INDENTURE
Dated as of May 18, 2023
between
THALASSA SHIPPING & LOGISTICS SOCIÉTÉ ANONYME
a société anonyme organized under the laws of the Hellenic Republic
as Issuer
and
GARRISON TRUST COMPANY
a trust company organized under the laws of the State of New York
as Trustee
________________________________________
$60,000,000 Aggregate Principal Amount
10.0% PIK Second-Lien Notes Due June 2028
________________________________________
Issued pursuant to the New Second-Lien Note Purchase Agreement dated May 18, 2023, between the Issuer and Dralvecen Mezzanine Capital LLC
Issued in exchange for the cancellation of $112,300,000 aggregate principal amount of existing mezzanine notes, representing a 46.6% haircut on the debt component, pursuant to the Restructuring Support Agreement dated March 14, 2023
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RECITALS
WHEREAS, Thalassa Shipping & Logistics Société Anonyme (the "Issuer") is a société anonyme organized and existing under the laws of the Hellenic Republic, founded in 1987, with its registered offices located at 42 Akti Miaouli, Piraeus 18538, Greece, Greek Tax ID (AFM) 998214763, and is engaged in the business of international maritime shipping and integrated logistics services;
WHEREAS, the Issuer owns and operates a fleet of fifty (50) vessels, consisting of thirty-eight (38) dry-bulk carriers and twelve (12) container vessels, and provides integrated port-to-door logistics services across international trade routes;
WHEREAS, the Issuer's wholly-owned subsidiary, Thalassa Americas Inc. ("TAI"), a C-corporation organized under the laws of the State of Delaware, with its principal offices at 1400 McKinney Street, Suite 2200, Houston, TX 77010, Employer Identification Number 84-3291057, operates the Issuer's logistics operations on the U.S. side, including terminal operations, warehousing, and domestic freight forwarding;
WHEREAS, the Issuer is party to a Senior Secured Credit Agreement dated as of June 15, 2019, as amended by Amendment No. 1 dated as of May 15, 2023 (as so amended, the "First Lien Credit Agreement"), among the Issuer, TAI (as co-borrower for the U.S. Tranche), Nordbank International AG, a company organized under the laws of Switzerland, with offices at Bahnhofstrasse 78, 8001 Zürich, Switzerland (as Administrative Agent and Collateral Agent), and a syndicate of lenders party thereto, with outstanding obligations of approximately $540,000,000 as of September 30, 2022, comprising Term Loan A in the principal amount of $270,000,000, a Revolving Credit Facility drawn to $185,000,000, and U.S. Tranche Term Loan B in the principal amount of $85,000,000;
WHEREAS, the Issuer previously issued $100,000,000 in aggregate principal amount of mezzanine notes on June 15, 2019 (the "Prior Mezzanine Notes"), all of which were held by Dralvecen Mezzanine Capital LLC, a limited liability company organized under the laws of the State of Delaware ("BMC" or the "Initial Holder"), with principal offices at 600 Lexington Avenue, 22nd Floor, New York, NY 10022, and the outstanding principal balance of the Prior Mezzanine Notes had accrued to $112,300,000 as of September 30, 2022, through the capitalization of payment-in-kind interest;
WHEREAS, as a result of adverse conditions in the global shipping and logistics markets, the Issuer and certain of its creditors entered into a Restructuring Support Agreement dated as of March 14, 2023 (the "RSA"), among the Issuer, TAI, Nordbank International AG, the consenting senior secured lenders party thereto, BMC, and KFO Holdings Société Anonyme ("KFO"), pursuant to which, among other things, the Prior Mezzanine Notes are being exchanged for (a) $60,000,000 aggregate principal amount of new 10.0% PIK Second-Lien Notes due June 2028 (the "Notes") issued under this Indenture and (b) 15% of the equity interests in the Issuer, representing a 46.6% haircut on the debt component of BMC's existing claim;
WHEREAS, in connection with the transactions contemplated by the RSA, the Issuer and Nordbank International AG (as First Lien Agent) and BMC (as Second Lien Holder) have entered into the Amended and Restated Intercreditor Agreement dated as of May 15, 2023 (the "Intercreditor Agreement"), amending and restating the original Intercreditor Agreement dated as of June 15, 2019, which Intercreditor Agreement governs the relative rights, priorities, and remedies of the first-lien creditors under the First Lien Credit Agreement and the second-lien holders of the Notes issued hereunder;
WHEREAS, the Issuer has duly authorized the creation, issuance, and delivery of the Notes in the aggregate principal amount of $60,000,000 and the execution and delivery of this Indenture pursuant to resolutions of its Board of Directors adopted on May 12, 2023;
WHEREAS, all acts and things necessary to make the Notes, when executed by the Issuer and authenticated and delivered by the Trustee as provided herein, the valid, binding, and legal obligations of the Issuer in accordance with their terms, and to make this Indenture a valid agreement of the Issuer in accordance with its terms, have been done and performed, and the execution and delivery of this Indenture and the issuance of the Notes have been duly authorized in all respects;
WHEREAS, the Trustee has accepted the trust created by this Indenture and has agreed to perform the duties and exercise the rights assigned to it hereunder upon the terms and conditions set forth herein;
NOW, THEREFORE, for and in consideration of the premises, the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Issuer and the Trustee hereby agree as follows:
ARTICLE I — DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 — Definitions
As used in this Indenture, the following terms shall have the meanings specified below:
"Affiliate" means, with respect to any specified Person, any other Person directly or indirectly controlling, controlled by, or under common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by," and "under common control with"), when used with respect to any specified Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement, or otherwise.
