1044-00004 · Client 1044 · Correspondence

payoff-letter-request-clearwater.docx DOCUMENT Capital Markets

5 / 35 ← → ✕

Contract analysis Extract to table

Prepared by Brendan Walsh, Calderwood & Harkness LLP, 125 Broad Street, New York, NY 10004

THALASSA SHIPPING & LOGISTICS SA

42 Akti Miaouli Piraeus 185 35 Greece

Greek General Commercial Registry (GEMI) No.: 148276201000

[●] October 2022

Clearwater Shipping Finance Ltd. 1 Fleet Place London EC4M 7RA United Kingdom

Attention: Emma Blackwood, Director, Structured Ship Finance

Re: Request for Payoff Statement and Discharge Mechanics — Bilateral Secured Ship Finance Facility (the "Clearwater Facility") in the original/outstanding principal amount of $120,000,000, between Thalassa Shipping & Logistics SA (as Borrower) and Clearwater Shipping Finance Ltd. (as Lender)

Dear Ms. Blackwood:

1. Introduction and Background

Thalassa Shipping & Logistics SA ("TSL"), a Société Anonyme organized and existing under the laws of the Hellenic Republic with its registered offices at 42 Akti Miaouli, Piraeus 185 35, Greece, is writing to you in connection with the bilateral secured ship finance facility (the "Clearwater Facility") entered into between TSL, as Borrower, and Clearwater Shipping Finance Ltd. ("Clearwater"), as Lender, pursuant to which Clearwater extended to TSL a secured credit facility in the aggregate outstanding principal amount of One Hundred Twenty Million United States Dollars ($120,000,000).

TSL is proposing to refinance the Clearwater Facility in its entirety utilizing a portion of the net proceeds from a proposed offering of $400,000,000 aggregate principal amount of Senior Secured Notes due 2029 (the "Notes"). The Notes are to be co-issued by TSL and Thalassa Finance Pte. Ltd. (UEN 202209345K), a private company limited by shares incorporated under the laws of the Republic of Singapore and a wholly-owned subsidiary of TSL (the "Co-Issuer" or "TFPL," and together with TSL, the "Issuers"). The offering of the Notes is being arranged by Anchor Bay Securities LLC, acting as lead bookrunner and lead initial purchaser, and Halcyon Partners International Ltd., acting as co-manager and co-initial purchaser (collectively, the "Initial Purchasers"). TSL and TFPL are being represented in connection with the Notes offering by Calderwood & Harkness LLP, as issuer's counsel.

The purpose of this letter is to request that Clearwater prepare and deliver a payoff letter (the "Payoff Letter") in form and substance reasonably satisfactory to TSL, its counsel, and the Initial Purchasers, setting forth the information, confirmations, and undertakings described herein, so as to facilitate the full and final repayment and discharge of all amounts outstanding under the Clearwater Facility and the release and discharge of all security granted in connection therewith on the anticipated closing date of the Notes offering.

2. Anticipated Closing Date and Payoff Date

The anticipated closing and settlement date for the Notes offering is October 15, 2022 (the "Closing Date"), subject to prevailing market conditions and the satisfaction or waiver of customary conditions precedent set forth in the Purchase Agreement to be entered into among the Issuers, the Guarantors, and the Initial Purchasers. Accordingly, TSL respectfully requests that the Payoff Letter be prepared and delivered on the basis that the payoff date shall be October 15, 2022 (the "Payoff Date").

In recognition of the possibility that the actual date of closing and settlement may be adjusted from the currently anticipated Closing Date, TSL further requests that the Payoff Letter include per diem interest calculations sufficient to accommodate any adjustment to the Payoff Date within a reasonable window of plus or minus five (5) business days (i.e., covering the period from approximately October 7, 2022 through approximately October 22, 2022). Such per diem interest calculations will enable TSL to determine the adjusted Payoff Amount (as defined below) in the event of any such adjustment without the need for a revised or supplemental Payoff Letter.

TSL additionally requests that the Payoff Letter, once delivered, remain valid and effective for a period of not less than fifteen (15) business days from the date of its delivery to TSL and its counsel. If the Payoff Letter will expire or become ineffective after such period, TSL requests that Clearwater confirm its willingness to issue a replacement or updated Payoff Letter upon reasonable request.

3. Requested Payoff Information

TSL requests that the Payoff Letter set forth, in reasonable detail, each of the following categories of information:

3.1 Outstanding Principal Amount

Confirmation of the aggregate outstanding principal amount under the Clearwater Facility as of the Payoff Date, including the principal amount of each tranche or advance outstanding thereunder, if applicable. Based on TSL's records, the aggregate outstanding principal amount as of the date hereof is $120,000,000. TSL requests that Clearwater confirm this amount or, if the outstanding principal amount as of the Payoff Date differs from this figure (whether as a result of scheduled amortization payments, mandatory prepayments, or otherwise), provide the correct outstanding principal balance as of the Payoff Date.

3.2 Accrued and Unpaid Interest

A statement of all accrued and unpaid interest under the Clearwater Facility through and including the Payoff Date, broken down by tranche or sub-facility, if applicable. TSL requests that the Payoff Letter specify (a) the applicable interest rate or rates (including the reference rate component and the applicable margin), (b) the relevant interest period or periods, (c) the day-count convention used for the calculation of interest (e.g., actual/360, actual/365, or 30/360), and (d) the date through which interest has been calculated. To the extent that the Clearwater Facility provides for the payment of interest at different rates on different tranches or sub-facilities, or that interest has accrued at a default rate during any period, TSL requests that the Payoff Letter separately identify each such component.

3.3 Per Diem Interest

The per diem interest amount for each day following the Payoff Date, expressed in United States Dollars, to account for any delay in the actual date of payoff beyond October 15, 2022. If the Clearwater Facility comprises multiple tranches or sub-facilities bearing interest at different rates, TSL requests that the per diem interest amount be broken down by tranche or sub-facility, with an aggregate per diem figure also provided, so as to facilitate the computation of the adjusted Payoff Amount in the event that the actual date of payment occurs after the Payoff Date.

3.4 Prepayment Premium or Breakage Costs

A statement of any and all prepayment premium, make-whole amount, yield maintenance fee, early termination fee, or similar charge applicable to the full repayment and termination of the Clearwater Facility prior to its stated maturity date. TSL requests that Clearwater identify the contractual basis for any such premium or fee (including the specific provision of the Clearwater Facility documentation pursuant to which such amount is claimed to be payable) and set forth the methodology used for its calculation.

