1044-00003 · Client 1044 · documents

draft-final-dip-order.docx DOCUMENT Finance & Banking

12 / 76 ← → ✕

Contract analysis Extract to table

UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

In re:

THALASSA AMERICAS INC.,

Debtor.

Case No. ___ (to be assigned)

Chapter 11

FINAL ORDER (I) AUTHORIZING THE DEBTOR TO OBTAIN POSTPETITION FINANCING PURSUANT TO 11 U.S.C. §§ 105, 361, 362, 364(c)(1), 364(c)(2), 364(c)(3), AND 364(d)(1), (II) GRANTING LIENS AND SUPERPRIORITY ADMINISTRATIVE EXPENSE STATUS, (III) AUTHORIZING THE USE OF CASH COLLATERAL, (IV) GRANTING ADEQUATE PROTECTION TO PREPETITION SECURED PARTIES, AND (V) GRANTING RELATED RELIEF

Draft — January 18, 2023

Upon the motion (the "DIP Motion") of Thalassa Americas Inc. ("Debtor" or "TAI"), debtor and debtor-in-possession in the above-captioned Chapter 11 case, for entry of an order pursuant to sections 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), and 364(d)(1) of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the "Bankruptcy Code"), and Rules 2002, 4001, 6004, and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), and Rules 4001-1 and 4001-2 of the Bankruptcy Local Rules for the Southern District of Texas (the "Local Rules"), authorizing the Debtor to obtain postpetition financing, granting liens and superpriority administrative expense status in connection therewith, authorizing the use of cash collateral, granting adequate protection to prepetition secured parties, and granting related relief; and the Court having conducted a final hearing (the "Final Hearing") on the DIP Motion; and the Court having reviewed and considered the DIP Motion, the Declaration of Marcus Hale in support thereof, the DIP Credit Agreement and related documents, the record of proceedings before the Court, and any objections filed or raised at the Final Hearing; and due and proper notice of the DIP Motion and the Final Hearing having been provided; and the Court having found that good and sufficient cause exists for the relief granted herein; and after due deliberation and sufficient cause appearing therefor:

RECITALS

The Court finds and determines the following:

A. Commencement of Case. On [Petition Date] (the "Petition Date"), Thalassa Americas Inc. ("TAI" or the "Debtor"), a corporation organized under the laws of the State of Delaware, Employer Identification Number 84-3291057, with its principal office located at 1400 McKinney Street, Suite 2200, Houston, Texas 77010, and its registered agent, Capitol Registered Agents LLC, at 1209 Orange Street, Wilmington, Delaware 19801, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in this Court (the "Chapter 11 Case"). The Debtor continues to operate its business and manage its properties as debtor-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No request has been made for the appointment of a trustee or examiner in this Chapter 11 Case.

TAI 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 (Greece), with its registered address at 42 Akti Miaouli, Piraeus 18538, Greece. TSL is not a debtor in this Chapter 11 Case, and no petition has been filed on behalf of TSL in any court within the United States or, to the Debtor's knowledge, in any foreign jurisdiction. TAI serves as the principal U.S.-side operating entity for TSL's global maritime transportation and logistics business, and TAI's operations include: (i) the management and operation of the Houston terminal facility pursuant to certain lease arrangements; (ii) the scheduling and commercial management of Jones Act–exempt foreign-flag vessels calling at U.S. ports; and (iii) domestic freight brokerage services for the movement of dry-bulk commodities and containerized cargo within and through the United States. As of the Petition Date, TAI employed approximately 680 employees in the United States across its Houston headquarters, terminal operations, and regional offices.

B. Interim DIP Order. On [date of interim hearing] (the "Interim Hearing Date"), approximately three (3) days after the Petition Date, this Court conducted an interim hearing on the DIP Motion. On that date, the Court entered an order (the "Interim Order") [Docket No. _], which, inter alia, authorized the Debtor to borrow up to $30,000,000 on an interim basis under the DIP Facility (as defined below), pending the Final Hearing on the DIP Motion. The Interim Order provided for interim DIP liens, interim superpriority administrative expense status, and interim adequate protection to the Prepetition Secured Parties (as defined below), all on the terms set forth therein. The Final Hearing was scheduled for and held on [date], approximately forty-five (45) days following the Petition Date, consistent with the timeline set forth in the Debtor's Chapter 11 Contingency Playbook and the milestones established in the DIP Credit Agreement. All parties in interest were given proper notice of the Final Hearing in compliance with the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules.

C. Debtor's Motion. On the Petition Date, the Debtor filed its Motion for Entry of Interim and Final Orders Authorizing Postpetition Financing, Granting Liens and Superpriority Administrative Expense Status, Authorizing the Use of Cash Collateral, Granting Adequate Protection to Prepetition Secured Parties, and Granting Related Relief [Docket No. _] (the "DIP Motion"). The DIP Motion was supported by the Declaration of Marcus Hale, President of TAI, which described, among other things, the Debtor's business operations, the circumstances necessitating the filing of the Chapter 11 Case, the Debtor's immediate and ongoing need for postpetition financing, and the terms and conditions of the proposed DIP Facility. The DIP Motion sought authority for the Debtor to enter into and perform under the DIP Credit Agreement and all related documents, and requested entry of an interim order and a final order granting the relief described therein.

D. The Prepetition Indebtedness. The Court finds that, as of the Petition Date, the Debtor was obligated under and party to the following prepetition indebtedness:

(i) Senior Secured Credit Facility. Pursuant 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 Petition Date, the "Prepetition Credit Agreement"), among TSL, as borrower, TAI, as co-borrower with respect to the U.S. Tranche (as defined therein), the financial institutions from time to time party thereto as lenders (collectively, the "Prepetition Lenders"), and Nordbank International AG, as administrative agent and collateral agent for the Prepetition Lenders (in such capacities, the "Prepetition Agent"), the Prepetition Lenders provided credit facilities with an aggregate original commitment of $685,000,000 (the "Senior Secured Credit Facility"), consisting of the following tranches:

(1) Term Loan A ("TLA"): An original principal amount of $400,000,000, subject to amortization through quarterly principal payments of $10,000,000 each; as of September 30, 2022, the outstanding principal balance of TLA was $270,000,000 (reflecting the original $400,000,000 principal less $130,000,000 in thirteen (13) quarterly amortization payments made from and including the third quarter of 2019 through and including the third quarter of 2022);

(2) Revolving Credit Facility ("Revolver"): A revolving credit commitment of $200,000,000; as of September 30, 2022, $185,000,000 was drawn and outstanding under the Revolver;

(3) U.S. Tranche Term Loan B ("TLB"): A non-amortizing term loan in the original principal amount of $85,000,000 with bullet maturity, for which TAI is the co-borrower; as of September 30, 2022, $85,000,000 was outstanding under TLB; and

(4) The aggregate outstanding principal balance under the Senior Secured Credit Facility as of September 30, 2022 was $540,000,000 (the "Prepetition Senior Secured Obligations").

The Senior Secured Credit Facility bears interest at a rate of the Secured Overnight Financing Rate ("SOFR") plus 375 basis points per annum, with a default rate of an additional 200 basis points per annum. The stated maturity date of the Senior Secured Credit Facility is June 15, 2024. The CUSIP number for TLA is 87265BAA7. The Prepetition Lender syndicate consists of nine (9) financial institutions, with the following approximate commitment and outstanding balances: 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).

The obligations under the Prepetition Credit Agreement are secured by first-priority liens (the "Prepetition First Liens") on substantially all of the assets of the Debtor and certain assets of TSL and its affiliates (collectively, the "Prepetition Collateral"), including, without limitation: (a) thirty-eight (38) dry-bulk carriers; (b) twelve (12) container vessels; (c) the Debtor's leasehold interest in the Houston terminal facility; (d) all accounts receivable; and (e) the equity interests in TAI and fourteen (14) vessel-owning special purpose vehicles (each, a "Vessel SPV").

(ii) Mezzanine Notes. The Debtor is party to that certain Mezzanine Note Purchase Agreement, dated as of June 15, 2019, pursuant to which TAI issued mezzanine notes (the "Mezzanine Notes") to Dralvecen Mezzanine Capital LLC ("BMC"), located at 600 Lexington Avenue, 22nd Floor, New York, New York 10022. As of September 30, 2022, the outstanding principal balance of the Mezzanine Notes was $112,300,000 (reflecting the original $100,000,000 principal amount plus $12,300,000 in payment-in-kind ("PIK") interest that has been capitalized and added to principal through September 30, 2022). The Mezzanine Notes bear interest at a rate of 11.5% per annum on a PIK toggle basis; since the second quarter of 2022, all interest has been paid in kind rather than in cash. The stated maturity date of the Mezzanine Notes is December 15, 2024. The Mezzanine Notes are secured by second-priority liens (the "Prepetition Second Liens") on the same Prepetition Collateral that secures the Senior Secured Credit Facility. The relative rights and priorities of the Prepetition First Lien parties and BMC with respect to the Prepetition Collateral are governed by that certain Intercreditor Agreement, dated as of June 15, 2019 (the "Intercreditor Agreement"), between Nordbank International AG (as first-lien agent) and BMC (together with the holders of the Prepetition First Liens, the "Prepetition Secured Parties"). The obligations under the Mezzanine Notes are referred to herein as the "Prepetition Second Lien Obligations."

(iii) Unsecured Notes. TAI has outstanding $50,000,000 in aggregate principal amount of 8.25% Senior Unsecured Notes due March 1, 2025 (CUSIP: 87265BAB5) (the "Unsecured Notes"), issued pursuant to an indenture (the "Indenture"), dated as of June 15, 2019, between TAI, as issuer, and Garrison Trust Company, as indenture trustee (the "Indenture Trustee"), located at 100 Wall Street, 16th Floor, New York, New York 10005. The Debtor failed to make the semi-annual interest payment of $2,062,500 that was due on December 1, 2022 under the Indenture. The thirty (30) day cure period specified in the Indenture expired on January 1, 2023 without such payment having been made, constituting an event of default under the Indenture. The Unsecured Notes are not secured by any lien on the Debtor's assets.

(iv) Intercompany Note. TAI is obligated to TSL in the principal amount of $76,400,000 pursuant to a subordinated intercompany promissory note (the "Intercompany Note"), bearing interest at 5.0% per annum. The Intercompany Note is subordinated to all other indebtedness of the Debtor, including the Senior Secured Credit Facility, the Mezzanine Notes, and the Unsecured Notes.

(v) Total Debt. As of September 30, 2022, the Debtor's total funded indebtedness and other obligations were approximately $847,300,000, inclusive of trade payables of approximately $38,700,000. The largest single trade creditor is Olympian Fuel & Supply SA, to whom the Debtor owed approximately $9,200,000 as of September 30, 2022.

E. Events Leading to the Filing. The Chapter 11 Case was precipitated by a severe liquidity crisis caused principally by a sustained and dramatic collapse in dry-bulk charter rates across the global maritime shipping industry. The Baltic Dry Index, a composite measure of the cost of shipping dry-bulk commodities, declined approximately 58% between January 2022 and September 2022. This collapse had a material and direct adverse impact on TSL's and the Debtor's revenue, earnings, and cash flows. TSL's average daily time-charter equivalent rate fell from $24,800 per day during fiscal year 2021 to $11,200 per day during the third quarter of 2022, representing a decline of approximately 55%.

As a result of the deteriorating market conditions, the Debtor and TSL experienced a series of covenant defaults under the Prepetition Credit Agreement:

(a) Minimum Liquidity Covenant Breach (September 15, 2022): The Debtor's unrestricted cash and cash equivalents fell to $27,300,000, below the required minimum of $40,000,000, resulting in a shortfall of $12,700,000 and a breach of the minimum liquidity covenant set forth in Section 7.11(a) of the Prepetition Credit Agreement.

(b) Net Leverage Ratio Breach (September 30, 2022): The Debtor's Net Leverage Ratio as of September 30, 2022 was 7.82x (calculated as Net Debt of $770,900,000 divided by last-twelve-months ("LTM") EBITDA of $98,600,000), which exceeded the maximum permitted Net Leverage Ratio of 5.50x set forth in Section 7.11(b) of the Prepetition Credit Agreement.

(c) Interest Coverage Ratio Breach (September 30, 2022): The Debtor's Interest Coverage Ratio as of September 30, 2022 was 1.74x (calculated as LTM EBITDA of $98,600,000 divided by LTM Interest Expense of $56,700,000), which was below the minimum required Interest Coverage Ratio of 2.50x set forth in Section 7.11(c) of the Prepetition Credit Agreement.

The fleet of fifty (50) vessels that constitutes a substantial portion of the Prepetition Collateral experienced significant value deterioration, declining from an appraised fair market value of $891,000,000 as of January 2022 to $623,000,000 as of November 1, 2022, in each case as appraised by Drakos Maritime Valuations Ltd., an independent vessel valuation firm. TSL's consolidated revenue declined from €1,420,000,000 for fiscal year 2021 to an estimated €987,000,000 for fiscal year 2022, representing a decline of approximately 30.5%. TAI's standalone revenue declined from $312,000,000 for fiscal year 2021 to an estimated $198,000,000 for fiscal year 2022.