"Agent" means Nordbank International AG, a company organized under the laws of Switzerland, in its capacity as Administrative Agent and Collateral Agent under the First Lien Credit Agreement, with offices at Bahnhofstrasse 78, 8001 Zürich, Switzerland, or any successor Administrative Agent and Collateral Agent appointed under the First Lien Credit Agreement.
"Amended and Restated Intercreditor Agreement" or "Intercreditor Agreement" means the Amended and Restated Intercreditor Agreement dated as of May 15, 2023, by and between Nordbank International AG (as First Lien Agent) and BMC (as Second Lien Holder), as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms, which agreement amends and restates the original Intercreditor Agreement dated as of June 15, 2019, by and between the same parties.
"Applicable Premium" means, with respect to a Note at any date of redemption, the premium payable on the outstanding principal amount of such Note (including all accrued and capitalized PIK Interest through the date of redemption) in connection with an optional redemption pursuant to Section 4.01 of this Indenture, calculated as the applicable redemption price set forth therein.
"Board of Directors" means the board of directors of the Issuer, as constituted from time to time, including as of the Issue Date, Dimitrios Kostandinos as Chairman and Elena Kostandinos-Pavlou as Vice Chairwoman, together with such other directors as may be duly elected or appointed from time to time in accordance with Greek corporate law and the Issuer's articles of association.
"BMC" or "Initial Holder" means Dralvecen Mezzanine Capital LLC, a limited liability company organized under the laws of the State of Delaware, with principal offices at 600 Lexington Avenue, 22nd Floor, New York, NY 10022, and its permitted successors and assigns.
"Business Day" means any day other than (a) a Saturday or Sunday, or (b) a day on which banking institutions in New York, New York, United States; Zürich, Switzerland; or Athens, Greece are authorized or required by law, regulation, or executive order to close or remain closed.
"Capital Stock" means, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting or non-voting) of, such Person's equity interests, including common stock, preferred stock, limited liability company interests, partnership interests, or any other form of equity interest, and any rights, warrants, or options exchangeable for or convertible into such equity interests.
"Cash Equivalents" means (a) United States Dollars, (b) Euro or any other currency received in the ordinary course of business that is promptly converted into United States Dollars, (c) direct obligations of the United States of America or any agency thereof with maturities of one year or less, (d) certificates of deposit and time deposits with maturities of one year or less issued by a commercial bank having combined capital and surplus of not less than $500,000,000, and (e) commercial paper rated at least A-1 by Standard & Poor's or P-1 by Moody's with maturities of 180 days or less.
"Change of Control" means the occurrence of any of the following: (a) the Kostandinos family (including Dimitrios Kostandinos, Elena Kostandinos-Pavlou, and their respective lineal descendants), directly or indirectly through KFO Holdings Société Anonyme or any other holding company controlled by any member of the Kostandinos family, ceases to own, in the aggregate, at least 51% of the voting equity interests of the Issuer, or (b) the sale, lease, transfer, conveyance, or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Issuer and its Subsidiaries, taken as a whole, to any Person other than a Permitted Holder.
"Collateral" means all assets and property of the Issuer and its Subsidiaries that are subject to the second-priority liens securing the Notes, being the same collateral pool as the first-priority liens under the First Lien Credit Agreement, including without limitation: (a) thirty-eight (38) dry-bulk carriers, (b) twelve (12) container vessels, (c) the Houston terminal lease, (d) all accounts receivable of the Issuer and its Subsidiaries, (e) the equity interests in TAI, and (f) the equity interests in the fourteen (14) vessel-owning special purpose vehicles (SPVs) organized under the laws of the Republic of Liberia, the Republic of the marshall Islands, and the Hellenic Republic, as more particularly described in Section 11.01.
"Default" means any event, condition, or circumstance which, with the passage of time, the giving of notice, or both, would constitute an Event of Default as defined in Section 6.01.
"Default Rate" means the Interest Rate plus 2.00% per annum (i.e., 12.0% per annum as of the Issue Date).
"Equity Subscription Agreement" means the Equity Subscription Agreement dated as of May 22, 2023, by and between the Issuer and KFO Holdings Société Anonyme ("KFO"), pursuant to which KFO subscribed for newly issued equity of the Issuer in the amount of €35,000,000 (approximately $38,200,000 at a spot exchange rate of €1.00 = $1.0914 as of May 18, 2023), on the terms and subject to the conditions set forth therein.
