1044-00006 · Hargrove, Delacroix & Stern LLP · Settlement

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

Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com

November 15, 2024

Via Email (mdelacroix@hdslaw.com) and Sundial Data Systems

Margaret Delacroix, Esq. Hargrove, Delacroix & Stern LLP 600 Lexington Avenue, 28th Floor New York, NY 10022

Re: 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 — Settlement Agreement Negotiations

C&H Matter No.: 1044-00006

Dear Ms. Delacroix:

I write on behalf of our clients, Thalassa Shipping & Logistics SA ("TSL") and Aegean Fortuna Shipholding Ltd. ("Aegean Fortuna" and, together with TSL, "Respondents"), in response to the redline markup of the Settlement Agreement and Mutual General Release (the "Settlement Agreement") that we received from your office on November 12, 2024 (the "HD&S Redline"). As you know, Calderwood & Harkness transmitted the first draft of the Settlement Agreement to Hargrove, Delacroix & Stern on November 5, 2024.

We have carefully reviewed each of the modifications proposed by Northwind Maritime Corporation ("Northwind") in the HD&S Redline, and I am now transmitting herewith a revised second draft of the Settlement Agreement dated November 15, 2024 (the "Second Draft"). The Second Draft incorporates those proposed changes to which our clients have agreed, as well as our counter-proposals on the remaining open items, each of which is discussed in detail below. A clean version and a comparison redline against the November 5 First Draft are enclosed for your convenience.

We wish to reiterate TSL's and Aegean Fortuna's continued commitment to finalizing the Settlement Agreement promptly and in a manner fully consistent with the terms of the mediator's term sheet executed by the parties on October 29, 2024 (the "Term Sheet") before the Honorable Gerald K. Fitzpatrick (Ret.) at Bayside Dispute Resolution Services LLC. As you are aware, time is of the essence with respect to these negotiations: the Oceanus Mutual Protection & Indemnity Club (the "Oceanus P&I Club") Board of Directors is scheduled to consider and, we anticipate, approve the settlement funding at its meeting on November 22, 2024. Accordingly, we must have a finalized, execution-ready version of the Settlement Agreement in hand no later than November 20, 2024, in order to deliver it to the Oceanus P&I Club Board in advance of that meeting. We trust that Northwind shares our interest in an expeditious resolution and will work with us to meet this timeline.

The balance of this letter addresses the HD&S Redline on a topic-by-topic basis, organized as follows: (I) changes accepted in the Second Draft; (II) changes accepted with modifications; (III) proposed changes not accepted, together with our counter-proposals; (IV) the Escrow Agreement; (V) the P&I Club approval timeline; (VI) court filings and pending motions; (VII) lender notification matters; and (VIII) enclosures.

I. AGREED CHANGES ACCEPTED IN THE SECOND DRAFT

The following proposed changes from the HD&S Redline have been accepted by TSL and Aegean Fortuna without modification and are reflected in the enclosed Second Draft.

A. Recitals and Background

TSL has accepted Northwind's proposed clarifications to the recital language in the Settlement Agreement describing the nature of the claims asserted in this action and the procedural history of the litigation. We agree that more detailed recitals provide useful context for the Settlement Agreement and will assist any court called upon to enforce its terms. Accordingly, the Second Draft incorporates Northwind's revised language in the "Whereas" clauses.

In addition, TSL has accepted Northwind's proposed expanded identification of the charter-party that is the subject of the underlying dispute. The charter-party is now referenced by its full designation — Charter-Party Reference No. NW-TSL-CP-2020-1203 — and its date of execution, December 3, 2020. These additions conform to the terminology used in the original charter-party instrument and eliminate any ambiguity regarding the scope of the agreement at issue.

TSL has further accepted Northwind's proposed addition of the vessel specifications in the recitals, which now include the following particulars: M/V Aegean Fortuna, IMO Number 9847231, Supramax dry bulk carrier, 58,200 DWT, registered under the flag of Liberia. We note that these specifications are consistent with the vessel description in the charter-party and in the verified complaint filed by Northwind in this action.