Following the covenant defaults described above, on October 10, 2022, the Debtor, TSL, the Prepetition Agent, and the Required Lenders (as defined in the Prepetition Credit Agreement) entered into a Forbearance Agreement (the "Forbearance Agreement"), pursuant to which the Prepetition Lenders agreed to a ninety (90) day standstill period during which they would forbear from exercising remedies under the Prepetition Credit Agreement. The Forbearance Agreement was subsequently extended twice: first, to March 8, 2023, and then to April 7, 2023. During the forbearance period, the Debtor and its advisors engaged in extensive negotiations with the Prepetition Lenders, BMC, and other key creditor constituencies regarding the terms of a potential out-of-court restructuring or, alternatively, the terms of a debtor-in-possession financing facility to be utilized in connection with a Chapter 11 filing.

F. The DIP Facility. The Debtor proposes to obtain postpetition financing (the "DIP Facility") pursuant to a DIP Credit Agreement (the "DIP Credit Agreement"), to be entered into among TAI, as borrower, Nordbank International AG, as DIP administrative agent (the "DIP Agent"), and Triton Credit Partners LP (the "DIP Lender" and, together with Nordbank International AG in its capacity as a DIP lender, the "DIP Lenders"). A DIP term sheet setting forth the principal terms of the DIP Facility was received by the Debtor on December 15, 2022. A draft of the DIP Credit Agreement, dated December 22, 2022 and marked as a draft, was prepared and has been provided to the Court and all parties in interest. The material terms of the DIP Facility are as follows:

(a) Total Commitment: $75,000,000.

(b) Interest Rate: SOFR plus 600 basis points per annum.

(d) Maturity: Twelve (12) months from the Petition Date (the "DIP Maturity Date").

(e) Interim Borrowing: Up to $30,000,000 in the aggregate, previously authorized under the Interim Order.

(f) Final Borrowing: The remaining $45,000,000 of the total $75,000,000 commitment, available upon entry of this Final Order, subject to the terms and conditions of the DIP Credit Agreement.

G. Adequate Notice. Due and proper notice of the DIP Motion and the Final Hearing was provided to all required parties in interest, including, without limitation: (i) the Office of the United States Trustee for the Southern District of Texas (the "U.S. Trustee"); (ii) all parties on the master service list maintained in this Chapter 11 Case; (iii) counsel to the Ad Hoc Group of Prepetition Lenders, Whitfield, Crane & Burgess LLP (Graham Whitfield III), 51 West 52nd Street, 38th Floor, New York, New York 10019; (iv) counsel to Dralvecen Mezzanine Capital LLC, Kellner & Foss LLP (Theodore Kellner), 1185 Avenue of the Americas, 30th Floor, New York, New York 10036; (v) counsel to the holders of the Unsecured Notes, Ashford, Brightmoor Group & McKay PC (Carolyn Brightmoor Group), 299 Park Avenue, 18th Floor, New York, New York 10171; (vi) the Prepetition Agent, Nordbank International AG; and (vii) the DIP Lenders. The Court finds that such notice was adequate and sufficient under the circumstances, and that all parties in interest were afforded adequate time and opportunity to object to the relief requested in the DIP Motion. The Final Hearing was conducted in accordance with all applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules.

H. Findings Regarding the DIP Facility. Based on the record before the Court, including the DIP Motion, the Hale Declaration, the evidence presented and arguments made at the Final Hearing, and the entire record of this Chapter 11 Case, the Court finds and concludes as follows:

(a) The Debtor has an immediate, critical, and ongoing need for the DIP Facility in order to fund ongoing operations, preserve the going-concern value of the Debtor's business and assets for the benefit of all stakeholders, maintain the Debtor's workforce, meet payroll and other essential operating obligations, and fund the administration of this Chapter 11 Case. The Debtor's estimated administrative costs for the first twelve (12) months of the Chapter 11 Case are approximately $18,500,000, including, without limitation, legal fees, financial advisor fees, CRO fees, U.S. Trustee fees, and claims agent fees. Without access to the DIP Facility and the ability to use Cash Collateral, the Debtor would be unable to maintain its business operations, and the going-concern value of the Debtor's estate would be materially and irreparably impaired.

(b) The Debtor has been unable to obtain credit on an unsecured basis, or as an administrative expense under section 364(a) or section 364(b) of the Bankruptcy Code, or with liens junior to existing liens under section 364(c) of the Bankruptcy Code alone. The Debtor has demonstrated, and the Court finds, that the only financing available to the Debtor is the DIP Facility on the terms and conditions set forth in the DIP Credit Agreement and this Final Order, including the provision of priming liens under section 364(d)(1) of the Bankruptcy Code.

(c) The terms of the DIP Facility, including the interest rate, fees, and other economic terms, are fair and reasonable under the circumstances and reflect terms that are consistent with or more favorable than terms available in the market for debtor-in-possession financing of this nature and size. The DIP Facility was negotiated in good faith and at arm's length among the Debtor, the DIP Agent, and the DIP Lenders, with the advice and involvement of the Debtor's professionals, including Calderwood & Harkness LLP and Kensington Veltrian Partners LLC.

(d) The DIP Lenders are entitled to the protections of section 364(e) of the Bankruptcy Code, and the DIP Facility has been extended, and the DIP Obligations have been and will be incurred, by the DIP Lenders in good faith.

(e) Good and sufficient cause exists for entry of this Final Order.

Based upon the foregoing findings, and after due deliberation and consideration:

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED AS FOLLOWS:

1. Authorization of DIP Facility. The DIP Motion is granted on a final basis as set forth herein. The Debtor is authorized, pursuant to sections 105, 361, 362, 364(c)(1), 364(c)(2), 364(c)(3), and 364(d)(1) of the Bankruptcy Code, to borrow up to $75,000,000 in the aggregate under the DIP Facility, on the terms and conditions set forth in the DIP Credit Agreement, a copy of which is attached hereto as Exhibit B and incorporated herein by reference. The $30,000,000 in interim borrowings previously authorized by the Interim Order is hereby ratified and confirmed in all respects. Upon entry of this Final Order, the Debtor is authorized to borrow the remaining $45,000,000 of the total $75,000,000 commitment, subject to satisfaction of the conditions precedent set forth in the DIP Credit Agreement. The Debtor is further authorized to execute and deliver the DIP Credit Agreement and all related documents, instruments, agreements, certificates, and notices, and to perform all of its obligations thereunder. All obligations arising under or in connection with the DIP Credit Agreement, this Final Order, and all related documents (collectively, the "DIP Obligations") shall be valid, binding, and enforceable against the Debtor in accordance with their terms and shall not be subject to any defense, counterclaim, offset, or recoupment of any kind.

2. DIP Liens. As security for the prompt and complete payment and performance of all DIP Obligations, and pursuant to sections 364(c)(2), 364(c)(3), and 364(d)(1) of the Bankruptcy Code, the DIP Agent is hereby granted, for the benefit of the DIP Lenders, effective as of the Petition Date, the following continuing, valid, binding, enforceable, non-avoidable, and automatically perfected liens on and security interests in all real and personal property of the Debtor and the Debtor's estate, whether now existing or hereafter acquired, created, or arising, and all proceeds, products, offspring, rents, and profits thereof (collectively, the "DIP Collateral," and such liens and security interests, the "DIP Liens"):

(a) Priming Liens. Pursuant to section 364(d)(1) of the Bankruptcy Code, first-priority priming liens on all Prepetition Collateral, which DIP Liens shall prime and be senior to the Prepetition First Liens and the Prepetition Second Liens. The DIP Liens granted pursuant to this paragraph shall be subject only to: (I) the Carve-Out (as defined in Paragraph 12 below); and (II) any valid, perfected, and non-avoidable liens in existence as of the Petition Date that are senior in priority to the Prepetition First Liens and Prepetition Second Liens (other than the Prepetition First Liens and Prepetition Second Liens themselves) (any such senior liens, "Permitted Prior Liens"), provided that the Debtor has not identified any Permitted Prior Liens on the Prepetition Collateral as of the date hereof.

(b) First-Priority Liens on Unencumbered Assets. Pursuant to section 364(c)(2) of the Bankruptcy Code, first-priority liens on all assets of the Debtor and the Debtor's estate that, as of the Petition Date, were not subject to valid, perfected, and non-avoidable liens, subject only to the Carve-Out.

(c) Junior Liens. Pursuant to section 364(c)(3) of the Bankruptcy Code, junior liens on all assets of the Debtor and the Debtor's estate that are subject to valid, perfected, and non-avoidable liens in existence as of the Petition Date (other than the Prepetition First Liens and Prepetition Second Liens, which are primed by the DIP Liens pursuant to subparagraph (a) above), which junior liens shall be junior only to such existing valid, perfected, and non-avoidable liens and the Carve-Out.

The DIP Liens shall attach to the DIP Collateral immediately upon entry of this Final Order (or, to the extent previously granted under the Interim Order, shall be deemed to have attached as of the date of the Interim Order) and shall be valid, perfected, and enforceable without the necessity of the execution, filing, or recording by the Debtor of any mortgages, security agreements, pledge agreements, financing statements, or other similar documents, or the possession or control by the DIP Agent of any DIP Collateral, or the taking of any other action to validate or perfect the DIP Liens. If the DIP Agent, in its sole discretion, elects to file or record any financing statements, mortgages, notices, or other instruments with respect to any of the DIP Liens, the Debtor and all applicable governmental units are directed to accept and record any such documents, and all filing fees and recording fees in connection therewith shall be waived. A certified copy of this Final Order may, in the DIP Agent's discretion, be filed with or recorded in filing or recording offices in addition to, or in lieu of, any such financing statements, mortgages, notices, or other instruments, and all filing and recording offices are directed to accept such certified copy of this Final Order for filing and recording.

3. Superpriority Administrative Expense Claims. Pursuant to section 364(c)(1) of the Bankruptcy Code, all DIP Obligations shall constitute allowed superpriority administrative expense claims against the Debtor and the Debtor's estate (collectively, the "DIP Superpriority Claims"), with priority in payment over any and all administrative expense claims, unsecured claims, and all other claims against the Debtor or the Debtor's estate, of any kind or nature whatsoever, whether now existing or hereafter arising, including, without limitation, administrative expense claims arising under sections 503(b), 507(a)(2), 507(b), and 726(b) of the Bankruptcy Code and any claims arising under sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b), 546(c), 726, 1113, and 1114 of the Bankruptcy Code. The DIP Superpriority Claims shall be subject only to the Carve-Out. The DIP Superpriority Claims shall be payable from, and shall have recourse to, all property of the Debtor and the Debtor's estate, including, without limitation, all DIP Collateral, all proceeds of avoidance actions under Chapter 5 of the Bankruptcy Code, and all other property and interests in property of the Debtor's estate.

4. Use of DIP Proceeds and Cash Collateral. The Debtor is authorized, pursuant to sections 361 and 363 of the Bankruptcy Code, to use: (a) the proceeds of the DIP Facility; and (b) "Cash Collateral" as defined in section 363(a) of the Bankruptcy Code, in each case in accordance with, and solely to the extent provided in, the DIP Budget (as defined in Paragraph 5 below) and the terms and conditions of this Final Order and the DIP Credit Agreement. The DIP Budget, which is attached hereto as Exhibit A, consists of a thirteen (13) week rolling cash flow projection prepared by Kensington Veltrian Partners LLC (James Calloway, Managing Director), the Debtor's Court-approved financial advisor. The Debtor shall not use DIP proceeds or Cash Collateral for any purpose not authorized by the DIP Budget, this Final Order, or the DIP Credit Agreement.

The Debtor shall prepare and deliver to the DIP Agent and the Prepetition Agent, no later than 5:00 p.m. Central Time on each Thursday (or, if Thursday is not a business day, the next succeeding business day), a weekly variance report (each, a "Variance Report") comparing actual results for the preceding week to the applicable line items in the DIP Budget. The Variance Report shall be in form and substance satisfactory to the DIP Agent. The following variance thresholds shall apply, measured on a cumulative four (4) week rolling basis: (i) no individual line-item variance shall exceed 15% of the budgeted amount for such line item; and (ii) no aggregate variance shall exceed 10% of the total budgeted disbursements for the applicable four-week measurement period (collectively, the "Permitted Variances"). Any variance in excess of the Permitted Variances that is not waived by the Required DIP Lenders within five (5) business days of delivery of the applicable Variance Report shall constitute an Event of Default under this Final Order and the DIP Credit Agreement.

5. DIP Budget. The initial DIP Budget is attached hereto as Exhibit A and is approved. The DIP Budget shall be updated by the Debtor every four (4) weeks and delivered to the DIP Agent and the Prepetition Agent no later than five (5) business days prior to the commencement of the applicable four-week period. Each updated DIP Budget shall be subject to review and approval by the DIP Agent and the Prepetition Agent, such approval not to be unreasonably withheld, conditioned, or delayed. Until an updated DIP Budget is approved by the DIP Agent and the Prepetition Agent, the most recently approved DIP Budget shall remain in effect. The DIP Budget shall include adequate provision for: (a) all professional fees and expenses incurred or expected to be incurred by professionals retained by the Debtor or any statutory committee in this Chapter 11 Case; (b) all operating expenses of the Debtor's business; (c) all adequate protection payments required under this Final Order; and (d) all quarterly fees payable to the U.S. Trustee pursuant to 28 U.S.C. § 1930.