"Event of Default" has the meaning assigned to such term in Section 6.01.
"First Lien Credit Agreement" means the Senior Secured Credit Agreement dated as of June 15, 2019, among the Issuer, TAI (as co-borrower for the U.S. Tranche), Nordbank International AG (as Administrative Agent and Collateral Agent), and the lender syndicate party thereto, as amended by Amendment No. 1 dated as of May 15, 2023, and as the same may be further amended, restated, supplemented, refinanced, replaced, or otherwise modified from time to time (subject to the terms of the Intercreditor Agreement).
"First Lien Debt" means all indebtedness and other obligations outstanding under or in respect of the First Lien Credit Agreement, including all principal, interest (including PIK interest and default interest), fees (including the $5,400,000 PIK amendment fee payable in connection with Amendment No. 1), expenses, indemnification obligations, and other amounts payable thereunder or in connection therewith. As of the Issue Date, the First Lien Debt consists of approximately $540,000,000 in principal plus the $5,400,000 PIK amendment fee, together with accrued and unpaid interest and fees.
"First Lien Agent" means Nordbank International AG, in its capacity as Administrative Agent and Collateral Agent under the First Lien Credit Agreement, or any successor thereto in such capacity.
"GAAP" means generally accepted accounting principles in the United States of America, as in effect from time to time, applied on a consistent basis.
"Holder" or "Noteholder" means the Person in whose name a Note is registered on the books and records of the Registrar.
"Indebtedness" means, with respect to any Person, without duplication, (a) all obligations for borrowed money, (b) all obligations evidenced by bonds, debentures, notes, or similar instruments, (c) all obligations in respect of letters of credit, bankers' acceptances, or similar facilities, (d) all obligations under capitalized leases, (e) all guarantees of obligations of the type described in clauses (a) through (d), and (f) all obligations secured by any Lien on any asset of such Person, whether or not such obligations are assumed by such Person.
"Indenture" means this Indenture, as originally executed, or as supplemented, amended, or restated from time to time in accordance with the terms hereof.
"Interest Payment Date" means June 30 and December 31 of each year, commencing on December 31, 2023. If any Interest Payment Date falls on a day that is not a Business Day, the applicable interest payment shall be made on the next succeeding Business Day, and no additional interest shall accrue as a result of such delay.
"Interest Rate" means 10.0% per annum, payable entirely in kind (PIK) in accordance with Article III, unless the Issuer elects to pay in cash as permitted thereunder.
"Issue Date" means May 18, 2023.
"Issuer" means Thalassa Shipping & Logistics Société Anonyme, a société anonyme organized under the laws of the Hellenic Republic, with its registered offices at 42 Akti Miaouli, Piraeus 18538, Greece, Greek Tax ID (AFM) 998214763, and its permitted successors and assigns under this Indenture.
"KFO" means KFO Holdings Société Anonyme, a société anonyme organized under the laws of the Hellenic Republic, with registered offices at 42 Akti Miaouli, Piraeus 18538, Greece, which is the holding company for the Kostandinos family. Following the consummation of the transactions contemplated by the RSA and the Equity Subscription Agreement, KFO holds approximately 68% of the total outstanding equity interests in the Issuer.
"Lien" means any mortgage, pledge, hypothecation, security interest, encumbrance, lien (statutory or otherwise), charge, claim, or preferential arrangement of any kind, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction.
"Maturity Date" means June 30, 2028.
"Note Purchase Agreement" means the New Second-Lien Note Purchase Agreement dated as of May 18, 2023, by and between the Issuer and BMC, pursuant to which the Notes were issued in exchange for the cancellation of the Prior Mezzanine Notes.
"Notes" means the 10.0% PIK Second-Lien Notes due June 2028 issued by the Issuer under this Indenture in the initial aggregate principal amount of $60,000,000, as such principal amount may be increased from time to time through the capitalization of PIK Interest in accordance with Article III, and including any Notes issued in exchange therefor or in replacement thereof.
"Officer" means, with respect to the Issuer, the Chief Executive Officer (as of the Issue Date, Georgios Andreadis), the Chief Financial Officer (as of the Issue Date, Irini Dalakoura), the General Counsel (as of the Issue Date, Stavros Papageorgiou), or any Vice President of the Issuer. With respect to TAI, "Officer" means the President (as of the Issue Date, Marcus Hale) or the Vice President — Finance (as of the Issue Date, Diana Restrepo).
"Officers' Certificate" means a certificate signed by two Officers of the Issuer, at least one of whom shall be the Chief Executive Officer or the Chief Financial Officer, delivered to the Trustee in accordance with the applicable provisions of this Indenture.
"Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the Trustee, which counsel may be in-house counsel to the Issuer or external counsel, as the context requires.
