DRAFT — Prepared by Calderwood & Harkness LLP, Matter No. 1044-00004 — NOT SENT
THALASSA SHIPPING & LOGISTICS SA 42 Akti Miaouli Piraeus 185 35, Greece GEMI No. 148276201000
[●] October 2022
By Email and International Courier
Meridian Maritime Bank AG Talstrasse 18 8001 Zürich, Switzerland
Attention: Hans-Peter Gerber, Senior Director, Shipping Finance
Re: Request for Payoff Letter and Release/Discharge of Security — Bilateral Secured Ship-Finance Facility dated [●] (the "Meridian Facility") in the outstanding principal amount of $190,000,000 between Thalassa Shipping & Logistics SA (as Borrower) and Meridian Maritime Bank AG (as Lender)
Dear Mr. Gerber:
1. Introduction and Background
We write on behalf of Thalassa Shipping & Logistics SA, a société anonyme organized and existing under the laws of the Hellenic Republic, with its registered office at 42 Akti Miaouli, Piraeus 185 35, Greece, and registered with the General Electronic Commercial Registry (GEMI) under No. 148276201000 ("TSL" or the "Borrower"). This letter has been prepared by Calderwood & Harkness LLP, serving as issuer's counsel to TSL in connection with the transaction described herein.
As you are aware, TSL is party to that certain bilateral secured ship-finance facility between TSL, as borrower, and Meridian Maritime Bank AG ("Meridian" or the "Lender"), as lender (as amended, restated, supplemented, or otherwise modified from time to time, the "Meridian Facility"). As of the date hereof, the aggregate outstanding principal amount under the Meridian Facility is approximately One Hundred Ninety Million United States Dollars ($190,000,000). The Meridian Facility is secured by, inter alia, first-priority ship mortgages registered over certain vessels in TSL's fleet, together with assignments of earnings (including charter hire and freight revenues) and assignments of insurances (including hull and machinery, protection and indemnity, and loss of hire insurance policies) in respect of such vessels, as well as certain other collateral security as more fully described in the Meridian Facility and the related security documents.
TSL hereby informs Meridian that it intends to refinance the Meridian Facility in full in connection with a proposed offering of $400,000,000 aggregate principal amount of Senior Secured Notes due 2029 (the "Notes") to be co-issued by TSL and Thalassa Finance Pte. Ltd. (UEN 202209345K), a private company limited by shares incorporated under the laws of Singapore and a wholly-owned subsidiary of TSL (together with TSL, the "Co-Issuers"). The Notes will be offered and sold pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and Regulation S under the Securities Act. Anchor Bay Securities LLC will act as lead bookrunner and initial purchaser, and Halcyon Partners International Ltd. will act as co-manager and co-initial purchaser in connection with the offering.
The Notes will be issued pursuant to an indenture (the "Indenture") to be entered into among the Co-Issuers, certain subsidiary guarantors of TSL, Marlowe Asset Management Trust Company of Singapore Pte. Ltd. (as Trustee), and Atlas Collateral Agency Pte. Ltd. (as Security Agent). The offering and the Indenture are governed by the laws of Singapore.
The anticipated closing date of the Notes offering is October 15, 2022 (the "Closing Date"), subject to prevailing market conditions and the satisfaction or waiver of applicable conditions precedent. TSL intends to apply a portion of the net proceeds of the Notes offering, in the amount of approximately $190,000,000 (or such adjusted amount as may be set forth in the Payoff Letter described below), specifically to repay in full all outstanding indebtedness under the Meridian Facility and to obtain the release and discharge of all related security interests. The full refinancing and discharge of the Meridian Facility is a condition precedent to the closing of the Notes offering, as set forth in the Indenture, the purchase agreement with the initial purchasers, and the offering memorandum relating to the Notes.
In light of the foregoing, TSL respectfully submits the following requests.
2. Request for Payoff Statement
TSL hereby formally requests that Meridian deliver a written payoff statement (the "Payoff Letter") setting forth, in reasonable detail and with specificity, each of the following items as of a specified payoff date (the "Payoff Date"), which is anticipated to be October 15, 2022:
(a) Outstanding Principal Balance. The total outstanding principal balance under the Meridian Facility as of the Payoff Date, which TSL currently understands to be $190,000,000, or such other amount as may be applicable following any interim scheduled amortization payments made between the date hereof and the Payoff Date.
