RESTRUCTURING SUPPORT AGREEMENT

RESTRUCTURING SUPPORT AGREEMENT
EXECUTION VERSION
Dated as of March 14, 2023
among
THALASSA SHIPPING & LOGISTICS SOCIÉTÉ ANONYME (as the Company)
THALASSA AMERICAS INC. (as Co-Borrower)
NORDBANK INTERNATIONAL AG (as Administrative Agent, Collateral Agent, and a Consenting Senior Lender)
THE CONSENTING SENIOR LENDERS PARTY HERETO
DRALVECEN MEZZANINE CAPITAL LLC (as Consenting Mezzanine Lender)
and
KFO HOLDINGS SOCIÉTÉ ANONYME (as Equity Sponsor)
CONFIDENTIAL — This document contains confidential information. Distribution is limited to the Parties and their respective legal and financial advisors. Any unauthorized reproduction, distribution, or disclosure is strictly prohibited.
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This RESTRUCTURING SUPPORT AGREEMENT (this "Agreement"), dated as of March 14, 2023 (the "RSA Execution Date"), is entered into by and among:
(i) Thalassa Shipping & Logistics Société Anonyme ("TSL" or the "Company"), a société anonyme organized and existing under the laws of the Hellenic Republic, with registered offices at 42 Akti Miaouli, Piraeus 18538, Greece (Greek Tax Identification Number (AFM): 998214763);
(ii) Thalassa Americas Inc. ("TAI"), a C-Corporation organized and existing under the laws of the State of Delaware, with its principal office at 1400 McKinney Street, Suite 2200, Houston, Texas 77010 (Employer Identification Number (EIN): 84-3291057), whose registered agent is Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801;
(iii) Nordbank International AG ("Nordbank" or the "Administrative Agent"), an Aktiengesellschaft organized and existing under the laws of Switzerland, with offices at Bahnhofstrasse 78, 8001 Zürich, Switzerland, acting in its capacity as Administrative Agent and Collateral Agent under the Senior Secured Credit Facility (as defined herein) and, individually, as a Consenting Senior Lender;
(iv) Each of the senior secured lenders party hereto by execution of a Joinder Agreement (collectively, the "Consenting Senior Lenders");
(v) Dralvecen Mezzanine Capital LLC ("BMC"), a limited liability company organized and existing under the laws of the State of Delaware, with offices at 600 Lexington Avenue, 22nd Floor, New York, New York 10022 (the "Consenting Mezzanine Lender"); and
(vi) KFO Holdings Société Anonyme ("KFO"), a société anonyme organized and existing under the laws of the Hellenic Republic, with registered offices at 42 Akti Miaouli, Piraeus 18538, Greece (the "Equity Sponsor").
Each of the foregoing is referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS:
A. Background of the Company. TSL was founded in 1987 by the Kostandinos family and is a privately held, Greek-headquartered shipping and logistics conglomerate. TSL owns and operates a diversified fleet of fifty (50) vessels, comprising thirty-eight (38) dry-bulk carriers and twelve (12) container vessels, and provides integrated port-to-door logistics services across the Mediterranean, Black Sea, and transatlantic trade lanes. TSL also operates terminal facilities at the Port of Piraeus, the Port of Thessaloniki, and the Port of Houston. TSL employs approximately 4,200 individuals globally, of whom approximately 680 are based in the United States. TAI is the wholly-owned Delaware subsidiary of TSL, conducting U.S.-side operations including Houston terminal operations, Jones Act–exempt foreign-flag vessel scheduling, and domestic freight brokerage. TSL reported consolidated revenue of approximately €1.42 billion for fiscal year 2021. Consolidated revenue for fiscal year 2022 is estimated at approximately €987 million, representing a decline of approximately 30.5% year-over-year. TAI reported revenue of approximately $312 million for fiscal year 2021, declining to an estimated $198 million for fiscal year 2022.
B. Existing Indebtedness. TSL and TAI are parties to, or obligors under, the following material indebtedness:
(i) Senior Secured Credit Facility. That certain Senior Secured Credit Agreement, dated as of June 15, 2019 (as amended, restated, supplemented, or otherwise modified from time to time prior to the date hereof, the "Credit Agreement"), among TSL (as Borrower), TAI (as Co-Borrower for the U.S. Tranche), Nordbank International AG (as Administrative Agent and Collateral Agent), and the lenders from time to time party thereto, providing for an aggregate commitment of $685,000,000, comprising: (a) a Term Loan A facility ("TLA") in an original principal amount of $400,000,000, amortizing in quarterly installments of $10,000,000, with an outstanding principal balance as of September 30, 2022 of $270,000,000 (reflecting thirteen quarterly payments of $10,000,000 each, totaling $130,000,000 in principal repayments); (b) a revolving credit facility (the "Revolver") with a commitment of $200,000,000, drawn to $185,000,000 as of September 30, 2022, with $15,000,000 remaining undrawn; and (c) a U.S. Tranche Term Loan B facility ("TLB") in the original principal amount of $85,000,000 (non-amortizing, with bullet maturity). As of September 30, 2022, the total outstanding principal amount under the Credit Agreement was $540,000,000 ($270,000,000 under TLA, $185,000,000 under the Revolver, and $85,000,000 under TLB). The Credit Agreement bears interest at SOFR plus 375 basis points per annum (with a default rate of SOFR plus 575 basis points per annum). The original maturity date of the Credit Agreement is June 15, 2024. The obligations under the Credit Agreement are secured by first-priority liens on all fifty (50) vessels in the TSL fleet, the Houston terminal lease, all accounts receivable of TSL and TAI, the equity interests in TAI, and the equity interests in fourteen (14) vessel-owning special purpose vehicles. The TLA is assigned CUSIP No. 87265BAA7.
(ii) Mezzanine Notes. Those certain mezzanine notes issued on June 15, 2019, held by BMC, in an original principal amount of $100,000,000, with an outstanding principal balance as of September 30, 2022 of $112,300,000 (including $12,300,000 of payment-in-kind ("PIK") interest capitalized to the principal balance since the second quarter of 2022) (the "Existing Mezzanine Notes"). The Existing Mezzanine Notes bear interest at 11.5% per annum on a PIK toggle basis, with all interest having been paid in kind since the second quarter of 2022. The Existing Mezzanine Notes mature on December 15, 2024 and are secured by second-priority liens on the same collateral securing the Credit Agreement, subject to that certain Intercreditor Agreement, dated as of June 15, 2019 (the "Existing Intercreditor Agreement"), between Nordbank (as first-lien agent) and BMC.
