CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED
CALDERWOOD & HARKNESS LLP Counselors at Law
125 Broad Street New York, NY 10004 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
June 13, 2022
Via Email and Hard Copy
Mr. Spyros Andreou Chief Executive Officer Thalassa Shipping & Logistics SA 42 Akti Miaouli Piraeus 185 35, Greece
Copy to: Mr. Alexandros Theodorakis, General Counsel, Thalassa Shipping & Logistics SA, 42 Akti Miaouli, Piraeus 185 35, Greece
Copy to: Ms. Marina Demetriou, Chief Financial Officer, Thalassa Shipping & Logistics SA, 42 Akti Miaouli, Piraeus 185 35, Greece
Re: Engagement of Calderwood & Harkness LLP as Issuer's Counsel — Proposed $400,000,000 Senior Secured Notes due 2029
Matter No.: 1044-00004
Client No.: 80214-TSL
Dear Mr. Andreou:
1. Introduction and Purpose
Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm") is pleased to confirm its engagement by Thalassa Shipping & Logistics SA ("TSL" or the "Company"), a Société Anonyme organized and existing under the laws of the Hellenic Republic (Greek General Commercial Registry (Geniko Emporiko Mitroo — GEMI) No. 148276201000), to serve as issuer's counsel in connection with the proposed offering of senior secured notes described in greater detail in Section 2 below (the "Transaction"). We very much appreciate the confidence that you and your colleagues have placed in our Firm, and we look forward to working with you on this important capital markets transaction.
The purpose of this engagement letter (this "Engagement Letter") is to set forth the terms and conditions that will govern our representation of the Company in connection with the Transaction, including the scope of the engagement, the anticipated staffing of the matter, our fee arrangements and billing procedures, and other matters relevant to the attorney-client relationship between Calderwood & Harkness and TSL. We ask that you review this Engagement Letter carefully and, if its terms are acceptable, countersign and return a copy as described in Section 14 below.
This Engagement Letter reflects our discussions earlier this month, including the telephone call on June 6, 2022, between Robert Adeyemi, Partner in the Capital Markets practice of Calderwood & Harkness, and Alexandros Theodorakis, General Counsel of TSL, as well as the follow-up call on June 9, 2022, during which the parties discussed the anticipated timeline, staffing, and fee arrangements for the Transaction. We understand from those discussions that the Company expects to launch the offering during the third quarter of 2022, subject to market conditions and the satisfactory completion of documentation, due diligence, and the rating process.
2. Description of the Transaction
Based on our discussions with Mr. Theodorakis and the preliminary term sheet circulated by Anchor Bay Securities LLC on May 31, 2022, we understand that the Transaction contemplated by this Engagement Letter is as follows:
Co-Issuers. The proposed transaction involves the offering by TSL and Thalassa Finance Pte. Ltd. ("TFPL"), a Singapore private company limited by shares (Unique Entity Number (UEN) 202209345K), acting as co-issuers (together, the "Issuers"), of senior secured notes as described below. TFPL is a wholly-owned subsidiary of TSL that was incorporated for the purpose of facilitating the issuance of the Notes.
The Notes. The Issuers propose to offer $400,000,000 in aggregate principal amount of Senior Secured Notes due 2029 (the "Notes"). Based on current market indications, the Notes are expected to bear interest at an indicative coupon of 8.750% per annum, payable semi-annually in arrears on dates to be specified in the Indenture. The Notes are expected to mature seven (7) years from the date of issuance. The final coupon rate, maturity date, and other economic terms will be determined at the time of pricing based on prevailing market conditions.
Offering Structure. The offering is expected to be structured as a private placement exempt from the registration requirements of the United States Securities Act of 1933, as amended (the "Securities Act"), with the Notes offered and sold (a) within the United States to qualified institutional buyers (as defined in Rule 144A under the Securities Act) in reliance on the exemption from registration provided by Rule 144A and (b) outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act.
Initial Purchasers. The initial purchasers of the Notes are expected to be Anchor Bay Securities LLC ("ABS"), acting as lead bookrunner and lead initial purchaser, and Halcyon Partners International Ltd. ("HPI"), acting as co-manager and co-initial purchaser (together, the "Initial Purchasers"). The terms of the initial purchase and sale of the Notes will be set forth in a Purchase Agreement to be entered into among the Issuers, the Guarantors (as defined below), and the Initial Purchasers.
Governing Law. The Indenture governing the Notes and the related transaction documents (other than the security documents, which will be governed by the laws of the relevant jurisdictions in which the collateral is located or the relevant entities are organized) are expected to be governed by the laws of the Republic of Singapore.
Security. The Notes are expected to be secured by, among other things:
(a) first-priority ship mortgage deeds registered over designated vessels in the Company's fleet (the "Mortgaged Vessels"), the identity and number of which will be determined during the due diligence and documentation process;
(b) deeds of assignment of earnings and insurances in respect of the Mortgaged Vessels;
(c) share pledges over the issued share capital of TFPL and each of the fleet-owning guarantor subsidiaries;
(d) assignments of intercompany loan receivables owed by subsidiaries to TSL and TFPL; and
(e) such other security interests as may be agreed among the parties during the negotiation of the transaction documents.