In addition, TSL requests a statement of any breakage costs, swap termination costs, hedging close-out amounts, or similar charges associated with any interest rate hedging arrangements, swap agreements, or derivative instruments entered into by Clearwater or by TSL at Clearwater's direction in connection with the Clearwater Facility. If any such hedging arrangements are in place, TSL requests that the Payoff Letter (a) identify each such arrangement (including the counterparty, notional amount, and maturity date), (b) set forth the estimated termination or close-out value as of the Payoff Date, and (c) confirm the mechanism by which such amounts will be settled upon the full repayment of the Clearwater Facility.

3.5 Fees, Costs, and Other Amounts

A statement of any and all other fees, costs, expenses, or other amounts owing by TSL to Clearwater under or in connection with the Clearwater Facility as of the Payoff Date, including but not limited to:

(a) any accrued and unpaid commitment fees, facility fees, utilization fees, or non-utilization fees;

(b) any outstanding reimbursement obligations, including any unreimbursed letter of credit drawings or other contingent obligations, if applicable;

(c) all reasonable and documented legal fees and expenses of Clearwater's external counsel incurred or expected to be incurred in connection with the preparation, negotiation, and delivery of the Payoff Letter and the preparation, execution, and delivery of all release and discharge documentation contemplated hereby;

(d) any administrative fees, agency fees, or similar charges payable to Clearwater in its capacity as Lender or in any other capacity under the Clearwater Facility documentation;

(e) any indemnification obligations of TSL that have been claimed or asserted by Clearwater as of the date of the Payoff Letter; and

(f) any other amounts of whatsoever nature that would become due and payable by TSL upon the full repayment, termination, and discharge of the Clearwater Facility and all related finance documents.

TSL requests that Clearwater itemize each such amount separately and identify the contractual basis for each.

3.6 Total Payoff Amount

The aggregate total payoff amount (the "Payoff Amount"), being the sum of all amounts described in Sections 3.1 through 3.5 above, stated as a single aggregate figure in United States Dollars, as of the Payoff Date. TSL requests that Clearwater provide an express confirmation in the Payoff Letter that payment of the Payoff Amount in full, in immediately available funds, on or before the expiry date of the Payoff Letter, shall constitute complete, irrevocable, and unconditional satisfaction and discharge of all obligations, liabilities, and indebtedness of TSL (and any guarantor or security provider) under the Clearwater Facility and all related finance documents, and that no further amounts shall be owing by TSL to Clearwater thereunder following receipt of the Payoff Amount.

4. Wire Transfer Instructions

TSL requests that the Payoff Letter include complete and accurate wire transfer instructions for the payment of the Payoff Amount, in sufficient detail to enable TSL and its paying agent to effect a single wire transfer in United States Dollars in immediately available funds. Such wire transfer instructions should include, at a minimum, the following information:

(a) the full legal name and address of the beneficiary bank;

(b) the beneficiary account name (expected to be Clearwater Shipping Finance Ltd.) and beneficiary account number;

(d) the sort code of the beneficiary bank, if applicable for the relevant United Kingdom banking institution;

(e) the reference or narrative to be included with the wire transfer (e.g., "Payoff — Clearwater Facility — Thalassa Shipping & Logistics SA");

(f) the name, address, and SWIFT/BIC code of any intermediary or correspondent bank, if applicable; and

(g) any other information or codes required to ensure that the wire transfer is properly credited to Clearwater's account without delay.

TSL further requests that the Payoff Letter contain a confirmation by Clearwater that payment of the Payoff Amount in United States Dollars by wire transfer in immediately available funds to the account specified in the wire transfer instructions shall constitute good and valid payment in satisfaction of all obligations under the Clearwater Facility.

5. Release and Discharge of Security

5.1 Identification of Existing Security

TSL requests that the Payoff Letter identify, in a schedule or annex thereto, all security interests, liens, mortgages, charges, assignments, pledges, hypothecations, and other encumbrances of any kind or nature whatsoever granted by TSL or any of its subsidiaries (including any fleet-owning special purpose vehicles) in favor of Clearwater in connection with the Clearwater Facility (collectively, the "Existing Clearwater Security"). Without limitation, the schedule or annex should identify the following categories of security, together with all relevant particulars:

(a) all ship mortgages (whether first preferred, first priority, or otherwise) granted over any vessels in the TSL fleet, including the vessel name, International Maritime Organization (IMO) number, official number, and flag-state registry for each mortgaged vessel, and the date and registration number of each such mortgage;

(b) all assignments of earnings (including assignments of charter hire, freight revenue, demurrage, and other sums receivable) for each mortgaged vessel, including the identity of the relevant charterer or counterparty and the date of each such assignment;

(c) all assignments of insurances (including assignments of hull and machinery insurance, protection and indemnity insurance, war risks insurance, and loss of hire insurance) for each mortgaged vessel, including the identity of the relevant insurance broker and P&I club and the date of each such assignment;

(d) all assignments of requisition compensation for each mortgaged vessel;

(e) all pledges, charges, or security assignments over the shares or equity interests of any fleet-owning or operating subsidiaries of TSL, including the name and jurisdiction of incorporation of each such subsidiary and a description of the pledged shares or interests;

(f) all assignments of intercompany receivables, including the identity of the debtor and creditor entities and the outstanding amount of each receivable;

(g) any floating charges, debentures, or general security agreements granted by TSL or any subsidiary in favor of Clearwater;

(h) any account pledges, cash collateral arrangements, or control agreements relating to any bank accounts of TSL or any subsidiary; and

(i) any other security documents, guarantees, comfort letters, or credit support instruments executed and delivered by TSL or any subsidiary in connection with the Clearwater Facility.