(iii) Unsecured Notes. $50,000,000 in aggregate principal amount of 8.25% Senior Unsecured Notes due March 1, 2025 (CUSIP: 87265BAB5) (the "Unsecured Notes"), issued on March 1, 2020, bearing semi-annual cash pay interest on June 1 and December 1 of each year, governed by an indenture with Garrison Trust Company, 100 Wall Street, 16th Floor, New York, New York 10005, as indenture trustee (the "Indenture Trustee").
(iv) Intercompany Note. A $76,400,000 subordinated intercompany promissory note from TAI (as maker) to TSL (as holder) (the "Intercompany Note"), bearing interest at 5.0% per annum.
(v) Trade Payables. Approximately $38,700,000 in aggregate trade payables as of September 30, 2022, the largest single trade creditor being Olympian Fuel & Supply SA in the amount of approximately $9,200,000.
(vi) Total Indebtedness. As of September 30, 2022, TSL's total consolidated indebtedness across all facilities (including trade and other payables) is approximately $847,300,000.
C. The Liquidity Crisis and Covenant Breaches. The global shipping market has experienced significant deterioration since the beginning of 2022. The Baltic Dry Index declined approximately 58% between January 2022 and September 2022. TSL's average daily time-charter equivalent rate fell from approximately $24,800 per day (fiscal year 2021 average) to approximately $11,200 per day (third quarter 2022 average). As a consequence of these severe market conditions and the resulting decline in the Company's earnings and cash flows, the following covenant defaults have occurred under the Credit Agreement:
(i) On September 15, 2022, TSL breached the Minimum Liquidity Covenant set forth in the Credit Agreement. As of such date, TSL's unrestricted cash was $27,300,000, which was $12,700,000 below the minimum requirement of $40,000,000.
(ii) As of September 30, 2022, TSL breached the Maximum Net Leverage Ratio covenant set forth in the Credit Agreement. The Company's Net Leverage Ratio 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 ratio of 5.50x.
(iii) As of September 30, 2022, TSL breached the Minimum Interest Coverage Ratio covenant set forth in the Credit Agreement. The Company's Interest Coverage Ratio 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 ratio of 2.50x.
In addition, the Company's fleet was appraised by Drakos Maritime Valuations Ltd. at an aggregate value of $623,000,000 as of November 1, 2022, representing a decline of $268,000,000, or approximately 30.1%, from the January 2022 appraised value of $891,000,000. Kensington Veltrian Partners LLC has estimated the Company's enterprise value in the range of $580,000,000 to $640,000,000, with a midpoint of approximately $610,000,000.
D. The Forbearance Agreement. In response to the covenant breaches described in Recital C, TSL, TAI, and the senior secured lender syndicate (with Nordbank acting as agent) entered into that certain Forbearance Agreement, dated as of October 10, 2022 (as amended, the "Forbearance Agreement"), pursuant to which the Consenting Senior Lenders agreed to forbear from exercising their rights and remedies under the Credit Agreement for an initial period of ninety (90) days through January 8, 2023. The Forbearance Agreement was subsequently amended by the First Amendment to Forbearance Agreement, dated as of January 8, 2023, extending the forbearance period through March 8, 2023, and by the Second Amendment to Forbearance Agreement, dated as of March 8, 2023, further extending the forbearance period through April 7, 2023. The Forbearance Agreement shall be superseded by this Agreement upon the RSA Execution Date, subject to the terms and conditions set forth herein.
E. Missed Unsecured Note Payment. TSL failed to make the semi-annual interest payment of $2,062,500 (calculated as $50,000,000 multiplied by 8.25% per annum, divided by two) due on December 1, 2022 under the Unsecured Notes. The thirty (30)-day cure period provided under the indenture governing the Unsecured Notes expired on January 1, 2023, and an Event of Default exists thereunder as a result. The Parties contemplate that such default will be cured at the Closing through full payment of the missed coupon from Equity Contribution proceeds.
F. Negotiations and Purpose. The Parties, with the assistance of their respective legal and financial advisors, have engaged in extensive, arm's-length, good-faith negotiations regarding the comprehensive restructuring of the Company's capital structure and indebtedness. TSL and TAI have been advised by Calderwood & Harkness LLP (Nathaniel Bower, Responsible Partner) as legal counsel and Kensington Veltrian Partners LLC (James Calloway, Managing Director) as financial advisor. The Ad Hoc Group of Senior Secured Lenders, comprising Nordbank, Harborstone Bank plc, Triton Credit Partners LP, and Continental Maritime Lending GmbH, holding collectively $372,000,000 or approximately 54.3% of the $685,000,000 Senior Secured Credit Facility, has been advised by Whitfield, Crane & Burgess LLP (Graham Whitfield III, Lead Partner) as legal counsel and Draycott Advisory Group LLC (Vanessa Chow, Partner) as financial advisor. BMC has been advised by Kellner & Foss LLP (Theodore Kellner, Lead Partner) as legal counsel. An informal group of unsecured noteholders has been advised by Ashford, Brightmoor Group & McKay PC (Carolyn Brightmoor Group, Lead Partner) as legal counsel. The Parties desire to memorialize the terms upon which they will implement the Restructuring Transactions (as defined herein) on an out-of-court basis, thereby preserving value for all stakeholders, maintaining ongoing business operations, and avoiding the need for a Chapter 11 filing by TAI in the United States Bankruptcy Court for the Southern District of Texas (Houston Division) or any insolvency proceeding by TSL under Greek Law 4738/2020 or otherwise.
G. Defined Terms. Capitalized terms used but not otherwise defined in these Recitals shall have the meanings ascribed to them in Section 1.01.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01 — Definitions.
As used in this Agreement, the following terms shall have the meanings set forth below:
"Ad Hoc Group" means the ad hoc group of senior secured lenders comprising Nordbank International AG, Harborstone Bank plc, Triton Credit Partners LP, and Continental Maritime Lending GmbH, holding collectively $372,000,000, or approximately 54.3%, of the aggregate commitments under the Senior Secured Credit Facility.
"Administrative Agent" means Nordbank International AG, in its capacity as administrative agent under the Credit Agreement.