B. Definition of "Released Claims"

TSL has accepted Northwind's proposed clarification of the defined term "Released Claims" in Section 2.1 of the Settlement Agreement. The revised definition now expressly provides that the mutual general release covers all claims, counterclaims, cross-claims, and third-party claims arising out of or related to Charter-Party Reference No. NW-TSL-CP-2020-1203 and the M/V Aegean Fortuna, including without limitation TSL's counterclaim in the amount of $1,620,000 for unpaid hire. We agree that this clarification removes any potential ambiguity regarding the scope of the release and confirms that both parties' affirmative claims are encompassed within the settlement.

TSL has also accepted Northwind's proposed language expressly referencing the withheld hire period of October 1, 2022 through December 31, 2022 — the three-month period during which Northwind withheld hire payments in connection with the disputes that gave rise to this litigation. This temporal reference provides additional specificity to the release and is consistent with the factual allegations in both the complaint and TSL's counterclaim.

C. Payment Mechanics — Wire Transfer Instructions

TSL has accepted Northwind's proposed addition to Section 5 of the Settlement Agreement requiring that wire transfer instructions be provided by Atlantic Fiduciary Trust Company in connection with the designated escrow account (Account No. ESC-2024-NYK-08831) no later than five (5) business days prior to each scheduled payment date. This advance-notice requirement is reasonable and will facilitate the timely processing of wire transfers by TSL's banking institution.

TSL has further accepted Northwind's proposed requirement that written payment confirmations be furnished to counsel for both parties within two (2) business days of each deposit into the escrow account. We understand this provision to require confirmation in the form of a wire transfer receipt or equivalent documentation from Atlantic Fiduciary Trust Company, and the Second Draft so provides.

D. Confidentiality — Permitted Disclosures

TSL has accepted Northwind's proposed additions to the list of permitted disclosures under the confidentiality provision in Section 9 of the Settlement Agreement. Specifically, Northwind has requested the addition of three categories of permitted disclosures: (i) disclosures to Northwind's auditors; (ii) disclosures to Pacific Maritime Legal Associates (Northwind's marshall Islands counsel, specifically Thomas Nauru, Esq.) for corporate formality purposes; and (iii) disclosures as required by applicable securities laws, regulations, or regulatory requirements. Each of these additions is reasonable and consistent with the purpose and structure of the confidentiality provision.

We note that these additions are fully consistent with the carve-outs that TSL included in the First Draft for disclosures to TSL's and Aegean Fortuna's own advisors and contractual counterparties, namely: (a) Meridian Capital Bank AG, in its capacity as TSL's lender; (b) the Oceanus Mutual Protection & Indemnity Club, in its capacity as TSL's P&I insurer; (c) Fortis Marine Underwriters Ltd., in its capacity as TSL's hull and machinery insurer; (d) Castellan Professional Liability Insurers Ltd., in its capacity as TSL's directors' and officers' liability insurer; (e) Lysander & Associates, TSL's auditor; and (f) Konstantinou & Rizos Law Offices, TSL's Greek local counsel. The symmetry of these permitted-disclosure carve-outs reflects the mutual and balanced nature of the confidentiality obligations.

E. Return/Destruction of discovery Materials

TSL has accepted Northwind's proposed change to Section 11 of the Settlement Agreement extending the period for return or destruction of discovery materials from forty-five (45) days to sixty (60) days following the date of the final settlement payment. We note that this sixty-day period is consistent with the time frame set forth in the Term Sheet executed at the October 29 mediation, and accordingly, we agree that the First Draft's forty-five-day period was inconsistent with the parties' mediated agreement. The Second Draft corrects this discrepancy.

TSL has also accepted Northwind's proposed addition of a certification requirement, pursuant to which counsel for each party shall provide written certification to the other party's counsel confirming that all discovery materials in that party's possession, custody, or control have been either returned to the producing party or destroyed in accordance with the Settlement Agreement. This certification shall be delivered no later than five (5) business days following the completion of the return or destruction process.