5.2 Confirmation of Full Release

TSL requests that Clearwater confirm in the Payoff Letter that, upon receipt by Clearwater of the Payoff Amount in full in immediately available funds on the Payoff Date (or such later date as may be agreed):

(a) all obligations, liabilities, and indebtedness of TSL and each of its subsidiaries under the Clearwater Facility and all related finance documents (including any guarantee, security document, or ancillary document) shall be deemed irrevocably and unconditionally satisfied, paid, and discharged in full;

(b) all Existing Clearwater Security shall be automatically and irrevocably released and discharged, and Clearwater shall have no continuing interest in any of the assets, property, or undertakings of TSL or any of its subsidiaries previously subject to the Existing Clearwater Security; and

(c) Clearwater shall have no further claims, rights, or remedies against TSL or any of its subsidiaries under or in connection with the Clearwater Facility or any related finance document, and Clearwater hereby irrevocably and unconditionally releases TSL and each of its subsidiaries from all such claims, rights, and remedies.

5.3 Release Documentation

TSL further requests that Clearwater, promptly following receipt of the Payoff Amount in full (and in any event within five (5) business days of the Payoff Date), execute and deliver to TSL (or to such other person or entity as TSL may designate in writing) each of the following items of release and discharge documentation:

(a) deeds of release, satisfaction, or discharge of each ship mortgage constituting part of the Existing Clearwater Security, in a form suitable for registration and filing with the relevant flag-state maritime registry, duly executed, notarized, apostilled, and legalized as required by the laws and regulations of the relevant flag state;

(b) notices of release and discharge of each assignment of earnings, addressed to the relevant charterer, time charter counterparty, or other obligor, and in form and substance reasonably satisfactory to TSL and its counsel;

(c) notices of release and discharge of each assignment of insurances, addressed to the relevant insurance broker, underwriter, and/or P&I club, and in form and substance reasonably satisfactory to TSL and its counsel;

(d) notices of release and discharge of each assignment of requisition compensation, addressed to the relevant governmental authority or compensation body;

(e) releases and discharges of each share pledge or equity interest pledge, in registrable form for filing with the relevant corporate registry or companies' house, as applicable;

(f) releases and discharges of each assignment of intercompany receivables;

(g) UCC-3 termination statements (or equivalent instruments or filings under the laws of any applicable jurisdiction, including without limitation England and Wales, Greece, Singapore, the Republic of the marshall Islands, the Republic of Liberia, the Republic of Panama, and any other relevant flag state or jurisdiction) terminating any financing statement or equivalent registration filed in connection with the Existing Clearwater Security; and

(h) any and all other documents, instruments, certificates, or filings as may be reasonably necessary or desirable to evidence and effect the full, complete, and irrevocable release and discharge of the Existing Clearwater Security in all relevant jurisdictions.

TSL requests that Clearwater cooperate fully and in good faith with TSL and its counsel — namely, Calderwood & Harkness LLP (as issuer's counsel, New York), Delphi & Karidis LLP (as Greek counsel to TSL), and Rajendra & Osman LLP (as Singapore counsel to TSL) — in effecting all necessary de-registration filings, deletions, and discharges with the relevant flag-state maritime registries, corporate registries, and other governmental or regulatory authorities in all applicable jurisdictions. TSL will bear all reasonable and documented out-of-pocket costs and expenses incurred by Clearwater in connection with the preparation, execution, and delivery of such release documentation, as set forth in Section 3.5 above.

TSL wishes to draw Clearwater's attention to the fact that the full release and discharge of all Existing Clearwater Security is a condition precedent to the closing of the Notes offering under the Indenture to be entered into among the Issuers, the Guarantors, the Security Agent, and the Indenture Trustee, and under the Purchase Agreement to be entered into among the Issuers, the Guarantors, and the Initial Purchasers. In connection with the closing of the Notes offering, TSL and its subsidiaries will be granting a new, first-priority security package over the relevant Collateral Vessels and related assets in favor of Atlas Collateral Agency Pte. Ltd., as Security Agent for the benefit of the Noteholders. It is essential that all Existing Clearwater Security be fully and validly released and discharged prior to or simultaneously with the closing of the Notes offering, so that the new first-priority security interests may be granted on a first-priority, unencumbered basis over the relevant Collateral Vessels and other Collateral.

5.4 Undertaking Not to Register New Security

TSL requests that Clearwater confirm and undertake in the Payoff Letter that, following receipt of the Payoff Amount in full, Clearwater will not register, file, assert, or claim any new lien, charge, mortgage, pledge, assignment, or other encumbrance or security interest over any assets, property, or undertaking of TSL or any of its subsidiaries in connection with, arising out of, or related to the Clearwater Facility or any related finance document. This undertaking is requested in order to ensure that the Collateral Vessels and other assets of TSL and its subsidiaries are free and clear of any claims by Clearwater at the time that the new security package in favor of the Noteholders is perfected and registered.

6. Representations and Confirmations Requested

TSL requests that the Payoff Letter contain the following representations and confirmations from Clearwater:

(a) Sufficiency of Payoff Amount. That the Payoff Amount set forth in the Payoff Letter constitutes the full, complete, and definitive amount necessary to satisfy, discharge, and extinguish all obligations, liabilities, and indebtedness of TSL and each of its subsidiaries under the Clearwater Facility and all related finance documents, and that no additional amounts will be owing by TSL following Clearwater's receipt of the Payoff Amount in full.

(b) No Existing Default. That, as of the date of the Payoff Letter, no default or event of default exists under the Clearwater Facility or any related finance document that would prevent, impair, or otherwise adversely affect the full repayment and discharge of the Clearwater Facility and the release of the Existing Clearwater Security as contemplated hereby, other than any default or event of default that may arise solely and directly from the prepayment of the Clearwater Facility itself (if applicable under the terms of the Clearwater Facility documentation) and that will be cured and rendered moot upon receipt of the Payoff Amount in full.

(c) No Third-Party Consent Required. That no consent, approval, authorization, or waiver of any third party (including, without limitation, any participant, assignee, sub-participant, governmental authority, or other person) is required for the full repayment and termination of the Clearwater Facility and the release and discharge of the Existing Clearwater Security, other than any consents that have been obtained or will be obtained by Clearwater prior to the Payoff Date, and that Clearwater shall be responsible for obtaining any such consents at its own cost and expense.

(d) No Assignments or Participations. That Clearwater has not assigned, transferred, novated, participated, or otherwise disposed of any of its rights, interests, or obligations under the Clearwater Facility to or in favor of any third party, and that Clearwater remains the sole and beneficial owner of all rights and interests thereunder. In the event that Clearwater has assigned, transferred, novated, or participated any of its rights or interests to a third party, TSL requests that Clearwater identify each such assignee, transferee, or participant, specify the nature and extent of such assignment, transfer, novation, or participation, and confirm that any required consent of such party to the full repayment and discharge of the Clearwater Facility has been or will be obtained prior to the Payoff Date.