Guarantees. The Notes are expected to be guaranteed by certain subsidiaries of TSL (together with any additional entities that may accede as guarantors, the "Guarantor Subsidiaries" or "Guarantors"), including:
(i) Thalassa Dry Bulk Operations Ltd., a company organized under the laws of Malta;
(ii) Thalassa Container Feeder Ltd., a company organized under the laws of the Republic of the marshall Islands;
(iii) Thalassa Port Services FZCO, a free zone company organized under the laws of Dubai, United Arab Emirates; and
(iv) Thalassa Freight Solutions Pte. Ltd., a company organized under the laws of the Republic of Singapore.
In addition, Kallistratos Maritime Holdings Ltd. ("KMH"), a company organized under the laws of the British Virgin Islands and the indirect parent company of TSL, is expected to provide a limited parent guarantee in respect of the Notes on terms to be negotiated.
Use of Proceeds. The net proceeds from the offering of the Notes are expected to be used for the following purposes:
(a) the refinancing and repayment in full of the Company's existing bilateral ship-finance facilities with Meridian Maritime Bank AG ("Meridian") and Clearwater Shipping Finance Ltd. ("Clearwater"), including all accrued and unpaid interest, fees, and prepayment premiums, if any;
(b) general corporate purposes and fleet capital expenditures, including funding the Company's vessel acquisition and newbuilding pipeline; and
(c) the payment of fees and expenses incurred in connection with the Transaction, including legal fees, initial purchaser discounts and commissions, rating agency fees, trustee fees, printing costs, and other customary transaction expenses.
Listing. Application is contemplated to be made for the listing of the Notes on the Singapore Exchange Securities Trading Limited (SGX-ST). There can be no assurance that such listing will be obtained, and the obligation of the Issuers to complete the offering will not be conditioned upon the receipt of any such listing approval.
Trustee and Security Agent. Marlowe Asset Management Trust Company of Singapore Pte. Ltd. is expected to serve as Indenture Trustee, Registrar, Paying Agent, and Transfer Agent under the Indenture. Atlas Collateral Agency Pte. Ltd. is expected to serve as Security Agent and Collateral Agent under the Intercreditor Agreement and the Security Documents.
The foregoing description of the Transaction is based on our current understanding and is subject to change as the terms of the Transaction are further developed and negotiated. Calderwood & Harkness will advise the Company promptly if any material changes to the Transaction structure come to our attention during the course of the engagement that may affect the scope of our representation or the estimated fees described in Section 5 below.
3. Scope of Representation
Calderwood & Harkness will serve as lead international counsel to TSL in connection with the Transaction. In such capacity, the Firm will undertake the responsibilities described in this Section 3. Unless otherwise specified, all work described below will be performed by the Calderwood & Harkness team identified in Section 4, with the assistance of such additional attorneys and professional staff as may be required from time to time.
3.1 Transaction Documents
Calderwood & Harkness will be responsible for the preparation, drafting, negotiation, and finalization of the principal transaction documents for the offering, including the following:
(a) Indenture. Drafting, negotiating, and finalizing the Indenture governing the Notes (the "Indenture"), to be entered into among the Issuers, the Guarantors, and Marlowe Asset Management Trust Company of Singapore Pte. Ltd., as Trustee. The Indenture is expected to contain customary terms and conditions for a high-yield offering of this nature, including covenants, events of default, redemption provisions, and provisions relating to the collateral.
(b) Purchase Agreement. Drafting, negotiating, and finalizing the Purchase Agreement among the Issuers, the Guarantors, and the Initial Purchasers, setting forth the terms and conditions of the initial purchase and sale of the Notes (the "Purchase Agreement").
(c) Registration Rights Agreement. Drafting the Registration Rights Agreement among the Issuers, the Guarantors, and the Initial Purchasers, providing for the registration or exchange of the Notes under specified circumstances (the "Registration Rights Agreement").
(d) Intercreditor Agreement. Drafting and negotiating the Intercreditor Agreement among the Issuers, the Guarantors, the Trustee, and the Security Agent, governing the relationship among the secured parties with respect to the collateral and the enforcement of security interests (the "Intercreditor Agreement").
(e) Global Notes. Preparing the forms of Global Notes in both Rule 144A and Regulation S form, to be deposited with the applicable clearing systems.
(f) Supplemental Indenture. Preparing a form of Supplemental Indenture to be used for guarantor joinder, enabling additional subsidiaries of TSL to accede to the Indenture and guarantee the Notes from time to time after the closing.
(g) Paying Agent and Transfer Agent Agreement. Drafting and negotiating the Paying Agent and Transfer Agent Agreement between the Issuers and Marlowe Asset Management Trust Company of Singapore Pte. Ltd., setting forth the terms of the paying agent and transfer agent services in connection with the Notes.