6. Interest, Fees, and Expenses. The DIP Facility shall bear interest, and the Debtor shall pay fees and expenses, in accordance with the following terms, which terms are incorporated in and consistent with the DIP Credit Agreement:

(a) Interest: The outstanding principal balance of all DIP borrowings shall bear interest at a rate per annum equal to SOFR plus 600 basis points, payable monthly in arrears on the first business day of each calendar month commencing with the first full calendar month following the initial borrowing under the DIP Facility.

(b) Default Interest: Upon the occurrence and during the continuance of an Event of Default (as defined in Paragraph 10 below), the outstanding principal balance of all DIP borrowings and all other DIP Obligations shall bear interest at a rate per annum equal to the otherwise applicable interest rate plus an additional 200 basis points.

(c) Commitment Fee: The Debtor shall pay a commitment fee equal to 0.50% per annum on the average daily undrawn and uncancelled portion of the total DIP commitment, payable quarterly in arrears commencing on the last day of the first full fiscal quarter following the Petition Date.

(d) Fees, Costs, and Expenses of the DIP Agent and DIP Lenders: The Debtor shall pay, promptly upon demand, all reasonable and documented fees, costs, and expenses of the DIP Agent and the DIP Lenders, including, without limitation, the reasonable and documented fees, disbursements, and other charges of their respective counsel and other professionals, incurred in connection with the negotiation, documentation, execution, and delivery of the DIP Credit Agreement and all related documents, the administration and enforcement of the DIP Facility, and the monitoring of the Chapter 11 Case. All such fees, costs, and expenses incurred prior to the entry of this Final Order are hereby authorized and approved, subject to the Debtor's right to review the reasonableness of such amounts.

7. Adequate Protection for Prepetition Secured Parties. As adequate protection of the interests of the Prepetition Secured Parties in the Prepetition Collateral against any diminution in value resulting from the use, sale, or lease of the Prepetition Collateral (including Cash Collateral), the imposition of the automatic stay under section 362 of the Bankruptcy Code, and the priming of the Prepetition Liens by the DIP Liens, the Prepetition Secured Parties are hereby granted the following adequate protection, in each case effective as of the Petition Date:

A. Adequate Protection for Prepetition First Lien Parties.

As adequate protection for the benefit of the Prepetition Agent and the Prepetition Lenders (collectively, the "Prepetition First Lien Parties") with respect to the Prepetition Senior Secured Obligations (outstanding in the aggregate amount of $540,000,000 as of September 30, 2022), the Prepetition First Lien Parties are hereby granted:

(a) Replacement Liens. Pursuant to sections 361(2) and 363(e) of the Bankruptcy Code, valid, binding, enforceable, non-avoidable, and automatically perfected replacement liens on and security interests in all postpetition assets of the Debtor and the Debtor's estate, whether now existing or hereafter acquired, created, or arising, and all proceeds, products, offspring, rents, and profits thereof, including the proceeds of DIP borrowings (the "First Lien Adequate Protection Liens"). The First Lien Adequate Protection Liens shall be junior and subordinate only to: (I) the DIP Liens; and (II) the Carve-Out, but shall be senior to all other liens, claims, and interests of any kind or nature whatsoever, including the Prepetition Second Liens and any replacement liens or adequate protection liens granted to BMC pursuant to this Final Order. The First Lien Adequate Protection Liens shall not be subject to sections 510, 549, 550, or 551 of the Bankruptcy Code. The First Lien Adequate Protection Liens shall be automatically perfected without the need for filing, recording, or any other act.

(b) Superpriority Administrative Expense Claims. Pursuant to section 507(b) of the Bankruptcy Code, allowed superpriority administrative expense claims (the "First Lien Adequate Protection Superpriority Claims"), which claims shall be junior and subordinate only to: (I) the DIP Superpriority Claims; and (II) the Carve-Out, and shall be senior to all other administrative expense claims and all other claims of any kind or nature against the Debtor and the Debtor's estate, including the Second Lien Adequate Protection Superpriority Claims (as defined below). The First Lien Adequate Protection Superpriority Claims shall be payable from and have recourse to all property of the Debtor and the Debtor's estate.

(c) Payment of Professional Fees and Expenses. The Debtor shall pay, on a current basis, all reasonable and documented professional fees and expenses of the Prepetition Agent and the Prepetition Lenders, including, without limitation, the fees, disbursements, and other charges of their respective counsel and other professionals, incurred in connection with the monitoring, administration, and enforcement of the Prepetition Credit Agreement, the Prepetition Liens, the Prepetition Collateral, and the adequate protection provided under this Final Order.

(d) Current Interest Payments. The Debtor shall pay current interest (at the non-default rate of SOFR plus 375 basis points per annum) on the Prepetition Senior Secured Obligations, payable monthly in arrears on the first business day of each calendar month during the pendency of this Chapter 11 Case, commencing on the first business day of the first full calendar month following the Petition Date. A schedule of estimated adequate protection interest payments is attached hereto as Exhibit D.

(e) Financial Reporting. The Debtor shall deliver to the Prepetition Agent a comprehensive financial reporting package consisting of: (i) weekly cash flow reports, to be delivered no later than 5:00 p.m. Central Time on each Thursday (or, if Thursday is not a business day, the next succeeding business day); (ii) monthly financial statements, to be delivered no later than thirty (30) days after the end of each calendar month; and (iii) quarterly compliance certificates, to be delivered no later than forty-five (45) days after the end of each fiscal quarter.

(f) Fleet Maintenance. The Debtor shall maintain the fleet of vessels constituting Prepetition Collateral at current appraised values to the extent commercially reasonable, consistent with prudent ship-management practices and applicable maritime regulations. The baseline for fleet valuation shall be the November 1, 2022 appraisal conducted by Drakos Maritime Valuations Ltd., which valued the fifty (50) vessel fleet at $623,000,000 in the aggregate, consisting of: ten (10) Capesize vessels valued at $215,000,000, fourteen (14) Panamax vessels valued at $182,000,000, fourteen (14) Supramax vessels valued at $128,000,000, and twelve (12) Sub-Panamax Container vessels valued at $98,000,000. The Debtor shall not permit any vessel to be laid up, scrapped, or otherwise removed from active service without the prior written consent of the DIP Agent and the Prepetition Agent, except as required by scheduled dry-docking or emergency repair.

(g) Adequate Protection Cushion. The Court finds that the Prepetition First Lien Parties possess an adequate protection cushion by virtue of the fact that the aggregate appraised fair market value of the Prepetition Collateral ($623,000,000, based on the November 1, 2022 Drakos Maritime Valuations Ltd. appraisal) exceeds the aggregate outstanding Prepetition Senior Secured Obligations ($540,000,000) by $83,000,000, representing an equity cushion of approximately 15.4%.

B. Adequate Protection for Prepetition Second Lien Party.

As adequate protection for the benefit of BMC with respect to the Prepetition Second Lien Obligations (outstanding in the aggregate amount of $112,300,000 as of September 30, 2022), BMC is hereby granted:

(a) Replacement Liens. Pursuant to sections 361(2) and 363(e) of the Bankruptcy Code, valid, binding, enforceable, non-avoidable, and automatically perfected replacement liens on and security interests in all postpetition assets of the Debtor and the Debtor's estate, whether now existing or hereafter acquired, created, or arising, and all proceeds, products, offspring, rents, and profits thereof (the "Second Lien Adequate Protection Liens"). The Second Lien Adequate Protection Liens shall be junior and subordinate to: (I) the DIP Liens; (II) the First Lien Adequate Protection Liens; (III) the Prepetition First Liens; and (IV) the Carve-Out. The Second Lien Adequate Protection Liens shall be automatically perfected without the need for filing, recording, or any other act.

(b) Superpriority Administrative Expense Claims. Pursuant to section 507(b) of the Bankruptcy Code, allowed superpriority administrative expense claims (the "Second Lien Adequate Protection Superpriority Claims"), which claims shall be junior and subordinate to: (I) the DIP Superpriority Claims; (II) the First Lien Adequate Protection Superpriority Claims; and (III) the Carve-Out. The Second Lien Adequate Protection Superpriority Claims shall be payable from and have recourse to all property of the Debtor and the Debtor's estate.

(c) Rights Subject to Intercreditor Agreement. The rights of BMC under this Paragraph 7.B, including the Second Lien Adequate Protection Liens and the Second Lien Adequate Protection Superpriority Claims, shall in all respects remain subject to the terms and conditions of the Intercreditor Agreement dated June 15, 2019, as such agreement applies to adequate protection matters. Nothing in this Final Order shall be construed to modify, amend, or supersede the Intercreditor Agreement except to the extent expressly set forth herein.

(d) Payment of Professional Fees and Expenses. The Debtor shall pay, on a current basis, all reasonable and documented professional fees and expenses of BMC, including, without limitation, the fees, disbursements, and other charges of Kellner & Foss LLP (Theodore Kellner), as counsel to BMC, incurred in connection with the monitoring, administration, and enforcement of the Mezzanine Notes, the Prepetition Second Liens, and the adequate protection provided under this Final Order.

8. Milestones. The Debtor shall comply with each of the following milestones (each, a "Milestone"), calculated from the Petition Date unless otherwise indicated, subject to extension only with the prior written consent of the Required DIP Lenders (defined as the DIP Lenders holding more than 50% of the aggregate DIP commitments outstanding at the applicable time):

(a) Day 1 (Petition Date): The Debtor shall file its voluntary petition under Chapter 11 of the Bankruptcy Code and shall file all first-day motions, including, without limitation, motions relating to: cash management, debtor-in-possession financing, critical vendor payments, employee wages and benefits, tax payments, and insurance.

(b) Day 45: The Court shall have entered this Final Order approving the DIP Facility on a final basis.

(c) Day 120: The Debtor shall have circulated plan support solicitation materials to representatives of all creditor classes, including, without limitation, counsel to the Ad Hoc Group, counsel to BMC, counsel to the holders of the Unsecured Notes, and the Indenture Trustee.

(d) Day 180: The Debtor shall have filed a Chapter 11 plan of reorganization and a related disclosure statement with the Court.

(e) Day 270: The Court shall have entered an order confirming the Chapter 11 plan of reorganization.

(f) Day 300: The effective date of the confirmed Chapter 11 plan shall have occurred.

The Debtor shall use its commercially reasonable best efforts to comply with each Milestone within the time periods specified above. Failure to satisfy any Milestone within ten (10) business days of the applicable deadline (unless extended by the Required DIP Lenders in writing) shall constitute an Event of Default under this Final Order and the DIP Credit Agreement.

9. Covenants. In addition to the covenants set forth in the DIP Credit Agreement, the Debtor shall comply with the following covenants for so long as any DIP Obligations remain outstanding:

A. Affirmative Covenants.

(a) Budget Compliance. The Debtor shall maintain compliance with the DIP Budget within the Permitted Variances specified in Paragraph 4 above.

(b) Insurance. The Debtor shall maintain in full force and effect all insurance policies, including, without limitation: (I) the directors' and officers' liability insurance policy with Promontory Indemnity Insurance Co. (policy number PII-DO-2022-08847, with an aggregate limit of $25,000,000), arranged through Seaward & Beckett Insurance Brokers Ltd.; and (II) all hull and machinery, protection and indemnity ("P&I"), cargo, war risk, and general liability insurance policies covering the Debtor's vessels, terminal operations, and business activities, in each case in amounts and on terms consistent with industry standards and the requirements of the DIP Credit Agreement and the Prepetition Credit Agreement.

(c) Weekly Cash Flow Reports. The Debtor shall deliver to the DIP Agent and the Prepetition Agent weekly cash flow reports (including Variance Reports), prepared by or in consultation with Kensington Veltrian Partners LLC (James Calloway, Managing Director), in accordance with the schedule set forth in Paragraph 4 above.

(d) Monthly Financial Statements. The Debtor shall deliver to the DIP Agent and the Prepetition Agent monthly unaudited financial statements (including a balance sheet, income statement, and statement of cash flows) within thirty (30) days after the end of each calendar month.

(e) Books and Records. The Debtor shall maintain its books and records in accordance with United States generally accepted accounting principles ("GAAP"), consistently applied, as audited by Grainger, Holt & Associates LLP (Malcolm Holt, Lead Engagement Partner).

(f) Milestone Compliance. The Debtor shall comply with all Milestones set forth in Paragraph 8 above.

(g) CRO Cooperation. The Debtor shall cooperate fully with any Chief Restructuring Officer ("CRO") appointed in this Chapter 11 Case. The designated CRO is Richard "Rick" Thornberg of Alderney Management Advisors LLC, 200 Clarendon Street, 45th Floor, Boston, Massachusetts 02116. If and when activated, the CRO shall report to the Board of Directors of the Debtor and shall have the authority and responsibilities set forth in the engagement agreement between the Debtor and Alderney Management Advisors LLC.