(b) Accrued and Unpaid Interest. All accrued and unpaid interest under the Meridian Facility through and including the Payoff Date, calculated in accordance with the interest rate provisions of the Meridian Facility and specifying the applicable interest rate(s), interest period(s), and day-count convention(s) used in such calculation.
(c) Per Diem Interest. The per diem interest amount for each day following the Payoff Date, stated as a daily United States Dollar figure, to account for any potential delay in the settlement or remittance of the Payoff Amount (as defined below) beyond the anticipated Payoff Date, so that TSL may compute the adjusted payoff amount as of the actual date of payment.
(d) Prepayment Premium, Make-Whole, and Breakage Costs. Any applicable prepayment premium, make-whole amount, breakage costs, early termination fees, swap breakage costs, or similar charges, if any, arising under or in connection with the terms of the Meridian Facility as a result of the prepayment contemplated herein. If no such premium, make-whole amount, or breakage costs are applicable, the Payoff Letter should so confirm.
(e) Other Amounts. All other amounts owing by TSL to Meridian under or in connection with the Meridian Facility or any related finance document, including but not limited to: (i) accrued and unpaid facility fees, (ii) commitment fees, (iii) agency fees or administrative fees, (iv) unpaid legal fees, out-of-pocket costs, and expenses of Meridian that are reimbursable by TSL under the terms of the Meridian Facility, (v) any outstanding indemnification amounts, and (vi) any other sums then due and payable or that will become due and payable upon prepayment, including any amounts that survive termination of the Meridian Facility.
(f) Aggregate Payoff Amount. The aggregate payoff amount (the "Payoff Amount"), being the sum of items (a) through (e) above, expressed as a single United States Dollar figure as of the Payoff Date, together with appropriate adjustments for the per diem amount described in item (c) above for any day after the Payoff Date on which payment is actually made.
TSL further requests that the Payoff Letter include an express statement confirming that, upon receipt by Meridian of the Payoff Amount in immediately available funds in United States Dollars on or before a date that is no earlier than three (3) business days following the Payoff Date (or such longer period as may be mutually agreed), the Meridian Facility shall be deemed repaid and satisfied in full, and all obligations of TSL and its subsidiaries under the Meridian Facility and each related finance and security document shall be irrevocably discharged and terminated, without recourse, and without the need for any further action or payment on the part of TSL, except as may be expressly set forth in the Payoff Letter with respect to surviving obligations (if any).
3. Wire Transfer Instructions
TSL requests that the Payoff Letter include complete wire transfer instructions for the remittance of the Payoff Amount to Meridian, including, at a minimum, the following information:
(a) The full legal name of the beneficiary bank at which funds are to be received.
(b) The street address of such beneficiary bank.
(c) The SWIFT/BIC code applicable to the receiving account.
(d) The account name in which the Payoff Amount is to be credited.
(e) The account number and/or IBAN of such account.
(f) Any specific reference, payment instruction details, or narrative to be included with the wire transfer to ensure proper identification and allocation of the payment by Meridian.
To the extent that payment must be routed through one or more intermediary or correspondent banks, TSL requests that full details of each such intermediary or correspondent bank be provided, including the bank name, address, SWIFT/BIC code, and any applicable intermediary account number or reference.
Payment of the Payoff Amount will be made in United States Dollars by wire transfer of immediately available funds to the account or accounts designated in the Payoff Letter.
4. Release and Discharge of Security
In connection with the full repayment of the Meridian Facility, TSL requests that Meridian agree, in the Payoff Letter itself or in a separate release instrument to be executed and delivered concurrently with the receipt of the Payoff Amount, to the following undertakings, each to become effective automatically and irrevocably upon Meridian's receipt of the Payoff Amount in full:
(a) Ship Mortgages. The unconditional release, discharge, and satisfaction of all first-priority ship mortgages (including but not limited to preferred mortgages, statutory mortgages, and any other form of maritime lien or encumbrance) registered by or on behalf of Meridian over any vessels owned by TSL or any of its subsidiaries that serve as collateral under the Meridian Facility, in each case in all relevant flag-state registries.