3.2 Security Documents
Calderwood & Harkness will prepare the following forms of security documents in connection with the collateral package for the Notes:
(a) Ship Mortgage Deeds. Drafting forms of first-priority ship mortgage deeds to be registered over each of the Mortgaged Vessels in the applicable flag state registries. Calderwood & Harkness will coordinate with local maritime counsel in each relevant jurisdiction regarding the form and registration requirements of such mortgage deeds.
(b) Deeds of Assignment of Earnings and Insurances. Drafting deeds of assignment of earnings and insurances in respect of each Mortgaged Vessel, pursuant to which the relevant fleet-owning subsidiary will assign to the Security Agent, for the benefit of the holders of the Notes, all earnings, charter hire, freight, and insurance proceeds attributable to such vessel.
(c) Share Pledge Agreements. Drafting share pledge agreements with respect to the issued share capital of TFPL and each fleet-owning Guarantor Subsidiary, pursuant to which the relevant parent entity will pledge its shares in such entity to the Security Agent as security for the Notes.
(d) Assignment of Intercompany Loan Receivables. Drafting instruments of assignment pursuant to which TSL and TFPL will assign to the Security Agent, for the benefit of the holders of the Notes, certain intercompany loan receivables owed by subsidiaries of the Company.
We note that the specific forms and terms of the security documents will depend on the laws of the jurisdictions in which the relevant collateral is located or in which the relevant entities are organized, and Calderwood & Harkness will coordinate with local counsel in each such jurisdiction as described in Section 3.7 below.
3.3 Offering Memorandum and Disclosure
Calderwood & Harkness will take primary responsibility for the preparation, coordination, and review of the disclosure documentation for the offering, including the following:
(a) Offering Memorandum. Preparing and coordinating the Offering Memorandum (the "OM") for the offering of the Notes, including drafting or reviewing the following principal sections: (i) summary of the offering and the Notes, (ii) risk factors, (iii) use of proceeds, (iv) capitalization, (v) selected financial data, (vi) management's discussion and analysis of financial condition and results of operations (to be prepared by the Company with Calderwood & Harkness review), (vii) business description, (viii) industry overview (to be prepared by the Company with Calderwood & Harkness review), (ix) management and corporate governance, (x) related party transactions, (xi) principal shareholders, (xii) description of the Notes, (xiii) description of the Security Documents, (xiv) description of the Intercreditor Agreement, (xv) taxation, (xvi) plan of distribution, (xvii) transfer restrictions, (xviii) enforcement of civil liabilities, and (xix) legal matters.
(b) Investor Presentation and Roadshow Materials. Reviewing the investor presentation and roadshow materials prepared by the Company and/or the Initial Purchasers for consistency with the disclosure contained in the OM and for compliance with applicable securities law requirements, including Rule 144A and Regulation S considerations.
(c) Comfort Letter Coordination. Coordinating with Kestrel & White Chartered Accountants, the Company's independent auditors, regarding the preparation and delivery of the auditor's comfort letter in accordance with the procedures set forth in Statement on Auditing Standards No. 72 (SAS 72) or the equivalent International Standard on Assurance Engagements (ISAE), as applicable. Calderwood & Harkness will prepare draft "circle-up" letters identifying the financial and statistical information in the OM to be covered by the comfort letter procedures.
3.4 Due Diligence
Calderwood & Harkness will conduct comprehensive legal due diligence on TSL and its subsidiaries in connection with the Transaction. The due diligence review is expected to cover the following areas, among others:
(a) corporate structure, organization, and good standing of TSL and each of the Guarantor Subsidiaries, including review of constitutive documents, shareholder agreements, and corporate governance arrangements;
(b) material contracts, including charter party agreements, shipbuilding contracts, ship management agreements, and commercial agreements;
(c) fleet documentation, including vessel registration documents, classification society records, safety management certificates, and International Ship and Port Facility Security (ISPS) Code certifications;
(d) existing indebtedness, including the bilateral ship-finance facilities with Meridian Maritime Bank AG and Clearwater Shipping Finance Ltd., any outstanding bonds or notes, and any other financial obligations;
(e) pending and threatened litigation, arbitration, and regulatory proceedings involving TSL and its subsidiaries;
(f) regulatory compliance, including compliance with applicable maritime regulations, flag state requirements, International Maritime Organization (IMO) conventions, and sanctions and anti-money laundering regulations;
(g) environmental matters, including compliance with MARPOL, the Ballast Water Management Convention, the EU Emissions Trading System as applicable to shipping, and any pending or threatened environmental claims or investigations;
(h) employment and labor matters, including collective bargaining agreements, crew management arrangements, and compliance with the Maritime Labour Convention (MLC 2006);
(i) insurance arrangements, including hull and machinery, protection and indemnity (P&I), loss of hire, and war risk coverages; and
(j) tax structure, including a high-level review of the jurisdictional tax positions of TSL and its subsidiaries (noting that Calderwood & Harkness is not engaged as tax counsel).
