C&H Matter No. 1044-00003
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
MARKED DRAFT — Calderwood & Harkness LLP Comments
December 22, 2022
DRAFT — FOR DISCUSSION PURPOSES ONLY — NOT EXECUTED
by and among
THALASSA AMERICAS INC.
as Borrower,
NORDBANK INTERNATIONAL AG
as DIP Agent and DIP Lender,
and
TRITON CREDIT PARTNERS LP
as DIP Lender
Prepared in connection with Chapter 11 contingency planning for Thalassa Americas Inc.
TABLE OF CONTENTS
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DEBTOR-IN-POSSESSION CREDIT AGREEMENT
This DEBTOR-IN-POSSESSION CREDIT AGREEMENT (this "Agreement"), dated as of [●], 2023, is entered into by and among:
(1) THALASSA AMERICAS INC., a C-Corporation organized and existing under the laws of the State of Delaware, with its principal office at 1400 McKinney Street, Suite 2200, Houston, Texas 77010 (EIN: 84-3291057; registered agent: Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801) (the "Borrower" or "TAI");
(2) NORDBANK INTERNATIONAL AG, an Aktiengesellschaft organized under the laws of Switzerland, with offices at Bahnhofstrasse 78, 8001 Zürich, Switzerland, acting in its capacity as Administrative Agent and Collateral Agent under the DIP Facility (in such capacity, the "DIP Agent") and as a DIP Lender hereunder; and
(3) TRITON CREDIT PARTNERS LP, a Delaware limited partnership with offices at 399 Park Avenue, 14th Floor, New York, New York 10022, acting as a DIP Lender hereunder.
The DIP Agent and the DIP Lenders are referred to herein collectively as the "DIP Secured Parties."
RECITALS
WHEREAS:
A. The Borrower is a wholly-owned subsidiary of Thalassa Shipping & Logistics Société Anonyme ("TSL" or the "Parent"), a société anonyme organized under the laws of the Hellenic Republic, with its principal headquarters at 42 Akti Miaouli, Piraeus 18538, Greece. TSL is a global shipping and logistics enterprise, and TAI serves as TSL's principal operating platform in the Americas for vessel scheduling, freight brokerage, terminal operations, and related logistics activities.
> [C&H Comment — Recital A]: No markup.
B. The Borrower anticipates filing, on or about the date hereof or as soon as practicable thereafter, a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the "Bankruptcy Code"), in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the "Bankruptcy Court"), thereby commencing a case (the "Bankruptcy Case") (the date of such filing, the "Petition Date"). During the pendency of the Bankruptcy Case, the Borrower intends to continue to operate its business and manage its assets as a debtor in possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
> [C&H Comment — Recital B]: Confirm that the filing entity is TAI only, and not TSL or any of the fourteen vessel-owning special purpose vehicles. Coordinate with the potential joint administration motion in the event that multiple entities file. As of the date of this draft, the current expectation is that only TAI will file a voluntary petition, with TSL and the vessel-owning SPVs remaining outside of the Chapter 11 process. If the filing scope changes, this Agreement and all ancillary documents will need to be revised accordingly.
C. The Borrower requires immediate access to debtor-in-possession financing to fund its ongoing operations, pay administrative expenses of the Bankruptcy Case, preserve the going-concern value of its estate for the benefit of all stakeholders, and facilitate a timely reorganization. Without such financing, the Borrower will be unable to meet its operating obligations, compensate its approximately 680 employees in the United States, or maintain its Houston terminal operations, vessel scheduling activities, and freight brokerage business, all to the detriment of the Borrower's estate and its creditors.
D. Prior to the Petition Date, the Borrower and TSL are parties to that certain Senior Secured Credit Agreement, dated as of June 15, 2019 (as amended, restated, supplemented, or otherwise modified from time to time prior to the date hereof, the "Existing Credit Agreement"), among TSL (as borrower), TAI (as co-borrower for the U.S. Tranche), Nordbank International AG (as Administrative Agent and Collateral Agent), and the lenders party thereto (the "Prepetition Lenders"), providing for an aggregate committed facility in the original principal amount of $685,000,000, of which approximately $540,000,000 in principal is outstanding as of September 30, 2022 (consisting of $270,000,000 under Term Loan A, $185,000,000 under the Revolving Credit Facility, and $85,000,000 under Term Loan B).
> [C&H Comment — Recital D]: Verify exact outstanding principal amounts as of the anticipated Petition Date. As of September 30, 2022, the balances are as follows: Term Loan A — $270,000,000; Revolving Credit Facility — $185,000,000; Term Loan B — $85,000,000; aggregating to $540,000,000 in total senior secured debt. Note that additional quarterly amortization of $10,000,000 on the Term Loan A may reduce the outstanding balance by the Petition Date. Confirm with Diana Restrepo (VP Finance, TAI) and James Calloway (Managing Director, KHP) the actual balances as of the anticipated Petition Date.
E. In addition to the obligations under the Existing Credit Agreement, TSL has issued $112,300,000 in aggregate principal amount of mezzanine notes (the "Existing Mezzanine Notes") held by Dralvecen Mezzanine Capital LLC ("BMC"), bearing interest at 11.5% per annum (PIK toggle), maturing on December 15, 2024, and secured by second-priority liens on the collateral under the Existing Credit Agreement, pursuant to that certain Intercreditor Agreement, dated as of June 15, 2019 (the "Existing Intercreditor Agreement"), between Nordbank International AG (as first-lien agent) and BMC (as second-lien holder).
F. TSL has also issued $50,000,000 in aggregate principal amount of 8.25% Senior Unsecured Notes due March 1, 2025 (the "Existing Unsecured Notes"), under an indenture dated as of March 1, 2020, with Garrison Trust Company, 100 Wall Street, 16th Floor, New York, New York 10005, as indenture trustee. The Borrower missed the coupon payment of $2,062,500 due December 1, 2022 on the Existing Unsecured Notes.
G. On October 10, 2022, the Borrower, TSL, Nordbank International AG (as Administrative Agent and Collateral Agent under the Existing Credit Agreement), and the requisite Prepetition Lenders entered into a Forbearance Agreement (the "Forbearance Agreement"), providing a 90-day standstill period with respect to certain defaults under the Existing Credit Agreement, expiring on or about January 8, 2023, during which the parties have engaged in negotiations regarding the terms of a potential restructuring.