"Paying Agent" means the Person authorized by the Issuer to pay the principal of and interest on any Notes on behalf of the Issuer. The initial Paying Agent under this Indenture is the Trustee, Garrison Trust Company.
"Permitted Holder" means (a) any member of the Kostandinos family (including Dimitrios Kostandinos and Elena Kostandinos-Pavlou), (b) KFO Holdings Société Anonyme, and (c) any trust, estate planning vehicle, or entity directly or indirectly controlled by any Person described in clause (a) or (b).
"Permitted Liens" means (a) the first-priority Liens in favor of the First Lien Agent securing the First Lien Debt under the First Lien Credit Agreement, (b) the second-priority Liens securing the Notes under this Indenture, (c) Liens for taxes, assessments, or governmental charges not yet due and payable or being contested in good faith by appropriate proceedings with adequate reserves maintained in accordance with GAAP, (d) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen, and other similar Liens imposed by law arising in the ordinary course of business, (e) easements, rights-of-way, restrictions, and other similar encumbrances incurred in the ordinary course of business that do not, in the aggregate, materially impair the value or use of the affected property, (f) Liens permitted under the Intercreditor Agreement, and (g) purchase money Liens securing purchase money indebtedness and capital leases permitted under Section 5.05(e).
"Person" means any individual, corporation, société anonyme, limited liability company, partnership, joint venture, trust, unincorporated organization, governmental authority, or any other entity.
"PIK Interest" means interest on the Notes payable in kind by increasing the principal amount of the outstanding Notes in accordance with the provisions of Section 3.02.
"Prior Mezzanine Notes" means the mezzanine notes in the original aggregate principal amount of $100,000,000 issued by the Issuer on June 15, 2019, all of which were held by BMC, with an outstanding principal balance of $112,300,000 as of September 30, 2022 (reflecting $12,300,000 in capitalized PIK interest), which Prior Mezzanine Notes were cancelled upon the issuance of the Notes under this Indenture.
"Registrar" means the Person authorized by the Issuer to maintain the register of Holders of the Notes. The initial Registrar under this Indenture is the Trustee, Garrison Trust Company.
"Restructuring Support Agreement" or "RSA" means the Restructuring Support Agreement dated as of March 14, 2023, among the Issuer, TAI, Nordbank International AG, the consenting senior secured lenders party thereto, BMC, and KFO Holdings Société Anonyme, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.
"Second Lien" means the second-priority liens on the Collateral securing the Notes, which liens are junior and subordinate in all respects to the first-priority liens securing the First Lien Debt, as set forth in and governed by the Intercreditor Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
"Subsidiary" means, with respect to any Person, any corporation, société anonyme, limited liability company, partnership, or other entity of which more than 50% of the outstanding voting equity interests are owned, directly or indirectly, by such Person. The principal Subsidiary of the Issuer as of the Issue Date is TAI.
"TAI" means Thalassa Americas Inc., a C-corporation organized under the laws of the State of Delaware, with Employer Identification Number 84-3291057, with its principal offices at 1400 McKinney Street, Suite 2200, Houston, TX 77010, and its registered agent at Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, DE 19801.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb), as in effect on the Issue Date.
"Transfer Agent" means the Person authorized by the Issuer to effect the transfer of Notes. The initial Transfer Agent under this Indenture is the Trustee, Garrison Trust Company.
"Trustee" means Garrison Trust Company, a trust company organized under the laws of the State of New York, with its principal offices at 100 Wall Street, 16th Floor, New York, NY 10005, until a successor replaces it in accordance with the applicable provisions of this Indenture, and thereafter means the successor serving hereunder.
"Unsecured Notes" means the $50,000,000 aggregate principal amount of 8.25% Senior Unsecured Notes due March 1, 2025, issued by the Issuer under a separate indenture dated as of February 28, 2022, with Garrison Trust Company as indenture trustee, CUSIP 87265BAB5.
"Vessel Disposition Undertaking" means the Side Letter Agreement dated as of March 14, 2023, by and between the Issuer and Nordbank International AG, requiring the sale of six (6) older dry-bulk carriers (with an average age of approximately 18 years) within twelve (12) months of the date thereof for estimated aggregate proceeds of approximately $72,000,000, with net proceeds to be applied to prepay Term Loan A under the First Lien Credit Agreement, as more fully set forth therein.
Section 1.02 — Other Definitions
The following terms are defined in the Sections of this Indenture set forth below:
Section 1.03 — Incorporation by Reference of Trust Indenture Act
Whenever this Indenture refers to a provision of the Trust Indenture Act of 1939, as amended (the "TIA"), the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:
(a) "Commission" means the Securities and Exchange Commission.
(b) "indenture securities" means the Notes.
(c) "indenture security holder" means a Holder.
(d) "indenture to be qualified" means this Indenture.
(e) "indenture trustee" or "institutional trustee" means the Trustee.
(f) "obligor" on the Notes means the Issuer and any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute, or defined by Commission rule under the TIA have the meanings so assigned to them to the extent the TIA is applicable to this Indenture.