Upon completion of the due diligence review, Calderwood & Harkness will prepare a due diligence memorandum summarizing its findings and identifying any material issues for discussion with the Company and the Initial Purchasers. We will also participate in due diligence calls and sessions with Company management as needed.
3.5 Legal Opinions
In connection with the closing of the Transaction, Calderwood & Harkness will undertake the following with respect to legal opinions:
(a) Calderwood & Harkness Opinion. Preparing and delivering a legal opinion of Calderwood & Harkness addressed to the Initial Purchasers and the Trustee, opining as to matters of Singapore law (to the extent within the scope of Calderwood & Harkness's Singapore-law practice), including due authorization of the issuance of the Notes, valid issuance of the Notes, and enforceability of the Indenture and related transaction documents. The specific opinions to be delivered will be the subject of negotiation with counsel to the Initial Purchasers and counsel to the Trustee.
(b) Review of Local Counsel Opinions. Reviewing and commenting on the form and substance of local counsel opinions to be delivered in connection with the closing, including: (i) the opinion of Delphi & Karidis LLP as to matters of Greek law relating to the due organization and good standing of TSL, the corporate authority of TSL to enter into the Transaction, and the enforceability of the Transaction Documents against TSL under Greek law; and (ii) the opinion of Rajendra & Osman LLP as to matters of Singapore law relating to the due organization and good standing of TFPL, the corporate authority of TFPL, and the enforceability of the Transaction Documents against TFPL under Singapore law.
3.6 Corporate Authorizations and Closing
Calderwood & Harkness will assist the Company with the corporate authorizations and closing mechanics for the Transaction, including the following:
(a) Board Resolutions. Drafting board resolutions for TSL (and assisting with the preparation of equivalent resolutions for TFPL and each Guarantor Subsidiary) authorizing the Transaction, including the issuance of the Notes, the execution and delivery of the Transaction Documents, and the granting of the security interests contemplated by the Security Documents.
(b) Officers' Certificates. Preparing forms of officers' certificates to be delivered at closing, including certificates as to incumbency, authority, compliance with conditions precedent, and absence of material adverse change.
(c) Closing Checklist and Deliverables. Assembling and maintaining a comprehensive closing checklist identifying all documents, certificates, opinions, and other items to be delivered at or prior to closing, and managing the closing process to ensure timely delivery of all closing deliverables.
(d) Payoff Letters. Coordinating with TSL and its existing lenders, Meridian Maritime Bank AG and Clearwater Shipping Finance Ltd., regarding the preparation and delivery of payoff letters confirming the outstanding amounts due under the existing bilateral ship-finance facilities, the wire instructions for repayment, and the release of existing security interests upon repayment in full.
3.7 Coordination with Other Counsel and Advisors
Calderwood & Harkness will serve as the coordinating counsel for the Transaction on behalf of TSL and will liaise with the other counsel and advisors involved in the Transaction, including the following:
(a) Counsel to the Initial Purchasers. Whitfield & Crane LLP, serving as counsel to ABS and HPI in their capacity as Initial Purchasers. Calderwood & Harkness will coordinate with Whitfield & Crane on the negotiation of the Purchase Agreement, the review of the OM, the due diligence process, and the opinion and closing deliverables.
(b) Counsel to the Trustee. Thornton Ashworth LLP, serving as counsel to Marlowe Asset Management Trust Company of Singapore Pte. Ltd. in its capacity as Indenture Trustee. Calderwood & Harkness will coordinate with Thornton Ashworth on the negotiation of the Indenture, the Paying Agent and Transfer Agent Agreement, and the Trustee's closing deliverables.
(c) Greek Local Counsel. Delphi & Karidis LLP, serving as local counsel to TSL as to matters of Greek law. Calderwood & Harkness will coordinate with Delphi & Karidis on Greek corporate and regulatory matters, the Greek-law legal opinion, and any Greek-law aspects of the security documents.
(d) Singapore Local Counsel. Rajendra & Osman LLP, serving as local counsel to TSL as to matters of Singapore law relating to TFPL and Singapore corporate matters. Calderwood & Harkness will coordinate with Rajendra & Osman on TFPL corporate matters, the Singapore-law legal opinion, and any Singapore-law aspects of the security documents.
(e) Rating Agencies. Polaris Ratings Group Ltd. and Oceanic Credit Assessments Inc., the rating agencies expected to assign ratings to the Notes. Calderwood & Harkness will coordinate with the rating agencies as needed in connection with the rating process, including responding to legal and structural questions raised during the rating review.
(f) Fleet Appraiser. Compass Marine Valuations Ltd., the independent fleet appraiser engaged to provide vessel valuations for the Transaction. Calderwood & Harkness will coordinate with Compass Marine regarding fleet appraisal matters as they relate to collateral coverage disclosure in the OM and compliance with the collateral coverage ratios contemplated by the Indenture.