(h) Monthly Operating Reports. The Debtor shall file monthly operating reports with the Court in the form and manner required by the U.S. Trustee for the Southern District of Texas.

(i) Permits, Licenses, and Governmental Authorizations. The Debtor shall maintain in full force and effect all permits, licenses, and governmental authorizations necessary for the operation of the Debtor's business, including, without limitation, all maritime permits, customs and border protection authorizations, Federal Maritime Commission licenses, and Coast Guard certifications.

B. Negative Covenants.

(a) No Additional Indebtedness. The Debtor shall not incur, assume, or permit to exist any additional indebtedness outside of the DIP Facility, other than ordinary course trade payables incurred in the operation of the Debtor's business consistent with the DIP Budget, without the prior written consent of the DIP Agent.

(b) No Additional Liens. The Debtor shall not grant, create, incur, assume, or permit to exist any liens on any property of the Debtor or the Debtor's estate, other than the DIP Liens and the Prepetition Liens as described and authorized in this Final Order.

(c) No Material Asset Dispositions. The Debtor shall not sell, transfer, lease, or otherwise dispose of any material asset or group of related assets outside the ordinary course of business without the prior written consent of the DIP Agent. For purposes of this covenant, a "material asset" means any single asset, or group of related assets, with a fair market value exceeding $5,000,000.

(d) No Intercompany Transfers. The Debtor shall not make any intercompany transfer, loan, advance, payment, distribution, or other transfer of value to TSL or any non-debtor affiliate, except in the ordinary course of business and consistent with the DIP Budget. For the avoidance of doubt, the Debtor shall not make any payment of principal or interest on the Intercompany Note (outstanding in the amount of $76,400,000) without the prior written consent of the DIP Agent and further order of the Court.

(e) No Modification of Material Contracts. The Debtor shall not modify, amend, supplement, terminate, or waive any material provision of any material contract or agreement without the prior written consent of the DIP Agent.

(f) Minimum Liquidity. The Debtor shall maintain unrestricted cash and cash equivalents of not less than $15,000,000 at all times during the pendency of this Chapter 11 Case (the "Minimum Liquidity Requirement"). For purposes of this covenant, "unrestricted cash and cash equivalents" means cash and cash equivalents held in accounts of the Debtor that are not subject to any restriction, lien, or encumbrance (other than the DIP Liens and the Prepetition Liens) and that are available for use by the Debtor in the ordinary course of business.

(g) No Prepetition Claims Payments. The Debtor shall not pay any prepetition claims of any kind or nature except as specifically authorized by order of this Court, including, without limitation, payments authorized pursuant to any first-day orders (including, but not limited to, critical vendor payments, employee wage and benefit payments, and tax payments).

(h) No Conversion or Dismissal. The Debtor shall not file a motion or consent to the conversion of this Chapter 11 Case to a case under Chapter 7 of the Bankruptcy Code or the dismissal of this Chapter 11 Case without the prior written consent of the DIP Agent.

10. Events of Default. The occurrence of any of the following shall constitute an "Event of Default" under this Final Order and the DIP Credit Agreement:

(a) The failure by the Debtor to make any payment of principal, interest, fees, or other amounts when due under the DIP Credit Agreement or this Final Order;

(b) Any breach by the Debtor of any covenant, representation, warranty, certification, or other agreement contained in the DIP Credit Agreement or this Final Order, which breach shall not have been cured within the applicable cure period, if any, set forth in the DIP Credit Agreement;

(c) The failure by the Debtor to satisfy any Milestone set forth in Paragraph 8 above within ten (10) business days of the applicable deadline, unless such Milestone has been extended in writing by the Required DIP Lenders;

(d) The appointment of a Chapter 11 trustee or an examiner with expanded powers (beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code) in this Chapter 11 Case;

(e) The conversion of this Chapter 11 Case to a case under Chapter 7 of the Bankruptcy Code;

(f) The dismissal of this Chapter 11 Case;

(g) The entry of an order by this Court or any other court of competent jurisdiction granting relief from the automatic stay under section 362 of the Bankruptcy Code with respect to any Prepetition Collateral or DIP Collateral with a fair market value exceeding $10,000,000 in the aggregate;

(h) The entry of an order by this Court or any other court of competent jurisdiction reversing, vacating, staying, or materially modifying this Final Order or the Interim Order without the prior written consent of the DIP Agent;

(i) The filing by the Debtor, any statutory committee, or any other party in interest of a motion, complaint, pleading, or other document challenging the validity, enforceability, perfection, or priority of any of the DIP Liens, the DIP Obligations, the DIP Superpriority Claims, the Prepetition Liens, or the Prepetition Obligations (including both the Prepetition Senior Secured Obligations and the Prepetition Second Lien Obligations);

(j) The Debtor's failure to maintain the Minimum Liquidity Requirement of $15,000,000 at any time;

(k) The occurrence of budget variances exceeding the Permitted Variances for two (2) consecutive four-week measurement periods;

(l) A material adverse change in the business, operations, assets, liabilities, financial condition, or prospects of the Debtor, as reasonably determined by the Required DIP Lenders; and

(m) Cross-Default: The occurrence of any event of default under the Prepetition Credit Agreement that is not stayed or cured, to the extent such event of default is not caused solely by the commencement of this Chapter 11 Case.

11. Remedies Upon Event of Default. Upon the occurrence and during the continuance of any Event of Default:

(a) Termination Notice. The DIP Agent may, in its sole discretion, deliver written notice of such Event of Default (a "Termination Notice") to the Debtor, counsel to the Debtor, the U.S. Trustee, counsel to any statutory committee appointed in this Chapter 11 Case, and the Prepetition Agent.

(b) Remedies Notice Period. Following delivery of a Termination Notice, there shall be a period of five (5) business days (the "Remedies Notice Period"), during which the Debtor, any statutory committee, and any other party in interest may seek emergency relief from this Court. The Remedies Notice Period shall commence on the date on which the Termination Notice is delivered (or deemed delivered) to all of the parties specified in subparagraph (a) above. During the Remedies Notice Period, the Debtor shall continue to have the right to use DIP proceeds and Cash Collateral in accordance with the DIP Budget, subject to the Minimum Liquidity Requirement.

(c) Exercise of Remedies. Upon the expiration of the Remedies Notice Period without the cure of the applicable Event of Default or the entry of an order by this Court to the contrary, the DIP Agent may, without further order of this Court or notice to any party (except as required by applicable law):

(i) Terminate all DIP commitments under the DIP Credit Agreement, and no further DIP borrowings shall be available to the Debtor;

(ii) Declare all DIP Obligations to be immediately due and payable in full, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived by the Debtor;

(iii) Exercise any and all rights and remedies available to the DIP Agent and the DIP Lenders under the DIP Credit Agreement, this Final Order, and applicable non-bankruptcy law, including, without limitation, the right to foreclose upon, collect, and dispose of the DIP Collateral;

(iv) Apply any and all cash of the Debtor, including Cash Collateral, to the repayment and satisfaction of the DIP Obligations, subject in all respects to the Carve-Out;

(d) Automatic Stay Modification. The automatic stay imposed by section 362 of the Bankruptcy Code is hereby automatically modified, without further order of this Court, to the extent necessary to permit the DIP Agent and the DIP Lenders to exercise any and all of the rights and remedies described in this Paragraph 11 following the expiration of the Remedies Notice Period. Nothing in this subparagraph shall prejudice the right of the Debtor, any statutory committee, or any other party in interest to seek emergency relief from this Court during the Remedies Notice Period or thereafter.

12. Professional Fee Carve-Out. Notwithstanding anything to the contrary in this Final Order, the DIP Liens, the DIP Superpriority Claims, the First Lien Adequate Protection Liens, the First Lien Adequate Protection Superpriority Claims, the Second Lien Adequate Protection Liens, and the Second Lien Adequate Protection Superpriority Claims shall in all cases be subject to a carve-out (the "Carve-Out") for the payment of the following:

(a) Pre-Trigger Notice Carve-Out. All allowed and unpaid fees, costs, disbursements, and expenses of professionals retained by the Debtor or any statutory committee pursuant to sections 327, 328, or 1103 of the Bankruptcy Code (collectively, "Retained Professionals"), incurred at any time prior to the delivery of a Termination Notice or the occurrence of an Event of Default (whichever occurs first), in each case to the extent such fees, costs, disbursements, and expenses are allowed by order of this Court. The Pre-Trigger Notice Carve-Out shall not be subject to any cap or limitation.

(b) Post-Trigger Notice Carve-Out. Following delivery of a Termination Notice, all allowed fees, costs, disbursements, and expenses of Retained Professionals incurred after the date of such Termination Notice; provided, however, that the aggregate amount of the Post-Trigger Notice Carve-Out shall not exceed $3,000,000 (the "Post-Trigger Cap"). The Post-Trigger Cap shall be available to fund the orderly wind-down of the Debtor's estate, the preparation, filing, and prosecution of any remaining motions and applications (including fee applications), and the pursuit of confirmation of a Chapter 11 plan, if feasible.

(c) U.S. Trustee Fees. All statutory fees payable to the U.S. Trustee pursuant to 28 U.S.C. § 1930(a)(6) and any fees payable to the Clerk of the Bankruptcy Court. Such fees shall not be subject to any cap or limitation.

(d) Claims Agent Fees. All fees and expenses of Pendleton Claim Services Inc. (Laura Pendleton, President, 1601 Elm Street, Suite 4200, Dallas, Texas 75201), as the Court-approved claims and noticing agent in this Chapter 11 Case, incurred after the date of delivery of a Termination Notice, in an aggregate amount not to exceed $500,000 from the date of such Termination Notice.

For purposes of the Carve-Out, the Retained Professionals whose fees and expenses are subject to the Carve-Out include, without limitation:

(i) Calderwood & Harkness LLP (Nathaniel Bower, Responsible Partner; Amy Chesterton, Lead Associate), counsel to the Debtor, with offices at 780 Third Avenue, New York, New York 10017. Hourly rates: Partners — $1,650; Senior Associates — $1,050; Associates — $850; Paralegals — $425.

(ii) Kensington Veltrian Partners LLC (James Calloway, Managing Director), financial advisor to the Debtor. Fee structure: monthly advisory fee of $250,000; completion fee of $4,500,000 upon execution of a restructuring support agreement ("RSA"), or a filing fee of $2,000,000 upon the filing of a Chapter 11 petition.

(iii) Alderney Management Advisors LLC (Richard "Rick" Thornberg), CRO services, if activated, with offices at 200 Clarendon Street, 45th Floor, Boston, Massachusetts 02116.

(iv) Vassiliou & Demetriou Law Offices (Alexandros Vassiliou, Lead Partner), Greek counsel to the Debtor for cross-border coordination, with offices at 15 Vasilissis Sofias Avenue, Athens 10674, Greece.

(v) Any professionals retained by a statutory committee appointed in this Chapter 11 Case pursuant to sections 327, 328, or 1103 of the Bankruptcy Code.

Upon delivery of a Termination Notice, the Debtor shall fund the Carve-Out by depositing $3,000,000 from available cash into a segregated, interest-bearing account (the "Carve-Out Reserve Account") maintained at a financial institution acceptable to the DIP Agent. Amounts held in the Carve-Out Reserve Account shall be used solely for the payment of amounts constituting the Carve-Out as set forth in this Paragraph 12 and shall not be subject to the DIP Liens or any other liens. The Carve-Out Reserve Account shall be administered by the Debtor (or, if applicable, any trustee appointed in this Chapter 11 Case), subject to oversight by the Court.

13. Reservation of Rights — Investigation of Prepetition Liens and Claims. Notwithstanding anything to the contrary in this Final Order:

(a) Committee Standing. Any official committee of unsecured creditors (an "Official Committee") appointed in this Chapter 11 Case pursuant to section 1102 of the Bankruptcy Code shall have standing to investigate, challenge, object to, or otherwise contest the validity, extent, priority, perfection, enforceability, or amount of the Prepetition Liens and the Prepetition Obligations (including both the Prepetition Senior Secured Obligations and the Prepetition Second Lien Obligations).

(b) Debtor Standing. The Debtor shall have standing to investigate, challenge, object to, or otherwise contest the validity, extent, priority, perfection, enforceability, or amount of the Prepetition Liens and the Prepetition Obligations.

(c) Challenge Period. Any challenge, objection, or contest to the Prepetition Liens or the Prepetition Obligations (a "Challenge") must be commenced by the filing of a complaint, motion, or other appropriate pleading initiating a contested matter or adversary proceeding on or before the earlier of: (I) the date that is sixty (60) days after the date of formation of any Official Committee; or (II) the date that is seventy-five (75) days after the entry of this Final Order, if no Official Committee is appointed (as applicable, the "Challenge Deadline"). The Challenge Deadline may be extended by order of this Court for cause shown, upon motion filed prior to the expiration of the Challenge Deadline.

