1044-00006 · Hargrove, Delacroix & Stern LLP · Insurance & Lender

letter-to-oceanus-transmitting-sa.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP Attorneys at Law One Liberty Plaza, 50th Floor New York, NY 10006

Telephone: (212) 555-7400 Facsimile: (212) 555-7401 www.calderwoodharkness.com

November 20, 2024

VIA INTERNATIONAL COURIER AND EMAIL (d.okafor@oceanusmutual.bm)

Mr. David Okafor Claims Handler Oceanus Mutual Protection & Indemnity Club Clarendon House, 2 Church Street Hamilton HM 11, Bermuda

Re: Thalassa Shipping & Logistics SA — Settlement Agreement for Board Approval

Policy No.: OCE-P&I-2020-TSL-0047

Member: Thalassa Shipping & Logistics SA (AFM: 998342671)

Vessel: M/V Aegean Fortuna (IMO 9847231)

Litigation: Northwind Maritime Corporation v. Thalassa Shipping & Logistics SA and Aegean Fortuna Shipholding Ltd., Index No. 655421/2023, Supreme Court of the State of New York, New York County, Commercial Division

C&H Matter No.: 1044-00006

Dear Mr. Okafor:

We write on behalf of our client, Thalassa Shipping & Logistics SA ("TSL"), a Société Anonyme organized and existing under the laws of the Hellenic Republic, with its principal headquarters located at 42 Akti Miaouli, Piraeus 185 38, Greece. The purpose of this letter is to transmit to you, for consideration and approval by the Board of Directors of the Oceanus Mutual Protection & Indemnity Club (the "Club" or "Oceanus"), the fully executed Settlement Agreement and Mutual General Release dated November 20, 2024 (the "Settlement Agreement"), together with certain related documents described more fully below.

As you are aware, by our letter dated October 31, 2024, we provided formal notice to the Club of the settlement reached in the above-referenced litigation and submitted a request for a contribution from the Club in the amount of $2,500,000.00 under Policy No. OCE-P&I-2020-TSL-0047, to be applied toward the total settlement amount. We understand that the Club's Board of Directors is scheduled to meet on November 22, 2024, and we respectfully request that the Board consider and approve the requested contribution at that meeting. The reasons for the urgency of this request are set forth in greater detail below.

I. Background — The Litigation

On October 2, 2023, Northwind Maritime Corporation ("Northwind"), a corporation incorporated under the laws of the Republic of the marshall Islands with its principal office at 1700 Harbor Gateway, Suite 500, Stamford, Connecticut 06902, commenced an action against TSL and Aegean Fortuna Shipholding Ltd. ("AFSL"), a wholly owned subsidiary of TSL incorporated in the Republic of Liberia (Liberian Registration No. LR-C-20167845), in the Supreme Court of the State of New York, New York County, Commercial Division. The case was assigned Index No. 655421/2023 and is pending before the Honorable Lorraine K. Chen, J.S.C., Part 49, Commercial Division.

The claims asserted by Northwind arose out of a 36-month time charter-party in the NYPE 2015 form, as amended (Charter-Party Ref. No. NW-TSL-CP-2020-1203), dated December 3, 2020, for the M/V Aegean Fortuna, a Supramax dry bulk carrier of 58,200 deadweight tonnage, built in 2016, registered under the flag of the Republic of Liberia, and classified by Global Maritime Classification Bureau. The charter period ran from January 15, 2021 through January 14, 2024, at a daily hire rate of $14,750.

Northwind alleged breaches by TSL and AFSL of their maintenance and seaworthiness obligations under Clauses 2 and 6 of the charter-party. The alleged breaches were based principally on three mechanical incidents that occurred during the charter period, which collectively resulted in sixty-eight (68) total off-hire days, as well as an alleged unauthorized route deviation to Maputo, Mozambique in September 2022.

Northwind claimed total damages in the aggregate amount of $18,300,000, broken down across the following categories:

Northwind is represented by Hargrove, Delacroix & Stern LLP, with Margaret Delacroix serving as lead partner in the matter.