3.8 Exclusions from Scope
The scope of Calderwood & Harkness's engagement is limited to the matters expressly described in this Section 3. The following matters are expressly excluded from the scope of this engagement:
(a) Greek Law. Calderwood & Harkness is not engaged to provide advice on matters of Greek law. All Greek-law advice in connection with the Transaction will be provided by Delphi & Karidis LLP. While Calderwood & Harkness will coordinate with Delphi & Karidis and review their work product in the context of the Transaction, Calderwood & Harkness does not assume responsibility for, and is not opining on, any matter of Greek law.
(b) Local Singapore Law on TFPL Corporate Matters. Calderwood & Harkness is not engaged to provide local Singapore law advice on the corporate matters of TFPL. Such advice will be provided by Rajendra & Osman LLP. Calderwood & Harkness's Singapore-law practice is limited to the matters described in Section 3.5(a) above with respect to the opinion, and to the preparation of the Transaction Documents governed by Singapore law.
(c) Tax Advice. Calderwood & Harkness is not engaged as tax counsel in connection with the Transaction. The Company should engage separate tax advisors as appropriate for advice on all tax matters, including the tax consequences of the offering, the tax disclosure in the OM, and the tax structuring of the collateral arrangements. While Calderwood & Harkness may conduct a high-level review of the Company's tax structure as part of the due diligence process described in Section 3.4, such review is not a substitute for the advice of qualified tax counsel.
(d) Financial, Business, and Accounting Advice. Calderwood & Harkness does not provide financial, business, or accounting advice. The Company should rely on its own financial advisors, accountants, and business judgment with respect to all financial, business, and accounting matters relating to the Transaction.
(e) Matters Outside the Transaction. Calderwood & Harkness's engagement does not extend to any matters other than the Transaction as described in Section 2 of this Engagement Letter. Any additional matters, including any post-closing covenant compliance, consent solicitations, exchange offers, or other transactions, would require a separate engagement letter or written agreement between the parties.
4. Staffing
The following Calderwood & Harkness professionals have been assigned to this matter and will constitute the core team for the engagement:
Robert Adeyemi will have overall responsibility for the engagement and will serve as the primary relationship partner for TSL. Mr. Adeyemi will be the principal point of contact for Mr. Theodorakis and other senior representatives of the Company on all material aspects of the Transaction. He will supervise the work of the Calderwood & Harkness team, participate in key negotiation sessions, and review all significant work product before it is delivered to the Company or distributed to other Transaction parties.
Jennifer Kwon will oversee the billing and financial administration of the matter. Ms. Kwon will be responsible for the review and approval of all invoices, the monitoring of fees and expenses against the estimate provided in Section 5 below, and the coordination of any billing-related inquiries with Ms. Demetriou or her designee.
Brendan Walsh will serve as the lead associate for the Transaction and will be responsible for the day-to-day management of the documentation process, including the drafting and coordination of the Indenture, the Purchase Agreement, and the other Transaction Documents. Mr. Walsh will also oversee the closing checklist and manage the closing deliverables.
Natasha Forbes will serve as the working associate for the Transaction and will be primarily responsible for the due diligence process, the preparation of the due diligence memorandum, and the coordination of the OM disclosure with the Company's management and the Company's auditors.
Additional Calderwood & Harkness attorneys and professional staff, including paralegals and legal assistants, may be assigned to the matter as the needs of the engagement require. TSL will be informed of any material changes to the composition of the core team described above. Specialized attorneys from the Firm's banking and finance, maritime, tax, restructuring, or other practice groups may be engaged on an as-needed basis to provide subject-matter expertise on discrete issues arising during the course of the Transaction. Any such involvement will be billed in accordance with the fee arrangements set forth in Section 5 below.
5. Fees and Billing Arrangements
5.1 Fee Basis
Calderwood & Harkness will bill for professional services rendered in connection with this engagement on an hourly basis at the Firm's standard billing rates then in effect for each timekeeper assigned to the matter. The Firm's standard billing rates are reviewed and adjusted periodically, typically on an annual basis effective January 1 of each year. The Company will be notified in advance of any changes to the billing rates of the timekeepers assigned to this matter.
For the core team identified in Section 4 above, the current standard hourly rates are as follows:
The blended hourly rate for the core team assigned to this matter, weighted by the anticipated allocation of hours among the timekeepers, is currently approximately $1,050 per hour.
5.2 Fee Estimate
Based on the anticipated scope of work described in Section 3 above, and on our experience with comparable high-yield note offerings in the shipping and maritime sectors, Calderwood & Harkness estimates that total professional fees for the engagement will be approximately $2,400,000 (Two Million Four Hundred Thousand U.S. Dollars). This estimate is based on approximately 2,285 billable hours at the blended rate described above, allocated approximately as follows:
This estimate is based on the following assumptions: (a) a single offering on the terms currently contemplated in Section 2 above, without material changes to the offering structure, collateral package, or guarantor group; (b) no material restructuring, renegotiation, or delay in the Transaction beyond what is customary for transactions of this nature; (c) the timely provision of information and documents by the Company and its advisors; and (d) the availability and cooperation of the other Transaction parties and their counsel.
