the Proposed Facility); (d) collateral coverage ratio (140% minimum under both facilities); (e) financial covenants (noting changes in covenant levels and step-down provisions); (f) commitment fee structure (0.375% per annum on the unused portion of the commitments, stepping down to 0.25% per annum at a utilization threshold of 50% or $75,000,000); and (g) subsidiary guarantor requirements, including the addition of guaranties from Thalassa Dry Bulk Holdings Ltd., Thalassa Tanker Operations Ltd., and Thalassa Logistics International Ltd. The comparison chart references the Existing Harborstone RCF dated November 15, 2018 (as amended by the First Amendment dated June 30, 2020 and the Second Amendment dated March 1, 2022) and the initial term sheet circulated by Meridian Atlantic on March 20, 2023. The chart was prepared for both internal use by the C&H engagement team and for delivery to the client.
• Status: Completed (internal and client use)
• File Reference: term-sheet-comparison-chart.xlsx
C. Credit Agreement Drafts & Markups
This category encompasses the successive drafts and markups of the credit agreement, together with related issues memoranda and the near-final execution version. Over the course of the engagement, the credit agreement was the subject of three rounds of drafting and markup between C&H (on behalf of the borrower) and WJA (on behalf of the lender group), culminating in a near-final Borrower's execution version that was never signed.
Document 9: First Markup of Draft Credit Agreement
• Date: April 14, 2023
• Author(s): Sophie Tremblay, Daniel Obi
• Source Document: WJA first draft credit agreement dated April 5, 2023
• Description: This is C&H's comprehensive first redline markup of the initial draft credit agreement circulated by WJA on April 5, 2023. The markup contains a total of 847 comments across 210 pages of the draft credit agreement. The comments address all principal provisions of the credit agreement, including, among others: (a) the SOFR fallback mechanics, including the benchmarks and triggers for the replacement of Term SOFR as the reference rate in the event that SOFR is discontinued or deemed no longer representative; (b) the mandatory prepayment waterfall, setting forth the order in which asset sale proceeds, casualty and condemnation proceeds, excess cash flow, and other prepayment sources are to be applied; (c) the definition of "Material Adverse Change" (also referred to as "Material Adverse Effect" in the draft), which was a heavily negotiated provision addressing the scope and materiality threshold applicable to the borrower's representations and the lender's ability to declare an event of default; (d) the change of control trigger, specifying the circumstances under which a change in the ownership or management of TSL would constitute an event of default or require a mandatory prepayment; (e) vessel sale proceeds application, including the interplay between the mandatory prepayment provisions and the collateral release mechanics; (f) representations and warranties, covering a broad range of topics including corporate existence, authorization, enforceability, compliance with laws, tax matters, environmental compliance, ERISA, anti-corruption and sanctions, and vessel-specific representations; and (g) conditions precedent to the initial borrowing, including the documentation required to be delivered on the closing date. The markup was delivered to WJA, directed to the attention of Priya Subramanian and Harrison Caldwell.
• Status: Completed (superseded by subsequent drafts)
• File Reference: credit-agreement-first-markup.docx
Document 10: Memorandum — Key Issues in First Draft Credit Agreement
• Date: April 12, 2023
• Author(s): Sophie Tremblay
• Addressee: Ian Blackwood, Partner, Banking & Finance
• Description: This internal C&H memorandum was prepared to summarize the principal issues identified in WJA's first draft credit agreement dated April 5, 2023, for review and discussion with Ian Blackwood prior to the circulation of C&H's first markup. The memorandum addresses the following key issues: (a) the SOFR fallback mechanics, noting areas where the WJA draft departed from ARRC-recommended language and suggesting conforming revisions; (b) the mandatory prepayment waterfall, identifying areas where the draft imposed overly burdensome sweep requirements on vessel sale proceeds and excess cash flow; (c) the material adverse change definition, recommending the inclusion of customary carve-outs for changes in general economic conditions, changes in the shipping industry generally, and changes in applicable law or GAAP; (d) the change of control trigger, proposing a narrower definition tied to changes in majority ownership and control rather than the broader definition included in the WJA draft; (e) the application of vessel sale proceeds, recommending greater flexibility for the borrower to reinvest proceeds in replacement vessels within a specified reinvestment period; (f) the restricted payments basket, proposing higher thresholds for permitted dividends and distributions to align with TSL's historical dividend practices; and (g) proposed revisions to the events of default section, including the addition of cure periods, grace periods, and materiality thresholds for certain cross-default and cross-acceleration triggers. The memorandum provides specific drafting suggestions for each issue and identifies relevant precedent from comparable shipping finance transactions.