H. The DIP Facility contemplated hereunder is intended to provide the Borrower with superpriority administrative expense claims and priming liens pursuant to Sections 364(c) and 364(d) of the Bankruptcy Code, to be approved by the Bankruptcy Court upon entry of appropriate orders (the "DIP Order").
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS AND INTERPRETATION
Section 1.01 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Administrative Agent" means Nordbank International AG, acting in its capacity as administrative agent under this Agreement and the other DIP Loan Documents, together with its successors and assigns in such capacity.
"Advance" means each disbursement of DIP Loan proceeds made by the DIP Lenders to the Borrower pursuant to this Agreement.
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
"Approved Budget" means the 13-week cash flow budget delivered by the Borrower and approved by the Required DIP Lenders in accordance with this Agreement, as the same may be updated, amended, or replaced from time to time in accordance with Section 6.01 hereof. The initial Approved Budget is attached hereto as Exhibit A. The Approved Budget shall be updated by the Borrower and submitted for approval by the Required DIP Lenders every four (4) weeks following the Petition Date.
> [C&H Comment — "Approved Budget"]: Insert the following requirement: "Each Approved Budget shall be prepared in consultation with Kensington Veltrian Partners LLC ('KHP'), the Borrower's retained financial advisor (James Calloway, Managing Director), and shall be in form and substance reasonably satisfactory to the Required DIP Lenders." This ensures the financial advisor's involvement in budget preparation is memorialized and provides the Required DIP Lenders with an appropriate standard of approval.
"Bankruptcy Case" means the case commenced by the filing of the voluntary petition by Thalassa Americas Inc. under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.
"Bankruptcy Code" means Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq., as amended from time to time, and any successor statutes thereto.
"Bankruptcy Court" means the United States Bankruptcy Court for the Southern District of Texas, Houston Division, or such other court of competent jurisdiction having jurisdiction over the Bankruptcy Case or any proceeding arising therein or related thereto.
"Borrower" means Thalassa Americas Inc., a C-Corporation organized under the laws of the State of Delaware.
"Budget Variance" means the permitted variance from the Approved Budget, defined as [●]% on a cumulative basis for disbursements and [●]% for receipts, tested on a rolling four-week basis. For purposes of clarity, a positive variance on the disbursement side (i.e., actual disbursements exceeding budgeted disbursements) shall constitute an adverse variance, and a negative variance on the receipt side (i.e., actual receipts falling below budgeted receipts) shall constitute an adverse variance.
> [C&H Comment — "Budget Variance"]: Propose 15% variance for disbursements and 10% for receipts. The Nordbank/Triton initial proposal in the DIP Term Sheet dated December 15, 2022 was 10%/10%. We recommend negotiating upward for operational flexibility given the inherent volatility in shipping revenues and the seasonal nature of dry-bulk charter rates. A 15%/10% threshold is well within the range of precedent shipping DIP facilities. If necessary, consider proposing a tiered approach: 15% for the first eight weeks and 12.5% thereafter, as operations stabilize post-petition.
"Business Day" means any day other than a Saturday, Sunday, or other day on which commercial banks in New York, New York, Zürich, Switzerland, or Houston, Texas are authorized or required by law to close.
"Carve-Out" has the meaning set forth in Section 2.09 of this Agreement.
"Closing Date" means the date on which all conditions precedent set forth in Section 5.01 of this Agreement have been satisfied (or waived by the DIP Agent and Required DIP Lenders in their sole discretion) and the initial Advance is funded to the Borrower.
"Collateral" means all property of the Borrower's estate (as defined in Section 541 of the Bankruptcy Code), whether now owned or hereafter acquired, including, without limitation, (a) all assets currently subject to the prepetition liens under the Existing Credit Agreement (including the Houston terminal lease, all accounts receivable, equity interests in TAI held by TSL, and TAI's interests in the fourteen (14) vessel-owning special purpose vehicles), (b) all other property of the Borrower's estate acquired or generated post-petition, and (c) all proceeds, products, rents, profits, and offspring of any of the foregoing, in each case as more fully described in Exhibit G hereto.
> [C&H Comment — "Collateral"]: Critical note: The thirty-eight (38) dry-bulk carriers and twelve (12) container vessels comprising the TSL fleet (aggregate fleet appraised value of $623,000,000 per the appraisal conducted by Drakos Maritime Valuations Ltd. (Captain Nikos Drakos) as of November 1, 2022) are owned by TSL and the vessel-owning SPVs, not directly by TAI. TAI's collateral base is primarily its equity interests in the fourteen vessel-owning SPVs, the Houston terminal lease, domestic accounts receivable, and other U.S.-based assets. It is important to clarify that the DIP Liens attach only to property of the TAI bankruptcy estate. The vessels themselves, as assets owned by non-debtor entities, are not directly pledged under this Agreement. The equity interests in the SPVs provide indirect access to vessel value, but enforcement would require separate proceedings against each SPV. This distinction must be clearly addressed in the DIP Motion and the DIP Order.
"Commitment" means, with respect to each DIP Lender, the amount of its DIP Loan commitment as set forth opposite such DIP Lender's name on Schedule 1.01 hereto, and "Commitments" means, collectively, the aggregate DIP Loan commitment of the DIP Lenders in the amount of Seventy-Five Million Dollars ($75,000,000).
"Compliance Certificate" means a certificate substantially in the form of Exhibit C hereto.
"CRO" means the Chief Restructuring Officer appointed by the Borrower, if any. As of the date of this Agreement, reference is made to the standby engagement letter between the Borrower and Alderney Management Advisors LLC, pursuant to which Richard "Rick" Thornberg has been designated as the CRO Designee for the Borrower.
"Default" means any event or condition that, with the giving of notice, the lapse of time, or both, would constitute an Event of Default.
"Default Rate" means a per annum rate of interest equal to the Applicable Rate then in effect plus two hundred (200) basis points.
"DIP Agent" means Nordbank International AG, in its capacity as Administrative Agent and Collateral Agent under this Agreement and the other DIP Loan Documents, together with its successors and assigns in such capacity.