"Alternative Transaction" means any restructuring, recapitalization, refinancing, asset sale (other than the sale of the Disposition Vessels pursuant to Section 2.05), merger, acquisition, equity issuance (other than the Equity Contribution), exchange offer, tender offer, or any other transaction involving the Company Parties or their material assets or equity interests that is not contemplated by this Agreement or the Restructuring Transactions.
"Amended Credit Agreement" means the Credit Agreement, as amended by Amendment No. 1.
"Amendment Fee" means a fee equal to 1.00% of the outstanding Senior Secured Debt as of the Closing Date ($540,000,000 multiplied by 1.00%, equaling $5,400,000), payable in kind by capitalization to the TLA principal balance in accordance with Section 2.01(e).
"Amendment No. 1" means the first amendment to the Credit Agreement substantially in the form contemplated by this Agreement and the Restructuring Term Sheet, implementing the Senior Secured Facility Amendment.
"BMC" means Dralvecen Mezzanine Capital LLC.
"Business Day" means any day other than a Saturday, Sunday, or other day on which commercial banks in New York, New York, Zürich, Switzerland, or Athens, Greece are authorized or required by law to close.
"Closing Date" or "Effective Date" means the date on which all Conditions Precedent set forth in Article VII have been satisfied or waived in accordance with this Agreement and the Restructuring Transactions are consummated.
"Collateral Agent" means Nordbank International AG, in its capacity as collateral agent under the Credit Agreement.
"Company" means Thalassa Shipping & Logistics Société Anonyme.
"Company Parties" means TSL, TAI, and KFO, collectively.
"Conditions Precedent" has the meaning set forth in Article VII.
"Consenting Lenders" means the Consenting Senior Lenders and the Consenting Mezzanine Lender, collectively.
"Consenting Mezzanine Lender" means BMC.
"Consenting Senior Lenders" means each senior secured lender that has executed a Joinder Agreement substantially in the form attached hereto as Exhibit C and delivered the same to the Administrative Agent and the Company, including 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), and any transferee that becomes a Consenting Senior Lender pursuant to Section 9.03.
"Credit Agreement" means that certain Senior Secured Credit Agreement, dated as of June 15, 2019, among TSL (as Borrower), TAI (as Co-Borrower for the U.S. Tranche), Nordbank International AG (as Administrative Agent and Collateral Agent), and the lenders from time to time party thereto, as amended, restated, supplemented, or otherwise modified from time to time prior to the date hereof.
"Default Interest" means the additional 200 basis points of interest per annum applicable under the Credit Agreement during the continuance of an Event of Default (resulting in an aggregate rate of SOFR plus 575 basis points per annum).
"Definitive Documents" means the documents listed in Section 3.01.
"Disposition Vessels" means the six (6) older dry-bulk carriers identified on Exhibit B to be sold by TSL pursuant to Section 2.05 and the Vessel Disposition Undertaking.
"Equity Contribution" means the contribution by KFO of €35,000,000 (approximately $38,200,000 at a EUR/USD exchange rate of €1 = $1.0914 as of the RSA Execution Date) in new equity to TSL, as more fully described in Section 2.03.
"Equity Sponsor" means KFO Holdings Société Anonyme.
"Equity Subscription Agreement" means the equity subscription agreement to be entered into between TSL and KFO in connection with the Equity Contribution, in form and substance reasonably acceptable to the Required Consenting Lenders.
"Event of Default" has the meaning ascribed to such term in the Credit Agreement.
"Existing Intercreditor Agreement" means that certain Intercreditor Agreement, dated as of June 15, 2019, by and between Nordbank International AG (as first-lien agent) and BMC, governing the relative priorities of the liens securing the Senior Secured Debt and the Existing Mezzanine Notes.
"Existing Mezzanine Notes" means the mezzanine notes held by BMC in the aggregate outstanding principal amount of $112,300,000 (including $12,300,000 of PIK interest capitalized to the principal balance), as more fully described in Recital B(ii).
"Forbearance Agreement" means that certain Forbearance Agreement, dated as of October 10, 2022, among TSL, TAI, and the senior secured lender syndicate (with Nordbank acting as agent), as amended by the First Amendment to Forbearance Agreement, dated as of January 8, 2023, and the Second Amendment to Forbearance Agreement, dated as of March 8, 2023.
"Funds Flow Memorandum" means the memorandum setting forth the sources and uses of funds and the sequence of fund transfers to be made on the Closing Date in connection with the consummation of the Restructuring Transactions, in form and substance reasonably acceptable to the Required Consenting Lenders, BMC, and the Company Parties.
"Indenture Trustee" means Garrison Trust Company, 100 Wall Street, 16th Floor, New York, New York 10005, in its capacity as indenture trustee under the indenture governing the Unsecured Notes and, where applicable, in its capacity as indenture trustee under the New Second-Lien Notes Indenture.
"Intercompany Note" means the $76,400,000 subordinated intercompany promissory note from TAI (as maker) to TSL (as holder), bearing interest at 5.0% per annum.
"Joinder Agreement" means a joinder agreement substantially in the form attached hereto as Exhibit C, executed by each Consenting Senior Lender concurrently herewith or in connection with a permitted transfer pursuant to Section 9.03.
"KFO" means KFO Holdings Société Anonyme.
"Lock-Up Agreement" means the lock-up agreement substantially in the form attached hereto as Exhibit D, executed by BMC concurrently herewith, restricting the transfer of the Existing Mezzanine Notes and (following issuance) the New Equity during the pendency of this Agreement.
"Material Adverse Change" means any event, circumstance, development, condition, occurrence, or combination thereof that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on (a) the business, operations, assets, liabilities, financial condition, or results of operations of TSL and its subsidiaries (including TAI), taken as a whole, (b) the ability of any Company Party to perform its obligations under this Agreement or any Definitive Document, or (c) the validity or enforceability of this Agreement or any Definitive Document; provided, however, that for purposes of this definition, the liquidity crisis and covenant breaches described in Recital C and Recital E, to the extent known to the Consenting Lenders and disclosed prior to the RSA Execution Date, shall not constitute a Material Adverse Change.
"Mezzanine Exchange" means the exchange of $112,300,000 in Existing Mezzanine Notes for (i) $60,000,000 in New Second-Lien Notes and (ii) the New Equity, as more fully described in Section 2.02.
"Milestone" has the meaning set forth in Section 4.04.
"New Equity" means the newly issued equity interests in TSL representing 15% of the post-Restructuring fully diluted equity of TSL, to be issued to BMC in connection with the Mezzanine Exchange.