• Status: Completed (internal document)
• File Reference: key-issues-memo-first-draft.docx
Document 11: Second Markup of Draft Credit Agreement
• Date: May 8, 2023
• Author(s): Sophie Tremblay, Daniel Obi
• Source Document: WJA second draft credit agreement dated April 28, 2023
• Description: This is C&H's second redline markup of the credit agreement, prepared in response to WJA's revised draft circulated on April 28, 2023. The number of open comments was significantly narrowed from the initial 847 to 312 as a result of the revisions incorporated by WJA in response to C&H's first markup and the resolution of certain issues through informal discussions between counsel. The remaining 312 comments focus on the following areas that continued to be the subject of negotiation: (a) negative covenants, including restrictions on the incurrence of additional indebtedness, creation of liens, disposition of assets, mergers and consolidations, and transactions with affiliates; (b) permitted indebtedness baskets, including the amount and type of indebtedness permitted to be incurred by the borrower and its subsidiaries outside the Proposed Facility, with particular attention to existing intercompany loans and the treatment of bareboat charter obligations; (c) permitted liens, including the scope of exceptions to the negative pledge covenant for liens securing obligations of vessel-owning subsidiaries; and (d) dividend restrictions, with TSL seeking to preserve a restricted payments basket sufficient to accommodate its historical dividend policy and anticipated dividend payments to its shareholders. The markup was delivered to WJA for review in advance of a scheduled negotiation call.
• Status: Completed (superseded by subsequent drafts)
• File Reference: credit-agreement-second-markup.docx
Document 12: Issues List & Negotiation Matrix
• Date: May 15, 2023
• Author(s): Sophie Tremblay, Daniel Obi
• Description: This document is a structured list and negotiation matrix setting forth the 28 open points remaining in the credit agreement negotiation following the exchange of the second markup. Each of the 28 items is categorized as a "business" point (requiring resolution by the principals at TSL and MAB), a "legal" point (requiring resolution by counsel), or a "documentary" point (relating to drafting form and cross-references). For each item, the matrix sets forth the Borrower's position (as articulated by C&H on behalf of TSL), the Lender's position (as articulated by WJA on behalf of MAB and the lender syndicate), and a proposed compromise or resolution. The issues cover a wide range of topics, including financial covenant step-down timing, the scope of the permitted acquisition carveout, the treatment of bareboat charter obligations in the leverage ratio calculation, the LC sublimit mechanics, the commitment fee step-down threshold, and the definition of "Eligible Vessel" for purposes of the collateral coverage test. The matrix was circulated to Aris Komnenidis and Dimitrios Pantazis at TSL for client input, and to Harrison Caldwell and Priya Subramanian at WJA.
• Status: Completed (circulated to all parties)
• File Reference: issues-list-negotiation-matrix.xlsx
Document 13: Third Markup of Draft Credit Agreement
• Date: June 9, 2023
• Author(s): Sophie Tremblay, Daniel Obi
• Source Document: WJA third draft credit agreement dated June 2, 2023
• Description: This is C&H's third and final redline markup of the credit agreement, prepared in response to WJA's third draft circulated on June 2, 2023. The number of remaining open comments was further reduced to 94, reflecting substantial convergence between the parties on the financial covenant levels, the collateral terms, the SOFR provisions, and the majority of the negative covenant baskets. The 94 remaining comments were concentrated in the following areas: (a) representations and warranties, including the scope and specificity of certain maritime-specific representations (relating to vessel classification, flag state compliance, ISM Code compliance, and ISPS Code compliance) and the knowledge qualifiers applicable to environmental and sanctions representations; (b) events of default, including the materiality thresholds and cure periods applicable to certain defaults, and the cross-default and cross-acceleration triggers with respect to other indebtedness of the borrower and its subsidiaries; and (c) voting and amendment mechanics, including the definition of "Required Lenders" (proposed at 66⅔% of commitments), the provisions requiring unanimous lender consent, and the mechanics for adding or removing lenders from the syndicate. The markup was delivered to WJA and served as the basis for the preparation of the near-final execution version.