(b) Assignments of Earnings. The unconditional release, discharge, and termination of all assignments of earnings, including assignments of charter hire, freight revenues, demurrage, and any other receivables arising out of the employment or operation of the mortgaged vessels, that were granted in favor of Meridian in connection with the Meridian Facility.
(c) Assignments of Insurances. The unconditional release, discharge, and termination of all assignments of insurances granted in favor of Meridian in connection with the Meridian Facility, including assignments of hull and machinery insurance policies, protection and indemnity (P&I) club entries, loss of hire insurance policies, and any other marine or non-marine insurance policies relating to the mortgaged vessels or the Borrower's business.
(d) Assignments of Requisition Compensation. The unconditional release, discharge, and termination of all assignments of requisition compensation (whether for loss, compulsory acquisition, or otherwise) granted in favor of Meridian in connection with the Meridian Facility.
(e) Share Pledges, Account Pledges, and Other Collateral. The unconditional release, discharge, and termination of any and all share pledges (whether over shares in vessel-owning subsidiaries or otherwise), account pledges (whether over earnings accounts, retention accounts, debt service reserve accounts, or otherwise), and any other form of collateral security granted by TSL or any of its subsidiaries in favor of Meridian in connection with the Meridian Facility, including the return of any original share certificates, blank stock transfer forms, or other pledged collateral held by or on behalf of Meridian.
(f) Subsidiary Guarantees. The unconditional termination and release of any and all guarantees (including corporate guarantees, performance guarantees, and any other form of credit support) provided by any subsidiary or affiliate of TSL in favor of Meridian in connection with the Meridian Facility.
In furtherance of the foregoing, TSL requests that Meridian provide, execute, and deliver (or cause to be provided, executed, and delivered) all documentation reasonably necessary to effectuate such releases and discharges, including without limitation:
(i) Mortgage Discharge/Deletion Documentation. Instruments of mortgage discharge, satisfaction, or deletion in registrable form for filing with each applicable flag-state ship registry in which a mortgage in favor of Meridian is currently recorded, together with any accompanying certificates, consular legalizations, apostilles, or notarizations required for registration purposes.
(ii) Letters of Release/Reassignment. Letters of release or reassignment, in form and substance reasonably satisfactory to TSL and its counsel, addressed to charterers, freight payers, insurance brokers, underwriters, and P&I clubs, as applicable, notifying such parties that Meridian's interest in the assigned earnings and insurances has been released and discharged.
(iii) UCC-3 Termination Statements. UCC-3 financing statement amendments reflecting the termination of any UCC-1 financing statements filed by or on behalf of Meridian with respect to collateral under the Meridian Facility in any United States jurisdiction, to the extent applicable.
(iv) Other Instruments. Any other instruments, documents, certificates, or filings as may be reasonably required by TSL, its counsel, the Trustee, the Security Agent, or any applicable flag-state registry, governmental authority, or insurance provider to evidence and perfect the full and unconditional release and discharge of all security interests, liens, encumbrances, and claims of Meridian in respect of the Meridian Facility and the related security documents.
TSL notes that the prompt execution and delivery of the foregoing release documentation is of critical importance, as the new security interests in favor of the noteholders under the Notes offering must be granted on a first-priority basis over the same collateral pool currently encumbered by Meridian's existing security. Any delay in the discharge of Meridian's security will directly impede the ability of TSL to deliver the security package required under the Indenture and the related security documents.
5. Representations and Confirmations Requested
TSL respectfully requests that the Payoff Letter include each of the following representations, confirmations, and acknowledgments by Meridian:
(a) Completeness of Payoff Amount. A confirmation that the Payoff Amount set forth in the Payoff Letter constitutes the entirety of all amounts owed by TSL, its subsidiaries, and its affiliates to Meridian under or in connection with the Meridian Facility and each related finance and security document, and that no additional amounts will be claimed by Meridian following receipt of the Payoff Amount (except to the extent of any per diem interest adjustment expressly set forth in the Payoff Letter).