II. Summary of TSL's Defenses

TSL and AFSL, represented by this firm, asserted a number of vigorous defenses throughout the litigation. These included, among others: (a) an interpretation of the single liquidated damages cap under Clause 28 of the charter-party that would limit Northwind's maximum liquidated damages exposure to $4,500,000 for the entire charter period, effectively capping a significant component of the claim; (b) a latent defect defense with respect to Incident 1, involving a turbocharger failure that occurred between March 12 and April 2, 2022, on the basis that the defect was not discoverable through the exercise of due diligence; (c) charterer causation with respect to Incident 2, involving a ballast water treatment system ("BWTS") malfunction that occurred between July 8 and July 29, 2022, where TSL contended that Northwind's operational instructions contributed to or caused the malfunction; (d) Master's discretion under general maritime law and the charter-party terms for the September 2022 deviation to Maputo; (e) the Inter-Club Agreement as a bar to the cargo damage claims asserted directly by Northwind; (f) non-recoverability of the third-party shipper claims, which TSL contended were speculative, unsubstantiated, and improperly aggregated; and (g) Northwind's failure to mitigate its damages with respect to several categories of claimed loss.

In addition to the foregoing defenses, TSL filed a counterclaim in the amount of $1,620,000 against Northwind for unpaid hire for the period of October 1 through December 31, 2022. TSL maintained that the hire for this period remained due and payable notwithstanding Northwind's purported deductions.

III. Procedural History Leading to Settlement

The procedural history of this matter, in relevant part, is as follows:

TSL and AFSL filed their Answer and Counterclaim on November 17, 2023. On December 15, 2023, TSL filed a Motion to Dismiss Counts III and V of Northwind's Complaint pursuant to CPLR § 3211(a)(7). By Decision and Order dated March 8, 2024, Justice Chen granted the motion in part, dismissing Count V (relating to certain consequential damages theories) in its entirety and narrowing Count III (relating to the Maputo deviation claims) to exclude speculative lost-profit damages.

The discovery period extended from January 2024 through August 2024. During this period, the parties exchanged extensive document productions and completed depositions of key witnesses, including Alexandros Stavridis (Chairman and CEO of TSL), Captain Nikolaos Giannopoulos (Master of the M/V Aegean Fortuna during the relevant period), Chief Engineer Petros Vlahos, Viktor Lindgren (Northwind's Head of Operations), Sandra Chow (Northwind's Head of Chartering), and three additional fact witnesses.

Expert reports were served on the following schedule: TSL served the expert reports of Dr. Henrik Sørensen of Nordic Maritime Consulting Group ApS (on maritime engineering matters) and Dr. Constance Albright of Clearwater Economics LLC (on damages) on August 5, 2024. Northwind served its expert reports on August 19, 2024. Rebuttal expert reports were exchanged on September 9, 2024.

On September 20, 2024, TSL filed a Motion for Partial Summary Judgment, which remained pending and fully briefed at the time the settlement was reached.

The Court ordered the parties to participate in mediation, which was conducted on October 28 and 29, 2024, before the Honorable Gerald K. Fitzpatrick (Ret.) at Bayside Dispute Resolution Services LLC, located at 140 Broadway, Suite 3200, New York, New York 10005. Following two intensive days of mediation, the parties reached a settlement in principle on October 29, 2024. A mediator's term sheet reflecting the principal terms of the settlement was signed by counsel for both parties on that date.

The parties thereafter negotiated and finalized the definitive Settlement Agreement, which was fully executed on November 20, 2024, and which is enclosed herewith.

IV. Settlement Terms — Summary of the Enclosed Agreement

The principal terms of the Settlement Agreement are summarized below for the Board's convenience. This summary is qualified in its entirety by reference to the full text of the Settlement Agreement, a copy of which is enclosed.

Settlement Amount. The total settlement amount is $7,850,000.00.

Payment Structure. The settlement amount is payable in three installments, as follows:

• Payment 1: $4,000,000.00, due within thirty (30) days of the Effective Date of the Settlement Agreement (i.e., on or before December 20, 2024);

• Payment 2: $2,000,000.00, due within ninety (90) days of the Effective Date (i.e., on or before February 18, 2025); and

• Payment 3: $1,850,000.00, due within one hundred fifty (150) days of the Effective Date (i.e., on or before April 19, 2025).

Funding Sources. The settlement payments will be funded from the following sources:

• TSL corporate funds: $5,350,000.00; and

• Requested Oceanus P&I Club contribution: $2,500,000.00.

Mutual Release. The Settlement Agreement provides for a mutual general release of all claims, counterclaims, cross-claims, and third-party claims arising out of or related to the charter-party and the M/V Aegean Fortuna. Significantly, the release includes TSL's waiver of its $1,620,000.00 counterclaim for unpaid hire. Accordingly, the net economic cost to TSL of the settlement is $6,230,000.00 (calculated as the $7,850,000.00 settlement amount less the $1,620,000.00 counterclaim waived by TSL).