• Status: Completed (superseded by near-final version)
• File Reference: credit-agreement-third-markup.docx
Document 14: Near-Final Credit Agreement (Borrower's Execution Version)
• Date: July 3, 2023
• Author(s): Sophie Tremblay, Daniel Obi (under the direction of Ian Blackwood)
• Description: This is a clean draft of the credit agreement prepared by C&H reflecting all terms agreed between the parties following the resolution of the open items identified in the third markup and subsequent discussions between counsel. The document is styled as a "Revolving Credit Agreement" and provides for a $150,000,000 revolving credit facility among Thalassa Shipping & Logistics SA, as Borrower; Thalassa Dry Bulk Holdings Ltd., Thalassa Tanker Operations Ltd., and Thalassa Logistics International Ltd., as Guarantors; Meridian Atlantic Bank, National Association, as Administrative Agent; and Meridian Atlantic Bank, National Association, Nordkapp Maritime Finance AG, Clearwater Commercial Lending LLC, and Eastbourne Capital Partners LLP, as Lenders, with commitments of $45,000,000, $40,000,000, $35,000,000, and $30,000,000, respectively. The credit agreement includes all schedules and exhibits, including the commitment schedule, the pricing grid, forms of borrowing request, compliance certificate, assignment and assumption agreement, and other ancillary forms. The principal terms include: governing law of New York; maturity of five years from the closing date; interest rate of Term SOFR plus a margin ranging from 225 to 325 basis points based on the borrower's consolidated net leverage ratio; a commitment fee of 0.375% per annum on the unused portion of the commitments, stepping down to 0.25% per annum upon utilization exceeding 50% or $75,000,000; an LC sublimit of $20,000,000; a swingline sublimit of $15,000,000; and the financial covenant package described elsewhere in this memorandum. The near-final credit agreement was circulated for internal review by TSL management (Elena Vassiliou, Dimitrios Pantazis, and Aris Komnenidis) and was intended to serve as the basis for the execution version upon the satisfaction of remaining conditions precedent and the completion of the closing checklist.
• Status: NEVER EXECUTED — near-final draft only
• File Reference: credit-agreement-near-final.docx
Document 15: Memorandum — Summary of Agreed Credit Agreement Terms
• Date: July 5, 2023
• Author(s): Ian Blackwood, Sophie Tremblay
• Addressees: Elena Vassiliou (CEO), Dimitrios Pantazis (CFO), Aris Komnenidis (General Counsel), Thalassa Shipping & Logistics SA
• Description: This memorandum was prepared for delivery to TSL's senior management and provides a comprehensive summary of the final negotiated terms of the Proposed Facility as reflected in the near-final credit agreement. The memorandum addresses the following principal terms: (a) pricing — Term SOFR plus 225 to 325 basis points, with the applicable margin determined by a pricing grid based on the consolidated net leverage ratio; (b) commitment fee — 0.375% per annum on the unused portion of the commitments, stepping down to 0.25% per annum when utilization exceeds 50% or $75,000,000; (c) financial covenants — maximum consolidated net leverage ratio of 4.50:1.00 for the first two years, stepping down to 4.00:1.00 commencing in Year 3; minimum interest coverage ratio of 3.00:1.00; minimum liquidity of $30,000,000; maximum capital expenditures of $80,000,000 per fiscal year; (d) collateral package — first preferred ship mortgages on 18 vessels, share pledges of 100% of the equity interests in each vessel-owning subsidiary, assignments of earnings, and assignments of insurances, with a minimum collateral coverage ratio of 140%; (e) LC sublimit — $20,000,000; (f) swingline sublimit — $15,000,000; (g) maturity — five years from closing. The memorandum also highlights departures from the initial term sheet and concessions made during the negotiation process, including adjustments to the leverage ratio step-down schedule, the inclusion of a broader permitted acquisition basket, and the expansion of the restricted payments basket to accommodate TSL's historical dividend practices.