7. Context — Use of Proceeds and New Financing

For Clearwater's information and reference, TSL provides the following summary of the proposed transaction giving rise to this request:

The Issuers are proposing to offer, on a private placement basis pursuant to Rule 144A and Regulation S under the United States Securities Act of 1933, as amended, $400,000,000 aggregate principal amount of Senior Secured Notes due 2029. The Notes will be co-issued by TSL and TFPL, guaranteed on a senior secured basis by certain subsidiaries of TSL, and secured by a comprehensive first-priority security package. The anticipated use of proceeds from the Notes offering is as follows:

(a) approximately $120,000,000 to repay in full all amounts outstanding under the Clearwater Facility;

(b) approximately $190,000,000 to repay in full all amounts outstanding under the bilateral secured ship finance facility with Meridian Maritime Bank AG (the "Meridian Facility");

(c) approximately $72,000,000 to fund general corporate purposes and fleet capital expenditures, including dry-docking and scrubber retrofitting costs; and

(d) approximately $18,000,000 to pay estimated transaction fees and expenses, including underwriting discounts and commissions, legal fees, and other issuance costs.

The Notes will be secured by, among other things, first-priority ship mortgages over twenty-eight (28) Collateral Vessels (with an aggregate appraised value of approximately $1,175,000,000 as of the most recent valuation date), assignments of earnings and insurances for each such Collateral Vessel, pledges over the shares or equity interests of the fleet-owning subsidiaries, and an assignment of intercompany loan receivables in the aggregate amount of approximately $365,000,000, all in favor of Atlas Collateral Agency Pte. Ltd., as Security Agent for the benefit of the Noteholders (the "Security Agent"). Marlowe Asset Management Trust Company of Singapore Pte. Ltd. will serve as Indenture Trustee. The Indenture and related security documents will be governed by the laws of the Republic of Singapore.

The full and unconditional discharge of the Clearwater Facility and the release and discharge of all Existing Clearwater Security is a condition precedent to the closing of the Notes offering, as more fully described in the Indenture and the Purchase Agreement. TSL therefore requests Clearwater's full cooperation in facilitating the timely delivery of the Payoff Letter and the prompt execution and delivery of all necessary release documentation.

8. Timing and Delivery

TSL requests that the Payoff Letter be prepared, executed, and delivered to TSL and its counsel no later than five (5) business days prior to the anticipated Closing Date, i.e., by approximately October 7, 2022. TSL recognizes that this timeline is ambitious and is prepared to work cooperatively with Clearwater and its counsel to ensure that the Payoff Letter can be finalized within this timeframe.

Delivery of the Payoff Letter should be made by email (with PDF attachment) and by international courier (with original ink-signed counterpart) to each of the following:

(a) Thalassa Shipping & Logistics SA 42 Akti Miaouli Piraeus 185 35, Greece

Attention: Marina Demetriou, Chief Financial Officer

and: Alexandros Theodorakis, General Counsel

(b) With a copy to: Calderwood & Harkness LLP 125 Broad Street New York, NY 10004 United States of America

Attention: Robert Adeyemi, Partner

and: Brendan Walsh, Associate

(c) And a copy to: Anchor Bay Securities LLC 599 Lexington Avenue, 28th Floor New York, NY 10022 United States of America

Attention: Marcus Reinhardt, Managing Director

9. Contact Information for Questions

Should Clearwater or its counsel have any questions, require any additional information, or wish to discuss any aspect of this request, please do not hesitate to contact any of the following persons:

(a) Marina Demetriou, Chief Financial Officer, Thalassa Shipping & Logistics SA Tel: [●]

Email: [●]

(b) Alexandros Theodorakis, General Counsel, Thalassa Shipping & Logistics SA Tel: [●]

Email: [●]

10. Reservation of Rights

TSL wishes to make clear that this letter constitutes a request for the preparation and delivery of a Payoff Letter only, and does not constitute a notice of prepayment, a notice of termination, or any other formal notice under the Clearwater Facility or any related finance document. A formal notice of prepayment will be delivered by TSL to Clearwater separately and in accordance with the terms, conditions, and notice requirements set forth in the Clearwater Facility documentation, at such time and in such form as the Clearwater Facility documentation may require.

TSL reserves all of its rights, remedies, claims, and defenses under the Clearwater Facility, all related finance documents, and applicable law, and nothing in this letter shall be construed as a waiver, release, or modification of any such right, remedy, claim, or defense.

This request is made without prejudice to TSL's right to modify, postpone, or adjust the anticipated Closing Date, or to withdraw this request in its entirety, in the event that the Notes offering does not proceed for any reason, including without limitation a failure of market conditions, a failure to satisfy conditions precedent, or a decision by TSL or the Initial Purchasers not to proceed with the offering. In the event that this request is withdrawn, TSL shall promptly notify Clearwater in writing.

We look forward to receiving the Payoff Letter at your earliest convenience and appreciate Clearwater's cooperation in facilitating the orderly refinancing of the Clearwater Facility in connection with the Notes offering. Should Clearwater wish to discuss any aspect of this request or require any further information, TSL and its counsel remain at your disposal. Thank you for your cooperation in this matter.

Very truly yours,

THALASSA SHIPPING & LOGISTICS SA

By: ________

Name: Spyros Andreou

Title: Chief Executive Officer

[Unsigned — Draft Only]

cc:

Dimitrios Kallistratos, Chairman, Thalassa Shipping & Logistics SA Marina Demetriou, Chief Financial Officer, Thalassa Shipping & Logistics SA Alexandros Theodorakis, General Counsel, Thalassa Shipping & Logistics SA Robert Adeyemi, Partner, Calderwood & Harkness LLP Brendan Walsh, Associate, Calderwood & Harkness LLP Marcus Reinhardt, Managing Director, Anchor Bay Securities LLC David Loh, Anchor Bay Securities LLC (Singapore office)

DRAFT — Prepared by Calderwood & Harkness LLP Matter No. 1044-00004 / Client No. 80214-TSL This letter was never finalized or sent due to the suspension of the Notes offering on November 14, 2022.