No Admission of Liability. Neither party makes any admission of liability, fault, or wrongdoing under the Settlement Agreement.

Confidentiality. The Settlement Agreement contains strict confidentiality provisions with respect to its terms. Permitted disclosures include disclosures to insurers (including the Club), lenders, auditors, tax advisors, and as may be required by applicable law, regulation, or court order.

Escrow Arrangements. All settlement payments are to be deposited with Atlantic Fiduciary Trust Company, located at 60 Wall Street, Suite 2800, New York, New York 10005 (Escrow Account No. ESC-2024-NYK-08831; contact: Martin Schreiber, Vice President, Escrow Services). Funds held in escrow will be released to Northwind upon the joint written instruction of counsel for both parties, in accordance with the terms of the Escrow Agreement dated November 20, 2024, a copy of which is also enclosed.

Consent Judgment Provision. Pursuant to Section 7.3 of the Settlement Agreement, in the event TSL defaults on any settlement payment, Northwind shall be entitled to enter a consent judgment against TSL for the unpaid balance of the settlement amount, plus interest at the rate of nine percent (9%) per annum, which is the statutory rate under New York law.

discontinuance. A Stipulation of discontinuance with prejudice is to be filed with the Court within ten (10) business days following receipt of the final settlement payment.

Withdrawal of Pending Motions. All pending motions, including TSL's Motion for Partial Summary Judgment filed on September 20, 2024, will be withdrawn with prejudice upon the filing of the Stipulation of discontinuance.

discovery Materials. All parties are required to return or destroy discovery materials, including confidential documents produced during the litigation, within sixty (60) days following receipt of the final settlement payment.

Continuing Jurisdiction. The Court will retain jurisdiction for a period of one hundred eighty (180) days following the Effective Date of the Settlement Agreement for the purpose of enforcing the settlement terms.

V. P&I Coverage Basis for the Requested Contribution

As set forth in our October 31, 2024 letter, TSL respectfully requests that the Club contribute $2,500,000.00 toward the settlement amount under Policy No. OCE-P&I-2020-TSL-0047. The policy provides coverage for third-party liabilities arising from the operation of entered vessels, including the M/V Aegean Fortuna.

The settlement resolves claims that fall squarely within the scope of the Club's P&I coverage. In particular, the claims most directly within the Club's coverage scope include the cargo damage claims, which Northwind alleged at $3,420,000 and which arose from the oxidation of iron ore cargo during Incident 2 at Richards Bay, South Africa; the third-party shipper claims, which were alleged at $5,634,400 and which represented pass-through claims from cargo interests; and the demurrage and dead freight claims, which were alleged at $1,230,000.

The requested contribution of $2,500,000.00 represents approximately 31.8% of the total settlement amount of $7,850,000.00. This percentage is commensurate with the portion of the overall settlement that is reasonably attributable to claims falling within the Club's coverage scope, taking into account the allocation analysis performed by this firm. We refer the Board to the coverage memorandum prepared by Calderwood & Harkness dated November 1, 2024, which analyzes in detail the applicability of P&I coverage to the various claim categories. A copy of that memorandum was provided to the Club with our prior correspondence dated October 31, 2024, and we are available to provide an additional copy upon request.

VI. Lender and Insurer Notifications

Meridian Capital Bank AG. TSL is separately notifying Meridian Capital Bank AG (Hamburg, Germany) of the settlement, as required by Section 8.14 of the Credit Agreement dated April 1, 2019, between TSL and Meridian. Section 8.14 of the Credit Agreement requires notification to the lender of material litigation settlements exceeding $5,000,000.00. Meridian holds first-priority ship mortgages on TSL's fleet under a $340,000,000.00 credit facility. For the avoidance of doubt, the settlement does not impair any of Meridian's security interests, and TSL remains in compliance with all financial covenants under the Credit Agreement.

Fortis Marine Underwriters Ltd. TSL's hull and machinery insurer, Fortis Marine Underwriters Ltd. (London), is being separately notified of the settlement under H&M Policy No. FMU-HM-2020-4892. The Settlement Agreement expressly preserves and does not impair any subrogation rights that Fortis Marine may hold with respect to the mechanical incidents at issue in the litigation.