• Status: Completed (delivered to client)
• File Reference: agreed-terms-summary-memo.docx
D. Security & Collateral Documents
This category includes the security documents prepared by WJA (as lender's counsel) and marked up by C&H (as borrower's counsel), together with C&H's internal collateral coverage analysis. The security documents collectively form the collateral package that was to secure the obligations of the borrower and the guarantors under the Proposed Facility. As with all transaction documents in this matter, none of the security documents were executed.
Document 16: Markup of Draft First Preferred Ship Mortgage (Form)
• Date: June 23, 2023
• Author(s): Sophie Tremblay
• Source Document: WJA form first preferred ship mortgage circulated June 16, 2023
• Description: This document is C&H's redline markup of the form first preferred ship mortgage prepared by WJA for use in connection with the 18 Mortgaged Vessels constituting the primary collateral for the Proposed Facility. The markup contains substantive comments and proposed revisions addressing the following areas: (a) the stated mortgage amount and its relationship to the total commitments under the credit agreement; (b) insurance covenants, including minimum coverage requirements for hull and machinery (H&M), protection and indemnity (P&I), and war risk insurance; (c) flag state requirements and filings applicable to the registration of the mortgage in each relevant jurisdiction (including the Republic of the marshall Islands, Greece, and such other flag states as may be applicable to individual vessels in TSL's fleet); (d) discharge and release mechanics, including the conditions under which the administrative agent or collateral agent is required to release a vessel from the mortgage upon repayment or the satisfaction of a collateral coverage test; and (e) provisions relating to Pinnacle Trust & Agency Services Inc. in its capacity as Collateral Agent and Security Trustee, including the scope of the collateral agent's authority, its standard of care, and the mechanics for the exercise of remedies upon the occurrence and during the continuance of an event of default. The mortgage form was designed to be adapted for each of the 18 Mortgaged Vessels, with vessel-specific schedules to be completed at closing.
• Status: Draft — never executed
• File Reference: ship-mortgage-markup.docx
Document 17: Markup of Draft Share Pledge Agreement
• Date: June 23, 2023
• Author(s): Sophie Tremblay, Daniel Obi
• Source Document: WJA draft share pledge agreement circulated June 16, 2023
• Description: This document is C&H's redline markup of the draft share pledge agreement prepared by WJA. The share pledge agreement provides for the pledge of 100% of the equity interests in each vessel-owning subsidiary of TSL to the collateral agent for the benefit of the secured parties. The markup addresses the following areas: (a) remedies upon the occurrence and during the continuance of an event of default, including the collateral agent's right to foreclose upon or otherwise dispose of the pledged equity interests; (b) voting rights during the continuance of a default, specifying the circumstances under which the collateral agent may exercise voting and other governance rights with respect to the pledged equity interests; (c) release provisions, including the conditions under which the pledge is to be released upon repayment of the secured obligations or the release of a subsidiary from its guaranty obligations; and (d) cross-references to the corporate law of the jurisdictions of organization of each pledgor and pledged entity, specifically: Thalassa Dry Bulk Holdings Ltd. (organized in Cyprus), Thalassa Tanker Operations Ltd. (organized in the Republic of the marshall Islands), and Thalassa Logistics International Ltd. (organized in Cyprus). The markup includes comments on the interaction between the share pledge agreement and the applicable corporate laws of Cyprus and the Republic of the marshall Islands, including share transfer restrictions, board consent requirements, and the enforceability of the pledge under the laws of each jurisdiction.