"DIP Lenders" means, collectively, Nordbank International AG (in its capacity as a lender hereunder) and Triton Credit Partners LP, together with their respective successors and permitted assigns, and "DIP Lender" means any one of them.
"DIP Liens" means the first-priority priming security interests and liens granted to the DIP Agent, for the benefit of the DIP Secured Parties, in and on the Collateral pursuant to Article III of this Agreement and the DIP Order.
"DIP Loan" means the superpriority secured debtor-in-possession term loan facility provided for under this Agreement in the aggregate principal amount of up to Seventy-Five Million Dollars ($75,000,000).
"DIP Loan Documents" means, collectively, this Agreement, the DIP Order, the Borrowing Requests, the Compliance Certificates, the Secretary's Certificate, and all other instruments, agreements, certificates, and documents executed and delivered in connection with the DIP Facility.
"DIP Order" means, collectively, the Interim DIP Order and the Final DIP Order.
"DIP Secured Parties" means, collectively, the DIP Agent and the DIP Lenders.
"DIP Superpriority Claim" means the superpriority administrative expense claim against the Borrower's estate held by the DIP Secured Parties under Section 364(c)(1) of the Bankruptcy Code, as further described in Section 2.07 hereof.
"Existing Credit Agreement" means that certain Senior Secured Credit Agreement, dated as of June 15, 2019 (as amended, restated, supplemented, or otherwise modified from time to time prior to the date hereof), among TSL (as borrower), TAI (as co-borrower for the U.S. Tranche), Nordbank International AG (as Administrative Agent and Collateral Agent), and the lenders party thereto, providing for an aggregate committed facility in the original principal amount of $685,000,000 (CUSIP for Term Loan A: 87265BAA7).
"Existing Intercreditor Agreement" means the Intercreditor Agreement, dated as of June 15, 2019, between Nordbank International AG (in its capacity as first-lien agent under the Existing Credit Agreement) and Dralvecen Mezzanine Capital LLC (in its capacity as second-lien holder under the Existing Mezzanine Notes), as amended, restated, supplemented, or otherwise modified from time to time prior to the date hereof.
"Existing Mezzanine Notes" means the $112,300,000 in aggregate principal amount of mezzanine notes (second lien) issued by TSL and held by Dralvecen Mezzanine Capital LLC, bearing interest at 11.5% per annum (PIK toggle), maturing on December 15, 2024, and secured by second-priority liens on the collateral under the Existing Credit Agreement pursuant to the Existing Intercreditor Agreement. The original principal amount issued was $100,000,000, with $12,300,000 of additional principal representing capitalized PIK interest as of the date hereof.
"Existing Unsecured Notes" means the $50,000,000 in aggregate principal amount of 8.25% Senior Unsecured Notes due March 1, 2025, issued by TSL under an indenture dated as of March 1, 2020, with Garrison Trust Company, 100 Wall Street, 16th Floor, New York, New York 10005, as indenture trustee (CUSIP: 87265BAB5).
"Event of Default" has the meaning set forth in Section 8.01 of this Agreement.
"Final DIP Order" means an order of the Bankruptcy Court, entered after a final hearing conducted on due notice to all parties in interest, approving the DIP Facility on a final basis, in form and substance acceptable to the DIP Agent and the Required DIP Lenders.
"Forbearance Agreement" means the Forbearance Agreement, dated as of October 10, 2022, among the Borrower, TSL, Nordbank International AG (as Administrative Agent and Collateral Agent under the Existing Credit Agreement), and the requisite Prepetition Lenders party thereto.
"Governmental Authority" means any federal, state, local, or foreign court, government, department, commission, board, bureau, agency, official, or other regulatory, administrative, or governmental authority.
"Interim DIP Order" means an order of the Bankruptcy Court, entered after an interim hearing conducted on the notice required by Bankruptcy Rule 4001(c), approving up to Thirty Million Dollars ($30,000,000) of the DIP Facility on an interim basis, in form and substance acceptable to the DIP Agent and the Required DIP Lenders.
> [C&H Comment — "Interim DIP Order"]: Confirm that $30,000,000 in interim availability is sufficient to fund the first forty-five (45) days of TAI's post-petition operations based on the 13-week cash flow projections prepared by KHP. Coordinate with James Calloway (KHP) to validate the interim draw requirement against projected disbursements for the initial post-petition period.
"Interest Payment Date" means the last Business Day of each calendar month during the term of the DIP Facility, commencing with the first full calendar month following the Closing Date.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, security interest, or preference, priority, or other security agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction.
"Material Adverse Effect" means a material adverse effect on (a) the business, financial condition, assets, operations, or prospects of the Borrower, (b) the ability of the Borrower to perform its obligations under this Agreement or any other DIP Loan Document, (c) the validity or enforceability of this Agreement, the DIP Order, or any other DIP Loan Document, (d) the rights and remedies of the DIP Agent and the DIP Lenders under this Agreement, the DIP Order, or any other DIP Loan Document, or (e) the value, priority, or enforceability of the DIP Liens.
"Maturity Date" means the date that is twelve (12) months following the Petition Date; provided, however, that the Maturity Date shall be subject to early termination in accordance with Section 8.01 of this Agreement.
"Parent" means Thalassa Shipping & Logistics Société Anonyme, a société anonyme organized under the laws of the Hellenic Republic, with its principal headquarters at 42 Akti Miaouli, Piraeus 18538, Greece.
"Permitted Indebtedness" means (a) the DIP Obligations, (b) the Prepetition Obligations, (c) obligations under the Existing Mezzanine Notes, (d) obligations under the Existing Unsecured Notes, (e) the intercompany note from TAI to TSL in the principal amount of $76,400,000 (provided that no payments shall be made thereon during the Bankruptcy Case without DIP Agent consent), (f) trade payables and accrued liabilities incurred in the ordinary course of business consistent with the Approved Budget, (g) obligations under capital leases and purchase money indebtedness not to exceed $2,000,000 in the aggregate at any time outstanding, and (h) other indebtedness approved in writing by the DIP Agent and the Required DIP Lenders.