"New Intercreditor Agreement" means the Amended and Restated Intercreditor Agreement to be entered into among Nordbank (as first-lien agent), BMC (as second-lien holder), and the Company Parties, amending and restating the Existing Intercreditor Agreement to reflect the New Second-Lien Notes structure.
"New Second-Lien Note Purchase Agreement" means the note purchase agreement to be entered into between TSL and BMC in connection with the issuance of the New Second-Lien Notes, in form and substance reasonably acceptable to the Required Consenting Lenders, BMC, and the Company Parties.
"New Second-Lien Notes" means the $60,000,000 in aggregate principal amount of new second-lien notes to be issued to BMC in connection with the Mezzanine Exchange, bearing interest at 10.0% per annum (payable in kind), maturing in June 2028, and secured by second-priority liens on the collateral securing the Amended Credit Agreement.
"New Second-Lien Notes Indenture" means the indenture governing the New Second-Lien Notes, to be entered into between TSL (as issuer) and Garrison Trust Company (as indenture trustee), in form and substance reasonably acceptable to the Required Consenting Lenders, BMC, and the Company Parties.
"Outside Date" means June 30, 2023, as such date may be extended by written agreement of the Required Consenting Lenders and the Company Parties.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated association, governmental authority, or any other entity of any kind.
"PIK Conversion Amount" means the $75,000,000 of TLA principal to be converted from cash-pay to payment-in-kind in accordance with Section 2.01(b).
"Required Consenting Lenders" means, at any time of determination, Consenting Senior Lenders holding at least 66⅔% of the aggregate Senior Secured Debt held by all Consenting Senior Lenders at such time.
"Restructuring Term Sheet" means the term sheet attached hereto as Exhibit A, which sets forth the material economic terms of the Restructuring Transactions.
"Restructuring Transactions" means, collectively, the Senior Secured Facility Amendment, the Mezzanine Exchange, the Equity Contribution, the Vessel Dispositions, the Intercompany Note Amendment, the cure of the missed Unsecured Notes coupon, and all related transactions, agreements, and actions contemplated by this Agreement.
"RSA Execution Date" means March 14, 2023.
"Senior Secured Debt" means all outstanding obligations under the Credit Agreement, which, as of September 30, 2022, aggregate $540,000,000 in principal amount.
"Termination Event" has the meaning set forth in Section 8.01.
"Unsecured Notes" means the $50,000,000 in aggregate principal amount of 8.25% Senior Unsecured Notes due March 1, 2025 (CUSIP: 87265BAB5) issued by TSL.
"Vessel Disposition Undertaking" means the Side Letter Agreement regarding the sale of the Disposition Vessels, to be executed concurrently herewith or as a Definitive Document, in form and substance reasonably acceptable to the Required Consenting Lenders and the Company Parties.
Section 1.02 — Rules of Interpretation.
Unless the context otherwise requires, the following rules of interpretation shall apply to this Agreement:
(a) The headings and captions contained in this Agreement are included for convenience of reference only and shall not affect the interpretation of this Agreement.
(b) References to "this Agreement," "herein," "hereof," "hereunder," and words of similar import refer to this Agreement as a whole and not to any particular provision.
(c) The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation."
(d) Words in the singular shall include the plural and vice versa, and words denoting any gender shall include all genders.
(e) Unless otherwise specified, references to "Sections," "Articles," "Exhibits," and "Schedules" are to the sections, articles, exhibits, and schedules of this Agreement.
(f) References to any agreement, instrument, or other document include all amendments, restatements, supplements, modifications, extensions, and replacements thereof, in each case as permitted by the terms thereof.
(g) References to any Person include such Person's successors and permitted assigns.
(h) Unless otherwise stated, all references to currency amounts denoted by "$" are to the lawful currency of the United States of America, and all references to currency amounts denoted by "€" are to the euro, the single currency unit of the participating member states of the European Economic and Monetary Union.
(i) Conversions between euros and United States dollars for the purposes of this Agreement shall be made at the EUR/USD exchange rate prevailing as of the applicable date of determination, as published by the European Central Bank, unless a specific exchange rate is stated herein.
(j) References to any statute, regulation, or law include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, or interpreting such statute, regulation, or law.
(k) The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision.
ARTICLE II
RESTRUCTURING TRANSACTIONS
Section 2.01 — Senior Secured Facility Amendment.
The following amendments to the Credit Agreement shall be implemented through Amendment No. 1, which shall be a Definitive Document in form and substance reasonably acceptable to the Required Consenting Lenders, the Administrative Agent, and the Company Parties:
(a) Maturity Extension. The maturity date of all tranches under the Credit Agreement (TLA, Revolver, and TLB) shall be extended from June 15, 2024 to June 15, 2027, representing a three-year extension. All scheduled amortization payments, interest payment dates, and other periodic obligations shall be recalculated and adjusted accordingly to reflect the extended maturity.
(b) TLA PIK Conversion. $75,000,000 of the $270,000,000 in outstanding TLA principal (the "PIK Conversion Amount") shall be converted from cash-pay to payment-in-kind. Interest on the PIK Conversion Amount shall accrue and be capitalized to the TLA principal balance on each quarterly interest payment date, and no cash debt service shall be required with respect to such amount during the remaining term of the Amended Credit Agreement. The remaining $195,000,000 of outstanding TLA principal shall continue to amortize on a quarterly basis in accordance with the existing amortization schedule under the Credit Agreement, subject to adjustment for the extended maturity.
(c) Revolver Commitment Reduction. The aggregate commitment under the Revolver shall be reduced from $200,000,000 to $150,000,000. To the extent that the Revolver is drawn in excess of $150,000,000 as of the Closing Date, the excess amount shall be repaid in full from the proceeds of the Equity Contribution on the Closing Date in accordance with the Funds Flow Memorandum. Following such repayment, the Company shall have availability under the Revolver equal to the difference between $150,000,000 and the then-outstanding drawn balance.
(d) Financial Covenant Reset. The financial maintenance covenants set forth in the Credit Agreement shall be amended as follows:
(i) Maximum Net Leverage Ratio. The Maximum Net Leverage Ratio shall be reset to 7.00x for the period from the Closing Date through and including the fiscal quarter ending December 31, 2023. The Maximum Net Leverage Ratio shall step down to 6.50x for fiscal quarters ending in 2024 (commencing with the fiscal quarter ending March 31, 2024 and concluding with the fiscal quarter ending December 31, 2024), and shall further step down to 5.50x for fiscal quarters ending on or after March 31, 2025.