• Status: Draft — never executed
• File Reference: share-pledge-agreement-markup.docx
Document 18: Markup of Draft Assignment of Earnings
• Date: June 23, 2023
• Author(s): Daniel Obi
• Source Document: WJA form assignment of earnings circulated June 16, 2023
• Description: This document is C&H's redline markup of the draft assignment of earnings prepared by WJA. The assignment of earnings provides for the assignment by each vessel-owning subsidiary of all charter hire, freight, demurrage, and other earnings generated by the Mortgaged Vessels to the collateral agent for the benefit of the secured parties. The markup addresses the following areas: (a) account bank requirements, including the designation of approved account banks and the terms of account control agreements to be entered into with such banks; (b) permitted distributions to the borrower, including the conditions under which earnings may be swept from the vessel-owning subsidiaries to the borrower's operating accounts prior to the occurrence of an event of default; (c) the subordination of inter-company receivables owed by the vessel-owning subsidiaries to the borrower or other affiliates; and (d) notification mechanics for the Mortgaged Vessels' earnings accounts, including the form and timing of notices to be delivered to charterers, account banks, and other relevant parties. The markup also addresses the interaction between the assignment of earnings and the earnings waterfall provisions in the credit agreement.
• Status: Draft — never executed
• File Reference: assignment-of-earnings-markup.docx
Document 19: Markup of Draft Assignment of Insurances
• Date: June 23, 2023
• Author(s): Daniel Obi
• Source Document: WJA draft assignment of insurances circulated June 16, 2023
• Description: This document is C&H's redline markup of the draft assignment of insurances prepared by WJA. The assignment of insurances provides for the assignment by each vessel-owning subsidiary of all insurance policies and proceeds relating to the Mortgaged Vessels to the collateral agent for the benefit of the secured parties. The markup addresses the following areas: (a) P&I club coverage, including the requirement that each vessel be entered in a P&I club that is a member of the International Group of P&I Clubs and the minimum coverage levels required; (b) hull and machinery (H&M) insurance, including minimum insured values and the identity of approved underwriters; (c) war risk coverage, including the scope of coverage and any geographic trading exclusion zones; (d) loss payee provisions in favor of Pinnacle Trust & Agency Services Inc. as Collateral Agent and Security Trustee, requiring that insurance proceeds in excess of a specified threshold be paid directly to the collateral agent for application in accordance with the credit agreement; and (e) references to Trident Marine Insurance Brokers Ltd. as TSL's insurance broker, including broker confirmation letters and the form of notice of assignment to be delivered to insurers and the P&I club. The markup also addresses the requirements for annual insurance certificates and the mechanics for the replacement of coverage upon the lapse or cancellation of any policy.
• Status: Draft — never executed
• File Reference: assignment-of-insurances-markup.docx
Document 20: Collateral Coverage Analysis Memorandum
• Date: July 11, 2023
• Author(s): Daniel Obi
• Addressee: Sophie Tremblay, Senior Associate, Banking & Finance
• Description: This internal memorandum provides a detailed analysis of the collateral coverage provided by the 18 Mortgaged Vessels against the 140% minimum collateral coverage ratio required under the near-final credit agreement. The analysis incorporates the vessel-by-vessel fair market valuations delivered by Seastone Maritime Advisors Ltd. (Duncan Fairweather, Managing Director) on July 10, 2023. The aggregate fair market value of the 18 Mortgaged Vessels as appraised by Seastone was $780,000,000. At full draw of $150,000,000 under the Proposed Facility, the minimum required collateral value to satisfy the 140% coverage ratio would be $210,000,000 (calculated as 140% multiplied by $150,000,000). The actual coverage ratio based on the Seastone appraisals is approximately 520% ($780,000,000 divided by $150,000,000), indicating substantial headroom above the minimum requirement. The memorandum also analyzes the vessel release mechanics in the near-final credit agreement, noting that the borrower would be entitled to request the release of a Mortgaged Vessel from the collateral package provided that, after giving effect to such release, the remaining Mortgaged Vessels would continue to satisfy the 140% minimum coverage ratio. Given the significant excess coverage, the memorandum observes that TSL would have considerable flexibility to release individual vessels from the collateral package if needed for fleet management or disposition purposes.
• Status: Completed (internal analysis)
• File Reference: collateral-coverage-analysis-memo.docx
E. Due Diligence, Corporate & Legal Opinion Documents
This category includes the corporate authorization materials, draft legal opinion outlines, and related due diligence documents prepared in connection with the anticipated closing of the Proposed Facility. These documents represent work undertaken to satisfy the conditions precedent to the initial borrowing under the credit agreement. None of the underlying corporate authorizations were finalized, and no legal opinions were issued.