"Permitted Liens" means (a) DIP Liens, (b) Prepetition Replacement Liens, (c) BMC Replacement Liens, (d) liens for taxes not yet due and payable or being contested in good faith by appropriate proceedings, (e) carriers', warehousemen's, mechanics', materialmen's, repairmen's, and similar liens arising in the ordinary course of business, (f) pledges and deposits made in the ordinary course of business in compliance with workers' compensation, unemployment insurance, and other social security laws, and (g) other liens consented to in writing by the DIP Agent.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, Governmental Authority, or any other entity.
"Petition Date" means the date on which the Borrower files a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.
"Prepetition Agent" means Nordbank International AG, in its capacity as Administrative Agent and Collateral Agent under the Existing Credit Agreement.
"Prepetition Lenders" means the lenders party to the Existing Credit Agreement, being: Nordbank International AG ($137,000,000), Aegean Capital Bank SA ($110,000,000), Harborstone Bank plc ($95,000,000), Pacifica Trade Finance Corp. ($82,000,000), Continental Maritime Lending GmbH ($72,000,000), Triton Credit Partners LP ($68,000,000), Laurentian Shipping Fund II ($55,000,000), Caspian Asset Management Ltd. ($40,000,000), and Pelagos Institutional Credit Fund ($26,000,000), together with their respective successors and assigns.
"Prepetition Obligations" means all obligations of the Borrower and TSL (as applicable) outstanding under the Existing Credit Agreement, consisting of approximately $540,000,000 in aggregate outstanding principal as of September 30, 2022 (Term Loan A: $270,000,000; Revolving Credit Facility: $185,000,000; Term Loan B: $85,000,000), together with all accrued and unpaid interest, fees, costs, expenses, and other amounts owing thereunder.
"Prepetition Replacement Liens" means the replacement liens on the Collateral granted to the Prepetition Agent, for the benefit of the Prepetition Lenders, as adequate protection in accordance with Section 2.08 of this Agreement and the DIP Order.
"Required DIP Lenders" means, at any time, DIP Lenders holding at least sixty-six and two-thirds percent (66-2/3%) of the aggregate outstanding DIP Commitments (or, if the DIP Commitments have been terminated, the aggregate outstanding principal amount of the DIP Loans).
"SOFR" means the Secured Overnight Financing Rate as published by the Federal Reserve Bank of New York (or a successor administrator), as determined by the DIP Agent in accordance with market conventions.
"Superpriority Claim" means a claim against the Borrower's estate under Section 364(c)(1) of the Bankruptcy Code having priority over all administrative expenses of the kind specified in Sections 503(b) and 507(b) of the Bankruptcy Code, subject only to the Carve-Out.
"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York.
All other capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Existing Credit Agreement to the extent such definitions are not inconsistent with the terms of this Agreement or the Bankruptcy Code.
> [C&H Comment — Section 1.01, General]: Cross-reference all defined terms with the Existing Credit Agreement definitions where appropriate to ensure consistency and avoid interpretive conflicts between the DIP definitions and the prepetition facility definitions. In particular, confirm that the definitions of "Collateral," "Permitted Liens," "Material Adverse Effect," and "Permitted Indebtedness" are consistent with or appropriately supersede the corresponding prepetition definitions.
Section 1.02 — Rules of Interpretation
(a) Unless the context otherwise requires, (i) words in the singular include the plural and vice versa, (ii) references to "herein," "hereof," "hereunder," and words of similar import refer to this Agreement as a whole, including all Exhibits and Schedules, and not to any particular Article, Section, or other subdivision, (iii) references to any Article, Section, Exhibit, or Schedule are to such Article or Section of, or Exhibit or Schedule to, this Agreement unless otherwise indicated, (iv) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation," and (v) references to any law or regulation shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, or interpreting such law or regulation, including, without limitation, references to the Bankruptcy Code (which shall include any successor provisions thereto).
(b) Headings and captions used in this Agreement are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.
(c) All dollar amounts referenced herein are in lawful currency of the United States of America unless otherwise expressly specified.
(d) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including," and the words "to" and "until" each mean "to but excluding."
(e) References to the Bankruptcy Code include any successor provisions and any regulations promulgated thereunder. References to any other statute shall include any regulations promulgated thereunder and shall be construed as including all statutory and regulatory provisions consolidating, amending, or replacing the statute referred to.
(f) Where this Agreement provides that any action shall be taken or any determination made by the DIP Agent or the Required DIP Lenders in their "sole discretion" or "in its discretion," such action or determination shall not be subject to any implied obligation of good faith or fair dealing, except to the extent expressly required by applicable law.
ARTICLE II — THE DIP FACILITY
Section 2.01 — DIP Loan Commitments
(a) Commitment. Subject to the terms and conditions set forth in this Agreement and in the DIP Order, each DIP Lender agrees, severally and not jointly, to make term loans (each, an "Advance" and, collectively, the "DIP Loans") to the Borrower during the Availability Period in an aggregate principal amount not to exceed such DIP Lender's Commitment as set forth on Schedule 1.01 hereto. The aggregate Commitments of all DIP Lenders under this Agreement shall not exceed Seventy-Five Million Dollars ($75,000,000).
(b) Allocation of Commitments. The Commitments shall be allocated among the DIP Lenders as set forth in Schedule 1.01 hereto.
> [C&H Comment — Section 2.01(b)]: The DIP Term Sheet received December 15, 2022 from Nordbank and Triton did not specify the allocation between the two DIP Lenders. Allocation remains to be finalized. Based on preliminary discussions with Henrik Lüdemann (Nordbank) and David Sorokin (Triton), we propose a 60/40 split — $45,000,000 to Nordbank International AG and $30,000,000 to Triton Credit Partners LP. This allocation reflects Nordbank's role as DIP Agent and its larger prepetition exposure. Schedule 1.01 should be completed once allocation is confirmed.
(c) Multi-Draw Facility. The DIP Loans shall be available to be drawn by the Borrower in multiple Advances during the Availability Period upon delivery of a Borrowing Request in accordance with Section 2.01(d) hereof.
> [C&H Comment — Section 2.01(c)]: The Nordbank/Triton DIP Term Sheet contemplated a single-draw term loan. We strongly recommend negotiating for a multi-draw structure to minimize interest costs and preserve flexibility for the Borrower. Drawing the full $75,000,000 at closing, when only $30,000,000 may be needed on an interim basis, would result in unnecessary interest expense. A multi-draw facility is standard in DIP financings of this nature and should not be controversial.