F. Representations Regarding Bankruptcy

TSL has accepted Northwind's proposed addition of a mutual representation and warranty in Section 12 of the Settlement Agreement to the effect that neither party has any pending or contemplated bankruptcy, insolvency, reorganization, receivership, or similar proceeding under any applicable domestic or foreign law, and that neither party is aware of any facts or circumstances that would reasonably be expected to give rise to any such proceeding. This representation mirrors the corresponding language in the Term Sheet and, as a mutual representation, is acceptable to our clients.

G. Miscellaneous / Boilerplate

TSL has accepted the following minor modifications to the miscellaneous provisions of the Settlement Agreement:

First, Northwind's proposed revision to the governing law clause in Section 14.1, which now provides that the Settlement Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts-of-law principles thereof. This is a standard formulation and is acceptable.

Second, Northwind's proposed addition of a severability clause (new Section 14.7), providing that if any provision of the Settlement Agreement is held to be invalid, illegal, or unenforceable, the remaining provisions shall continue in full force and effect. This is a customary provision, and its inclusion is unobjectionable.

Third, Northwind's proposed addition of counterpart execution and electronic signature provisions (new Section 14.8), permitting the Settlement Agreement to be executed in one or more counterparts, each of which shall be deemed an original, and authorizing execution by electronic signature (including Brightwater Software or similar platforms), with electronic signatures having the same legal effect as original ink signatures. Given the multi-jurisdictional nature of the parties and the desirability of prompt execution, this provision is practical and acceptable.

II. CHANGES ACCEPTED WITH MODIFICATIONS

The following proposed changes from the HD&S Redline have been accepted in principle by TSL but have been modified in the Second Draft to address specific concerns, as described below.

A. Scope of Release — Affiliates and Related Entities

Northwind proposed expanding the scope of the mutual general release in Section 2 of the Settlement Agreement to cover not only TSL and Aegean Fortuna Shipholding Ltd. (on the Respondents' side) and Northwind Maritime Corporation (on the claimant's side), but also all "affiliates, subsidiaries, parents, successors, and assigns" of each party, as well as their respective directors, officers, employees, and agents.

TSL accepts this expansion in principle. A broadly worded release that extends to related entities, corporate affiliates, and individual officers and directors is customary in settlements of this nature and serves the parties' shared interest in achieving finality. However, TSL has made two modifications to Northwind's proposed language, both of which are reflected in the Second Draft:

First, TSL has added reciprocal language ensuring that the release running in favor of Northwind extends equally to Northwind's affiliates, including specifically any entities involved in the sub-charter arrangement with Eastbourne Bulk Carriers Ltd. As you are aware, a significant component of the underlying dispute concerned the sub-chartering of the M/V Aegean Fortuna to Eastbourne Bulk Carriers Ltd. and the allocation of responsibility for cargo damage claims arising during the sub-charter period. The release should foreclose any future claims among the parties arising from or related to the sub-charter arrangement, and the reciprocal language in the Second Draft ensures this result.

Second, TSL has added a clarifying sentence providing that the mutual release does not extend to any claims or obligations arising under separate contracts between the parties (or their respective affiliates) that are unrelated to Charter-Party Reference No. NW-TSL-CP-2020-1203 and the M/V Aegean Fortuna. This carve-out is important to preserve TSL's rights under other commercial arrangements that may exist between the parties' respective corporate families and that are wholly unrelated to the matters at issue in this litigation.

B. Consent Judgment — Cure Period

Northwind proposed in its redline that, in the event of any payment default by TSL under the Settlement Agreement, Northwind would be entitled to seek immediate entry of a consent judgment for the unpaid balance, without prior notice to or opportunity to cure by TSL.

TSL acknowledges the importance of the consent judgment mechanism, which was agreed upon in principle in the Term Sheet. However, TSL cannot accept a provision permitting immediate entry of a consent judgment without any notice or cure period. Payment delays may arise from circumstances beyond TSL's control, including wire transfer processing times, banking holidays in foreign jurisdictions, or administrative errors by intermediary banks. An immediate-entry provision would expose TSL to the risk of a judgment being entered before TSL has had any opportunity to address and remedy an inadvertent delay.