(ii) Minimum Liquidity. The Minimum Liquidity covenant shall be reduced from $40,000,000 to $30,000,000, tested as of the last Business Day of each calendar month.
(iii) Minimum Interest Coverage Ratio. The Minimum Interest Coverage Ratio covenant shall be waived in its entirety for the period from the Closing Date through and including the fiscal quarter ending December 31, 2023. The Minimum Interest Coverage Ratio shall be reinstated at 2.00x for the fiscal quarter ending March 31, 2024, and shall step up to 2.50x for fiscal quarters ending on or after December 31, 2024.
(e) Amendment Fee. On the Closing Date, TSL shall pay to the Consenting Senior Lenders (pro rata in accordance with their respective commitments) an amendment fee equal to 1.00% of the outstanding Senior Secured Debt ($540,000,000 multiplied by 1.00%, equaling $5,400,000) (the "Amendment Fee"). The Amendment Fee shall be payable in kind by capitalization to the outstanding TLA principal balance under the Amended Credit Agreement.
(f) Default Interest Waiver. The Consenting Senior Lenders hereby agree that Default Interest (the additional 200 basis points per annum, resulting in an aggregate rate of SOFR plus 575 basis points per annum) that would otherwise have been applicable during the period from September 15, 2022 (the date of the initial covenant breach) through the Closing Date shall be retroactively waived. For the avoidance of doubt, interest during such period shall be calculated at the non-default rate of SOFR plus 375 basis points per annum.
(g) Other Amendments. Amendment No. 1 shall include such other amendments to the Credit Agreement as may be necessary or appropriate to implement the foregoing provisions, including updated reporting requirements, updated definitions, updated Events of Default thresholds, and conforming changes, in each case consistent with the terms set forth in this Section 2.01 and the Restructuring Term Sheet.
Section 2.02 — Mezzanine Exchange.
(a) Exchange Terms. On the Closing Date, BMC shall exchange all of its Existing Mezzanine Notes (in the aggregate outstanding principal amount of $112,300,000, including $12,300,000 of PIK interest capitalized to the principal balance) for the following consideration:
(i) $60,000,000 in aggregate principal amount of New Second-Lien Notes, bearing interest at 10.0% per annum (payable in kind), maturing in June 2028, to be issued under the New Second-Lien Notes Indenture with Garrison Trust Company as indenture trustee and secured by second-priority liens on the collateral securing the Amended Credit Agreement; and
(ii) Newly issued equity interests in TSL representing 15% of the post-Restructuring fully diluted equity of TSL (the "New Equity").
(b) Debt Haircut. The Mezzanine Exchange results in a haircut on the debt component of the Existing Mezzanine Notes of approximately 46.6%, calculated as ($112,300,000 minus $60,000,000) divided by $112,300,000, with the balance of the recovery represented by the New Equity.
(c) Equity Dilution. As of the RSA Execution Date, the equity interests in TSL are held as follows: Dimitrios Kostandinos (62%) and Elena Kostandinos-Pavlou (18%), representing the Kostandinos family at 80% in the aggregate, and non-family holders at 20% in the aggregate. Following the consummation of the Mezzanine Exchange and the issuance of the New Equity, the post-Restructuring equity interests in TSL shall be held as follows: Kostandinos family at 68% (representing 80% multiplied by 85%); non-family holders at 17% (representing 20% multiplied by 85%); and BMC at 15%. The foregoing percentages are on a fully diluted basis and give effect to the dilutive impact of the New Equity issuance but do not give effect to any additional dilution that may result from the Equity Contribution (which shall be structured so as not to result in additional dilution beyond that contemplated herein, unless otherwise agreed).
(d) Cancellation of Existing Mezzanine Notes. Upon the consummation of the Mezzanine Exchange on the Closing Date, the Existing Mezzanine Notes shall be cancelled in full and all obligations of TSL and its subsidiaries thereunder shall be irrevocably and unconditionally discharged, and the second-priority liens securing the Existing Mezzanine Notes shall be released.
(e) Amended and Restated Intercreditor Agreement. Concurrently with the consummation of the Mezzanine Exchange, the Existing Intercreditor Agreement (dated as of June 15, 2019, between Nordbank as first-lien agent and BMC) shall be amended and restated in its entirety to reflect the New Second-Lien Notes structure, the relative priorities of the first-priority liens securing the Amended Credit Agreement and the second-priority liens securing the New Second-Lien Notes, and such other terms as are customary for intercreditor agreements of this type, all in form and substance reasonably acceptable to the Required Consenting Lenders, BMC, and the Administrative Agent.
Section 2.03 — KFO Equity Contribution.
(a) Contribution Amount. On the Closing Date, KFO Holdings SA shall contribute €35,000,000 (approximately $38,200,000 at a EUR/USD exchange rate of €1 = $1.0914 as of the RSA Execution Date) in new equity capital to TSL (the "Equity Contribution"). The actual dollar equivalent of the Equity Contribution shall be determined based on the EUR/USD exchange rate prevailing on the Closing Date.
(b) Use of Proceeds. The proceeds of the Equity Contribution shall be applied as follows:
(i) to fund the Company's working capital and general liquidity requirements;
(ii) to pay transaction costs incurred in connection with the Restructuring Transactions, including advisory fees, legal fees, and other professional fees;
(iii) to cure the missed December 1, 2022 semi-annual interest payment of $2,062,500 on the Unsecured Notes;
(iv) to repay any drawn amounts under the Revolver in excess of $150,000,000 in connection with the Revolver commitment reduction described in Section 2.01(c); and
(v) as otherwise set forth in the Funds Flow Memorandum.
(c) Form. The Equity Contribution shall be documented by an Equity Subscription Agreement between TSL and KFO, in form and substance reasonably acceptable to the Required Consenting Lenders and BMC, which Equity Subscription Agreement shall be a Definitive Document.
Section 2.04 — Treatment of Unsecured Notes.
(a) No Impairment. The $50,000,000 in aggregate principal amount of 8.25% Senior Unsecured Notes due March 1, 2025 shall remain outstanding and unmodified in accordance with the terms of the indenture governing such Unsecured Notes. The Restructuring Transactions do not contemplate any amendment, modification, or impairment of the rights of the holders of the Unsecured Notes (other than the cure of the missed payment described below).