Section 1.04 — Rules of Construction
Unless the context otherwise requires:
(a) A term has the meaning assigned to it herein.
(b) An accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP.
(c) "Or" is not exclusive.
(d) Words in the singular include the plural, and words in the plural include the singular.
(e) "Will" shall be interpreted to express a command, as if the word "shall" were used.
(f) Provisions apply to successive events and transactions.
(g) References to sections of or rules under the Securities Act shall be deemed to include substitute, replacement, or successor sections or rules adopted by the Commission from time to time.
(h) Unless otherwise indicated, references to "Sections" and "Articles" refer to the corresponding Sections and Articles of this Indenture.
(i) The headings and table of contents of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture, and shall in no way modify or restrict any of the terms or provisions hereof.
(j) Whenever any action is required to be taken on a day that is not a Business Day, such action shall be taken on the next succeeding Business Day, and no additional interest or other amounts shall accrue as a result of such delay.
(k) References to any agreement, instrument, or document mean such agreement, instrument, or document as amended, supplemented, restated, or otherwise modified from time to time in accordance with its terms and the terms of this Indenture and the Intercreditor Agreement, as applicable.
ARTICLE II — THE NOTES
Section 2.01 — Form and Dating
(a) General. The Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends, or endorsements required by law, securities exchange rules, or usage. Each Note shall be dated the date of its authentication.
(b) Global Form. The Notes shall be issued in registered, global form, without coupons. The Notes shall be denominated in United States Dollars.
(c) Initial Aggregate Principal Amount. The initial aggregate principal amount of Notes to be issued under this Indenture on the Issue Date shall be $60,000,000, subject to increase through the capitalization of PIK Interest in accordance with Article III.
(d) Legends. The Notes shall not bear any legend except as may be required under the Securities Act in connection with the private placement of the Notes. Each Note issued on the Issue Date shall bear a restrictive legend substantially to the effect that the Note has not been registered under the Securities Act and may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
(e) Minimum Denominations. The Notes shall be issued in minimum denominations of $1,000,000 and integral multiples of $1,000 in excess thereof.
Section 2.02 — Execution, Authentication, and Delivery
(a) The Notes shall be executed on behalf of the Issuer by the manual or facsimile signature of two Officers of the Issuer. The Issuer's seal, if any, shall be reproduced on the Notes and may be in facsimile form.
(b) If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall nevertheless be valid.
(c) A Note shall not be valid or obligatory for any purpose until authenticated by the manual or facsimile signature of an authorized signatory of the Trustee. The signature of the Trustee on a Note shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.
(d) The Trustee shall, upon receipt of a written order of the Issuer signed by two Officers, authenticate and deliver Notes for original issue on the Issue Date in the aggregate principal amount of $60,000,000. Such written order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated. The aggregate principal amount of Notes outstanding at any time may not exceed $60,000,000 as of the Issue Date, except as increased through the capitalization of PIK Interest pursuant to Section 3.02.
(e) The Trustee shall authenticate and deliver Notes for original issue only upon receipt of: (i) an Officers' Certificate, (ii) an Opinion of Counsel reasonably satisfactory to the Trustee, and (iii) evidence of the board authorization of the Issuer for the issuance of such Notes.
Section 2.03 — Registrar and Paying Agent
(a) The Issuer shall maintain an office or agency in the City of New York where Notes may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Notes may be presented for payment (the "Paying Agent"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Issuer may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent.
(b) The Issuer initially appoints the Trustee, Garrison Trust Company, as Registrar and Paying Agent for the Notes, at its offices located at 100 Wall Street, 16th Floor, New York, NY 10005.
(c) The Issuer may change the Registrar or Paying Agent without prior notice to any Holder; provided that the Issuer shall give prior written notice to the Trustee of any such change. The Issuer shall notify the Trustee and each Holder in writing of the name and address of any agent appointed hereunder.
Section 2.04 — Paying Agent to Hold Money or Securities in Trust
(a) The Issuer shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent will hold in trust, for the benefit of the Holders or the Trustee, all money and securities held by the Paying Agent for the payment of principal of, or interest on, the Notes, and will notify the Trustee of any default by the Issuer in making any such payment.
(b) While any such default by the Issuer continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer) shall have no further liability for the money so paid.
(c) If the Issuer or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of Holders all money held by it as Paying Agent.
Section 2.05 — Holder Lists
(a) The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders. If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least seven (7) Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders.
(b) Each Holder, by receiving and holding a Note, agrees with the Issuer and the Trustee that neither the Issuer nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of any such name and address made pursuant to the TIA.
Section 2.06 — Transfer and Exchange
(a) Transfer and Exchange Generally. When Notes are presented to the Registrar with a request to register a transfer or to exchange them for an equal principal amount of Notes of other authorized denominations, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Notes at the Registrar's request.