(d) Consequences of Failure to Challenge. If no Challenge is timely commenced by the Challenge Deadline, then, without further order of this Court, the Prepetition Liens and the Prepetition Obligatio

UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION
In re:
THALASSA AMERICAS INC.,
Debtor.
Case No. ___ (to be assigned)
Chapter 11
FINAL ORDER (I) AUTHORIZING THE DEBTOR TO OBTAIN POSTPETITION FINANCING PURSUANT TO 11 U.S.C. §§ 105, 361, 362, 364(c)(1), 364(c)(2), 364(c)(3), AND 364(d)(1), (II) GRANTING LIENS AND SUPERPRIORITY ADMINISTRATIVE EXPENSE STATUS, (III) AUTHORIZING THE USE OF CASH COLLATERAL, (IV) GRANTING ADEQUATE PROTECTION TO PREPETITION SECURED PARTIES, AND (V) GRANTING RELATED RELIEF
Draft — January 18, 2023
Upon the motion (the "DIP Motion") of Thalassa Americas Inc. ("Debtor" or "TAI"), debtor and debtor-in-possession in the above-captioned Chapter 11 case, for entry of an order pursuant to sections 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), and 364(d)(1) of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the "Bankruptcy Code"), and Rules 2002, 4001, 6004, and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), and Rules 4001-1 and 4001-2 of the Bankruptcy Local Rules for the Southern District of Texas (the "Local Rules"), authorizing the Debtor to obtain postpetition financing, granting liens and superpriority administrative expense status in connection therewith, authorizing the use of cash collateral, granting adequate protection to prepetition secured parties, and granting related relief; and the Court having conducted a final hearing (the "Final Hearing") on the DIP Motion; and the Court having reviewed and considered the DIP Motion, the Declaration of Marcus Hale in support thereof, the DIP Credit Agreement and related documents, the record of proceedings before the Court, and any objections filed or raised at the Final Hearing; and due and proper notice of the DIP Motion and the Final Hearing having been provided; and the Court having found that good and sufficient cause exists for the relief granted herein; and after due deliberation and sufficient cause appearing therefor:
RECITALS
The Court finds and determines the following:
A. Commencement of Case. On [Petition Date] (the "Petition Date"), Thalassa Americas Inc. ("TAI" or the "Debtor"), a corporation organized under the laws of the State of Delaware, Employer Identification Number 84-3291057, with its principal office located at 1400 McKinney Street, Suite 2200, Houston, Texas 77010, and its registered agent, Capitol Registered Agents LLC, at 1209 Orange Street, Wilmington, Delaware 19801, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in this Court (the "Chapter 11 Case"). The Debtor continues to operate its business and manage its properties as debtor-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No request has been made for the appointment of a trustee or examiner in this Chapter 11 Case.
TAI 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 (Greece), with its registered address at 42 Akti Miaouli, Piraeus 18538, Greece. TSL is not a debtor in this Chapter 11 Case, and no petition has been filed on behalf of TSL in any court within the United States or, to the Debtor's knowledge, in any foreign jurisdiction. TAI serves as the principal U.S.-side operating entity for TSL's global maritime transportation and logistics business, and TAI's operations include: (i) the management and operation of the Houston terminal facility pursuant to certain lease arrangements; (ii) the scheduling and commercial management of Jones Act–exempt foreign-flag vessels calling at U.S. ports; and (iii) domestic freight brokerage services for the movement of dry-bulk commodities and containerized cargo within and through the United States. As of the Petition Date, TAI employed approximately 680 employees in the United States across its Houston headquarters, terminal operations, and regional offices.
B. Interim DIP Order. On [date of interim hearing] (the "Interim Hearing Date"), approximately three (3) days after the Petition Date, this Court conducted an interim hearing on the DIP Motion. On that date, the Court entered an order (the "Interim Order") [Docket No. _], which, inter alia, authorized the Debtor to borrow up to $30,000,000 on an interim basis under the DIP Facility (as defined below), pending the Final Hearing on the DIP Motion. The Interim Order provided for interim DIP liens, interim superpriority administrative expense status, and interim adequate protection to the Prepetition Secured Parties (as defined below), all on the terms set forth therein. The Final Hearing was scheduled for and held on [date], approximately forty-five (45) days following the Petition Date, consistent with the timeline set forth in the Debtor's Chapter 11 Contingency Playbook and the milestones established in the DIP Credit Agreement. All parties in interest were given proper notice of the Final Hearing in compliance with the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules.
C. Debtor's Motion. On the Petition Date, the Debtor filed its Motion for Entry of Interim and Final Orders Authorizing Postpetition Financing, Granting Liens and Superpriority Administrative Expense Status, Authorizing the Use of Cash Collateral, Granting Adequate Protection to Prepetition Secured Parties, and Granting Related Relief [Docket No. _] (the "DIP Motion"). The DIP Motion was supported by the Declaration of Marcus Hale, President of TAI, which described, among other things, the Debtor's business operations, the circumstances necessitating the filing of the Chapter 11 Case, the Debtor's immediate and ongoing need for postpetition financing, and the terms and conditions of the proposed DIP Facility. The DIP Motion sought authority for the Debtor to enter into and perform under the DIP Credit Agreement and all related documents, and requested entry of an interim order and a final order granting the relief described therein.
D. The Prepetition Indebtedness. The Court finds that, as of the Petition Date, the Debtor was obligated under and party to the following prepetition indebtedness:
(i) Senior Secured Credit Facility. Pursuant 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 Petition Date, the "Prepetition Credit Agreement"), among TSL, as borrower, TAI, as co-borrower with respect to the U.S. Tranche (as defined therein), the financial institutions from time to time party thereto as lenders (collectively, the "Prepetition Lenders"), and Nordbank International AG, as administrative agent and collateral agent for the Prepetition Lenders (in such capacities, the "Prepetition Agent"), the Prepetition Lenders provided credit facilities with an aggregate original commitment of $685,000,000 (the "Senior Secured Credit Facility"), consisting of the following tranches:
(1) Term Loan A ("TLA"): An original principal amount of $400,000,000, subject to amortization through quarterly principal payments of $10,000,000 each; as of September 30, 2022, the outstanding principal balance of TLA was $270,000,000 (reflecting the original $400,000,000 principal less $130,000,000 in thirteen (13) quarterly amortization payments made from and including the third quarter of 2019 through and including the third quarter of 2022);
(2) Revolving Credit Facility ("Revolver"): A revolving credit commitment of $200,000,000; as of September 30, 2022, $185,000,000 was drawn and outstanding under the Revolver;
(3) U.S. Tranche Term Loan B ("TLB"): A non-amortizing term loan in the original principal amount of $85,000,000 with bullet maturity, for which TAI is the co-borrower; as of September 30, 2022, $85,000,000 was outstanding under TLB; and
(4) The aggregate outstanding principal balance under the Senior Secured Credit Facility as of September 30, 2022 was $540,000,000 (the "Prepetition Senior Secured Obligations").
The Senior Secured Credit Facility bears interest at a rate of the Secured Overnight Financing Rate ("SOFR") plus 375 basis points per annum, with a default rate of an additional 200 basis points per annum. The stated maturity date of the Senior Secured Credit Facility is June 15, 2024. The CUSIP number for TLA is 87265BAA7. The Prepetition Lender syndicate consists of nine (9) financial institutions, with the following approximate commitment and outstanding balances: 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).
The obligations under the Prepetition Credit Agreement are secured by first-priority liens (the "Prepetition First Liens") on substantially all of the assets of the Debtor and certain assets of TSL and its affiliates (collectively, the "Prepetition Collateral"), including, without limitation: (a) thirty-eight (38) dry-bulk carriers; (b) twelve (12) container vessels; (c) the Debtor's leasehold interest in the Houston terminal facility; (d) all accounts receivable; and (e) the equity interests in TAI and fourteen (14) vessel-owning special purpose vehicles (each, a "Vessel SPV").
(ii) Mezzanine Notes. The Debtor is party to that certain Mezzanine Note Purchase Agreement, dated as of June 15, 2019, pursuant to which TAI issued mezzanine notes (the "Mezzanine Notes") to Dralvecen Mezzanine Capital LLC ("BMC"), located at 600 Lexington Avenue, 22nd Floor, New York, New York 10022. As of September 30, 2022, the outstanding principal balance of the Mezzanine Notes was $112,300,000 (reflecting the original $100,000,000 principal amount plus $12,300,000 in payment-in-kind ("PIK") interest that has been capitalized and added to principal through September 30, 2022). The Mezzanine Notes bear interest at a rate of 11.5% per annum on a PIK toggle basis; since the second quarter of 2022, all interest has been paid in kind rather than in cash. The stated maturity date of the Mezzanine Notes is December 15, 2024. The Mezzanine Notes are secured by second-priority liens (the "Prepetition Second Liens") on the same Prepetition Collateral that secures the Senior Secured Credit Facility. The relative rights and priorities of the Prepetition First Lien parties and BMC with respect to the Prepetition Collateral are governed by that certain Intercreditor Agreement, dated as of June 15, 2019 (the "Intercreditor Agreement"), between Nordbank International AG (as first-lien agent) and BMC (together with the holders of the Prepetition First Liens, the "Prepetition Secured Parties"). The obligations under the Mezzanine Notes are referred to herein as the "Prepetition Second Lien Obligations."
(iii) Unsecured Notes. TAI has outstanding $50,000,000 in aggregate principal amount of 8.25% Senior Unsecured Notes due March 1, 2025 (CUSIP: 87265BAB5) (the "Unsecured Notes"), issued pursuant to an indenture (the "Indenture"), dated as of June 15, 2019, between TAI, as issuer, and Garrison Trust Company, as indenture trustee (the "Indenture Trustee"), located at 100 Wall Street, 16th Floor, New York, New York 10005. The Debtor failed to make the semi-annual interest payment of $2,062,500 that was due on December 1, 2022 under the Indenture. The thirty (30) day cure period specified in the Indenture expired on January 1, 2023 without such payment having been made, constituting an event of default under the Indenture. The Unsecured Notes are not secured by any lien on the Debtor's assets.
(iv) Intercompany Note. TAI is obligated to TSL in the principal amount of $76,400,000 pursuant to a subordinated intercompany promissory note (the "Intercompany Note"), bearing interest at 5.0% per annum. The Intercompany Note is subordinated to all other indebtedness of the Debtor, including the Senior Secured Credit Facility, the Mezzanine Notes, and the Unsecured Notes.
(v) Total Debt. As of September 30, 2022, the Debtor's total funded indebtedness and other obligations were approximately $847,300,000, inclusive of trade payables of approximately $38,700,000. The largest single trade creditor is Olympian Fuel & Supply SA, to whom the Debtor owed approximately $9,200,000 as of September 30, 2022.
E. Events Leading to the Filing. The Chapter 11 Case was precipitated by a severe liquidity crisis caused principally by a sustained and dramatic collapse in dry-bulk charter rates across the global maritime shipping industry. The Baltic Dry Index, a composite measure of the cost of shipping dry-bulk commodities, declined approximately 58% between January 2022 and September 2022. This collapse had a material and direct adverse impact on TSL's and the Debtor's revenue, earnings, and cash flows. TSL's average daily time-charter equivalent rate fell from $24,800 per day during fiscal year 2021 to $11,200 per day during the third quarter of 2022, representing a decline of approximately 55%.
As a result of the deteriorating market conditions, the Debtor and TSL experienced a series of covenant defaults under the Prepetition Credit Agreement:
(a) Minimum Liquidity Covenant Breach (September 15, 2022): The Debtor's unrestricted cash and cash equivalents fell to $27,300,000, below the required minimum of $40,000,000, resulting in a shortfall of $12,700,000 and a breach of the minimum liquidity covenant set forth in Section 7.11(a) of the Prepetition Credit Agreement.
(b) Net Leverage Ratio Breach (September 30, 2022): The Debtor's Net Leverage Ratio as of September 30, 2022 was 7.82x (calculated as Net Debt of $770,900,000 divided by last-twelve-months ("LTM") EBITDA of $98,600,000), which exceeded the maximum permitted Net Leverage Ratio of 5.50x set forth in Section 7.11(b) of the Prepetition Credit Agreement.
(c) Interest Coverage Ratio Breach (September 30, 2022): The Debtor's Interest Coverage Ratio as of September 30, 2022 was 1.74x (calculated as LTM EBITDA of $98,600,000 divided by LTM Interest Expense of $56,700,000), which was below the minimum required Interest Coverage Ratio of 2.50x set forth in Section 7.11(c) of the Prepetition Credit Agreement.
The fleet of fifty (50) vessels that constitutes a substantial portion of the Prepetition Collateral experienced significant value deterioration, declining from an appraised fair market value of $891,000,000 as of January 2022 to $623,000,000 as of November 1, 2022, in each case as appraised by Drakos Maritime Valuations Ltd., an independent vessel valuation firm. TSL's consolidated revenue declined from €1,420,000,000 for fiscal year 2021 to an estimated €987,000,000 for fiscal year 2022, representing a decline of approximately 30.5%. TAI's standalone revenue declined from $312,000,000 for fiscal year 2021 to an estimated $198,000,000 for fiscal year 2022.