(b) Cure of Missed Payment. On the Closing Date, TSL shall pay in full the missed December 1, 2022 semi-annual interest payment of $2,062,500 on the Unsecured Notes. Such payment shall be funded from the proceeds of the Equity Contribution and shall be remitted to Garrison Trust Company (as Indenture Trustee) for distribution to the holders of the Unsecured Notes in accordance with the terms of the applicable indenture.
(c) Consent and Waiver. In connection with the cure of the missed payment, Garrison Trust Company (as Indenture Trustee) shall deliver a Consent and Waiver Letter, in form and substance reasonably acceptable to the Company Parties and the Required Consenting Lenders, waiving the Event of Default arising under the indenture governing the Unsecured Notes as a result of the missed December 1, 2022 interest payment. Such Consent and Waiver Letter shall be conditioned upon (and shall become effective only upon) the full payment of the missed coupon on the Closing Date and shall constitute a Definitive Document.
Section 2.05 — Vessel Dispositions.
(a) Undertaking. TSL shall use commercially reasonable efforts to sell six (6) older dry-bulk carriers (having an average age of approximately 18 years as of the RSA Execution Date) identified as the Disposition Vessels on Exhibit B, within twelve (12) months following the Closing Date.
(b) Estimated Proceeds. Based on the fleet appraisal prepared by Drakos Maritime Valuations Ltd. as of November 1, 2022, the aggregate estimated sale proceeds from the Disposition Vessels are approximately $72,000,000. Actual proceeds may vary based on market conditions prevailing at the time of each sale.
(c) Application of Net Proceeds. The net sale proceeds from each Disposition Vessel (after deduction of brokerage commissions, transaction costs, and other customary deductions) shall be applied to prepay outstanding TLA principal under the Amended Credit Agreement, with such prepayments applied in accordance with the mandatory prepayment provisions of the Amended Credit Agreement.
(d) Sale Process. The sale of each Disposition Vessel shall be conducted in accordance with the Side Letter Agreement (Vessel Disposition Undertaking) to be executed concurrently herewith or as a Definitive Document. Each sale shall be subject to minimum price floors to be established in such Side Letter Agreement and shall require the reasonable prior approval of Nordbank (as Administrative Agent and Collateral Agent), including with respect to the identity of the purchaser, the purchase price, and the material terms of sale. To the extent that TSL is unable to sell any Disposition Vessel at or above the applicable minimum price floor within the twelve-month period, the Company shall promptly notify the Administrative Agent and the Required Consenting Lenders, and the Parties shall consult in good faith regarding an appropriate course of action.
Section 2.06 — Intercompany Note Amendment.
(a) Principal. The $76,400,000 subordinated intercompany promissory note from TAI (as maker) to TSL (as holder) shall be amended and restated as a Definitive Document to reflect the terms set forth in this Section 2.06.
(b) Maturity Extension. The maturity date of the Intercompany Note shall be extended to December 2028.
(c) Interest Rate Reduction. The interest rate on the Intercompany Note shall be reduced from 5.0% per annum to 2.0% per annum.
(d) Subordination. The amended and restated Intercompany Note shall expressly confirm that all obligations thereunder remain fully subordinated to (i) all obligations under the Amended Credit Agreement (including the Senior Secured Debt) and (ii) all obligations under the New Second-Lien Notes, in each case in accordance with the terms of the applicable subordination provisions and the New Intercreditor Agreement.
Section 2.07 — Treatment of Trade Creditors.
The Restructuring Transactions do not contemplate any impairment or modification of the claims of trade creditors of TSL or TAI. All trade payables (approximately $38,700,000 in the aggregate as of September 30, 2022) shall continue to be paid in full in the ordinary course of business, in accordance with their respective terms. For the avoidance of doubt, no consent, waiver, or other action by or on behalf of trade creditors is required to consummate the Restructuring Transactions, and trade creditors are not parties to this Agreement.
ARTICLE III
DEFINITIVE DOCUMENTS
Section 3.01 — List of Definitive Documents.
The Restructuring Transactions shall be implemented through the execution and delivery of the following documents and instruments (collectively, the "Definitive Documents"), each in form and substance reasonably acceptable to the Required Consenting Lenders, BMC, and the Company Parties (unless otherwise specified):
1.  Amendment No. 1 to the Senior Secured Credit Agreement;
2.  Amended and Restated Intercreditor Agreement (the New Intercreditor Agreement);
3.  New Second-Lien Note Purchase Agreement;
4.  New Second-Lien Notes Indenture;
5.  Equity Subscription Agreement (between KFO and TSL);
6.  Amended and Restated Intercompany Promissory Note (from TAI to TSL);
7.  Consent and Waiver Letter (to be delivered by Garrison Trust Company, as Indenture Trustee);
8.  Side Letter Agreement: Vessel Disposition Undertaking;
9.  Lock-Up Agreement (to be executed by BMC);
10.  Joinder Agreements (to be executed by each Consenting Senior Lender);
11.  Secretary's Certificate of TAI, attaching certified copies of TAI's certificate of incorporation, bylaws, and resolutions of the board of directors authorizing the Restructuring Transactions;
12.  Officer's Certificate of TAI, executed by Marcus Hale, President, certifying as to the satisfaction of certain conditions precedent;
13.  Solvency Certificate of TAI, executed by Diana Restrepo, VP Finance, certifying as to the solvency of TAI as of the Closing Date after giving effect to the Restructuring Transactions;
14.  Legal opinions of Calderwood & Harkness LLP, addressed to Nordbank (as Administrative Agent) and the Consenting Senior Lenders, opining as to (a) due authorization and enforceability of the Definitive Documents executed by the Company Parties and (b) no conflicts with, or violations of, the organizational documents of the Company Parties, applicable law, or material agreements;
15.  Funds Flow Memorandum; and
16.  Such other agreements, documents, certificates, or instruments as may be reasonably necessary or appropriate to implement and consummate the Restructuring Transactions.
Section 3.02 — Preparation and Negotiation.
The Company Parties, through their legal counsel Calderwood & Harkness LLP, shall be responsible for preparing the initial drafts of all Definitive Documents and shall distribute such drafts to the Consenting Lenders and their respective counsel in accordance with the Milestones set forth in Section 4.04. All Definitive Documents shall be subject to review and comment by Whitfield, Crane & Burgess LLP (as counsel to the Ad Hoc Group), Kellner & Foss LLP (as counsel to BMC), and, to the extent applicable to the treatment of the Unsecured Notes, Ashford, Brightmoor Group & McKay PC (as counsel to the informal group of unsecured noteholders). The Parties shall use commercially reasonable efforts to complete the negotiation and finalization of all Definitive Documents by no later than May 31, 2023, in advance of the Outside Date. During the negotiation period, the Parties shall make their respective counsel and advisors reasonably available for drafting sessions, comment calls, and in-person meetings as necessary to facilitate timely completion.