(b) No Further Claims. A confirmation that, upon Meridian's receipt of the Payoff Amount in full, Meridian will have no further claims, rights, or entitlements against TSL, any subsidiary or affiliate of TSL, or any of their respective assets, revenues, accounts, vessels, or other property under the Meridian Facility, any related security document, any guarantee, or any other agreement entered into in connection therewith, and that Meridian will not assert any such claim following payment.
(c) No Default. A confirmation that no "Default" or "Event of Default" (as such terms are defined in the Meridian Facility) is continuing as of the date of the Payoff Letter or the Payoff Date that would prevent, restrict, or otherwise impair the ability of TSL to make the prepayment and obtain the discharge contemplated hereby. In the event that any Default or Event of Default is continuing or may arise as a result of the prepayment, TSL requests that Meridian specify the nature and particulars of such Default or Event of Default in reasonable detail so that the parties may address and resolve any such issue in advance of the Payoff Date.
(d) No Assignment or Transfer. A confirmation that Meridian has not assigned, transferred, participated, sub-participated, or otherwise disposed of or encumbered any of its rights, interests, or obligations under the Meridian Facility to any third party, or if Meridian has made any such assignment, transfer, or participation, identification of each such assignee, transferee, or participant, together with confirmation that each such party has been duly notified of the contemplated prepayment and discharge and has provided (or will provide prior to the Payoff Date) any consent required in connection therewith.
(e) Participant Confirmation. Confirmation of the identity of any participant (whether funded or unfunded, risk or sub-participant) in the Meridian Facility, together with a confirmation that no participant consent is required under the terms of any participation agreement or sub-participation agreement for the full prepayment and discharge of the Meridian Facility. In the event that any such participant consent is required, TSL requests that Meridian confirm that it will obtain such consent prior to the Payoff Date and deliver evidence thereof to TSL and its counsel.
6. Timing and Delivery
Given the transaction timeline, TSL requests that the Payoff Letter, together with all supporting documentation (including, to the extent practicable, draft forms of the release and discharge documentation described in Section 4 above), be delivered to TSL and Calderwood & Harkness LLP no later than five (5) business days prior to the anticipated Payoff Date — that is, no later than approximately October 7, 2022.
The Payoff Letter should remain valid and effective for a period of not less than ten (10) business days from its date, with adjustments to the Payoff Amount to be calculated on the basis of the per diem interest amount specified therein for each day that payment is made after the stated Payoff Date. If the Payoff Letter is subject to an expiration date, TSL requests that such expiration date not fall earlier than October 28, 2022, so as to accommodate potential adjustments to the Closing Date.
The Payoff Letter and all related documentation should be delivered as follows:
To TSL: Thalassa Shipping & Logistics SA 42 Akti Miaouli Piraeus 185 35, Greece
Attention: Marina Demetriou, Chief Financial Officer
and Alexandros Theodorakis, General Counsel Telephone: [●]
Email: [●]
To Calderwood & Harkness LLP: Calderwood & Harkness LLP 125 Broad Street New York, NY 10004
Attention: Robert Adeyemi, Partner, Capital Markets
and Brendan Walsh, Associate, Capital Markets Reference: Matter No. 1044-00004 Telephone: [●]
Email: [●]
TSL requests that email copies of the Payoff Letter and all related documentation be transmitted simultaneously to the contacts specified above, in addition to delivery of original executed copies by international courier.
7. Cooperation and Further Assurances
TSL respectfully requests that Meridian cooperate in good faith with TSL, its counsel (including Calderwood & Harkness LLP and Rajendra & Osman LLP, Singapore local counsel), and Atlas Collateral Agency Pte. Ltd. (as Security Agent under the Indenture) to facilitate the timely and orderly discharge of all existing security interests held by Meridian and the simultaneous or near-simultaneous granting of new first-priority security interests in favor of the noteholders under the Notes offering.
TSL wishes to emphasize that the discharge of Meridian's security interests is a condition precedent to the closing of the Notes offering and is integral to the overall transaction timeline. Any delay in providing the Payoff Letter, the release and discharge documentation, or any other cooperation reasonably requested in connection with the discharge may adversely affect TSL's ability to consummate the Notes offering on the anticipated Closing Date, which could have material financial and commercial consequences for all parties involved.