VII. Enclosed Documents

The following documents are enclosed for the Board's review:

1. Settlement Agreement and Mutual General Release — Execution Version (dated November 20, 2024), among Thalassa Shipping & Logistics SA, Aegean Fortuna Shipholding Ltd., and Northwind Maritime Corporation;

2. Escrow Agreement — Execution Version (dated November 20, 2024), among Thalassa Shipping & Logistics SA, Northwind Maritime Corporation, and Atlantic Fiduciary Trust Company;

3. Mediator's Term Sheet (dated October 29, 2024), reflecting the settlement terms reached in principle during the October 28–29, 2024 mediation before Hon. Gerald K. Fitzpatrick (Ret.); and

4. TSL Board Resolution Authorizing Settlement (dated October 18, 2024), authorizing settlement of the litigation in an amount up to $8,500,000.00, prepared with input from Konstantinou & Rizos Law Offices, TSL's Greek local counsel (15 Vasilissis Sofias Avenue, Athens 106 74, Greece).

VIII. Request for Expedited Board Action

We respectfully but urgently request that the Oceanus Board of Directors consider and approve the requested $2,500,000.00 contribution at its meeting scheduled for November 22, 2024. The timing of Board action is critical for the following reasons.

The first settlement payment of $4,000,000.00 becomes due within thirty (30) days of the Effective Date of the Settlement Agreement, which was November 20, 2024. Accordingly, Payment 1 must be deposited into escrow on or before December 20, 2024. TSL's treasury and cash flow planning requires prompt confirmation of the Club's contribution allocation so that TSL can determine the precise amount of corporate funds it must deploy to meet the first installment deadline. Any delay in confirming the Club's participation could create cash flow complications for TSL and jeopardize the timely performance of TSL's payment obligations under the Settlement Agreement.

We therefore respectfully request that the Club confirm its approval of the requested contribution in writing at the earliest opportunity following the Board meeting, and in any event not later than November 25, 2024, so that TSL may finalize its funding arrangements.

IX. Availability of Counsel

Douglas Carmichael, the responsible partner for this matter, is available at any time to discuss the settlement terms and to answer any questions that the Board or Club staff may have in advance of or during the Board meeting. Mr. Carmichael can be reached at:

Direct Line: (212) 555-7422 Email: dcarmichael@calderwoodharkness.com

Carlos Espinoza, the lead associate on this matter, is also available as the primary day-to-day contact and can be reached at:

Direct Line: (212) 555-7489 Email: cespinoza@calderwoodharkness.com

Should the Board find it helpful, we are pleased to make ourselves available to present the settlement terms and respond to questions by telephone or video conference during the Board meeting on November 22, 2024, or at any other time convenient to the Board.

We thank the Club for its attention to this matter and for its cooperation throughout the claims process. We are confident that the settlement represents a favorable resolution for TSL and the Club, particularly in light of the significant litigation risks attendant to a trial on the merits and the magnitude of Northwind's original claim of $18,300,000.00. The settlement achieves a resolution at approximately 42.9% of Northwind's total demand, eliminates the risk of an adverse judgment, and provides certainty of outcome and a structured payment schedule that accommodates TSL's financial planning.

We respectfully request written confirmation of the Board's decision at the earliest opportunity following the November 22, 2024 meeting.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Douglas Carmichael Partner

One Liberty Plaza, 50th Floor New York, NY 10006 Tel: (212) 555-7422

Email: dcarmichael@calderwoodharkness.com

cc: (via email)

Markos Theodorakis, General Counsel, Thalassa Shipping & Logistics SA Elena Papadimitriou, Chief Financial Officer, Thalassa Shipping & Logistics SA Alexandros Stavridis, Chairman and Chief Executive Officer, Thalassa Shipping & Logistics SA Francesca Morano, Partner, Calderwood & Harkness LLP Carlos Espinoza, Associate, Calderwood & Harkness LLP

Enclosures (4):

1. Settlement Agreement and Mutual General Release — Execution Version (November 20, 2024)

2. Escrow Agreement — Execution Version (November 20, 2024)

3. Mediator's Term Sheet (October 29, 2024)

4. TSL Board Resolution Authorizing Settlement (October 18, 2024)

Damage Category	Amount Claimed
Off-hire deductions	$1,003,000
Liquidated damages under Clause 28 (aggregate cap)	$4,500,000
Substitute charter costs	$471,600
Cargo damage (iron ore oxidation)	$3,420,000
Demurrage and dead freight	$1,230,000
Additional port and bunker costs	$875,400
Lost sub-charter profit	$166,600
Third-party shipper claims	$5,634,400
Legal fees	$999,000
Total	$18,300,000