ARTICLE IV
COMMITMENTS OF THE PARTIES
Section 4.01 — Commitments of the Company Parties.
Subject to the terms and conditions of this Agreement, TSL, TAI, and KFO (collectively, the "Company Parties") hereby covenant and agree as follows:
TSL and TAI shall:
(a) Negotiate in good faith and use commercially reasonable efforts to prepare, finalize, execute, and deliver all Definitive Documents in accordance with the terms of this Agreement and by the Outside Date;
(b) Provide timely access to their books, records, financial systems, management personnel, and advisors as reasonably requested by the Consenting Lenders and their respective legal and financial advisors, including for the purpose of conducting such due diligence as the Consenting Lenders may reasonably require;
(c) Operate their respective businesses in the ordinary course of business consistent with past practice, and maintain their respective assets, properties, and insurance, subject to the limitations and restrictions set forth in the Forbearance Agreement during its pendency and the restrictions set forth in Section 6.02 of this Agreement;
(d) Not solicit, initiate, encourage, facilitate, or support any Alternative Transaction, and not participate in any discussions or negotiations regarding any Alternative Transaction, or provide any confidential information to any Person in connection with any Alternative Transaction;
(e) Promptly (and in any event within two (2) Business Days) notify the Administrative Agent, the Required Consenting Lenders, and BMC in writing of (i) any material event or development that could reasonably be expected to give rise to a Termination Event, (ii) any material breach or default under any material agreement to which TSL or TAI is a party, (iii) any material litigation or governmental investigation commenced against TSL, TAI, or any material subsidiary, and (iv) any Material Adverse Change;
(f) Pay, from Equity Contribution proceeds, operating cash flow, or other available funds, all reasonable and documented fees and expenses of the Consenting Lenders' advisors, including Whitfield, Crane & Burgess LLP, Draycott Advisory Group LLC, Kellner & Foss LLP, and Ashford, Brightmoor Group & McKay PC, in accordance with Section 6.03;
(g) Not take any action, or fail to take any action, that is materially inconsistent with, or would reasonably be expected to prevent, delay, impede, or interfere with, the consummation of the Restructuring Transactions on the terms and within the timeframes contemplated by this Agreement; and
(h) Not file, or cause to be filed, a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code"), under Chapter 15 of the Bankruptcy Code, under Greek Law 4738/2020, or under any other applicable insolvency, reorganization, or similar law of any jurisdiction, unless and until this Agreement has been terminated in accordance with Article VIII.
KFO shall:
(a) Fund the Equity Contribution of €35,000,000 on the Closing Date, in immediately available funds, by wire transfer to the account(s) designated in the Funds Flow Memorandum; and
(b) Execute and deliver the Equity Subscription Agreement and such other Definitive Documents to which KFO is a party.
Section 4.02 — Commitments of the Consenting Senior Lenders.
Subject to the terms and conditions of this Agreement, each Consenting Senior Lender hereby covenants and agrees as follows:
(a) Execute and deliver a Joinder Agreement substantially in the form attached hereto as Exhibit C, concurrently with or prior to the RSA Execution Date;
(b) Vote in favor of, consent to, and otherwise support the approval and implementation of Amendment No. 1 to the Credit Agreement and any related amendments, consents, or waivers necessary to effectuate the Senior Secured Facility Amendment;
(c) Not exercise, or direct or instruct the Administrative Agent or the Collateral Agent to exercise, any right or remedy under the Credit Agreement, the Forbearance Agreement, or any related loan document (including any right of acceleration, any right to enforce any lien, or any right to commence any enforcement action or proceeding) during the pendency of this Agreement, other than as expressly permitted upon the occurrence of a Termination Event and termination of this Agreement in accordance with Article VIII;
(d) Not sell, assign, transfer, pledge, hypothecate, or otherwise dispose of any Senior Secured Debt or any interest therein, except to a transferee that (i) is an Eligible Assignee (as defined in the Credit Agreement) and (ii) agrees to be bound by this Agreement by executing and delivering a Joinder Agreement substantially in the form attached hereto as Exhibit C, whereupon such transferee shall become a Consenting Senior Lender for all purposes of this Agreement; and
(e) Negotiate in good faith regarding the Definitive Documents and use commercially reasonable efforts to facilitate the timely consummation of the Restructuring Transactions.
Section 4.03 — Commitments of the Consenting Mezzanine Lender (BMC).
Subject to the terms and conditions of this Agreement, BMC hereby covenants and agrees as follows:
(a) Execute and deliver the Lock-Up Agreement substantially in the form attached hereto as Exhibit D, concurrently with or prior to the RSA Execution Date;
(b) Consent to and participate in the Mezzanine Exchange on the terms set forth in Section 2.02, including the exchange of all of its Existing Mezzanine Notes for the New Second-Lien Notes and the New Equity;
(c) Execute and deliver the New Second-Lien Note Purchase Agreement, the New Second-Lien Notes Indenture, the New Intercreditor Agreement, and such other Definitive Documents to which BMC is a party;
(d) Not sell, assign, transfer, pledge, hypothecate, or otherwise dispose of any Existing Mezzanine Notes, or (following issuance) any New Equity, during the pendency of this Agreement, in each case in accordance with and subject to the terms of the Lock-Up Agreement; and
(e) Negotiate in good faith regarding the Definitive Documents and use commercially reasonable efforts to facilitate the timely consummation of the Restructuring Transactions.
Section 4.04 — Milestones.
The following milestones shall apply to the implementation of the Restructuring Transactions (each, a "Milestone"):
Failure to satisfy any Milestone by the applicable date shall constitute a Termination Event under Section 8.01(c), subject to any extension of such date agreed upon in writing by the Required Consenting Lenders and the Company Parties. Any such extension shall be promptly communicated to all Parties and, to the extent it would extend the Outside Date, shall also require the written consent of BMC.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01 — Representations and Warranties of the Company Parties.