Following the covenant defaults described above, on October 10, 2022, the Debtor, TSL, the Prepetition Agent, and the Required Lenders (as defined in the Prepetition Credit Agreement) entered into a Forbearance Agreement (the "Forbearance Agreement"), pursuant to which the Prepetition Lenders agreed to a ninety (90) day standstill period during which they would forbear from exercising remedies under the Prepetition Credit Agreement. The Forbearance Agreement was subsequently extended twice: first, to March 8, 2023, and then to April 7, 2023. During the forbearance period, the Debtor and its advisors engaged in extensive negotiations with the Prepetition Lenders, BMC, and other key creditor constituencies regarding the terms of a potential out-of-court restructuring or, alternatively, the terms of a debtor-in-possession financing facility to be utilized in connection with a Chapter 11 filing.
F. The DIP Facility. The Debtor proposes to obtain postpetition financing (the "DIP Facility") pursuant to a DIP Credit Agreement (the "DIP Credit Agreement"), to be entered into among TAI, as borrower, Nordbank International AG, as DIP administrative agent (the "DIP Agent"), and Triton Credit Partners LP (the "DIP Lender" and, together with Nordbank International AG in its capacity as a DIP lender, the "DIP Lenders"). A DIP term sheet setting forth the principal terms of the DIP Facility was received by the Debtor on December 15, 2022. A draft of the DIP Credit Agreement, dated December 22, 2022 and marked as a draft, was prepared and has been provided to the Court and all parties in interest. The material terms of the DIP Facility are as follows:
(a) Total Commitment: $75,000,000.
(b) Interest Rate: SOFR plus 600 basis points per annum.
(c) Commitment Fee: 0.50% per annum on undrawn amounts, payable quarterly in arrears.
(d) Maturity: Twelve (12) months from the Petition Date (the "DIP Maturity Date").
(e) Interim Borrowing: Up to $30,000,000 in the aggregate, previously authorized under the Interim Order.
(f) Final Borrowing: The remaining $45,000,000 of the total $75,000,000 commitment, available upon entry of this Final Order, subject to the terms and conditions of the DIP Credit Agreement.
G. Adequate Notice. Due and proper notice of the DIP Motion and the Final Hearing was provided to all required parties in interest, including, without limitation: (i) the Office of the United States Trustee for the Southern District of Texas (the "U.S. Trustee"); (ii) all parties on the master service list maintained in this Chapter 11 Case; (iii) counsel to the Ad Hoc Group of Prepetition Lenders, Whitfield, Crane & Burgess LLP (Graham Whitfield III), 51 West 52nd Street, 38th Floor, New York, New York 10019; (iv) counsel to Dralvecen Mezzanine Capital LLC, Kellner & Foss LLP (Theodore Kellner), 1185 Avenue of the Americas, 30th Floor, New York, New York 10036; (v) counsel to the holders of the Unsecured Notes, Ashford, Brightmoor Group & McKay PC (Carolyn Brightmoor Group), 299 Park Avenue, 18th Floor, New York, New York 10171; (vi) the Prepetition Agent, Nordbank International AG; and (vii) the DIP Lenders. The Court finds that such notice was adequate and sufficient under the circumstances, and that all parties in interest were afforded adequate time and opportunity to object to the relief requested in the DIP Motion. The Final Hearing was conducted in accordance with all applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules.
H. Findings Regarding the DIP Facility. Based on the record before the Court, including the DIP Motion, the Hale Declaration, the evidence presented and arguments made at the Final Hearing, and the entire record of this Chapter 11 Case, the Court finds and concludes as follows:
(a) The Debtor has an immediate, critical, and ongoing need for the DIP Facility in order to fund ongoing operations, preserve the going-concern value of the Debtor's business and assets for the benefit of all stakeholders, maintain the Debtor's workforce, meet payroll and other essential operating obligations, and fund the administration of this Chapter 11 Case. The Debtor's estimated administrative costs for the first twelve (12) months of the Chapter 11 Case are approximately $18,500,000, including, without limitation, legal fees, financial advisor fees, CRO fees, U.S. Trustee fees, and claims agent fees. Without access to the DIP Facility and the ability to use Cash Collateral, the Debtor would be unable to maintain its business operations, and the going-concern value of the Debtor's estate would be materially and irreparably impaired.
(b) The Debtor has been unable to obtain credit on an unsecured basis, or as an administrative expense under section 364(a) or section 364(b) of the Bankruptcy Code, or with liens junior to existing liens under section 364(c) of the Bankruptcy Code alone. The Debtor has demonstrated, and the Court finds, that the only financing available to the Debtor is the DIP Facility on the terms and conditions set forth in the DIP Credit Agreement and this Final Order, including the provision of priming liens under section 364(d)(1) of the Bankruptcy Code.
(c) The terms of the DIP Facility, including the interest rate, fees, and other economic terms, are fair and reasonable under the circumstances and reflect terms that are consistent with or more favorable than terms available in the market for debtor-in-possession financing of this nature and size. The DIP Facility was negotiated in good faith and at arm's length among the Debtor, the DIP Agent, and the DIP Lenders, with the advice and involvement of the Debtor's professionals, including Calderwood & Harkness LLP and Kensington Veltrian Partners LLC.
(d) The DIP Lenders are entitled to the protections of section 364(e) of the Bankruptcy Code, and the DIP Facility has been extended, and the DIP Obligations have been and will be incurred, by the DIP Lenders in good faith.
(e) Good and sufficient cause exists for entry of this Final Order.
Based upon the foregoing findings, and after due deliberation and consideration:
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED AS FOLLOWS:
1. Authorization of DIP Facility. The DIP Motion is granted on a final basis as set forth herein. The Debtor is authorized, pursuant to sections 105, 361, 362, 364(c)(1), 364(c)(2), 364(c)(3), and 364(d)(1) of the Bankruptcy Code, to borrow up to $75,000,000 in the aggregate under the DIP Facility, on the terms and conditions set forth in the DIP Credit Agreement, a copy of which is attached hereto as Exhibit B and incorporated herein by reference. The $30,000,000 in interim borrowings previously authorized by the Interim Order is hereby ratified and confirmed in all respects. Upon entry of this Final Order, the Debtor is authorized to borrow the remaining $45,000,000 of the total $75,000,000 commitment, subject to satisfaction of the conditions precedent set forth in the DIP Credit Agreement. The Debtor is further authorized to execute and deliver the DIP Credit Agreement and all related documents, instruments, agreements, certificates, and notices, and to perform all of its obligations thereunder. All obligations arising under or in connection with the DIP Credit Agreement, this Final Order, and all related documents (collectively, the "DIP Obligations") shall be valid, binding, and enforceable against the Debtor in accordance with their terms and shall not be subject to any defense, counterclaim, offset, or recoupment of any kind.
2. DIP Liens. As security for the prompt and complete payment and performance of all DIP Obligations, and pursuant to sections 364(c)(2), 364(c)(3), and 364(d)(1) of the Bankruptcy Code, the DIP Agent is hereby granted, for the benefit of the DIP Lenders, effective as of the Petition Date, the following continuing, valid, binding, enforceable, non-avoidable, and automatically perfected liens on and security interests in all real and personal property of the Debtor and the Debtor's estate, whether now existing or hereafter acquired, created, or arising, and all proceeds, products, offspring, rents, and profits thereof (collectively, the "DIP Collateral," and such liens and security interests, the "DIP Liens"):
(a) Priming Liens. Pursuant to section 364(d)(1) of the Bankruptcy Code, first-priority priming liens on all Prepetition Collateral, which DIP Liens shall prime and be senior to the Prepetition First Liens and the Prepetition Second Liens. The DIP Liens granted pursuant to this paragraph shall be subject only to: (I) the Carve-Out (as defined in Paragraph 12 below); and (II) any valid, perfected, and non-avoidable liens in existence as of the Petition Date that are senior in priority to the Prepetition First Liens and Prepetition Second Liens (other than the Prepetition First Liens and Prepetition Second Liens themselves) (any such senior liens, "Permitted Prior Liens"), provided that the Debtor has not identified any Permitted Prior Liens on the Prepetition Collateral as of the date hereof.
(b) First-Priority Liens on Unencumbered Assets. Pursuant to section 364(c)(2) of the Bankruptcy Code, first-priority liens on all assets of the Debtor and the Debtor's estate that, as of the Petition Date, were not subject to valid, perfected, and non-avoidable liens, subject only to the Carve-Out.
(c) Junior Liens. Pursuant to section 364(c)(3) of the Bankruptcy Code, junior liens on all assets of the Debtor and the Debtor's estate that are subject to valid, perfected, and non-avoidable liens in existence as of the Petition Date (other than the Prepetition First Liens and Prepetition Second Liens, which are primed by the DIP Liens pursuant to subparagraph (a) above), which junior liens shall be junior only to such existing valid, perfected, and non-avoidable liens and the Carve-Out.
The DIP Liens shall attach to the DIP Collateral immediately upon entry of this Final Order (or, to the extent previously granted under the Interim Order, shall be deemed to have attached as of the date of the Interim Order) and shall be valid, perfected, and enforceable without the necessity of the execution, filing, or recording by the Debtor of any mortgages, security agreements, pledge agreements, financing statements, or other similar documents, or the possession or control by the DIP Agent of any DIP Collateral, or the taking of any other action to validate or perfect the DIP Liens. If the DIP Agent, in its sole discretion, elects to file or record any financing statements, mortgages, notices, or other instruments with respect to any of the DIP Liens, the Debtor and all applicable governmental units are directed to accept and record any such documents, and all filing fees and recording fees in connection therewith shall be waived. A certified copy of this Final Order may, in the DIP Agent's discretion, be filed with or recorded in filing or recording offices in addition to, or in lieu of, any such financing statements, mortgages, notices, or other instruments, and all filing and recording offices are directed to accept such certified copy of this Final Order for filing and recording.
3. Superpriority Administrative Expense Claims. Pursuant to section 364(c)(1) of the Bankruptcy Code, all DIP Obligations shall constitute allowed superpriority administrative expense claims against the Debtor and the Debtor's estate (collectively, the "DIP Superpriority Claims"), with priority in payment over any and all administrative expense claims, unsecured claims, and all other claims against the Debtor or the Debtor's estate, of any kind or nature whatsoever, whether now existing or hereafter arising, including, without limitation, administrative expense claims arising under sections 503(b), 507(a)(2), 507(b), and 726(b) of the Bankruptcy Code and any claims arising under sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b), 546(c), 726, 1113, and 1114 of the Bankruptcy Code. The DIP Superpriority Claims shall be subject only to the Carve-Out. The DIP Superpriority Claims shall be payable from, and shall have recourse to, all property of the Debtor and the Debtor's estate, including, without limitation, all DIP Collateral, all proceeds of avoidance actions under Chapter 5 of the Bankruptcy Code, and all other property and interests in property of the Debtor's estate.
4. Use of DIP Proceeds and Cash Collateral. The Debtor is authorized, pursuant to sections 361 and 363 of the Bankruptcy Code, to use: (a) the proceeds of the DIP Facility; and (b) "Cash Collateral" as defined in section 363(a) of the Bankruptcy Code, in each case in accordance with, and solely to the extent provided in, the DIP Budget (as defined in Paragraph 5 below) and the terms and conditions of this Final Order and the DIP Credit Agreement. The DIP Budget, which is attached hereto as Exhibit A, consists of a thirteen (13) week rolling cash flow projection prepared by Kensington Veltrian Partners LLC (James Calloway, Managing Director), the Debtor's Court-approved financial advisor. The Debtor shall not use DIP proceeds or Cash Collateral for any purpose not authorized by the DIP Budget, this Final Order, or the DIP Credit Agreement.
The Debtor shall prepare and deliver to the DIP Agent and the Prepetition Agent, no later than 5:00 p.m. Central Time on each Thursday (or, if Thursday is not a business day, the next succeeding business day), a weekly variance report (each, a "Variance Report") comparing actual results for the preceding week to the applicable line items in the DIP Budget. The Variance Report shall be in form and substance satisfactory to the DIP Agent. The following variance thresholds shall apply, measured on a cumulative four (4) week rolling basis: (i) no individual line-item variance shall exceed 15% of the budgeted amount for such line item; and (ii) no aggregate variance shall exceed 10% of the total budgeted disbursements for the applicable four-week measurement period (collectively, the "Permitted Variances"). Any variance in excess of the Permitted Variances that is not waived by the Required DIP Lenders within five (5) business days of delivery of the applicable Variance Report shall constitute an Event of Default under this Final Order and the DIP Credit Agreement.
5. DIP Budget. The initial DIP Budget is attached hereto as Exhibit A and is approved. The DIP Budget shall be updated by the Debtor every four (4) weeks and delivered to the DIP Agent and the Prepetition Agent no later than five (5) business days prior to the commencement of the applicable four-week period. Each updated DIP Budget shall be subject to review and approval by the DIP Agent and the Prepetition Agent, such approval not to be unreasonably withheld, conditioned, or delayed. Until an updated DIP Budget is approved by the DIP Agent and the Prepetition Agent, the most recently approved DIP Budget shall remain in effect. The DIP Budget shall include adequate provision for: (a) all professional fees and expenses incurred or expected to be incurred by professionals retained by the Debtor or any statutory committee in this Chapter 11 Case; (b) all operating expenses of the Debtor's business; (c) all adequate protection payments required under this Final Order; and (d) all quarterly fees payable to the U.S. Trustee pursuant to 28 U.S.C. § 1930.