CALDERWOOD & HARKNESS LLP Attorneys at Law One Liberty Plaza, 50th Floor New York, NY 10006
Telephone: (212) 555-7400 Facsimile: (212) 555-7401 www.calderwoodharkness.com
November 20, 2024
VIA INTERNATIONAL COURIER AND EMAIL (d.okafor@oceanusmutual.bm)
Mr. David Okafor Claims Handler Oceanus Mutual Protection & Indemnity Club Clarendon House, 2 Church Street Hamilton HM 11, Bermuda
Re: Thalassa Shipping & Logistics SA — Settlement Agreement for Board Approval
Policy No.: OCE-P&I-2020-TSL-0047
Member: Thalassa Shipping & Logistics SA (AFM: 998342671)
Vessel: M/V Aegean Fortuna (IMO 9847231)
Litigation: Northwind Maritime Corporation v. Thalassa Shipping & Logistics SA and Aegean Fortuna Shipholding Ltd., Index No. 655421/2023, Supreme Court of the State of New York, New York County, Commercial Division
C&H Matter No.: 1044-00006
Dear Mr. Okafor:
We write on behalf of our client, Thalassa Shipping & Logistics SA ("TSL"), a Société Anonyme organized and existing under the laws of the Hellenic Republic, with its principal headquarters located at 42 Akti Miaouli, Piraeus 185 38, Greece. The purpose of this letter is to transmit to you, for consideration and approval by the Board of Directors of the Oceanus Mutual Protection & Indemnity Club (the "Club" or "Oceanus"), the fully executed Settlement Agreement and Mutual General Release dated November 20, 2024 (the "Settlement Agreement"), together with certain related documents described more fully below.
As you are aware, by our letter dated October 31, 2024, we provided formal notice to the Club of the settlement reached in the above-referenced litigation and submitted a request for a contribution from the Club in the amount of $2,500,000.00 under Policy No. OCE-P&I-2020-TSL-0047, to be applied toward the total settlement amount. We understand that the Club's Board of Directors is scheduled to meet on November 22, 2024, and we respectfully request that the Board consider and approve the requested contribution at that meeting. The reasons for the urgency of this request are set forth in greater detail below.
I. Background — The Litigation
On October 2, 2023, Northwind Maritime Corporation ("Northwind"), a corporation incorporated under the laws of the Republic of the marshall Islands with its principal office at 1700 Harbor Gateway, Suite 500, Stamford, Connecticut 06902, commenced an action against TSL and Aegean Fortuna Shipholding Ltd. ("AFSL"), a wholly owned subsidiary of TSL incorporated in the Republic of Liberia (Liberian Registration No. LR-C-20167845), in the Supreme Court of the State of New York, New York County, Commercial Division. The case was assigned Index No. 655421/2023 and is pending before the Honorable Lorraine K. Chen, J.S.C., Part 49, Commercial Division.
The claims asserted by Northwind arose out of a 36-month time charter-party in the NYPE 2015 form, as amended (Charter-Party Ref. No. NW-TSL-CP-2020-1203), dated December 3, 2020, for the M/V Aegean Fortuna, a Supramax dry bulk carrier of 58,200 deadweight tonnage, built in 2016, registered under the flag of the Republic of Liberia, and classified by Global Maritime Classification Bureau. The charter period ran from January 15, 2021 through January 14, 2024, at a daily hire rate of $14,750.
Northwind alleged breaches by TSL and AFSL of their maintenance and seaworthiness obligations under Clauses 2 and 6 of the charter-party. The alleged breaches were based principally on three mechanical incidents that occurred during the charter period, which collectively resulted in sixty-eight (68) total off-hire days, as well as an alleged unauthorized route deviation to Maputo, Mozambique in September 2022.
Northwind claimed total damages in the aggregate amount of $18,300,000, broken down across the following categories:
Northwind is represented by Hargrove, Delacroix & Stern LLP, with Margaret Delacroix serving as lead partner in the matter.
II. Summary of TSL's Defenses
TSL and AFSL, represented by this firm, asserted a number of vigorous defenses throughout the litigation. These included, among others: (a) an interpretation of the single liquidated damages cap under Clause 28 of the charter-party that would limit Northwind's maximum liquidated damages exposure to $4,500,000 for the entire charter period, effectively capping a significant component of the claim; (b) a latent defect defense with respect to Incident 1, involving a turbocharger failure that occurred between March 12 and April 2, 2022, on the basis that the defect was not discoverable through the exercise of due diligence; (c) charterer causation with respect to Incident 2, involving a ballast water treatment system ("BWTS") malfunction that occurred between July 8 and July 29, 2022, where TSL contended that Northwind's operational instructions contributed to or caused the malfunction; (d) Master's discretion under general maritime law and the charter-party terms for the September 2022 deviation to Maputo; (e) the Inter-Club Agreement as a bar to the cargo damage claims asserted directly by Northwind; (f) non-recoverability of the third-party shipper claims, which TSL contended were speculative, unsubstantiated, and improperly aggregated; and (g) Northwind's failure to mitigate its damages with respect to several categories of claimed loss.