The estimate set forth above is provided for budgeting purposes only and does not constitute a cap on fees or a fixed-fee arrangement. Actual fees may be higher or lower than the estimate depending on the complexity, duration, and circumstances of the matter. In the event that circumstances arise during the course of the engagement that suggest actual fees will materially exceed this estimate — for example, as a result of a significant change in the Transaction structure, unanticipated issues identified during due diligence, extended negotiations, or the need for additional work streams not contemplated by the current scope — Calderwood & Harkness will notify TSL promptly and discuss the revised fee expectations with Mr. Theodorakis or his designee before incurring material additional fees.
5.3 Expenses. In addition to professional fees, TSL will reimburse Calderwood & Harkness for all reasonable out-of-pocket expenses incurred by the Firm in connection with the engagement. Such expenses may include, but are not limited to, the following:
(a) travel expenses, including airfare, hotel accommodations, ground transportation, and meals, incurred in connection with due diligence sessions, negotiation meetings, roadshow attendance (if requested by the Company), and closing;
(b) filing fees and registration charges;
(c) courier and delivery charges;
(d) printing and document reproduction costs, including the printing of the Offering Memorandum and Transaction Documents;
(e) telecommunications charges, including long-distance telephone calls and video conferencing costs;
(f) computerized legal research charges (e.g., Westmark Data Systems, Sundial Solutions, Cascade Services Inc.); and
(g) other miscellaneous disbursements reasonably incurred in furtherance of the engagement.
All expenses will be itemized on invoices and are subject to the same payment terms as professional fees. Calderwood & Harkness will endeavor to keep expenses reasonable and will comply with any expense guidelines or policies that the Company may communicate to us in writing.
5.4 Billing and Payment
Calderwood & Harkness will render invoices on a monthly basis for professional fees earned and expenses incurred during the preceding calendar month. Each invoice will include a summary of the professional fees by timekeeper, a description of the services rendered, and an itemized list of expenses.
Invoices are due and payable within thirty (30) days of the date of the invoice. All payments shall be made in United States Dollars by wire transfer to the account designated on the invoice or by such other method as Calderwood & Harkness may specify from time to time.
Invoices will be directed to the attention of:
Ms. Marina Demetriou Chief Financial Officer Thalassa Shipping & Logistics SA 42 Akti Miaouli Piraeus 185 35, Greece
Email: m.demetriou@thalassasl.gr
or such other person or address as TSL may designate in writing from time to time.
Calderwood & Harkness reserves the right to charge interest at the rate of 1.0% per month (or the maximum rate permitted by applicable law, if lower) on any amounts that remain outstanding more than sixty (60) days past the date of the applicable invoice. Any such interest charges will be reflected on subsequent invoices.
5.5 Retainer. No retainer is required at this time. However, Calderwood & Harkness reserves the right to request a retainer from TSL in the event that invoices become materially past due (i.e., outstanding for more than sixty (60) days). Any retainer so requested will be held by Calderwood & Harkness in its client trust account and applied against outstanding invoices and future fees and expenses in accordance with applicable professional responsibility rules.
6. Identification of the Client
The client in this engagement is Thalassa Shipping & Logistics SA, and only Thalassa Shipping & Logistics SA. Calderwood & Harkness does not represent, and this Engagement Letter does not create an attorney-client relationship with, any affiliate, subsidiary, parent company, shareholder, partner, officer, director, employee, or agent of TSL, whether in a corporate or individual capacity. Without limiting the generality of the foregoing, Calderwood & Harkness does not represent, and no attorney-client relationship exists or is created with, any of the following persons or entities:
(a) Thalassa Finance Pte. Ltd.;
(b) Kallistratos Maritime Holdings Ltd.;
(c) Pelagos Capital Partners Fund III LP (or any of its general partners, limited partners, or affiliated funds);
(d) any Guarantor Subsidiary, including Thalassa Dry Bulk Operations Ltd., Thalassa Container Feeder Ltd., Thalassa Port Services FZCO, and Thalassa Freight Solutions Pte. Ltd.;
(e) Mr. Dimitrios Kallistratos, in his individual capacity;
(f) Ms. Elena Kallistratos-Pavlou, in her individual capacity;
(g) Mr. Spyros Andreou, in his individual capacity;
(h) Ms. Marina Demetriou, in her individual capacity; or
(i) Mr. Alexandros Theodorakis, in his individual capacity.
Notwithstanding the foregoing, Calderwood & Harkness may, at TSL's direction and for the benefit of TSL, prepare documents on behalf of TFPL and the Guarantor Subsidiaries in connection with the Transaction, including board resolutions, officers' certificates, and accession documents. Any such work is performed solely in Calderwood & Harkness's capacity as counsel to TSL and does not establish a separate or independent attorney-client relationship between Calderwood & Harkness and any such entity. To the extent that the interests of TSL and any such entity diverge with respect to any matter arising during the course of the Transaction, Calderwood & Harkness will advise TSL of the situation and such entity should obtain independent legal advice.