(b) Restrictions on Transfer. The Notes are being issued in a private placement exempt from registration under the Securities Act. Accordingly, the Notes may not be offered, sold, pledged, or otherwise transferred except (i) to a person who the transferor reasonably believes is a qualified institutional buyer (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A, (ii) in a transaction otherwise exempt from the registration requirements of the Securities Act, or (iii) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States.
(c) Transfer Restrictions under Intercreditor Agreement. Notwithstanding the foregoing, any transfer of Notes shall be subject to the terms and conditions of the Intercreditor Agreement, including, without limitation, the transfer restrictions set forth in BMC's Lock-Up Agreement dated as of March 14, 2023 (the "Lock-Up Agreement"), which restricts transfers of the Notes by BMC during the RSA implementation period (as defined in the Lock-Up Agreement) ending on the earlier of (i) the date that is 180 days after the Issue Date and (ii) the date on which all conditions to the effectiveness of the transactions contemplated by the RSA have been satisfied or waived.
(d) No Obligation to Register. The Issuer shall not be required to (i) issue, register the transfer of, or exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 4.03 and ending at the close of business on the day of selection, or (ii) register the transfer of or exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.
(e) No Service Charge. No service charge shall be made to a Holder for any registration of transfer or exchange of a Note, but the Issuer may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith.
Section 2.07 — Replacement Notes
(a) If any mutilated Note is surrendered to the Trustee, the Issuer shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Note of like tenor and principal amount and bearing a number not contemporaneously outstanding.
(b) If there is delivered to the Issuer and the Trustee (i) evidence to their satisfaction of the destruction, loss, or theft of any Note, and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Issuer or the Trustee that such Note has been acquired by a bona fide purchaser, the Issuer shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost, or stolen Note, a new Note of like tenor and principal amount and bearing a number not contemporaneously outstanding.
(c) In case any such mutilated, destroyed, lost, or stolen Note has become or is about to become due and payable, the Issuer in its discretion may, instead of issuing a new Note, pay such Note.
(d) Upon the issuance of any new Note under this Section, the Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
(e) Every new Note issued pursuant to this Section in lieu of any destroyed, lost, or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the destroyed, lost, or stolen Note shall be at any time enforceable by anyone.
Section 2.08 — Outstanding Notes
(a) The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation, those reductions in principal amount that have been reflected on the register as a result of partial redemption, and those described in this Section as not outstanding.
(b) If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.
(c) If the Paying Agent (other than the Issuer or a Subsidiary) holds, on the Maturity Date or a redemption date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.
(d) A Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note; provided, however, that Notes held by the Issuer or an Affiliate of the Issuer shall not be counted for purposes of determining whether Holders of the requisite principal amount of Notes have consented to or voted on any matter under this Indenture.
Section 2.09 — Temporary Notes
Pending the preparation of definitive Notes, the Issuer may execute, and upon its order the Trustee shall authenticate and deliver, temporary Notes that are printed, lithographed, typewritten, or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Notes in lieu of which they are issued and with such appropriate insertions, omissions, substitutions, and other variations as the Officers executing such Notes may determine, as conclusively evidenced by their execution of such Notes. If temporary Notes are issued, the Issuer will cause definitive Notes to be prepared without unreasonable delay. After the preparation of definitive Notes, the temporary Notes shall be exchangeable for definitive Notes upon surrender of the temporary Notes at the office or agency of the Issuer designated for such purpose, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute, and the Trustee shall authenticate and deliver in exchange therefor, a like principal amount of definitive Notes of authorized denominations.
Section 2.10 — Cancellation
(a) The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange, payment, or redemption. The Trustee shall cancel all Notes surrendered for registration of transfer, exchange, payment, redemption, or cancellation and shall dispose of cancelled Notes in accordance with its customary procedures. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.
(b) The Prior Mezzanine Notes in the aggregate outstanding principal amount of $112,300,000 shall be deemed cancelled and of no further force or effect upon the issuance of the Notes under this Indenture on the Issue Date. BMC, as the sole holder of the Prior Mezzanine Notes, has consented to the cancellation of the Prior Mezzanine Notes in consideration of the issuance to it of the Notes and the equity interests in the Issuer as contemplated by the RSA and the Note Purchase Agreement.
Section 2.11 — CUSIP / ISIN Numbers
The Issuer may cause one or more CUSIP numbers or International Securities Identification Numbers (ISIN) to be printed on the Notes for the convenience of the Holders. No representation is made as to the accuracy of such numbers as printed on the Notes, and reliance may be placed only on the other identification numbers printed on the Notes. Any such CUSIP or ISIN number shall not be deemed to be a part of the Notes or a part of this Indenture.
ARTICLE III — INTEREST
Section 3.01 — Interest Rate and Payment
(a) The Notes shall bear interest at the rate of 10.0% per annum (the "Interest Rate") from the Issue Date (May 18, 2023) or from the most recent Interest Payment Date to which interest has been paid or duly provided for.