In addition to the foregoing defenses, TSL filed a counterclaim in the amount of $1,620,000 against Northwind for unpaid hire for the period of October 1 through December 31, 2022. TSL maintained that the hire for this period remained due and payable notwithstanding Northwind's purported deductions.
III. Procedural History Leading to Settlement
The procedural history of this matter, in relevant part, is as follows:
TSL and AFSL filed their Answer and Counterclaim on November 17, 2023. On December 15, 2023, TSL filed a Motion to Dismiss Counts III and V of Northwind's Complaint pursuant to CPLR § 3211(a)(7). By Decision and Order dated March 8, 2024, Justice Chen granted the motion in part, dismissing Count V (relating to certain consequential damages theories) in its entirety and narrowing Count III (relating to the Maputo deviation claims) to exclude speculative lost-profit damages.
The discovery period extended from January 2024 through August 2024. During this period, the parties exchanged extensive document productions and completed depositions of key witnesses, including Alexandros Stavridis (Chairman and CEO of TSL), Captain Nikolaos Giannopoulos (Master of the M/V Aegean Fortuna during the relevant period), Chief Engineer Petros Vlahos, Viktor Lindgren (Northwind's Head of Operations), Sandra Chow (Northwind's Head of Chartering), and three additional fact witnesses.
Expert reports were served on the following schedule: TSL served the expert reports of Dr. Henrik Sørensen of Nordic Maritime Consulting Group ApS (on maritime engineering matters) and Dr. Constance Albright of Clearwater Economics LLC (on damages) on August 5, 2024. Northwind served its expert reports on August 19, 2024. Rebuttal expert reports were exchanged on September 9, 2024.
On September 20, 2024, TSL filed a Motion for Partial Summary Judgment, which remained pending and fully briefed at the time the settlement was reached.
The Court ordered the parties to participate in mediation, which was conducted on October 28 and 29, 2024, before the Honorable Gerald K. Fitzpatrick (Ret.) at Bayside Dispute Resolution Services LLC, located at 140 Broadway, Suite 3200, New York, New York 10005. Following two intensive days of mediation, the parties reached a settlement in principle on October 29, 2024. A mediator's term sheet reflecting the principal terms of the settlement was signed by counsel for both parties on that date.
The parties thereafter negotiated and finalized the definitive Settlement Agreement, which was fully executed on November 20, 2024, and which is enclosed herewith.
IV. Settlement Terms — Summary of the Enclosed Agreement
The principal terms of the Settlement Agreement are summarized below for the Board's convenience. This summary is qualified in its entirety by reference to the full text of the Settlement Agreement, a copy of which is enclosed.
Settlement Amount. The total settlement amount is $7,850,000.00.
Payment Structure. The settlement amount is payable in three installments, as follows:
• Payment 1: $4,000,000.00, due within thirty (30) days of the Effective Date of the Settlement Agreement (i.e., on or before December 20, 2024);
• Payment 2: $2,000,000.00, due within ninety (90) days of the Effective Date (i.e., on or before February 18, 2025); and
• Payment 3: $1,850,000.00, due within one hundred fifty (150) days of the Effective Date (i.e., on or before April 19, 2025).
Funding Sources. The settlement payments will be funded from the following sources:
• TSL corporate funds: $5,350,000.00; and
• Requested Oceanus P&I Club contribution: $2,500,000.00.
Mutual Release. The Settlement Agreement provides for a mutual general release of all claims, counterclaims, cross-claims, and third-party claims arising out of or related to the charter-party and the M/V Aegean Fortuna. Significantly, the release includes TSL's waiver of its $1,620,000.00 counterclaim for unpaid hire. Accordingly, the net economic cost to TSL of the settlement is $6,230,000.00 (calculated as the $7,850,000.00 settlement amount less the $1,620,000.00 counterclaim waived by TSL).
No Admission of Liability. Neither party makes any admission of liability, fault, or wrongdoing under the Settlement Agreement.