(d) Borrowing Requests. The Borrower may request an Advance by delivering to the DIP Agent a Borrowing Request substantially in the form of Exhibit B hereto, duly executed by an authorized officer of the Borrower, not less than three (3) Business Days prior to the requested date of such Advance (or such shorter period as the DIP Agent may agree in its sole discretion).
(e) Availability Period. The DIP Loans shall be available to be drawn from the Closing Date until the earliest of (i) the Maturity Date, (ii) the date of termination of the Commitments in accordance with this Agreement, and (iii) the occurrence of an Event of Default that has not been waived (the "Availability Period").
(f) Interim Availability. Notwithstanding the foregoing, upon entry of the Interim DIP Order, the Borrower may draw up to Thirty Million Dollars ($30,000,000) in aggregate principal amount of DIP Loans (the "Interim DIP Loans"). The remaining Forty-Five Million Dollars ($45,000,000) of the Commitments shall be available only upon entry of the Final DIP Order and satisfaction of the conditions set forth in Section 5.02 hereof.
(g) No Reinstatement. Any amounts repaid or prepaid under the DIP Facility may not be reborrowed.
Section 2.02 — Use of Proceeds
(a) The proceeds of the DIP Loans shall be used by the Borrower solely for the following purposes:
(i) working capital and general corporate purposes of the Borrower during the pendency of the Bankruptcy Case, in each case consistent with the Approved Budget;
(ii) payment of administrative expenses of the Bankruptcy Case, including, without limitation, legal fees, financial advisory fees, fees of the CRO, United States Trustee fees, claims agent fees, and other professional fees and expenses (estimated at approximately $18,500,000 for the first twelve (12) months of the Bankruptcy Case);
(iii) payment of adequate protection obligations to the Prepetition Lenders as set forth in Section 2.08 hereof;
(iv) funding of the Carve-Out as set forth in Section 2.09 hereof; and
(v) payment of the fees and expenses contemplated by Sections 2.04 and 2.05 hereof and Article X hereof.
(b) Notwithstanding the foregoing, the proceeds of the DIP Loans shall NOT be used, directly or indirectly, for any of the following purposes:
(i) any payment or distribution on account of any equity interests in the Borrower, or any dividend, redemption, or repurchase of equity interests;
(ii) any payment on account of prepetition unsecured claims (including, without limitation, claims arising under the Existing Unsecured Notes and trade payables) except to the extent expressly authorized by order of the Bankruptcy Court (including in connection with any critical vendor, employee wage, or similar first-day orders);
(iii) the investigation, prosecution, initiation, joinder in, or assertion of any claims, counterclaims, actions, objections, defenses, or causes of action (including, without limitation, any claims or causes of action arising under Chapter 5 of the Bankruptcy Code) against any of the DIP Agent, the DIP Lenders, the Prepetition Agent, or the Prepetition Lenders, or any of their respective officers, directors, employees, agents, attorneys, advisors, affiliates, or representatives, in any capacity;
(iv) any purpose that is inconsistent with the Approved Budget (subject to the permitted Budget Variance); or
(v) any intercompany transfer, loan, advance, or payment to or for the benefit of TSL or any Affiliate of the Borrower, except as expressly permitted by Section 2.10 hereof.
> [C&H Comment — Section 2.02(b)(iii)]: This investigation/challenge waiver provision is overbroad as currently drafted. It would effectively prohibit the Borrower and any other party in interest (including an official committee of unsecured creditors, if appointed) from investigating or challenging the validity, extent, priority, or perfection of the prepetition liens held by the Prepetition Lenders under the Existing Credit Agreement. We recommend negotiating a carve-out permitting a duly appointed official committee of unsecured creditors (or other party in interest with standing) to investigate and, if appropriate, challenge prepetition liens within sixty (60) days after the appointment of such committee, at a cost not to exceed a reasonable budget (suggest $250,000 of committee professional fees for investigation purposes). This type of investigation carve-out is standard in Chapter 11 DIP facilities, particularly in shipping cases, and failure to include it is likely to generate significant opposition from the United States Trustee and any committee. This issue should be flagged for discussion with Nordbank and Triton.
(c) The Borrower shall ensure that all use of DIP Loan proceeds is in compliance with the Approved Budget, subject to the permitted Budget Variance.
Section 2.03 — Interest Rate
(a) Applicable Rate. Each DIP Loan shall bear interest from the date of the applicable Advance at a per annum rate equal to the sum of (i) SOFR (determined on a one-month basis) plus (ii) six hundred (600) basis points (6.00%) (such sum, the "Applicable Rate").
(b) SOFR Floor. Notwithstanding anything to the contrary herein, if SOFR on any date of determination is less than [●]% per annum, SOFR shall be deemed to be [●]% per annum for purposes of this Agreement.
> [C&H Comment — Section 2.03(b)]: We propose a SOFR floor of 0.00%. If the DIP Lenders insist on a floor, we recommend capping it at 1.00%. As of the date of this draft, one-month SOFR is approximately 4.33%, making any floor largely academic in the current rate environment, but a zero or nominal floor protects the Borrower in the event rates decline during the case.
(c) Default Rate. Upon the occurrence and during the continuance of any Event of Default, all outstanding DIP Obligations shall, at the election of the Required DIP Lenders (acting through the DIP Agent), bear interest at the Default Rate (i.e., the Applicable Rate plus two hundred (200) basis points, resulting in an effective rate of SOFR + 800 basis points per annum). Interest at the Default Rate shall accrue from the date of the Event of Default until such Event of Default has been cured or waived.
(d) Computation of Interest. Interest on the DIP Loans shall be computed on the basis of a 360-day year for the actual number of days elapsed (including the first day but excluding the last day of each interest period).
(e) Payment of Interest. Accrued interest on the DIP Loans shall be due and payable monthly in arrears on each Interest Payment Date, commencing on the first Interest Payment Date occurring after the Closing Date.