Prepared by Brendan Walsh, Calderwood & Harkness LLP, 125 Broad Street, New York, NY 10004 | Reviewed by Robert Adeyemi
THALASSA SHIPPING & LOGISTICS SA
42 Akti Miaouli Piraeus 185 35 Greece
Greek General Commercial Registry (GEMI) No.: 148276201000
[●] October 2022
Clearwater Shipping Finance Ltd. 1 Fleet Place London EC4M 7RA United Kingdom
Attention: Emma Blackwood, Director, Structured Ship Finance
Re: Request for Payoff Statement and Discharge Mechanics — Bilateral Secured Ship Finance Facility (the "Clearwater Facility") in the original/outstanding principal amount of $120,000,000, between Thalassa Shipping & Logistics SA (as Borrower) and Clearwater Shipping Finance Ltd. (as Lender)
Dear Ms. Blackwood:
1. Introduction and Background
Thalassa Shipping & Logistics SA ("TSL"), a Société Anonyme organized and existing under the laws of the Hellenic Republic with its registered offices at 42 Akti Miaouli, Piraeus 185 35, Greece, is writing to you in connection with the bilateral secured ship finance facility (the "Clearwater Facility") entered into between TSL, as Borrower, and Clearwater Shipping Finance Ltd. ("Clearwater"), as Lender, pursuant to which Clearwater extended to TSL a secured credit facility in the aggregate outstanding principal amount of One Hundred Twenty Million United States Dollars ($120,000,000).
TSL is proposing to refinance the Clearwater Facility in its entirety utilizing a portion of the net proceeds from a proposed offering of $400,000,000 aggregate principal amount of Senior Secured Notes due 2029 (the "Notes"). The Notes are to be co-issued by TSL and Thalassa Finance Pte. Ltd. (UEN 202209345K), a private company limited by shares incorporated under the laws of the Republic of Singapore and a wholly-owned subsidiary of TSL (the "Co-Issuer" or "TFPL," and together with TSL, the "Issuers"). The offering of the Notes is being arranged by Anchor Bay Securities LLC, acting as lead bookrunner and lead initial purchaser, and Halcyon Partners International Ltd., acting as co-manager and co-initial purchaser (collectively, the "Initial Purchasers"). TSL and TFPL are being represented in connection with the Notes offering by Calderwood & Harkness LLP, as issuer's counsel.
The purpose of this letter is to request that Clearwater prepare and deliver a payoff letter (the "Payoff Letter") in form and substance reasonably satisfactory to TSL, its counsel, and the Initial Purchasers, setting forth the information, confirmations, and undertakings described herein, so as to facilitate the full and final repayment and discharge of all amounts outstanding under the Clearwater Facility and the release and discharge of all security granted in connection therewith on the anticipated closing date of the Notes offering.
2. Anticipated Closing Date and Payoff Date
The anticipated closing and settlement date for the Notes offering is October 15, 2022 (the "Closing Date"), subject to prevailing market conditions and the satisfaction or waiver of customary conditions precedent set forth in the Purchase Agreement to be entered into among the Issuers, the Guarantors, and the Initial Purchasers. Accordingly, TSL respectfully requests that the Payoff Letter be prepared and delivered on the basis that the payoff date shall be October 15, 2022 (the "Payoff Date").
In recognition of the possibility that the actual date of closing and settlement may be adjusted from the currently anticipated Closing Date, TSL further requests that the Payoff Letter include per diem interest calculations sufficient to accommodate any adjustment to the Payoff Date within a reasonable window of plus or minus five (5) business days (i.e., covering the period from approximately October 7, 2022 through approximately October 22, 2022). Such per diem interest calculations will enable TSL to determine the adjusted Payoff Amount (as defined below) in the event of any such adjustment without the need for a revised or supplemental Payoff Letter.
TSL additionally requests that the Payoff Letter, once delivered, remain valid and effective for a period of not less than fifteen (15) business days from the date of its delivery to TSL and its counsel. If the Payoff Letter will expire or become ineffective after such period, TSL requests that Clearwater confirm its willingness to issue a replacement or updated Payoff Letter upon reasonable request.
3. Requested Payoff Information
TSL requests that the Payoff Letter set forth, in reasonable detail, each of the following categories of information:
3.1 Outstanding Principal Amount
Confirmation of the aggregate outstanding principal amount under the Clearwater Facility as of the Payoff Date, including the principal amount of each tranche or advance outstanding thereunder, if applicable. Based on TSL's records, the aggregate outstanding principal amount as of the date hereof is $120,000,000. TSL requests that Clearwater confirm this amount or, if the outstanding principal amount as of the Payoff Date differs from this figure (whether as a result of scheduled amortization payments, mandatory prepayments, or otherwise), provide the correct outstanding principal balance as of the Payoff Date.
3.2 Accrued and Unpaid Interest
A statement of all accrued and unpaid interest under the Clearwater Facility through and including the Payoff Date, broken down by tranche or sub-facility, if applicable. TSL requests that the Payoff Letter specify (a) the applicable interest rate or rates (including the reference rate component and the applicable margin), (b) the relevant interest period or periods, (c) the day-count convention used for the calculation of interest (e.g., actual/360, actual/365, or 30/360), and (d) the date through which interest has been calculated. To the extent that the Clearwater Facility provides for the payment of interest at different rates on different tranches or sub-facilities, or that interest has accrued at a default rate during any period, TSL requests that the Payoff Letter separately identify each such component.
3.3 Per Diem Interest
The per diem interest amount for each day following the Payoff Date, expressed in United States Dollars, to account for any delay in the actual date of payoff beyond October 15, 2022. If the Clearwater Facility comprises multiple tranches or sub-facilities bearing interest at different rates, TSL requests that the per diem interest amount be broken down by tranche or sub-facility, with an aggregate per diem figure also provided, so as to facilitate the computation of the adjusted Payoff Amount in the event that the actual date of payment occurs after the Payoff Date.
3.4 Prepayment Premium or Breakage Costs
A statement of any and all prepayment premium, make-whole amount, yield maintenance fee, early termination fee, or similar charge applicable to the full repayment and termination of the Clearwater Facility prior to its stated maturity date. TSL requests that Clearwater identify the contractual basis for any such premium or fee (including the specific provision of the Clearwater Facility documentation pursuant to which such amount is claimed to be payable) and set forth the methodology used for its calculation.