Should Meridian or its legal counsel have any questions regarding the mechanics of the refinancing, the new security arrangements under the Notes offering, or the coordination of the release and re-grant of security, TSL invites Meridian's counsel to contact the following individuals:
Robert Adeyemi, Partner Calderwood & Harkness LLP 125 Broad Street, New York, NY 10004 Telephone: [●]
Email: [●]
Anil Rajendra, Senior Partner Rajendra & Osman LLP (Singapore local counsel) 6 Battery Road, #28-01 Singapore 049909 Telephone: [●]
Email: [●]
TSL and its advisors stand ready to engage with Meridian and its counsel at the earliest opportunity to ensure a smooth and efficient closing process for all parties.
8. Contact Information
For purposes of this request and all related communications, the primary contacts at TSL are as follows:
Marina Demetriou Chief Financial Officer Thalassa Shipping & Logistics SA 42 Akti Miaouli Piraeus 185 35, Greece Telephone: [●]
Email: [●]
Alexandros Theodorakis General Counsel Thalassa Shipping & Logistics SA 42 Akti Miaouli Piraeus 185 35, Greece Telephone: [●]
Email: [●]
The legal counsel contacts for TSL in connection with this matter are:
Robert Adeyemi Responsible Partner, Capital Markets Calderwood & Harkness LLP 125 Broad Street New York, NY 10004 Telephone: [●]
Email: [●]
Brendan Walsh Lead Associate, Capital Markets Calderwood & Harkness LLP 125 Broad Street New York, NY 10004 Telephone: [●]
Email: [●]
All correspondence and documentation relating to this request should be directed to the above-named individuals.
9. Reservation of Rights
Nothing in this letter shall be construed as a binding commitment or obligation on the part of TSL to prepay the Meridian Facility on the anticipated Payoff Date or at any other time. The prepayment contemplated herein is contingent upon the successful closing of the Notes offering, which remains subject to prevailing market conditions, the satisfaction or waiver of applicable conditions precedent, and the execution and delivery of definitive transaction documentation. This letter constitutes a request only and is being submitted in anticipation of the contemplated refinancing for the purpose of facilitating the orderly and timely preparation of the Payoff Letter and related discharge documentation.
TSL expressly reserves all of its rights, remedies, claims, and defenses under the Meridian Facility, the related finance and security documents, and applicable law, none of which shall be deemed waived, modified, or otherwise affected by the submission of this letter or any negotiations or communications conducted in connection herewith.
TSL further reserves the right to modify the anticipated Payoff Date upon reasonable written notice to Meridian, in the event that the Closing Date of the Notes offering is adjusted due to market conditions, regulatory requirements, or other factors. In such event, TSL will promptly notify Meridian of the revised anticipated Payoff Date and request that the Payoff Letter be updated accordingly, including recalculation of accrued interest and any other date-sensitive components of the Payoff Amount.
We appreciate your prompt attention to this matter and look forward to receiving the Payoff Letter at your earliest convenience. We are confident that, with the cooperation of both parties and their respective advisors, the refinancing and discharge process can be completed efficiently and in accordance with the anticipated transaction timeline.
Please do not hesitate to contact us or any of the individuals identified above should you have any questions or require additional information in connection with this request.
Very truly yours,
THALASSA SHIPPING & LOGISTICS SA
By: ________
Name: Spyros Andreou
Title: Chief Executive Officer
Date: ________
cc:
Marina Demetriou, Chief Financial Officer, Thalassa Shipping & Logistics SA
Alexandros Theodorakis, General Counsel, Thalassa Shipping & Logistics SA
Robert Adeyemi, Partner, Capital Markets, Calderwood & Harkness LLP, 125 Broad Street, New York, NY 10004
Brendan Walsh, Associate, Capital Markets, Calderwood & Harkness LLP, 125 Broad Street, New York, NY 10004
Marcus Reinhardt, Managing Director, Anchor Bay Securities LLC, 599 Lexington Avenue, 28th Floor, New York, NY 10022