Confidentiality. The Settlement Agreement contains strict confidentiality provisions with respect to its terms. Permitted disclosures include disclosures to insurers (including the Club), lenders, auditors, tax advisors, and as may be required by applicable law, regulation, or court order.
Escrow Arrangements. All settlement payments are to be deposited with Atlantic Fiduciary Trust Company, located at 60 Wall Street, Suite 2800, New York, New York 10005 (Escrow Account No. ESC-2024-NYK-08831; contact: Martin Schreiber, Vice President, Escrow Services). Funds held in escrow will be released to Northwind upon the joint written instruction of counsel for both parties, in accordance with the terms of the Escrow Agreement dated November 20, 2024, a copy of which is also enclosed.
Consent Judgment Provision. Pursuant to Section 7.3 of the Settlement Agreement, in the event TSL defaults on any settlement payment, Northwind shall be entitled to enter a consent judgment against TSL for the unpaid balance of the settlement amount, plus interest at the rate of nine percent (9%) per annum, which is the statutory rate under New York law.
discontinuance. A Stipulation of discontinuance with prejudice is to be filed with the Court within ten (10) business days following receipt of the final settlement payment.
Withdrawal of Pending Motions. All pending motions, including TSL's Motion for Partial Summary Judgment filed on September 20, 2024, will be withdrawn with prejudice upon the filing of the Stipulation of discontinuance.
discovery Materials. All parties are required to return or destroy discovery materials, including confidential documents produced during the litigation, within sixty (60) days following receipt of the final settlement payment.
Continuing Jurisdiction. The Court will retain jurisdiction for a period of one hundred eighty (180) days following the Effective Date of the Settlement Agreement for the purpose of enforcing the settlement terms.
V. P&I Coverage Basis for the Requested Contribution
As set forth in our October 31, 2024 letter, TSL respectfully requests that the Club contribute $2,500,000.00 toward the settlement amount under Policy No. OCE-P&I-2020-TSL-0047. The policy provides coverage for third-party liabilities arising from the operation of entered vessels, including the M/V Aegean Fortuna.
The settlement resolves claims that fall squarely within the scope of the Club's P&I coverage. In particular, the claims most directly within the Club's coverage scope include the cargo damage claims, which Northwind alleged at $3,420,000 and which arose from the oxidation of iron ore cargo during Incident 2 at Richards Bay, South Africa; the third-party shipper claims, which were alleged at $5,634,400 and which represented pass-through claims from cargo interests; and the demurrage and dead freight claims, which were alleged at $1,230,000.
The requested contribution of $2,500,000.00 represents approximately 31.8% of the total settlement amount of $7,850,000.00. This percentage is commensurate with the portion of the overall settlement that is reasonably attributable to claims falling within the Club's coverage scope, taking into account the allocation analysis performed by this firm. We refer the Board to the coverage memorandum prepared by Calderwood & Harkness dated November 1, 2024, which analyzes in detail the applicability of P&I coverage to the various claim categories. A copy of that memorandum was provided to the Club with our prior correspondence dated October 31, 2024, and we are available to provide an additional copy upon request.
VI. Lender and Insurer Notifications
Meridian Capital Bank AG. TSL is separately notifying Meridian Capital Bank AG (Hamburg, Germany) of the settlement, as required by Section 8.14 of the Credit Agreement dated April 1, 2019, between TSL and Meridian. Section 8.14 of the Credit Agreement requires notification to the lender of material litigation settlements exceeding $5,000,000.00. Meridian holds first-priority ship mortgages on TSL's fleet under a $340,000,000.00 credit facility. For the avoidance of doubt, the settlement does not impair any of Meridian's security interests, and TSL remains in compliance with all financial covenants under the Credit Agreement.
Fortis Marine Underwriters Ltd. TSL's hull and machinery insurer, Fortis Marine Underwriters Ltd. (London), is being separately notified of the settlement under H&M Policy No. FMU-HM-2020-4892. The Settlement Agreement expressly preserves and does not impair any subrogation rights that Fortis Marine may hold with respect to the mechanical incidents at issue in the litigation.
VII. Enclosed Documents
The following documents are enclosed for the Board's review:
1. Settlement Agreement and Mutual General Release — Execution Version (dated November 20, 2024), among Thalassa Shipping & Logistics SA, Aegean Fortuna Shipholding Ltd., and Northwind Maritime Corporation;