> [C&H Comment — Section 2.03, General]: SOFR + 600 basis points is at the high end of market for shipping DIP facilities. Recent comparable transactions include: (i) Genco Shipping (2020) at LIBOR + 500 bps; (ii) Eagle Bulk Shipping (2014) at LIBOR + 450 bps; (iii) Overseas Shipholding Group (2012) at LIBOR + 500 bps. We recommend benchmarking the proposed rate against these precedents and pushing for SOFR + 500 basis points. The Borrower's relatively strong collateral position (Drakos fleet appraisal of $623M against $540M senior secured and $75M DIP) supports a more favorable rate.
Section 2.04 — Commitment Fee
(a) The Borrower shall pay to the DIP Agent, for the ratable benefit of the DIP Lenders, a non-refundable commitment fee (the "Commitment Fee") in an amount equal to one-half of one percent (0.50%) of the aggregate Commitments, being Three Hundred Seventy-Five Thousand Dollars ($375,000).
(b) The Commitment Fee shall be fully earned on the Closing Date and shall be payable in full on the Closing Date by deduction from the proceeds of the initial Advance, or by wire transfer of immediately available funds, as directed by the DIP Agent.
> [C&H Comment — Section 2.04]: Confirm that the Commitment Fee is calculated on the total commitment amount ($75,000,000) rather than on the undrawn portion of the facility. The DIP Term Sheet dated December 15, 2022 specified a flat 0.50% on the total commitment payable at closing. If converted to a multi-draw facility (as recommended in Section 2.01), consider negotiating for a reduced commitment fee on the undrawn portion or an unused line fee structure instead.
Section 2.05 — Agent Fee
(a) The Borrower shall pay to the DIP Agent a non-refundable annual agency fee (the "Agent Fee") in the amount of $[●] per annum.
(b) The Agent Fee shall be payable quarterly in advance, commencing on the Closing Date, and shall be prorated for any partial quarter.
> [C&H Comment — Section 2.05]: Request disclosure of the Agent Fee amount from Nordbank. Standard DIP agent fees in comparable transactions range from $75,000 to $150,000 per annum. The fee should be commensurate with the scope of Nordbank's agency obligations and the size of the facility.
Section 2.06 — Repayment and Prepayment
(a) Mandatory Repayment. All outstanding DIP Loans, together with all accrued and unpaid interest, fees, costs, expenses, and other amounts constituting DIP Obligations, shall be repaid in full in cash on the earliest to occur of (each, a "Termination Event"):
(i) the Maturity Date (being twelve (12) months after the Petition Date);
(ii) the effective date of a Chapter 11 plan of reorganization confirmed by the Bankruptcy Court (which plan must provide for payment in full in cash of all DIP Obligations on or before such effective date);
(iii) the date of entry of an order converting the Bankruptcy Case to a case under Chapter 7 of the Bankruptcy Code;
(iv) the date of entry of an order dismissing the Bankruptcy Case; and
(v) the date on which the DIP Agent declares all DIP Obligations to be immediately due and payable following an Event of Default in accordance with Section 8.02 hereof.
(b) Mandatory Prepayment from Asset Dispositions. If the Borrower or any of its subsidiaries consummates any sale, transfer, or other disposition of any assets outside the ordinary course of business (whether in a single transaction or a series of related transactions) and the aggregate net cash proceeds therefrom exceed Two Million Five Hundred Thousand Dollars ($2,500,000) (the "Asset Disposition Threshold"), the Borrower shall, within five (5) Business Days of receipt of such net cash proceeds, apply one hundred percent (100%) of such net cash proceeds (in excess of the Asset Disposition Threshold) to the prepayment of the outstanding DIP Loans.
> [C&H Comment — Section 2.06(b)]: We have proposed an Asset Disposition Threshold of $2,500,000 for ordinary-course dispositions. The DIP Term Sheet was silent on a de minimis basket. This threshold permits the Borrower to dispose of minor or obsolete assets in the ordinary course without triggering mandatory prepayment. A threshold below $2,500,000 would be unduly burdensome for a company of TAI's size and operational complexity.
(c) Voluntary Prepayment. The Borrower may prepay the DIP Loans in whole or in part at any time, without premium or penalty, upon delivery of not less than three (3) Business Days' prior written notice to the DIP Agent (which notice shall specify the date and principal amount of such prepayment). Any partial prepayment shall be in a minimum principal amount of $1,000,000 and in integral multiples of $500,000 in excess thereof.
> [C&H Comment — Section 2.06(c)]: The DIP Term Sheet was silent on the existence of any prepayment penalty, make-whole premium, or call protection. Confirm with Nordbank and Triton that no prepayment premium or make-whole applies. Voluntary prepayment without premium is standard for DIP facilities and should be non-negotiable.
(d) Application of Prepayments. All mandatory and voluntary prepayments shall be applied first to accrued and unpaid interest, then to outstanding principal, then to all other amounts constituting DIP Obligations.
Section 2.07 — Superpriority Claims and Priming Liens
(a) Superpriority Administrative Expense Claim. Pursuant to Section 364(c)(1) of the Bankruptcy Code, all DIP Obligations shall constitute allowed superpriority administrative expense claims against the Borrower and the Borrower's estate (the "DIP Superpriority Claims"), with priority over all administrative expenses of the kind specified in Sections 503(b) and 507(b) of the Bankruptcy Code, including any superpriority administrative claims granted as adequate protection to the Prepetition Lenders or any other party in interest, subject only to the Carve-Out.
(b) Priming Liens under Section 364(d). Pursuant to Section 364(d)(1) of the Bankruptcy Code, the DIP Lenders shall receive first-priority priming liens (the "DIP Liens") on all Collateral, including, without limitation, all property and assets of the Borrower's estate that are currently subject to liens under the Existing Credit Agreement and the Existing Mezzanine Notes. The DIP Liens shall be senior in priority to (i) all liens of the Prepetition Agent and the Prepetition Lenders under the Existing Credit Agreement, (ii) all liens of BMC under the Existing Mezzanine Notes, and (iii) all other liens and encumbrances on the Collateral, whether arising prepetition or post-petition.