In addition, TSL requests a statement of any breakage costs, swap termination costs, hedging close-out amounts, or similar charges associated with any interest rate hedging arrangements, swap agreements, or derivative instruments entered into by Clearwater or by TSL at Clearwater's direction in connection with the Clearwater Facility. If any such hedging arrangements are in place, TSL requests that the Payoff Letter (a) identify each such arrangement (including the counterparty, notional amount, and maturity date), (b) set forth the estimated termination or close-out value as of the Payoff Date, and (c) confirm the mechanism by which such amounts will be settled upon the full repayment of the Clearwater Facility.
3.5 Fees, Costs, and Other Amounts
A statement of any and all other fees, costs, expenses, or other amounts owing by TSL to Clearwater under or in connection with the Clearwater Facility as of the Payoff Date, including but not limited to:
(a) any accrued and unpaid commitment fees, facility fees, utilization fees, or non-utilization fees;
(b) any outstanding reimbursement obligations, including any unreimbursed letter of credit drawings or other contingent obligations, if applicable;
(c) all reasonable and documented legal fees and expenses of Clearwater's external counsel incurred or expected to be incurred in connection with the preparation, negotiation, and delivery of the Payoff Letter and the preparation, execution, and delivery of all release and discharge documentation contemplated hereby;
(d) any administrative fees, agency fees, or similar charges payable to Clearwater in its capacity as Lender or in any other capacity under the Clearwater Facility documentation;
(e) any indemnification obligations of TSL that have been claimed or asserted by Clearwater as of the date of the Payoff Letter; and
(f) any other amounts of whatsoever nature that would become due and payable by TSL upon the full repayment, termination, and discharge of the Clearwater Facility and all related finance documents.
TSL requests that Clearwater itemize each such amount separately and identify the contractual basis for each.
3.6 Total Payoff Amount
The aggregate total payoff amount (the "Payoff Amount"), being the sum of all amounts described in Sections 3.1 through 3.5 above, stated as a single aggregate figure in United States Dollars, as of the Payoff Date. TSL requests that Clearwater provide an express confirmation in the Payoff Letter that payment of the Payoff Amount in full, in immediately available funds, on or before the expiry date of the Payoff Letter, shall constitute complete, irrevocable, and unconditional satisfaction and discharge of all obligations, liabilities, and indebtedness of TSL (and any guarantor or security provider) under the Clearwater Facility and all related finance documents, and that no further amounts shall be owing by TSL to Clearwater thereunder following receipt of the Payoff Amount.
4. Wire Transfer Instructions
TSL requests that the Payoff Letter include complete and accurate wire transfer instructions for the payment of the Payoff Amount, in sufficient detail to enable TSL and its paying agent to effect a single wire transfer in United States Dollars in immediately available funds. Such wire transfer instructions should include, at a minimum, the following information:
(a) the full legal name and address of the beneficiary bank;
(b) the beneficiary account name (expected to be Clearwater Shipping Finance Ltd.) and beneficiary account number;
(c) the SWIFT/BIC code of the beneficiary bank;
(d) the sort code of the beneficiary bank, if applicable for the relevant United Kingdom banking institution;
(e) the reference or narrative to be included with the wire transfer (e.g., "Payoff — Clearwater Facility — Thalassa Shipping & Logistics SA");
(f) the name, address, and SWIFT/BIC code of any intermediary or correspondent bank, if applicable; and
(g) any other information or codes required to ensure that the wire transfer is properly credited to Clearwater's account without delay.
TSL further requests that the Payoff Letter contain a confirmation by Clearwater that payment of the Payoff Amount in United States Dollars by wire transfer in immediately available funds to the account specified in the wire transfer instructions shall constitute good and valid payment in satisfaction of all obligations under the Clearwater Facility.
5. Release and Discharge of Security
5.1 Identification of Existing Security
TSL requests that the Payoff Letter identify, in a schedule or annex thereto, all security interests, liens, mortgages, charges, assignments, pledges, hypothecations, and other encumbrances of any kind or nature whatsoever granted by TSL or any of its subsidiaries (including any fleet-owning special purpose vehicles) in favor of Clearwater in connection with the Clearwater Facility (collectively, the "Existing Clearwater Security"). Without limitation, the schedule or annex should identify the following categories of security, together with all relevant particulars:
(a) all ship mortgages (whether first preferred, first priority, or otherwise) granted over any vessels in the TSL fleet, including the vessel name, International Maritime Organization (IMO) number, official number, and flag-state registry for each mortgaged vessel, and the date and registration number of each such mortgage;
(b) all assignments of earnings (including assignments of charter hire, freight revenue, demurrage, and other sums receivable) for each mortgaged vessel, including the identity of the relevant charterer or counterparty and the date of each such assignment;
(c) all assignments of insurances (including assignments of hull and machinery insurance, protection and indemnity insurance, war risks insurance, and loss of hire insurance) for each mortgaged vessel, including the identity of the relevant insurance broker and P&I club and the date of each such assignment;
(d) all assignments of requisition compensation for each mortgaged vessel;
(e) all pledges, charges, or security assignments over the shares or equity interests of any fleet-owning or operating subsidiaries of TSL, including the name and jurisdiction of incorporation of each such subsidiary and a description of the pledged shares or interests;
(f) all assignments of intercompany receivables, including the identity of the debtor and creditor entities and the outstanding amount of each receivable;
(g) any floating charges, debentures, or general security agreements granted by TSL or any subsidiary in favor of Clearwater;
(h) any account pledges, cash collateral arrangements, or control agreements relating to any bank accounts of TSL or any subsidiary; and
(i) any other security documents, guarantees, comfort letters, or credit support instruments executed and delivered by TSL or any subsidiary in connection with the Clearwater Facility.
5.2 Confirmation of Full Release
TSL requests that Clearwater confirm in the Payoff Letter that, upon receipt by Clearwater of the Payoff Amount in full in immediately available funds on the Payoff Date (or such later date as may be agreed):
(a) all obligations, liabilities, and indebtedness of TSL and each of its subsidiaries under the Clearwater Facility and all related finance documents (including any guarantee, security document, or ancillary document) shall be deemed irrevocably and unconditionally satisfied, paid, and discharged in full;