7. Conflicts of Interest
7.1 Conflict Check
Prior to undertaking this engagement, Calderwood & Harkness conducted a conflict of interest check in accordance with the Firm's standard policies and procedures and the applicable rules of professional conduct. The conflict check was documented in a Conflict Check Memorandum dated June 10, 2022, prepared by Natasha Forbes and reviewed and approved by Robert Adeyemi.
The conflict check covered the following persons and entities:
• Thalassa Shipping & Logistics SA and its known affiliates and subsidiaries;
• Anchor Bay Securities LLC;
• Halcyon Partners International Ltd.;
• Pelagos Capital Partners Fund III LP;
• Kallistratos Maritime Holdings Ltd.;
• Meridian Maritime Bank AG;
• Clearwater Shipping Finance Ltd.;
• Marlowe Asset Management Trust Company of Singapore Pte. Ltd.; and
• Atlas Collateral Agency Pte. Ltd.
Based on the results of the conflict check, no conflicts of interest have been identified that would preclude Calderwood & Harkness from undertaking this engagement under applicable rules of professional conduct, including Rule 1.7 (Conflict of Interest: Current Clients) and Rule 1.9 (Duties to Former Clients) of the New York Rules of Professional Conduct.
7.2 Advance Waiver for Unrelated Matters
TSL acknowledges that Calderwood & Harkness is a large, multi-office international law firm with hundreds of attorneys that represents a broad range of clients in a range matters across numerous industries and jurisdictions. It is possible that some of the Firm's current or future clients may have interests that are adverse to TSL in matters that are unrelated to this engagement or to the Transaction.
By countersigning this Engagement Letter, TSL agrees that Calderwood & Harkness may continue to represent, and may in the future undertake the representation of, other clients (including clients that may be competitors of, or have commercial disputes with, TSL or its affiliates) in matters that are not substantially related to this engagement, even if such clients have interests adverse to TSL in those unrelated matters. This consent is given after full disclosure and with an understanding that the Firm maintains rigorous internal information barriers and ethical screens to prevent the inappropriate sharing of confidential information between engagement teams.
This advance waiver does not extend to: (a) any matter that is substantially related to the Transaction described in Section 2 of this Engagement Letter; or (b) any representation that would involve the use or disclosure of TSL's confidential information obtained during the course of this engagement. Should a conflict of interest arise during the course of this engagement that is not covered by this advance waiver, Calderwood & Harkness will promptly notify TSL and either (i) seek TSL's informed written consent to continue the representation under appropriate conditions, or (ii) take such other steps as may be required by applicable rules of professional conduct, including, if necessary, withdrawal from one or more of the conflicting engagements.
7.3 Representation of Other Parties in the Transaction
Calderwood & Harkness does not represent and will not represent any other party to the Transaction during the pendency of this engagement. For the avoidance of doubt, Calderwood & Harkness does not represent and is not counsel to the Initial Purchasers (ABS or HPI), the Trustee (Marlowe Asset Management Trust Company of Singapore Pte. Ltd.), the Security Agent (Atlas Collateral Agency Pte. Ltd.), any rating agency (including Polaris Ratings Group Ltd. and Oceanic Credit Assessments Inc.), or any existing lender to the Company (including Meridian Maritime Bank AG and Clearwater Shipping Finance Ltd.).
The roles of the other counsel involved in the Transaction are as follows:
• Whitfield & Crane LLP serves as counsel to the Initial Purchasers (ABS and HPI);
• Thornton Ashworth LLP serves as counsel to Marlowe Asset Management Trust Company of Singapore Pte. Ltd. in its capacity as Trustee;
• Delphi & Karidis LLP serves as local Greek counsel to TSL; and
• Rajendra & Osman LLP serves as local Singapore counsel to TSL (with respect to TFPL and Singapore-law matters).
8. Confidentiality
Calderwood & Harkness will maintain the confidentiality of all information received from or on behalf of TSL in connection with this engagement, including all documents, data, communications, and other materials provided to the Firm by the Company or its affiliates, officers, directors, employees, agents, or advisors (collectively, "Confidential Information"). The Firm's confidentiality obligations are subject to the applicable rules of professional conduct governing attorneys' duties of confidentiality and any obligations imposed by law, regulation, subpoena, court order, or other legal process requiring disclosure.
The Firm's obligations with respect to the confidentiality of TSL's Confidential Information shall survive the completion or termination of this engagement and shall continue in full force and effect thereafter in accordance with applicable rules of professional conduct.