(b) Interest on the Notes shall be payable entirely in kind ("PIK") on each Interest Payment Date, being June 30 and December 31 of each year, commencing on December 31, 2023, to the Persons who are registered Holders at the close of business on the record date for such Interest Payment Date, which shall be the fifteenth (15th) calendar day immediately preceding such Interest Payment Date (whether or not a Business Day).
(c) PIK Interest shall be paid by increasing the aggregate principal amount of the outstanding Notes by the amount of accrued and unpaid interest on each Interest Payment Date, as more fully described in Section 3.02.
(d) Interest on the Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months (the "30/360 convention").
(e) Notwithstanding the foregoing, the Issuer may, at its option and in its sole discretion, elect to pay interest in cash on any Interest Payment Date, in whole or in part; provided that any such cash payment of interest shall be subject to (i) compliance with all restrictive covenants and conditions set forth in the First Lien Credit Agreement (including, without limitation, any limitations on restricted payments or junior debt service) and (ii) the terms and conditions of the Intercreditor Agreement. The Issuer shall provide the Trustee with at least ten (10) Business Days' prior written notice of any election to pay interest in cash.
Section 3.02 — PIK Interest Mechanics
(a) On each Interest Payment Date, the principal amount of each Note outstanding shall be increased by the amount of accrued and unpaid interest thereon as of such Interest Payment Date, calculated at the Interest Rate (or the Default Rate, if applicable) on the basis of the 30/360 convention. The increased principal amount shall thereafter constitute the outstanding principal amount of such Note for all purposes under this Indenture, including for purposes of calculating interest accruing from and after such Interest Payment Date.
(b) The Trustee shall maintain records of the aggregate principal amount of Notes outstanding at all times, as adjusted for PIK Interest on each Interest Payment Date. The Issuer shall deliver to the Trustee, on or before each Interest Payment Date, a PIK Interest Notice substantially in the form of Exhibit C hereto, setting forth (i) the aggregate principal amount of Notes outstanding immediately prior to such Interest Payment Date, (ii) the amount of PIK Interest to be capitalized on such Interest Payment Date, and (iii) the resulting adjusted aggregate principal amount of Notes outstanding immediately following such Interest Payment Date.
(c) Upon receipt of each PIK Interest Notice, the Trustee shall update its records to reflect the increased aggregate principal amount of Notes outstanding. The Trustee shall have no duty to verify the calculations set forth in any PIK Interest Notice delivered by the Issuer, and may conclusively rely upon the accuracy of the information contained therein.
(d) No physical exchange of Notes or issuance of new Notes shall be required in connection with the increase in principal amount resulting from the capitalization of PIK Interest. The notation of the adjusted principal amount in the records of the Trustee shall constitute conclusive evidence of the increased principal amount of each Note.
(e) For the avoidance of doubt, PIK Interest that is capitalized and added to the principal amount of the Notes on any Interest Payment Date shall thereafter bear interest at the Interest Rate (or, if applicable, the Default Rate) from and after such Interest Payment Date.
Section 3.03 — Default Interest
(a) Upon the occurrence and during the continuance of any Event of Default under this Indenture, interest on the Notes shall accrue at the Default Rate of 12.0% per annum (being the Interest Rate of 10.0% plus 2.00%).
(b) Default interest shall be payable in kind and shall be subject to the same PIK Interest mechanics set forth in Section 3.02. Accordingly, on each Interest Payment Date during the continuance of an Event of Default, the aggregate principal amount of the outstanding Notes shall be increased by the amount of accrued default interest calculated at the Default Rate.
(c) Default interest shall accrue from the date of the occurrence of the applicable Event of Default until such Event of Default has been cured or waived in accordance with Section 6.09. Upon the cure or waiver of an Event of Default, interest shall revert to the Interest Rate from and after the date of such cure or waiver.
Section 3.04 — Interest Computation
Interest on the Notes (including PIK Interest and Default Interest) shall be computed on the basis of a 360-day year of twelve 30-day months (the "30/360 convention"). In computing interest for any period, the first day of such period shall be included and the last day shall be excluded; provided, however, that the Maturity Date shall be included.
ARTICLE IV — REDEMPTION
Section 4.01 — Optional Redemption
(a) Non-Call Period. The Notes shall not be redeemable at the option of the Issuer prior to June 30, 2025 (the "Non-Call Period"). During the Non-Call Period, the Issuer may not optionally redeem the Notes, in whole or in part, for any reason.
(b) Redemption After Non-Call Period. On and after June 30, 2025, the Issuer may redeem the Notes, in whole or in part, at its option, at the following redemption prices (expressed as a percentage of the then-outstanding principal amount of the Notes being redeemed, including all accrued and capitalized PIK Interest as of the redemption date), plus, in each case, accrued and unpaid interest (if any, to the extent not already capitalized as PIK Interest) to, but excluding, the applicable redemption date:
(c) Partial Redemption. If fewer than all of the Notes are to be redeemed at any time, the Registrar shall select the Notes to be redeemed on a pro rata basis (or, if the Notes are held in global form, by such method as the depository may require).