(b) all Existing Clearwater Security shall be automatically and irrevocably released and discharged, and Clearwater shall have no continuing interest in any of the assets, property, or undertakings of TSL or any of its subsidiaries previously subject to the Existing Clearwater Security; and
(c) Clearwater shall have no further claims, rights, or remedies against TSL or any of its subsidiaries under or in connection with the Clearwater Facility or any related finance document, and Clearwater hereby irrevocably and unconditionally releases TSL and each of its subsidiaries from all such claims, rights, and remedies.
5.3 Release Documentation
TSL further requests that Clearwater, promptly following receipt of the Payoff Amount in full (and in any event within five (5) business days of the Payoff Date), execute and deliver to TSL (or to such other person or entity as TSL may designate in writing) each of the following items of release and discharge documentation:
(a) deeds of release, satisfaction, or discharge of each ship mortgage constituting part of the Existing Clearwater Security, in a form suitable for registration and filing with the relevant flag-state maritime registry, duly executed, notarized, apostilled, and legalized as required by the laws and regulations of the relevant flag state;
(b) notices of release and discharge of each assignment of earnings, addressed to the relevant charterer, time charter counterparty, or other obligor, and in form and substance reasonably satisfactory to TSL and its counsel;
(c) notices of release and discharge of each assignment of insurances, addressed to the relevant insurance broker, underwriter, and/or P&I club, and in form and substance reasonably satisfactory to TSL and its counsel;
(d) notices of release and discharge of each assignment of requisition compensation, addressed to the relevant governmental authority or compensation body;
(e) releases and discharges of each share pledge or equity interest pledge, in registrable form for filing with the relevant corporate registry or companies' house, as applicable;
(f) releases and discharges of each assignment of intercompany receivables;
(g) UCC-3 termination statements (or equivalent instruments or filings under the laws of any applicable jurisdiction, including without limitation England and Wales, Greece, Singapore, the Republic of the marshall Islands, the Republic of Liberia, the Republic of Panama, and any other relevant flag state or jurisdiction) terminating any financing statement or equivalent registration filed in connection with the Existing Clearwater Security; and
(h) any and all other documents, instruments, certificates, or filings as may be reasonably necessary or desirable to evidence and effect the full, complete, and irrevocable release and discharge of the Existing Clearwater Security in all relevant jurisdictions.
TSL requests that Clearwater cooperate fully and in good faith with TSL and its counsel — namely, Calderwood & Harkness LLP (as issuer's counsel, New York), Delphi & Karidis LLP (as Greek counsel to TSL), and Rajendra & Osman LLP (as Singapore counsel to TSL) — in effecting all necessary de-registration filings, deletions, and discharges with the relevant flag-state maritime registries, corporate registries, and other governmental or regulatory authorities in all applicable jurisdictions. TSL will bear all reasonable and documented out-of-pocket costs and expenses incurred by Clearwater in connection with the preparation, execution, and delivery of such release documentation, as set forth in Section 3.5 above.
TSL wishes to draw Clearwater's attention to the fact that the full release and discharge of all Existing Clearwater Security is a condition precedent to the closing of the Notes offering under the Indenture to be entered into among the Issuers, the Guarantors, the Security Agent, and the Indenture Trustee, and under the Purchase Agreement to be entered into among the Issuers, the Guarantors, and the Initial Purchasers. In connection with the closing of the Notes offering, TSL and its subsidiaries will be granting a new, first-priority security package over the relevant Collateral Vessels and related assets in favor of Atlas Collateral Agency Pte. Ltd., as Security Agent for the benefit of the Noteholders. It is essential that all Existing Clearwater Security be fully and validly released and discharged prior to or simultaneously with the closing of the Notes offering, so that the new first-priority security interests may be granted on a first-priority, unencumbered basis over the relevant Collateral Vessels and other Collateral.
5.4 Undertaking Not to Register New Security
TSL requests that Clearwater confirm and undertake in the Payoff Letter that, following receipt of the Payoff Amount in full, Clearwater will not register, file, assert, or claim any new lien, charge, mortgage, pledge, assignment, or other encumbrance or security interest over any assets, property, or undertaking of TSL or any of its subsidiaries in connection with, arising out of, or related to the Clearwater Facility or any related finance document. This undertaking is requested in order to ensure that the Collateral Vessels and other assets of TSL and its subsidiaries are free and clear of any claims by Clearwater at the time that the new security package in favor of the Noteholders is perfected and registered.
6. Representations and Confirmations Requested
TSL requests that the Payoff Letter contain the following representations and confirmations from Clearwater:
(a) Sufficiency of Payoff Amount. That the Payoff Amount set forth in the Payoff Letter constitutes the full, complete, and definitive amount necessary to satisfy, discharge, and extinguish all obligations, liabilities, and indebtedness of TSL and each of its subsidiaries under the Clearwater Facility and all related finance documents, and that no additional amounts will be owing by TSL following Clearwater's receipt of the Payoff Amount in full.
(b) No Existing Default. That, as of the date of the Payoff Letter, no default or event of default exists under the Clearwater Facility or any related finance document that would prevent, impair, or otherwise adversely affect the full repayment and discharge of the Clearwater Facility and the release of the Existing Clearwater Security as contemplated hereby, other than any default or event of default that may arise solely and directly from the prepayment of the Clearwater Facility itself (if applicable under the terms of the Clearwater Facility documentation) and that will be cured and rendered moot upon receipt of the Payoff Amount in full.
(c) No Third-Party Consent Required. That no consent, approval, authorization, or waiver of any third party (including, without limitation, any participant, assignee, sub-participant, governmental authority, or other person) is required for the full repayment and termination of the Clearwater Facility and the release and discharge of the Existing Clearwater Security, other than any consents that have been obtained or will be obtained by Clearwater prior to the Payoff Date, and that Clearwater shall be responsible for obtaining any such consents at its own cost and expense.