> [C&H Comment — Section 2.07(b)]: Priming of the Prepetition Lenders' first-priority liens on TAI's assets requires either (A) consent of the affected lien holders, or (B) a showing that such lien holders' interests are adequately protected, pursuant to Section 364(d)(1) of the Bankruptcy Code. As to consent: Nordbank and Triton, who collectively hold approximately $205,000,000 of the $540,000,000 in Prepetition Obligations (and are also the DIP Lenders), will consent to priming. The Ad Hoc Group of Prepetition Lenders (represented by Whitfield, Crane & Burgess LLP) is expected to consent as part of the broader DIP negotiation, subject to satisfactory adequate protection terms. As to adequate protection: the Borrower must demonstrate adequate protection for all non-consenting Prepetition Lenders and for BMC (the second-lien holder). See Section 2.08 for the adequate protection package. This issue will be the central focus of the interim DIP hearing.
(c) Liens under Sections 364(c)(2) and 364(c)(3). To the extent that priming liens under Section 364(d)(1) are not available or are insufficient with respect to any portion of the Collateral, the DIP Lenders shall receive (i) first-priority liens on all unencumbered property and assets of the Borrower and the Borrower's estate pursuant to Section 364(c)(2) of the Bankruptcy Code, and (ii) junior liens on all property and assets of the Borrower and the Borrower's estate that are subject to valid and perfected liens as of the Petition Date pursuant to Section 364(c)(3) of the Bankruptcy Code, in each case subject to the Carve-Out.
Section 2.08 — Adequate Protection
(a) Adequate Protection for Prepetition Secured Lenders. As adequate protection of the interests of the Prepetition Agent and the Prepetition Lenders in the Collateral (in respect of approximately $540,000,000 in outstanding Prepetition Obligations), the Borrower shall provide the following:
(i) Replacement Liens. The Prepetition Agent, for the benefit of the Prepetition Lenders, shall receive replacement liens (the "Prepetition Replacement Liens") on all Collateral (including all property acquired post-petition), which Prepetition Replacement Liens shall be junior only to (A) the DIP Liens, (B) the Carve-Out, and (C) any Permitted Liens that are senior in priority by operation of law. The Prepetition Replacement Liens shall be senior to the BMC Replacement Liens (as defined below) and all other liens and encumbrances on the Collateral.
(ii) Superpriority Administrative Expense Claims. The Prepetition Agent and the Prepetition Lenders shall receive allowed superpriority administrative expense claims under Section 507(b) of the Bankruptcy Code (the "Prepetition Adequate Protection Claims"), which Prepetition Adequate Protection Claims shall be junior only to (A) the DIP Superpriority Claims and (B) the Carve-Out.
(iii) Current-Pay Interest. The Borrower shall pay current-pay interest on the outstanding Prepetition Obligations at the non-default contract rate of SOFR + 375 basis points per annum, payable monthly in arrears on each Interest Payment Date, commencing on the first Interest Payment Date occurring after the Petition Date, in each case as an adequate protection payment.
(iv) Payment of Prepetition Agent Fees and Expenses. The Borrower shall pay the reasonable and documented fees and out-of-pocket expenses of (A) the Prepetition Agent (Nordbank International AG) incurred in connection with the Bankruptcy Case, and (B) Whitfield, Crane & Burgess LLP (Graham Whitfield III, lead partner), as counsel to the Ad Hoc Group of Prepetition Lenders, in each case subject to the Approved Budget.
(v) Financial Reporting and Budget Compliance. The Borrower shall provide the Prepetition Agent and the Prepetition Lenders with the financial reporting and budget compliance information set forth in Article VII of this Agreement.
> [C&H Comment — Section 2.08(a)(iii)]: Confirm that adequate protection interest is at the non-default contract rate (SOFR + 375 bps), not the default rate (SOFR + 575 bps). Application of the default rate during the Chapter 11 case is not appropriate absent a specific Bankruptcy Court order approving the same. The Borrower's position is that adequate protection interest at the non-default contract rate is more than sufficient given the substantial equity cushion protecting the Prepetition Lenders' position. Based on the Drakos Maritime Valuations Ltd. fleet appraisal dated November 1, 2022, the aggregate fleet value of $623,000,000 provides an equity cushion of approximately $83,000,000 over the $540,000,000 in senior secured debt (a 15.4% cushion). This analysis should be presented in the DIP Motion and at the interim hearing.
(b) Adequate Protection for Dralvecen Mezzanine Capital. As adequate protection of the interests of BMC in the Collateral (in respect of $112,300,000 in outstanding Existing Mezzanine Notes), the Borrower shall provide the following:
(i) Replacement Liens. BMC shall receive replacement liens (the "BMC Replacement Liens") on all Collateral (including all property acquired post-petition), which BMC Replacement Liens shall be junior to (A) the DIP Liens, (B) the Carve-Out, (C) the Prepetition Replacement Liens, and (D) any Permitted Liens that are senior in priority by operation of law.
(ii) Superpriority Administrative Expense Claims. BMC shall receive allowed superpriority administrative expense claims under Section 507(b) of the Bankruptcy Code (the "BMC Adequate Protection Claims"), which BMC Adequate Protection Claims shall be junior to (A) the DIP Superpriority Claims, (B) the Carve-Out, and (C) the Prepetition Adequate Protection Claims.
> [C&H Comment — Section 2.08(b)]: BMC's adequate protection package will be heavily contested. BMC's counsel, Kellner & Foss LLP (Theodore Kellner and Samantha Ong), will almost certainly demand current-pay interest on the Existing Mezzanine Notes (at 11.5%) as a condition to consenting to priming. The Borrower's position is as follows: BMC's second-lien position is out of the money or, at best, marginally in the money on a standalone basis. At the Drakos midpoint enterprise valuation of approximately $610,000,000, the recovery waterfall yields the following: (1) senior secured claims ($540M) — fully covered; (2) mezzanine claims ($112.3M) — recovery of approximately $70M, or 62.3 cents on the dollar. In this context, replacement liens plus Section 507(b) claims should satisfy the adequate protection standard under Section 364(d)(1)(B) of the Bankruptcy Code. No current-pay interest for BMC. Prepare for a contested interim hearing on this point.
(c) Adequate Protection for Unsecured Creditors. The holders of the Existing Unsecured Notes (approximately $50,000,000 outstanding) and trade creditors (approximately $38,700,000 outstanding) are not entitled to adequate protection, as their claims are unsecured. Any rights of such creditors under Section 507(b) of the Bankruptcy Code shall be preserved to the extent applicable under law.