Accordingly, TSL has modified Northwind's proposed language to provide for a ten (10) business-day written notice and cure period before Northwind may seek entry of the consent judgment. Specifically, the Second Draft provides in revised Section 7.3 that: (a) upon a payment default, Northwind shall deliver written notice of such default to TSL and its counsel; (b) TSL shall have ten (10) business days from receipt of such notice to cure the default by making the required payment in full; and (c) if TSL fails to cure the default within such ten-business-day period, Northwind may file the consent judgment with the Court for the full unpaid balance, together with accrued interest at nine percent (9%) per annum (the New York statutory rate under CPLR § 5004).

This modification preserves the substance of the consent judgment mechanism agreed upon in the Term Sheet while providing TSL with a reasonable opportunity to cure any inadvertent payment delay. We submit that this is a balanced and commercially reasonable approach, and we respectfully request Northwind's agreement to this formulation.

C. Confidentiality — Scope of Restrictions

Northwind proposed in the HD&S Redline to narrow the confidentiality provision in Section 9 of the Settlement Agreement so that confidentiality obligations would apply only to the financial terms of the settlement, and not to the existence or other non-financial terms of the settlement.

TSL has considered this proposal carefully and has adopted a middle-ground approach in the Second Draft. Specifically:

The Second Draft provides that the existence of a settlement between the parties may be disclosed. This is appropriate because the Stipulation of discontinuance With Prejudice, which will be filed with the Court upon completion of the settlement payments, is a public court filing and will necessarily indicate that the action has been resolved. It would be impractical to maintain the fiction that no settlement exists once the Stipulation is filed.

However, TSL's position is that the specific financial terms of the settlement — including the total settlement amount of $7,850,000, the three-installment payment structure, the respective funding sources (namely, the Oceanus P&I Club contribution of $2,500,000 and TSL's corporate contribution of $5,350,000), and any other details regarding the payment mechanics or economic terms — must remain strictly confidential. Disclosure of these financial details could prejudice both parties in future commercial negotiations and could affect TSL's position with its insurers and lenders.

The Second Draft further provides that neither party shall make any public statement regarding the settlement — whether in press releases, on websites, in marketing materials, on social media, or otherwise — beyond confirming that the matter has been amicably resolved. We believe this approach appropriately balances Northwind's desire for flexibility in disclosing the existence of the settlement with TSL's interest in maintaining the confidentiality of the financial terms.

III. PROPOSED CHANGES NOT ACCEPTED / COUNTER-PROPOSALS

The following proposed changes from the HD&S Redline have not been accepted by TSL. In each instance, we set forth our position and, where applicable, our counter-proposal.

A. Acceleration Clause

Northwind proposed the addition of an acceleration clause (proposed new Section 7.4) providing that any default on a scheduled payment would automatically accelerate the entire remaining unpaid balance, making the full unpaid amount immediately due and payable.

TSL does not accept this provision. Our clients' position is as follows:

The three-installment payment structure — $4,000,000 within thirty (30) days of the Effective Date, $2,000,000 within ninety (90) days of the Effective Date, and $1,850,000 within one hundred fifty (150) days of the Effective Date — was a material term negotiated at length during the October 29 mediation and reflected in the Term Sheet. The deferred payment arrangement was a central element of the economic bargain between the parties and was agreed upon in consideration of the total settlement amount. An automatic acceleration clause would effectively convert the negotiated installment structure into a lump-sum obligation upon the occurrence of any default, however minor or inadvertent, and would thereby fundamentally undermine the deferred payment arrangement that the parties agreed upon.

Moreover, the consent judgment mechanism (as modified with the ten-business-day cure period discussed in Section II.B above) provides Northwind with adequate and robust protection in the event of a payment default. If TSL fails to cure a payment default within the ten-business-day cure period, Northwind may seek entry of the consent judgment for the full unpaid balance, plus accrued interest at nine percent (9%) per annum. This mechanism effectively gives Northwind recourse to the entire remaining settlement amount, but only after TSL has been afforded a reasonable opportunity to cure. We respectfully submit that this protection is sufficient and that a separate automatic acceleration clause is unnecessary and would be commercially unreasonable in these circumstances.