6. Interest, Fees, and Expenses. The DIP Facility shall bear interest, and the Debtor shall pay fees and expenses, in accordance with the following terms, which terms are incorporated in and consistent with the DIP Credit Agreement:
(a) Interest: The outstanding principal balance of all DIP borrowings shall bear interest at a rate per annum equal to SOFR plus 600 basis points, payable monthly in arrears on the first business day of each calendar month commencing with the first full calendar month following the initial borrowing under the DIP Facility.
(b) Default Interest: Upon the occurrence and during the continuance of an Event of Default (as defined in Paragraph 10 below), the outstanding principal balance of all DIP borrowings and all other DIP Obligations shall bear interest at a rate per annum equal to the otherwise applicable interest rate plus an additional 200 basis points.
(c) Commitment Fee: The Debtor shall pay a commitment fee equal to 0.50% per annum on the average daily undrawn and uncancelled portion of the total DIP commitment, payable quarterly in arrears commencing on the last day of the first full fiscal quarter following the Petition Date.
(d) Fees, Costs, and Expenses of the DIP Agent and DIP Lenders: The Debtor shall pay, promptly upon demand, all reasonable and documented fees, costs, and expenses of the DIP Agent and the DIP Lenders, including, without limitation, the reasonable and documented fees, disbursements, and other charges of their respective counsel and other professionals, incurred in connection with the negotiation, documentation, execution, and delivery of the DIP Credit Agreement and all related documents, the administration and enforcement of the DIP Facility, and the monitoring of the Chapter 11 Case. All such fees, costs, and expenses incurred prior to the entry of this Final Order are hereby authorized and approved, subject to the Debtor's right to review the reasonableness of such amounts.
7. Adequate Protection for Prepetition Secured Parties. As adequate protection of the interests of the Prepetition Secured Parties in the Prepetition Collateral against any diminution in value resulting from the use, sale, or lease of the Prepetition Collateral (including Cash Collateral), the imposition of the automatic stay under section 362 of the Bankruptcy Code, and the priming of the Prepetition Liens by the DIP Liens, the Prepetition Secured Parties are hereby granted the following adequate protection, in each case effective as of the Petition Date:
A. Adequate Protection for Prepetition First Lien Parties.
As adequate protection for the benefit of the Prepetition Agent and the Prepetition Lenders (collectively, the "Prepetition First Lien Parties") with respect to the Prepetition Senior Secured Obligations (outstanding in the aggregate amount of $540,000,000 as of September 30, 2022), the Prepetition First Lien Parties are hereby granted:
(a) Replacement Liens. Pursuant to sections 361(2) and 363(e) of the Bankruptcy Code, valid, binding, enforceable, non-avoidable, and automatically perfected replacement liens on and security interests in all postpetition assets of the Debtor and the Debtor's estate, whether now existing or hereafter acquired, created, or arising, and all proceeds, products, offspring, rents, and profits thereof, including the proceeds of DIP borrowings (the "First Lien Adequate Protection Liens"). The First Lien Adequate Protection Liens shall be junior and subordinate only to: (I) the DIP Liens; and (II) the Carve-Out, but shall be senior to all other liens, claims, and interests of any kind or nature whatsoever, including the Prepetition Second Liens and any replacement liens or adequate protection liens granted to BMC pursuant to this Final Order. The First Lien Adequate Protection Liens shall not be subject to sections 510, 549, 550, or 551 of the Bankruptcy Code. The First Lien Adequate Protection Liens shall be automatically perfected without the need for filing, recording, or any other act.
(b) Superpriority Administrative Expense Claims. Pursuant to section 507(b) of the Bankruptcy Code, allowed superpriority administrative expense claims (the "First Lien Adequate Protection Superpriority Claims"), which claims shall be junior and subordinate only to: (I) the DIP Superpriority Claims; and (II) the Carve-Out, and shall be senior to all other administrative expense claims and all other claims of any kind or nature against the Debtor and the Debtor's estate, including the Second Lien Adequate Protection Superpriority Claims (as defined below). The First Lien Adequate Protection Superpriority Claims shall be payable from and have recourse to all property of the Debtor and the Debtor's estate.
(c) Payment of Professional Fees and Expenses. The Debtor shall pay, on a current basis, all reasonable and documented professional fees and expenses of the Prepetition Agent and the Prepetition Lenders, including, without limitation, the fees, disbursements, and other charges of their respective counsel and other professionals, incurred in connection with the monitoring, administration, and enforcement of the Prepetition Credit Agreement, the Prepetition Liens, the Prepetition Collateral, and the adequate protection provided under this Final Order.
(d) Current Interest Payments. The Debtor shall pay current interest (at the non-default rate of SOFR plus 375 basis points per annum) on the Prepetition Senior Secured Obligations, payable monthly in arrears on the first business day of each calendar month during the pendency of this Chapter 11 Case, commencing on the first business day of the first full calendar month following the Petition Date. A schedule of estimated adequate protection interest payments is attached hereto as Exhibit D.
(e) Financial Reporting. The Debtor shall deliver to the Prepetition Agent a comprehensive financial reporting package consisting of: (i) weekly cash flow reports, to be delivered no later than 5:00 p.m. Central Time on each Thursday (or, if Thursday is not a business day, the next succeeding business day); (ii) monthly financial statements, to be delivered no later than thirty (30) days after the end of each calendar month; and (iii) quarterly compliance certificates, to be delivered no later than forty-five (45) days after the end of each fiscal quarter.
(f) Fleet Maintenance. The Debtor shall maintain the fleet of vessels constituting Prepetition Collateral at current appraised values to the extent commercially reasonable, consistent with prudent ship-management practices and applicable maritime regulations. The baseline for fleet valuation shall be the November 1, 2022 appraisal conducted by Drakos Maritime Valuations Ltd., which valued the fifty (50) vessel fleet at $623,000,000 in the aggregate, consisting of: ten (10) Capesize vessels valued at $215,000,000, fourteen (14) Panamax vessels valued at $182,000,000, fourteen (14) Supramax vessels valued at $128,000,000, and twelve (12) Sub-Panamax Container vessels valued at $98,000,000. The Debtor shall not permit any vessel to be laid up, scrapped, or otherwise removed from active service without the prior written consent of the DIP Agent and the Prepetition Agent, except as required by scheduled dry-docking or emergency repair.
(g) Adequate Protection Cushion. The Court finds that the Prepetition First Lien Parties possess an adequate protection cushion by virtue of the fact that the aggregate appraised fair market value of the Prepetition Collateral ($623,000,000, based on the November 1, 2022 Drakos Maritime Valuations Ltd. appraisal) exceeds the aggregate outstanding Prepetition Senior Secured Obligations ($540,000,000) by $83,000,000, representing an equity cushion of approximately 15.4%.
B. Adequate Protection for Prepetition Second Lien Party.
As adequate protection for the benefit of BMC with respect to the Prepetition Second Lien Obligations (outstanding in the aggregate amount of $112,300,000 as of September 30, 2022), BMC is hereby granted:
(a) Replacement Liens. Pursuant to sections 361(2) and 363(e) of the Bankruptcy Code, valid, binding, enforceable, non-avoidable, and automatically perfected replacement liens on and security interests in all postpetition assets of the Debtor and the Debtor's estate, whether now existing or hereafter acquired, created, or arising, and all proceeds, products, offspring, rents, and profits thereof (the "Second Lien Adequate Protection Liens"). The Second Lien Adequate Protection Liens shall be junior and subordinate to: (I) the DIP Liens; (II) the First Lien Adequate Protection Liens; (III) the Prepetition First Liens; and (IV) the Carve-Out. The Second Lien Adequate Protection Liens shall be automatically perfected without the need for filing, recording, or any other act.
(b) Superpriority Administrative Expense Claims. Pursuant to section 507(b) of the Bankruptcy Code, allowed superpriority administrative expense claims (the "Second Lien Adequate Protection Superpriority Claims"), which claims shall be junior and subordinate to: (I) the DIP Superpriority Claims; (II) the First Lien Adequate Protection Superpriority Claims; and (III) the Carve-Out. The Second Lien Adequate Protection Superpriority Claims shall be payable from and have recourse to all property of the Debtor and the Debtor's estate.
(c) Rights Subject to Intercreditor Agreement. The rights of BMC under this Paragraph 7.B, including the Second Lien Adequate Protection Liens and the Second Lien Adequate Protection Superpriority Claims, shall in all respects remain subject to the terms and conditions of the Intercreditor Agreement dated June 15, 2019, as such agreement applies to adequate protection matters. Nothing in this Final Order shall be construed to modify, amend, or supersede the Intercreditor Agreement except to the extent expressly set forth herein.
(d) Payment of Professional Fees and Expenses. The Debtor shall pay, on a current basis, all reasonable and documented professional fees and expenses of BMC, including, without limitation, the fees, disbursements, and other charges of Kellner & Foss LLP (Theodore Kellner), as counsel to BMC, incurred in connection with the monitoring, administration, and enforcement of the Mezzanine Notes, the Prepetition Second Liens, and the adequate protection provided under this Final Order.
8. Milestones. The Debtor shall comply with each of the following milestones (each, a "Milestone"), calculated from the Petition Date unless otherwise indicated, subject to extension only with the prior written consent of the Required DIP Lenders (defined as the DIP Lenders holding more than 50% of the aggregate DIP commitments outstanding at the applicable time):
(a) Day 1 (Petition Date): The Debtor shall file its voluntary petition under Chapter 11 of the Bankruptcy Code and shall file all first-day motions, including, without limitation, motions relating to: cash management, debtor-in-possession financing, critical vendor payments, employee wages and benefits, tax payments, and insurance.
(b) Day 45: The Court shall have entered this Final Order approving the DIP Facility on a final basis.
(c) Day 120: The Debtor shall have circulated plan support solicitation materials to representatives of all creditor classes, including, without limitation, counsel to the Ad Hoc Group, counsel to BMC, counsel to the holders of the Unsecured Notes, and the Indenture Trustee.
(d) Day 180: The Debtor shall have filed a Chapter 11 plan of reorganization and a related disclosure statement with the Court.
(e) Day 270: The Court shall have entered an order confirming the Chapter 11 plan of reorganization.
(f) Day 300: The effective date of the confirmed Chapter 11 plan shall have occurred.
The Debtor shall use its commercially reasonable best efforts to comply with each Milestone within the time periods specified above. Failure to satisfy any Milestone within ten (10) business days of the applicable deadline (unless extended by the Required DIP Lenders in writing) shall constitute an Event of Default under this Final Order and the DIP Credit Agreement.
9. Covenants. In addition to the covenants set forth in the DIP Credit Agreement, the Debtor shall comply with the following covenants for so long as any DIP Obligations remain outstanding:
A. Affirmative Covenants.
(a) Budget Compliance. The Debtor shall maintain compliance with the DIP Budget within the Permitted Variances specified in Paragraph 4 above.
(b) Insurance. The Debtor shall maintain in full force and effect all insurance policies, including, without limitation: (I) the directors' and officers' liability insurance policy with Promontory Indemnity Insurance Co. (policy number PII-DO-2022-08847, with an aggregate limit of $25,000,000), arranged through Seaward & Beckett Insurance Brokers Ltd.; and (II) all hull and machinery, protection and indemnity ("P&I"), cargo, war risk, and general liability insurance policies covering the Debtor's vessels, terminal operations, and business activities, in each case in amounts and on terms consistent with industry standards and the requirements of the DIP Credit Agreement and the Prepetition Credit Agreement.
(c) Weekly Cash Flow Reports. The Debtor shall deliver to the DIP Agent and the Prepetition Agent weekly cash flow reports (including Variance Reports), prepared by or in consultation with Kensington Veltrian Partners LLC (James Calloway, Managing Director), in accordance with the schedule set forth in Paragraph 4 above.
(d) Monthly Financial Statements. The Debtor shall deliver to the DIP Agent and the Prepetition Agent monthly unaudited financial statements (including a balance sheet, income statement, and statement of cash flows) within thirty (30) days after the end of each calendar month.
(e) Books and Records. The Debtor shall maintain its books and records in accordance with United States generally accepted accounting principles ("GAAP"), consistently applied, as audited by Grainger, Holt & Associates LLP (Malcolm Holt, Lead Engagement Partner).
(f) Milestone Compliance. The Debtor shall comply with all Milestones set forth in Paragraph 8 above.
(g) CRO Cooperation. The Debtor shall cooperate fully with any Chief Restructuring Officer ("CRO") appointed in this Chapter 11 Case. The designated CRO is Richard "Rick" Thornberg of Alderney Management Advisors LLC, 200 Clarendon Street, 45th Floor, Boston, Massachusetts 02116. If and when activated, the CRO shall report to the Board of Directors of the Debtor and shall have the authority and responsibilities set forth in the engagement agreement between the Debtor and Alderney Management Advisors LLC.
(h) Monthly Operating Reports. The Debtor shall file monthly operating reports with the Court in the form and manner required by the U.S. Trustee for the Southern District of Texas.