> [C&H Comment — Section 2.08(c)]: If an official committee of unsecured creditors is appointed by the United States Trustee, the committee may challenge the adequacy of the adequate protection package for all classes and may seek additional protections. Estimated recovery for general unsecured creditors (including the Existing Unsecured Notes and trade claims) in the Chapter 11 case is 8 to 14 cents on the dollar based on KHP's preliminary waterfall analysis. This relatively low recovery rate may motivate aggressive committee advocacy.
Section 2.09 — Carve-Out
(a) Professional Fee Carve-Out. Notwithstanding any other provision of this Agreement or the DIP Order, the DIP Liens and DIP Superpriority Claims shall be subject to a carve-out (the "Carve-Out") for the following:
(i) all fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee under 28 U.S.C. § 1930(a) (without regard to any limitation thereon);
(ii) all reasonable and documented unpaid professional fees and disbursements incurred by professionals retained by the Borrower and by any official committee of unsecured creditors appointed in the Bankruptcy Case (each such professional, a "Retained Professional"), in each case to the extent allowed by the Bankruptcy Court, that are incurred at any time prior to the delivery of a Carve-Out Trigger Notice (as defined below), in amounts not to exceed the amounts set forth in the Approved Budget for such fees and disbursements; and
(iii) following delivery of a Carve-Out Trigger Notice, all reasonable and documented unpaid professional fees and disbursements of the Retained Professionals in an aggregate amount not to exceed (A) [●] for the Borrower's Retained Professionals and (B) [●] for any committee's Retained Professionals (the aggregate of (A) and (B), the "Post-Trigger Carve-Out").
> [C&H Comment — Section 2.09(a)(iii)]: We propose a Post-Trigger Carve-Out of $3,000,000 for the Borrower's professionals and $1,500,000 for the committee's professionals, for an aggregate Post-Trigger Carve-Out of $4,500,000. The DIP Term Sheet proposed $2,000,000 for the Borrower's professionals and $750,000 for the committee's professionals (aggregate $2,750,000), which is insufficient given the complexity of this cross-border shipping restructuring involving multiple stakeholder groups, contested adequate protection issues, and potential intercreditor disputes. Push for the higher amounts. Comparable shipping Chapter 11 cases have featured Post-Trigger Carve-Outs in the range of $3,000,000 to $5,000,000 for debtor professionals and $1,000,000 to $2,000,000 for committee professionals.
(b) Carve-Out Trigger Notice. A "Carve-Out Trigger Notice" means a written notice delivered by the DIP Agent to the Borrower, each Retained Professional, and the United States Trustee following the occurrence of an Event of Default that has not been cured or waived, declaring that the Carve-Out period has commenced. Upon delivery of a Carve-Out Trigger Notice, the Retained Professionals shall have a period of ten (10) Business Days to complete the wind-down of their activities, and fees and disbursements incurred during such period shall be subject to the Post-Trigger Carve-Out.
(c) Carve-Out Reserve. At any time following delivery of a Carve-Out Trigger Notice, the DIP Agent may direct the Borrower to fund a segregated reserve account (the "Carve-Out Reserve Account") in an amount equal to the then-remaining Post-Trigger Carve-Out, which account shall be maintained for the sole purpose of paying allowed professional fees and disbursements of the Retained Professionals.
Section 2.10 — Cash Management
(a) Existing Cash Management System. The Borrower shall be authorized to maintain its existing cash management system in substantially the same manner as operated prepetition, subject to entry of a first-day order of the Bankruptcy Court approving the continued use of such cash management system (the "Cash Management Order").
(b) Control Agreements. All cash and deposit accounts of the Borrower shall be maintained at depository institutions acceptable to the DIP Agent, and the Borrower shall, within ten (10) Business Days of the Closing Date (or such later date as the DIP Agent may agree), deliver to the DIP Agent duly executed deposit account control agreements granting the DIP Agent control over each such account for purposes of perfecting the DIP Liens thereon.
(c) Intercompany Transfers Prohibited. No intercompany transfers, loans, advances, or payments shall be made by the Borrower to TSL or any Affiliate of the Borrower without the prior written consent of the DIP Agent and the Required DIP Lenders, which consent may be withheld in their sole discretion.
> [C&H Comment — Section 2.10(c)]: We will need to negotiate an exception for ordinary-course intercompany transactions conducted at arm's length and in amounts consistent with the Approved Budget. TAI and TSL engage in regular intercompany transactions in connection with vessel scheduling, freight brokerage, and terminal services. A blanket prohibition on all intercompany transfers could disrupt TAI's day-to-day operations. Note, however, that no payments may be made on the $76,400,000 subordinated intercompany note from TAI to TSL during the Bankruptcy Case.
(d) Intercompany Note. For the avoidance of doubt, no payments of principal, interest, or any other amounts shall be made by the Borrower on account of the intercompany note from TAI to TSL in the outstanding principal amount of $76,400,000 during the pendency of the Bankruptcy Case, without the prior written consent of the DIP Agent and the Required DIP Lenders and the approval of the Bankruptcy Court.
ARTICLE III — SECURITY AND PRIORITY
Section 3.01 — Grant of Security Interest
(a) As collateral security for the prompt and complete payment and performance when due of all DIP Obligations, the Borrower hereby grants to the DIP Agent, for the ratable benefit of the DIP Secured Parties, a continuing, first-priority priming security interest in and lien on all of the Borrower's right, title, and interest in and to all Collateral, whether now owned or hereafter acquired, wherever located.
(b) Description of Collateral. Without limiting the generality of the foregoing, the Collateral includes all of the following assets and property of the Borrower and the Borrower's estate:
(i) the Houston terminal lease (premises at 1400 McKinney Street, Suite 2200, Houston, Texas 77010) and all rights, interests, and privileges of the Borrower as lessee or sublessee thereunder;
(ii) all accounts receivable, whether now existing or hereafter arising, including all rights to payment for goods sold, services rendered, or any other transaction giving rise to a debt obligation;
(iii) all inventory, raw materials, work in progress, and finished goods;
(iv) all equipment, machinery, fixtures, furniture, and other tangible personal property;
(v) all general intangibles, including contract rights, goodwill, intellectual property, patents, trademarks, trade names, service marks, copyrights, licenses, permits, and government authorizations;