Document 21: Borrower's Corporate Authorization Checklist
• Date: April 20, 2023
• Author(s): Daniel Obi
• Description: This checklist identifies all board and shareholder resolutions required from TSL and each of the three Guarantors in connection with the authorization of the Proposed Facility and the related transaction documents. For each entity, the checklist sets forth the specific corporate actions required, the governing corporate law and constitutional documents, the form of resolution to be adopted, and any specific procedural requirements applicable under the laws of the relevant jurisdiction. The entities covered are: (a) Thalassa Shipping & Logistics SA, organized under the laws of Greece — requiring board of directors' resolutions authorizing the execution and delivery of the credit agreement, security documents, and related agreements, and the designation of authorized signatories; (b) Thalassa Dry Bulk Holdings Ltd., organized under the laws of Cyprus — requiring board of directors' resolutions authorizing the execution and delivery of the guaranty, share pledge, and related security documents; (c) Thalassa Tanker Operations Ltd., organized under the laws of the Republic of the marshall Islands — requiring board of directors' resolutions authorizing the guaranty and related documents; and (d) Thalassa Logistics International Ltd., organized under the laws of Cyprus — requiring board of directors' resolutions authorizing the guaranty and related documents. The checklist also tracks the requirement for incumbency certificates, specimen signatures, and certified copies of constitutional documents (articles of association, memoranda of association, certificates of incorporation, and certificates of good standing or equivalent) for each entity. Jurisdiction-specific requirements for Greece, Cyprus, and the Republic of the marshall Islands are noted throughout, including notarization and apostille requirements where applicable.
• Status: Completed (checklist prepared; underlying resolutions were never finalized due to the termination of the transaction)
• File Reference: corporate-authorization-checklist.xlsx
Document 22: Draft Secretary's Certificate — Thalassa Shipping & Logistics SA
• Date: June 28, 2023
• Author(s): Daniel Obi
• Description: This is a draft secretary's certificate to be signed by the secretary or other authorized officer of Thalassa Shipping & Logistics SA and delivered to the administrative agent and the lenders as a condition precedent to the initial borrowing under the credit agreement. The draft certificate provides for the attachment of the following exhibits: (a) a certified copy of the articles of association (katastatiko) of TSL, as most recently amended; (b) a certified copy of the resolutions of the board of directors of TSL, duly adopted, authorizing the execution, delivery, and performance of the credit agreement, the security documents, and all related transaction documents; (c) an incumbency certificate setting forth the names, titles, and specimen signatures of each officer of TSL authorized to execute and deliver the transaction documents; and (d) specimen signatures of Elena Vassiliou (Chief Executive Officer) and Dimitrios Pantazis (Chief Financial Officer) as authorized signatories for the borrower. The draft certificate includes customary certifications regarding the accuracy and completeness of the attached documents, the continuing validity of the corporate resolutions, and the absence of any event of default or material adverse change.
• Status: Draft — never executed
• File Reference: draft-secretary-certificate-tsl.docx
Document 23: Draft Legal Opinion Outline — Pavlopoulos & Drakos (Greek Law)
• Date: June 30, 2023
• Author(s): Sophie Tremblay
• Description: This document is an outline prepared by C&H for use by Pavlopoulos & Drakos Law Firm (Theodoros Pavlopoulos, Senior Partner; 22 Filellinon Street, Athens 105 57, Greece), TSL's Greek local counsel, in preparing the Greek-law legal opinion required as a condition precedent to closing. The outline sets forth the proposed scope and substance of the opinion, which was to cover the following matters: (a) due organization and valid existence of TSL as a Société Anonyme under the laws of the Hellenic Republic; (b) corporate power and authority of TSL to execute, deliver, and perform its obligations under the credit agreement and the related transaction documents to which it is a party; (c) due authorization of the execution, delivery, and performance of the transaction documents by all necessary corporate action on the part of TSL; (d) enforceability of the obligations of TSL under the transaction documents under Greek law, subject to customary qualifications and assumptions; (e) no conflict of the execution, delivery, and performance of the transaction documents with Greek law, the constitutional documents of TSL, or any orders, judgments, or decrees binding on TSL; and (f) no governmental approvals, registrations, filings, or consents required under Greek law in connection with the execution, delivery, and performance of the transaction documents that have not been obtained or made. The opinion was to be addressed to Meridian Atlantic Bank, National Association, as Administrative Agent, and to the Lenders. The outline also includes proposed assumptions, qualifications, and limitations customary for Greek-law opinions in shipping finance transactions, including qualifications relating to bankruptcy, insolvency, reorganization, and other creditors' rights laws.