(d) Intercreditor Agreement Conditions. Any optional redemption of the Notes under this Section 4.01 shall be subject to the terms and conditions of the Intercreditor Agreement, including, without limitation, any provisions requiring the prior repayment of First Lien Debt or the prior written consent of the First Lien Agent or the holders of the First Lien Debt before any payment may be made in respect of the Notes.
Section 4.02 — Mandatory Redemption / Asset Sale Proceeds
(a) Asset Sale Offers. Upon the consummation of any Asset Sale by the Issuer or any Subsidiary (including, without limitation, the disposition of vessels pursuant to the Vessel Disposition Undertaking), the net cash proceeds of such Asset Sale (after deduction of reasonable costs, fees, commissions, and expenses incurred in connection with such Asset Sale, and any taxes paid or reasonably estimated to be payable in connection therewith) shall be applied as follows:
(i) First, to repay the First Lien Debt in accordance with the mandatory prepayment provisions of the First Lien Credit Agreement and the Intercreditor Agreement; and
(ii) Second, to the extent any excess net proceeds remain after giving effect to the prepayment described in clause (i) and are not required to be applied to the First Lien Debt under the terms of the First Lien Credit Agreement or the Intercreditor Agreement, such excess net proceeds shall be offered to the Holders of the Notes, pro rata in proportion to the aggregate principal amount of Notes held by each Holder, for the redemption of Notes at a redemption price equal to 100% of the outstanding principal amount of the Notes being redeemed (including all accrued and capitalized PIK Interest) plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
(b) Vessel Disposition Undertaking. Without limiting the generality of the foregoing, the Issuer acknowledges that, pursuant to the Vessel Disposition Undertaking, the Issuer is required to sell six (6) older dry-bulk carriers (with an average age of approximately 18 years) within twelve (12) months of the date of the Vessel Disposition Undertaking for estimated aggregate proceeds of approximately $72,000,000. The net proceeds of such sales shall be applied to prepay Term Loan A under the First Lien Credit Agreement in accordance with the terms of the Vessel Disposition Undertaking and the Intercreditor Agreement before any excess proceeds are available for application to the Notes.
(c) Offer Procedures. If excess net proceeds are available for application to the Notes as set forth in clause (a)(ii) above, the Issuer shall mail or cause to be mailed (or otherwise transmit in accordance with the applicable procedures of any depository) a notice to each Holder, with a copy to the Trustee, not less than fifteen (15) nor more than sixty (60) days prior to the proposed redemption date, offering to redeem Notes in an aggregate principal amount equal to such excess net proceeds. Each Holder may elect to have all or any portion of its Notes redeemed pursuant to such offer. If the aggregate principal amount of Notes tendered by Holders exceeds the amount of excess net proceeds available, Notes shall be redeemed on a pro rata basis.
Section 4.03 — Redemption Procedures
(a) Notice of Redemption. If the Issuer elects to redeem Notes pursuant to Section 4.01 or is required to offer to redeem Notes pursuant to Section 4.02, the Issuer shall deliver (or cause to be delivered) to the Trustee and each Holder of Notes to be redeemed a notice of redemption (the "Redemption Notice") not less than fifteen (15) nor more than sixty (60) days prior to the applicable redemption date.
(b) Contents of Redemption Notice. Each Redemption Notice shall specify:
(i) the redemption date;
(ii) the redemption price, including the applicable premium (if any) and accrued and unpaid interest to the redemption date;
(iii) the aggregate principal amount of Notes to be redeemed;
(iv) if fewer than all outstanding Notes are to be redeemed, the identification (and, in the case of partial redemption of a Note, the principal amount) of the Notes to be redeemed;
(v) the name and address of the Paying Agent;
(vi) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; and
(vii) that, unless the Issuer defaults in making the redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date.
(c) Effect of Redemption. Notes called for redemption shall become due and payable on the redemption date at the applicable redemption price. Unless the Issuer defaults in the payment of the redemption price, interest shall cease to accrue on the Notes (or the portions thereof) called for redemption on and after the applicable redemption date. Upon surrender to the Paying Agent, such Notes shall be paid at the applicable redemption price. If fewer than all of a Holder's Notes are being redeemed, the Issuer shall issue to such Holder a new Note or Notes in aggregate principal amount equal to the unredeemed portion.
(d) Conditional Redemption. The Issuer may condition any optional redemption under Section 4.01 on the occurrence or non-occurrence of any event or condition specified in the Redemption Notice. If any such condition is not satisfied by the redemption date, the Redemption Notice shall be of no further force or effect, the redemption shall not be consummated, and interest shall continue to accrue on the Notes.
Section 4.04 — No Sinking Fund
The Notes are not entitled to the benefit of any sinking fund. The Issuer is not required to make any mandatory redemption or sinking fund payments with respect to the Notes, except as set forth in Section 4.02.