2. Escrow Agreement — Execution Version (dated November 20, 2024), among Thalassa Shipping & Logistics SA, Northwind Maritime Corporation, and Atlantic Fiduciary Trust Company;
3. Mediator's Term Sheet (dated October 29, 2024), reflecting the settlement terms reached in principle during the October 28–29, 2024 mediation before Hon. Gerald K. Fitzpatrick (Ret.); and
4. TSL Board Resolution Authorizing Settlement (dated October 18, 2024), authorizing settlement of the litigation in an amount up to $8,500,000.00, prepared with input from Konstantinou & Rizos Law Offices, TSL's Greek local counsel (15 Vasilissis Sofias Avenue, Athens 106 74, Greece).
VIII. Request for Expedited Board Action
We respectfully but urgently request that the Oceanus Board of Directors consider and approve the requested $2,500,000.00 contribution at its meeting scheduled for November 22, 2024. The timing of Board action is critical for the following reasons.
The first settlement payment of $4,000,000.00 becomes due within thirty (30) days of the Effective Date of the Settlement Agreement, which was November 20, 2024. Accordingly, Payment 1 must be deposited into escrow on or before December 20, 2024. TSL's treasury and cash flow planning requires prompt confirmation of the Club's contribution allocation so that TSL can determine the precise amount of corporate funds it must deploy to meet the first installment deadline. Any delay in confirming the Club's participation could create cash flow complications for TSL and jeopardize the timely performance of TSL's payment obligations under the Settlement Agreement.
We therefore respectfully request that the Club confirm its approval of the requested contribution in writing at the earliest opportunity following the Board meeting, and in any event not later than November 25, 2024, so that TSL may finalize its funding arrangements.
IX. Availability of Counsel
Douglas Carmichael, the responsible partner for this matter, is available at any time to discuss the settlement terms and to answer any questions that the Board or Club staff may have in advance of or during the Board meeting. Mr. Carmichael can be reached at:
Direct Line: (212) 555-7422 Email: dcarmichael@calderwoodharkness.com
Carlos Espinoza, the lead associate on this matter, is also available as the primary day-to-day contact and can be reached at:
Direct Line: (212) 555-7489 Email: cespinoza@calderwoodharkness.com
Should the Board find it helpful, we are pleased to make ourselves available to present the settlement terms and respond to questions by telephone or video conference during the Board meeting on November 22, 2024, or at any other time convenient to the Board.
We thank the Club for its attention to this matter and for its cooperation throughout the claims process. We are confident that the settlement represents a favorable resolution for TSL and the Club, particularly in light of the significant litigation risks attendant to a trial on the merits and the magnitude of Northwind's original claim of $18,300,000.00. The settlement achieves a resolution at approximately 42.9% of Northwind's total demand, eliminates the risk of an adverse judgment, and provides certainty of outcome and a structured payment schedule that accommodates TSL's financial planning.
We respectfully request written confirmation of the Board's decision at the earliest opportunity following the November 22, 2024 meeting.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Douglas Carmichael Partner
One Liberty Plaza, 50th Floor New York, NY 10006 Tel: (212) 555-7422
Email: dcarmichael@calderwoodharkness.com
cc: (via email)
Markos Theodorakis, General Counsel, Thalassa Shipping & Logistics SA Elena Papadimitriou, Chief Financial Officer, Thalassa Shipping & Logistics SA Alexandros Stavridis, Chairman and Chief Executive Officer, Thalassa Shipping & Logistics SA Francesca Morano, Partner, Calderwood & Harkness LLP Carlos Espinoza, Associate, Calderwood & Harkness LLP
Enclosures (4):
1. Settlement Agreement and Mutual General Release — Execution Version (November 20, 2024)
2. Escrow Agreement — Execution Version (November 20, 2024)
3. Mediator's Term Sheet (October 29, 2024)
4. TSL Board Resolution Authorizing Settlement (October 18, 2024)
Damage Category | Amount Claimed
Off-hire deductions | $1,003,000
Liquidated damages under Clause 28 (aggregate cap) | $4,500,000
Substitute charter costs | $471,600
Cargo damage (iron ore oxidation) | $3,420,000
Demurrage and dead freight | $1,230,000
Additional port and bunker costs | $875,400
Lost sub-charter profit | $166,600
Third-party shipper claims | $5,634,400
Legal fees | $999,000
Total | $18,300,000

CALDERWOOD & HARKNESS LLP Attorneys at Law One Liberty Plaza, 50th Floor New York, NY 10006

CALDERWOOD & HARKNESS LLP

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