TSL hereby authorizes Calderwood & Harkness to share Confidential Information, to the extent reasonably necessary for the purposes of the Transaction, with the following persons and entities, in each case subject to customary confidentiality protections (including, where applicable, confidentiality agreements, professional duties of confidentiality, or equivalent protections):
(a) Delphi & Karidis LLP (Greek local counsel to TSL);
(b) Rajendra & Osman LLP (Singapore local counsel to TSL);
(c) Whitfield & Crane LLP (counsel to the Initial Purchasers), to the extent necessary in connection with the due diligence process, the negotiation of Transaction Documents, and the disclosure process;
(d) Thornton Ashworth LLP (counsel to the Trustee), to the extent necessary in connection with the negotiation of the Indenture and related documents;
(e) Kestrel & White Chartered Accountants (independent auditors), to the extent necessary in connection with the audit, comfort letter, and financial disclosure process; and
(f) Compass Marine Valuations Ltd. (independent fleet appraiser), to the extent necessary in connection with the fleet appraisal and collateral coverage analysis.
TSL's authorization to share Confidential Information with the foregoing parties may be modified, expanded, or revoked at any time by written notice to Calderwood & Harkness. To the extent that Confidential Information is shared with any third party in accordance with this Section 8, Calderwood & Harkness shall use reasonable efforts to ensure that the recipient is aware of the confidential nature of such information and has agreed to appropriate confidentiality protections.
9. Document Retention
Calderwood & Harkness will retain all engagement files and records relating to this matter in accordance with the Firm's document retention policy, as in effect from time to time. The Firm's current document retention policy provides for the retention of closed matter files for a period of ten (10) years from the date of matter closure, unless a longer retention period is required by applicable law, regulation, or professional responsibility rules. "Matter closure" for purposes of this Section 9 means the date on which the engagement is completed or terminated, as applicable, and all outstanding fees and expenses have been paid or resolved.
Upon the completion or termination of this engagement, TSL may request the return or transfer of its files and documents, including original documents provided by the Company to Calderwood & Harkness during the course of the engagement. Calderwood & Harkness will comply with any such request in a timely manner, subject to the Firm's right to retain copies of all documents for its records, for compliance with applicable professional responsibility rules and legal obligations, and for use in connection with any dispute arising out of the engagement.
10. Limitation of Liability
To the fullest extent permitted by applicable law, Calderwood & Harkness's aggregate liability to TSL arising out of or in connection with this engagement, whether based on contract, tort (including negligence), breach of fiduciary duty, or any other theory of liability, shall not exceed the total professional fees actually paid by TSL to Calderwood & Harkness for services rendered under this Engagement Letter.
The foregoing limitation of liability shall not apply to any liability arising from Calderwood & Harkness's willful misconduct or gross negligence. In no event shall Calderwood & Harkness be liable to TSL, or to any person or entity claiming through TSL, for any consequential, incidental, indirect, special, punitive, or exemplary damages, including lost profits, loss of revenue, loss of business opportunities, or diminution in value, regardless of whether such damages were foreseeable or whether Calderwood & Harkness was advised of the possibility of such damages.
TSL acknowledges that the limitation of liability and exclusion of damages set forth in this Section 10 are material terms of this Engagement Letter and that Calderwood & Harkness's willingness to undertake this engagement and the fees charged hereunder are based in part on these provisions.
11. Governing Law and Dispute Resolution
This Engagement Letter and any dispute, claim, or controversy arising out of, relating to, or in connection with this Engagement Letter, the engagement contemplated hereby, or the attorney-client relationship between Calderwood & Harkness and TSL, shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of law or conflict of laws rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.
Any dispute, claim, or controversy arising out of, relating to, or in connection with this Engagement Letter, the engagement contemplated hereby, or the attorney-client relationship between Calderwood & Harkness and TSL, including any question regarding the existence, scope, validity, or termination of this Engagement Letter, shall be finally resolved by binding arbitration in New York, New York, administered by the American Arbitration Association (the "AAA") in accordance with its Commercial Arbitration Rules then in effect. The arbitration shall be conducted before a single arbitrator selected in accordance with the AAA's rules. The language of the arbitration shall be English. The arbitral award shall be final and binding on the parties and may be entered and enforced in any court of competent jurisdiction.
EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS ENGAGEMENT LETTER, THE ENGAGEMENT CONTEMPLATED HEREBY, OR THE ATTORNEY-CLIENT RELATIONSHIP BETWEEN CALDERWOOD & HARKNESS AND TSL.
12. Termination
Either party may terminate this engagement at any time, with or without cause, upon written notice to the other party delivered in accordance with the notice provisions of this Engagement Letter.
In the event of termination by TSL, TSL shall remain obligated to pay Calderwood & Harkness for all professional services rendered and all out-of-pocket expenses incurred by the Firm through the effective date of termination, in accordance with the fee and billing provisions of Section 5 above. Calderwood & Harkness will render a final invoice promptly following the effective date of termination.
In the event of termination by Calderwood & Harkness, the Firm will take reasonable steps to avoid prejudice to TSL's interests, including: (a) providing reasonable advance notice of the Firm's intention to terminate, taking into account the status of the Transaction and any applicable deadlines; (b) cooperating with TSL and any successor counsel in the orderly transition of the matter, including the transfer of files, work product, and other materials; and (c) taking such other steps as may be required by applicable rules of professional conduct governing an attorney's withdrawal from a representation.