(i) Permits, Licenses, and Governmental Authorizations. The Debtor shall maintain in full force and effect all permits, licenses, and governmental authorizations necessary for the operation of the Debtor's business, including, without limitation, all maritime permits, customs and border protection authorizations, Federal Maritime Commission licenses, and Coast Guard certifications.
B. Negative Covenants.
(a) No Additional Indebtedness. The Debtor shall not incur, assume, or permit to exist any additional indebtedness outside of the DIP Facility, other than ordinary course trade payables incurred in the operation of the Debtor's business consistent with the DIP Budget, without the prior written consent of the DIP Agent.
(b) No Additional Liens. The Debtor shall not grant, create, incur, assume, or permit to exist any liens on any property of the Debtor or the Debtor's estate, other than the DIP Liens and the Prepetition Liens as described and authorized in this Final Order.
(c) No Material Asset Dispositions. The Debtor shall not sell, transfer, lease, or otherwise dispose of any material asset or group of related assets outside the ordinary course of business without the prior written consent of the DIP Agent. For purposes of this covenant, a "material asset" means any single asset, or group of related assets, with a fair market value exceeding $5,000,000.
(d) No Intercompany Transfers. The Debtor shall not make any intercompany transfer, loan, advance, payment, distribution, or other transfer of value to TSL or any non-debtor affiliate, except in the ordinary course of business and consistent with the DIP Budget. For the avoidance of doubt, the Debtor shall not make any payment of principal or interest on the Intercompany Note (outstanding in the amount of $76,400,000) without the prior written consent of the DIP Agent and further order of the Court.
(e) No Modification of Material Contracts. The Debtor shall not modify, amend, supplement, terminate, or waive any material provision of any material contract or agreement without the prior written consent of the DIP Agent.
(f) Minimum Liquidity. The Debtor shall maintain unrestricted cash and cash equivalents of not less than $15,000,000 at all times during the pendency of this Chapter 11 Case (the "Minimum Liquidity Requirement"). For purposes of this covenant, "unrestricted cash and cash equivalents" means cash and cash equivalents held in accounts of the Debtor that are not subject to any restriction, lien, or encumbrance (other than the DIP Liens and the Prepetition Liens) and that are available for use by the Debtor in the ordinary course of business.
(g) No Prepetition Claims Payments. The Debtor shall not pay any prepetition claims of any kind or nature except as specifically authorized by order of this Court, including, without limitation, payments authorized pursuant to any first-day orders (including, but not limited to, critical vendor payments, employee wage and benefit payments, and tax payments).
(h) No Conversion or Dismissal. The Debtor shall not file a motion or consent to the conversion of this Chapter 11 Case to a case under Chapter 7 of the Bankruptcy Code or the dismissal of this Chapter 11 Case without the prior written consent of the DIP Agent.
10. Events of Default. The occurrence of any of the following shall constitute an "Event of Default" under this Final Order and the DIP Credit Agreement:
(a) The failure by the Debtor to make any payment of principal, interest, fees, or other amounts when due under the DIP Credit Agreement or this Final Order;
(b) Any breach by the Debtor of any covenant, representation, warranty, certification, or other agreement contained in the DIP Credit Agreement or this Final Order, which breach shall not have been cured within the applicable cure period, if any, set forth in the DIP Credit Agreement;
(c) The failure by the Debtor to satisfy any Milestone set forth in Paragraph 8 above within ten (10) business days of the applicable deadline, unless such Milestone has been extended in writing by the Required DIP Lenders;
(d) The appointment of a Chapter 11 trustee or an examiner with expanded powers (beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code) in this Chapter 11 Case;
(e) The conversion of this Chapter 11 Case to a case under Chapter 7 of the Bankruptcy Code;
(f) The dismissal of this Chapter 11 Case;
(g) The entry of an order by this Court or any other court of competent jurisdiction granting relief from the automatic stay under section 362 of the Bankruptcy Code with respect to any Prepetition Collateral or DIP Collateral with a fair market value exceeding $10,000,000 in the aggregate;
(h) The entry of an order by this Court or any other court of competent jurisdiction reversing, vacating, staying, or materially modifying this Final Order or the Interim Order without the prior written consent of the DIP Agent;
(i) The filing by the Debtor, any statutory committee, or any other party in interest of a motion, complaint, pleading, or other document challenging the validity, enforceability, perfection, or priority of any of the DIP Liens, the DIP Obligations, the DIP Superpriority Claims, the Prepetition Liens, or the Prepetition Obligations (including both the Prepetition Senior Secured Obligations and the Prepetition Second Lien Obligations);
(j) The Debtor's failure to maintain the Minimum Liquidity Requirement of $15,000,000 at any time;
(k) The occurrence of budget variances exceeding the Permitted Variances for two (2) consecutive four-week measurement periods;
(l) A material adverse change in the business, operations, assets, liabilities, financial condition, or prospects of the Debtor, as reasonably determined by the Required DIP Lenders; and
(m) Cross-Default: The occurrence of any event of default under the Prepetition Credit Agreement that is not stayed or cured, to the extent such event of default is not caused solely by the commencement of this Chapter 11 Case.
11. Remedies Upon Event of Default. Upon the occurrence and during the continuance of any Event of Default:
(a) Termination Notice. The DIP Agent may, in its sole discretion, deliver written notice of such Event of Default (a "Termination Notice") to the Debtor, counsel to the Debtor, the U.S. Trustee, counsel to any statutory committee appointed in this Chapter 11 Case, and the Prepetition Agent.
(b) Remedies Notice Period. Following delivery of a Termination Notice, there shall be a period of five (5) business days (the "Remedies Notice Period"), during which the Debtor, any statutory committee, and any other party in interest may seek emergency relief from this Court. The Remedies Notice Period shall commence on the date on which the Termination Notice is delivered (or deemed delivered) to all of the parties specified in subparagraph (a) above. During the Remedies Notice Period, the Debtor shall continue to have the right to use DIP proceeds and Cash Collateral in accordance with the DIP Budget, subject to the Minimum Liquidity Requirement.
(c) Exercise of Remedies. Upon the expiration of the Remedies Notice Period without the cure of the applicable Event of Default or the entry of an order by this Court to the contrary, the DIP Agent may, without further order of this Court or notice to any party (except as required by applicable law):
(i) Terminate all DIP commitments under the DIP Credit Agreement, and no further DIP borrowings shall be available to the Debtor;
(ii) Declare all DIP Obligations to be immediately due and payable in full, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived by the Debtor;
(iii) Exercise any and all rights and remedies available to the DIP Agent and the DIP Lenders under the DIP Credit Agreement, this Final Order, and applicable non-bankruptcy law, including, without limitation, the right to foreclose upon, collect, and dispose of the DIP Collateral;
(iv) Apply any and all cash of the Debtor, including Cash Collateral, to the repayment and satisfaction of the DIP Obligations, subject in all respects to the Carve-Out;
(d) Automatic Stay Modification. The automatic stay imposed by section 362 of the Bankruptcy Code is hereby automatically modified, without further order of this Court, to the extent necessary to permit the DIP Agent and the DIP Lenders to exercise any and all of the rights and remedies described in this Paragraph 11 following the expiration of the Remedies Notice Period. Nothing in this subparagraph shall prejudice the right of the Debtor, any statutory committee, or any other party in interest to seek emergency relief from this Court during the Remedies Notice Period or thereafter.
12. Professional Fee Carve-Out. Notwithstanding anything to the contrary in this Final Order, the DIP Liens, the DIP Superpriority Claims, the First Lien Adequate Protection Liens, the First Lien Adequate Protection Superpriority Claims, the Second Lien Adequate Protection Liens, and the Second Lien Adequate Protection Superpriority Claims shall in all cases be subject to a carve-out (the "Carve-Out") for the payment of the following:
(a) Pre-Trigger Notice Carve-Out. All allowed and unpaid fees, costs, disbursements, and expenses of professionals retained by the Debtor or any statutory committee pursuant to sections 327, 328, or 1103 of the Bankruptcy Code (collectively, "Retained Professionals"), incurred at any time prior to the delivery of a Termination Notice or the occurrence of an Event of Default (whichever occurs first), in each case to the extent such fees, costs, disbursements, and expenses are allowed by order of this Court. The Pre-Trigger Notice Carve-Out shall not be subject to any cap or limitation.
(b) Post-Trigger Notice Carve-Out. Following delivery of a Termination Notice, all allowed fees, costs, disbursements, and expenses of Retained Professionals incurred after the date of such Termination Notice; provided, however, that the aggregate amount of the Post-Trigger Notice Carve-Out shall not exceed $3,000,000 (the "Post-Trigger Cap"). The Post-Trigger Cap shall be available to fund the orderly wind-down of the Debtor's estate, the preparation, filing, and prosecution of any remaining motions and applications (including fee applications), and the pursuit of confirmation of a Chapter 11 plan, if feasible.
(c) U.S. Trustee Fees. All statutory fees payable to the U.S. Trustee pursuant to 28 U.S.C. § 1930(a)(6) and any fees payable to the Clerk of the Bankruptcy Court. Such fees shall not be subject to any cap or limitation.
(d) Claims Agent Fees. All fees and expenses of Pendleton Claim Services Inc. (Laura Pendleton, President, 1601 Elm Street, Suite 4200, Dallas, Texas 75201), as the Court-approved claims and noticing agent in this Chapter 11 Case, incurred after the date of delivery of a Termination Notice, in an aggregate amount not to exceed $500,000 from the date of such Termination Notice.
For purposes of the Carve-Out, the Retained Professionals whose fees and expenses are subject to the Carve-Out include, without limitation:
(i) Calderwood & Harkness LLP (Nathaniel Bower, Responsible Partner; Amy Chesterton, Lead Associate), counsel to the Debtor, with offices at 780 Third Avenue, New York, New York 10017. Hourly rates: Partners — $1,650; Senior Associates — $1,050; Associates — $850; Paralegals — $425.
(ii) Kensington Veltrian Partners LLC (James Calloway, Managing Director), financial advisor to the Debtor. Fee structure: monthly advisory fee of $250,000; completion fee of $4,500,000 upon execution of a restructuring support agreement ("RSA"), or a filing fee of $2,000,000 upon the filing of a Chapter 11 petition.
(iii) Alderney Management Advisors LLC (Richard "Rick" Thornberg), CRO services, if activated, with offices at 200 Clarendon Street, 45th Floor, Boston, Massachusetts 02116.
(iv) Vassiliou & Demetriou Law Offices (Alexandros Vassiliou, Lead Partner), Greek counsel to the Debtor for cross-border coordination, with offices at 15 Vasilissis Sofias Avenue, Athens 10674, Greece.
(v) Any professionals retained by a statutory committee appointed in this Chapter 11 Case pursuant to sections 327, 328, or 1103 of the Bankruptcy Code.
Upon delivery of a Termination Notice, the Debtor shall fund the Carve-Out by depositing $3,000,000 from available cash into a segregated, interest-bearing account (the "Carve-Out Reserve Account") maintained at a financial institution acceptable to the DIP Agent. Amounts held in the Carve-Out Reserve Account shall be used solely for the payment of amounts constituting the Carve-Out as set forth in this Paragraph 12 and shall not be subject to the DIP Liens or any other liens. The Carve-Out Reserve Account shall be administered by the Debtor (or, if applicable, any trustee appointed in this Chapter 11 Case), subject to oversight by the Court.
13. Reservation of Rights — Investigation of Prepetition Liens and Claims. Notwithstanding anything to the contrary in this Final Order:
(a) Committee Standing. Any official committee of unsecured creditors (an "Official Committee") appointed in this Chapter 11 Case pursuant to section 1102 of the Bankruptcy Code shall have standing to investigate, challenge, object to, or otherwise contest the validity, extent, priority, perfection, enforceability, or amount of the Prepetition Liens and the Prepetition Obligations (including both the Prepetition Senior Secured Obligations and the Prepetition Second Lien Obligations).
(b) Debtor Standing. The Debtor shall have standing to investigate, challenge, object to, or otherwise contest the validity, extent, priority, perfection, enforceability, or amount of the Prepetition Liens and the Prepetition Obligations.
(c) Challenge Period. Any challenge, objection, or contest to the Prepetition Liens or the Prepetition Obligations (a "Challenge") must be commenced by the filing of a complaint, motion, or other appropriate pleading initiating a contested matter or adversary proceeding on or before the earlier of: (I) the date that is sixty (60) days after the date of formation of any Official Committee; or (II) the date that is seventy-five (75) days after the entry of this Final Order, if no Official Committee is appointed (as applicable, the "Challenge Deadline"). The Challenge Deadline may be extended by order of this Court for cause shown, upon motion filed prior to the expiration of the Challenge Deadline.
(d) Consequences of Failure to Challenge. If no Challenge is timely commenced by the Challenge Deadline, then, without further order of this Court, the Prepetition Liens and the Prepetition Obligatio

UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

THALASSA AMERICAS INC.,

RECITALS

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED AS FOLLOWS:

Record

Parties

Dates

Amounts