• Status: Draft outline only — opinion never issued
• File Reference: greek-law-opinion-outline.docx
Document 24: Draft Legal Opinion Outline — Calderwood & Harkness LLP (NY Law)
• Date: July 1, 2023
• Author(s): Sophie Tremblay
• Description: This document is an outline of C&H's proposed New York law enforceability opinion on the credit agreement and related transaction documents. The opinion was to be issued by C&H as borrower's New York counsel and addressed to Meridian Atlantic Bank, National Association, as Administrative Agent, and to the Lenders. The outline covers the following principal opinions: (a) the enforceability of the credit agreement and related documents governed by New York law against the borrower and the guarantors (to the extent such guarantors are parties to New York law-governed documents), in each case subject to customary qualifications; (b) the choice of New York law as the governing law of the credit agreement and related documents, subject to customary choice-of-law qualifications; and (c) the submission to jurisdiction and waiver of sovereign immunity provisions in the credit agreement. The outline includes standard assumptions and qualifications customary for New York law opinions in shipping finance transactions, including: (i) bankruptcy, insolvency, fraudulent transfer, and other creditors' rights limitations; (ii) equitable principles and the exercise of judicial discretion; (iii) choice-of-law qualifications under New York General Obligations Law Section 5-1401; (iv) usury savings clause qualifications; and (v) qualifications relating to indemnification, contribution, exculpation, and limitation of liability provisions. The outline was prepared in anticipation of a closing that did not occur, and no opinion was issued.
• Status: Draft outline only — opinion never issued
• File Reference: ny-law-opinion-outline.docx
F. Closing Preparation Documents
This category includes the closing checklist, the draft funds flow memorandum, and the draft borrowing request form prepared in anticipation of the closing of the Proposed Facility. All of these documents remained in draft or template form and were never finalized or executed.
Document 25: Closing Checklist
• Date: July 3, 2023
• Author(s): Sophie Tremblay
• Description: This is a 78-item closing checklist prepared by C&H covering all conditions precedent to the initial borrowing under the proposed credit agreement. The checklist is organized by category and includes, among other items: (a) execution and delivery of the credit agreement, guaranties, and all ancillary agreements; (b) execution and delivery of all security documents, including first preferred ship mortgages, share pledge agreements, assignments of earnings, and assignments of insurances; (c) delivery of corporate authorization documents, including board resolutions, secretary's certificates, incumbency certificates, and good standing certificates (or equivalents) for the borrower and each guarantor; (d) delivery of legal opinions, including the Greek-law opinion from Pavlopoulos & Drakos and the New York-law opinion from C&H; (e) delivery of officer's certificates certifying the accuracy of representations and warranties and the absence of any event of default; (f) evidence of insurance coverages for the Mortgaged Vessels; (g) vessel appraisal reports demonstrating compliance with the minimum collateral coverage ratio; (h) payoff letter from Harborstone National Bank for the Existing Harborstone RCF; (i) UCC filings and other perfection actions; (j) payment of fees and expenses; and (k) satisfaction of all other conditions precedent specified in the credit agreement. The checklist includes a responsibility matrix assigning primary and secondary responsibility for each item among the following parties: the Borrower (TSL), the Administrative Agent (MAB), Lender's Counsel (WJA), Borrower's Counsel (C&H), and the Collateral Agent (Pinnacle Trust & Agency Services Inc.). The status column for all 78 items was marked as either "pending" or "in progress" as of the date of preparation, as no item had been completed in final form by the time of Meridian Atlantic's withdrawal.
• Status: Completed (checklist prepared; never completed due to MAB withdrawal)
• File Reference: closing-checklist.xlsx