Each of TSL, TAI, and KFO (solely with respect to itself) hereby represents and warrants to each of the other Parties, as of the RSA Execution Date and as of the Closing Date (except where a representation speaks as of a specific date), as follows:
(a) Organization and Good Standing. TSL is a société anonyme duly organized, validly existing, and in good standing under the laws of the Hellenic Republic. TAI is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, and is duly qualified to do business and is in good standing in each other jurisdiction where the nature of its business or the ownership, leasing, or operation of its properties makes such qualification necessary, except where the failure to be so qualified would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change. KFO is a société anonyme duly organized, validly existing, and in good standing under the laws of the Hellenic Republic.
(b) Authority. Each Company Party has the requisite corporate power and authority to execute, deliver, and perform its obligations under this Agreement and each other Definitive Document to which it is or will be a party. The execution, delivery, and performance by each Company Party of this Agreement and the consummation of the Restructuring Transactions have been duly authorized by all necessary corporate action on the part of such Company Party, including approval by the board of directors (or equivalent governing body) of each such entity, and no further corporate proceedings on the part of any Company Party are necessary to authorize the execution, delivery, and performance of this Agreement.
(c) Enforceability. This Agreement has been duly executed and delivered by each Company Party and constitutes the legal, valid, and binding obligation of each Company Party, enforceable against each Company Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights generally and to general principles of equity.
(d) No Conflicts. The execution, delivery, and performance of this Agreement by each Company Party, and the consummation of the Restructuring Transactions, do not and will not (i) violate, conflict with, or result in a breach of any provision of the organizational documents (including the articles of association, certificate of incorporation, or bylaws, as applicable) of such Company Party, (ii) violate, conflict with, or result in a breach of, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give rise to a right of termination, amendment, cancellation, or acceleration under, any material agreement or instrument to which such Company Party is a party or by which its assets are bound (other than the Events of Default that are the subject of this Agreement and the Forbearance Agreement), or (iii) violate any applicable law, rule, regulation, order, judgment, or decree of any governmental authority having jurisdiction over such Company Party or its properties.
(e) Financial Statements. The audited consolidated financial statements of TSL and its subsidiaries (including TAI) for the fiscal years ended December 31, 2020 and December 31, 2021, audited by Grainger, Holt & Associates LLP (lead engagement partner: Malcolm Holt), and the unaudited management accounts for the nine-month period ended September 30, 2022, in each case as previously provided to the Consenting Lenders, have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union (in the case of TSL) and United States generally accepted accounting principles ("U.S. GAAP") (in the case of TAI) applied on a consistent basis throughout the periods presented, and fairly present in all material respects the consolidated financial condition, results of operations, and cash flows of TSL and its subsidiaries as of the dates and for the periods indicated.
(f) Litigation. Except as previously disclosed to the Consenting Lenders, there is no action, suit, proceeding, claim, arbitration, or investigation pending or, to the knowledge of the Company Parties, threatened against TSL, TAI, or any of their material subsidiaries that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Change.
(g) Taxes. TSL (Greek Tax Identification Number (AFM): 998214763) and TAI (Employer Identification Number (EIN): 84-3291057) are in material compliance with all applicable tax laws, rules, and regulations, have timely filed (or have been granted extensions for the filing of) all material tax returns required to be filed, and have timely paid all material taxes due and payable.
(h) Capitalization. As of the RSA Execution Date, the equity interests in TSL are held as follows: Dimitrios Kostandinos holds 62% of the outstanding equity, Elena Kostandinos-Pavlou holds 18% of the outstanding equity, and non-family holders hold 20% of the outstanding equity in the aggregate. All outstanding equity interests in TSL have been duly authorized and validly issued, are fully paid and non-assessable, and are held free and clear of all liens (other than liens arising under applicable securities laws or the organizational documents of TSL). TAI is a wholly-owned subsidiary of TSL.
(i) Material Adverse Change. Since September 30, 2022, there has been no event, development, circumstance, or condition that, individually or in the aggregate, has constituted or would reasonably be expected to constitute a Material Adverse Change, other than (i) the liquidity crisis, covenant breaches, and fleet value declines disclosed to the Consenting Lenders and reflected in the Recitals to this Agreement, and (ii) the continuation of the conditions giving rise thereto.
(j) Insurance. All material insurance policies of TSL and its subsidiaries (including TAI) are in full force and effect and all premiums due thereunder have been timely paid. Without limiting the generality of the foregoing, the Company maintains a directors' and officers' liability insurance policy with Promontory Indemnity Insurance Co. (Policy No. PII-DO-2022-08847) providing an aggregate coverage limit of $25,000,000.
(k) Fleet. TSL is the sole owner of the fleet of fifty (50) vessels (comprising thirty-eight (38) dry-bulk carriers and twelve (12) container vessels) described in the fleet schedule attached hereto as Exhibit B. All vessels are registered under applicable flag state registries and are in compliance in all material respects with all applicable maritime regulations, classification society requirements, and international conventions. Drakos Maritime Valuations Ltd. appraised the aggregate fleet at $623,000,000 as of November 1, 2022.
Section 5.02 — Representations and Warranties of Each Consenting Lender.
Each Consenting Senior Lender, severally and not jointly, hereby represents and warrants to each of the other Parties, as of the RSA Execution Date (or, in the case of a transferee that becomes a Consenting Senior Lender after the RSA Execution Date, as of the date of its execution of a Joinder Agreement), as follows:
(a) Organization and Authority. Such Consenting Senior Lender is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization, and has the requisite corporate, partnership, or limited liability company power and authority to execute, deliver, and perform its obligations under this Agreement and the Joinder Agreement to which it is a party.
(b) Enforceability. This Agreement (or the Joinder Agreement, as applicable) has been duly authorized, executed, and delivered by such Consenting Senior Lender and constitutes the legal, valid, and binding obligation of such Consenting Senior Lender, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights generally and to general principles of equity.
(c) Ownership of Claims. Each Consenting Senior Lender is the legal and beneficial owner of, or has the power and authority to bind the holder of, the commitment amounts set forth opposite its name on Schedule I hereto, free and clear of any lien, encumbrance, option, or restriction on transfer (other than restrictions imposed by the Credit Agreement or applicable securities laws). As of the RSA Execution Date, the Consenting Senior Lenders collectively hold the aggregate commitments set forth on Schedule I, as follows: 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), for an aggregate of $685,000,000.
BMC, solely with respect to itself, further represents and warrants that it is the legal and beneficial owner of the Exis