(d) No Assignments or Participations. That Clearwater has not assigned, transferred, novated, participated, or otherwise disposed of any of its rights, interests, or obligations under the Clearwater Facility to or in favor of any third party, and that Clearwater remains the sole and beneficial owner of all rights and interests thereunder. In the event that Clearwater has assigned, transferred, novated, or participated any of its rights or interests to a third party, TSL requests that Clearwater identify each such assignee, transferee, or participant, specify the nature and extent of such assignment, transfer, novation, or participation, and confirm that any required consent of such party to the full repayment and discharge of the Clearwater Facility has been or will be obtained prior to the Payoff Date.
7. Context — Use of Proceeds and New Financing
For Clearwater's information and reference, TSL provides the following summary of the proposed transaction giving rise to this request:
The Issuers are proposing to offer, on a private placement basis pursuant to Rule 144A and Regulation S under the United States Securities Act of 1933, as amended, $400,000,000 aggregate principal amount of Senior Secured Notes due 2029. The Notes will be co-issued by TSL and TFPL, guaranteed on a senior secured basis by certain subsidiaries of TSL, and secured by a comprehensive first-priority security package. The anticipated use of proceeds from the Notes offering is as follows:
(a) approximately $120,000,000 to repay in full all amounts outstanding under the Clearwater Facility;
(b) approximately $190,000,000 to repay in full all amounts outstanding under the bilateral secured ship finance facility with Meridian Maritime Bank AG (the "Meridian Facility");
(c) approximately $72,000,000 to fund general corporate purposes and fleet capital expenditures, including dry-docking and scrubber retrofitting costs; and
(d) approximately $18,000,000 to pay estimated transaction fees and expenses, including underwriting discounts and commissions, legal fees, and other issuance costs.
The Notes will be secured by, among other things, first-priority ship mortgages over twenty-eight (28) Collateral Vessels (with an aggregate appraised value of approximately $1,175,000,000 as of the most recent valuation date), assignments of earnings and insurances for each such Collateral Vessel, pledges over the shares or equity interests of the fleet-owning subsidiaries, and an assignment of intercompany loan receivables in the aggregate amount of approximately $365,000,000, all in favor of Atlas Collateral Agency Pte. Ltd., as Security Agent for the benefit of the Noteholders (the "Security Agent"). Marlowe Asset Management Trust Company of Singapore Pte. Ltd. will serve as Indenture Trustee. The Indenture and related security documents will be governed by the laws of the Republic of Singapore.
The full and unconditional discharge of the Clearwater Facility and the release and discharge of all Existing Clearwater Security is a condition precedent to the closing of the Notes offering, as more fully described in the Indenture and the Purchase Agreement. TSL therefore requests Clearwater's full cooperation in facilitating the timely delivery of the Payoff Letter and the prompt execution and delivery of all necessary release documentation.
8. Timing and Delivery
TSL requests that the Payoff Letter be prepared, executed, and delivered to TSL and its counsel no later than five (5) business days prior to the anticipated Closing Date, i.e., by approximately October 7, 2022. TSL recognizes that this timeline is ambitious and is prepared to work cooperatively with Clearwater and its counsel to ensure that the Payoff Letter can be finalized within this timeframe.
Delivery of the Payoff Letter should be made by email (with PDF attachment) and by international courier (with original ink-signed counterpart) to each of the following:
(a) Thalassa Shipping & Logistics SA 42 Akti Miaouli Piraeus 185 35, Greece
Attention: Marina Demetriou, Chief Financial Officer
and: Alexandros Theodorakis, General Counsel
(b) With a copy to: Calderwood & Harkness LLP 125 Broad Street New York, NY 10004 United States of America
Attention: Robert Adeyemi, Partner
and: Brendan Walsh, Associate
(c) And a copy to: Anchor Bay Securities LLC 599 Lexington Avenue, 28th Floor New York, NY 10022 United States of America
Attention: Marcus Reinhardt, Managing Director
9. Contact Information for Questions
Should Clearwater or its counsel have any questions, require any additional information, or wish to discuss any aspect of this request, please do not hesitate to contact any of the following persons:
(a) Marina Demetriou, Chief Financial Officer, Thalassa Shipping & Logistics SA Tel: [●]
Email: [●]
(b) Alexandros Theodorakis, General Counsel, Thalassa Shipping & Logistics SA Tel: [●]
Email: [●]
(c) Brendan Walsh, Associate, Calderwood & Harkness LLP Tel: [●]
Email: [●]
10. Reservation of Rights
TSL wishes to make clear that this letter constitutes a request for the preparation and delivery of a Payoff Letter only, and does not constitute a notice of prepayment, a notice of termination, or any other formal notice under the Clearwater Facility or any related finance document. A formal notice of prepayment will be delivered by TSL to Clearwater separately and in accordance with the terms, conditions, and notice requirements set forth in the Clearwater Facility documentation, at such time and in such form as the Clearwater Facility documentation may require.
TSL reserves all of its rights, remedies, claims, and defenses under the Clearwater Facility, all related finance documents, and applicable law, and nothing in this letter shall be construed as a waiver, release, or modification of any such right, remedy, claim, or defense.
This request is made without prejudice to TSL's right to modify, postpone, or adjust the anticipated Closing Date, or to withdraw this request in its entirety, in the event that the Notes offering does not proceed for any reason, including without limitation a failure of market conditions, a failure to satisfy conditions precedent, or a decision by TSL or the Initial Purchasers not to proceed with the offering. In the event that this request is withdrawn, TSL shall promptly notify Clearwater in writing.
We look forward to receiving the Payoff Letter at your earliest convenience and appreciate Clearwater's cooperation in facilitating the orderly refinancing of the Clearwater Facility in connection with the Notes offering. Should Clearwater wish to discuss any aspect of this request or require any further information, TSL and its counsel remain at your disposal. Thank you for your cooperation in this matter.
Very truly yours,
THALASSA SHIPPING & LOGISTICS SA
By: ________
Name: Spyros Andreou
Title: Chief Executive Officer
[Unsigned — Draft Only]
cc:
Dimitrios Kallistratos, Chairman, Thalassa Shipping & Logistics SA Marina Demetriou, Chief Financial Officer, Thalassa Shipping & Logistics SA Alexandros Theodorakis, General Counsel, Thalassa Shipping & Logistics SA Robert Adeyemi, Partner, Calderwood & Harkness LLP Brendan Walsh, Associate, Calderwood & Harkness LLP Marcus Reinhardt, Managing Director, Anchor Bay Securities LLC David Loh, Anchor Bay Securities LLC (Singapore office)
DRAFT — Prepared by Calderwood & Harkness LLP Matter No. 1044-00004 / Client No. 80214-TSL This letter was never finalized or sent due to the suspension of the Notes offering on November 14, 2022.

THALASSA SHIPPING & LOGISTICS SA

THALASSA SHIPPING & LOGISTICS SA

Record

Parties

Dates

Amounts