Accordingly, the Second Draft does not include an acceleration clause. TSL's counter-proposal is as set forth in revised Section 7.3: upon a failure to cure a payment default within the ten-business-day cure period, Northwind may seek entry of the consent judgment for the full unpaid balance plus accrued interest. We believe this approach is fair to both parties and consistent with the spirit of the Term Sheet.

B. Indemnification for Third-Party Claims

Northwind proposed the addition of a new indemnification provision (proposed new Section 8) under which TSL would indemnify, defend, and hold harmless Northwind against any third-party claims arising from the M/V Aegean Fortuna's operations during the charter period (December 3, 2020 through March 15, 2023) that are not covered by the mutual release.

TSL does not accept this provision, for the following reasons:

First, the mutual general release set forth in Section 2 of the Settlement Agreement is intended to be comprehensive and final, covering all claims of any kind or nature arising out of or related to Charter-Party Reference No. NW-TSL-CP-2020-1203 and the M/V Aegean Fortuna. The release was drafted broadly, and the expanded definition of "Released Claims" (as accepted in the Second Draft, see Section I.B above) further confirms its comprehensive scope. If the release is drafted and interpreted as intended, there should be no category of charter-period operational claims that falls outside its scope. An indemnification provision for claims that are "not covered by" the release presupposes gaps in the release that should not exist.

Second, the total settlement amount of $7,850,000 was negotiated by the parties at arm's length, with the assistance of Judge Fitzpatrick, to constitute a complete and all-inclusive resolution of the dispute. The settlement amount reflects the parties' respective assessments of the value of their claims and defenses, the risks of continued litigation, and the costs of proceeding to trial. An open-ended indemnification obligation would fundamentally alter the economic bargain by exposing TSL to uncapped, unquantified future liability beyond the negotiated settlement amount. This is precisely the type of tail risk that a settlement agreement is designed to eliminate.

Third, we note for the record that TSL's protection and indemnity coverage with the Oceanus P&I Club (Policy No. OCE-P&I-2020-TSL-0047) and its hull and machinery coverage with Fortis Marine Underwriters Ltd. (Policy No. FMU-HM-2020-4892) remain in effect for any post-settlement third-party claims that may arise under those policies. To the extent that any third-party claim relating to the M/V Aegean Fortuna's operations during the charter period were to be asserted against TSL, TSL's insurance coverage would be the appropriate source of protection — not a contractual indemnification obligation running in favor of Northwind under the Settlement Agreement. Those insurance matters are separate from and independent of the settlement.

TSL's counter-proposal is to retain the comprehensive mutual release as drafted, without the additional indemnification provision. The Second Draft reflects this position.

C. Interest on Late Payments Prior to Consent Judgment

Northwind proposed that interest at the rate of nine percent (9%) per annum begin accruing on any late payment from the original scheduled due date, including during the cure period preceding any entry of a consent judgment.

TSL does not accept the accrual of interest during the cure period. The purpose of the ten-business-day cure period is to afford TSL a reasonable opportunity to remedy inadvertent payment delays without penalty. If interest begins accruing from the original due date — including during the cure period — the cure period is effectively rendered punitive rather than remedial. A payment delay of even a single business day due to, for example, an international wire transfer processing issue or a banking holiday in Greece or Liberia, would trigger interest accrual that the cure period was designed to prevent.

TSL's counter-proposal, reflected in revised Section 7.2 of the Second Draft, provides that interest at the rate of nine percent (9%) per annum shall accrue on any unpaid amount beginning on the first day after the expiration of the ten-business-day cure period. Interest shall continue to accrue until the date of payment in full. This approach ensures that TSL has a genuine opportunity to cure any inadvertent delay without penalty, while also ensuring that Northwind is compensated for any extended delay in payment following expiration of the cure period.

D. Northwind's Proposed Addition — Attorney's Fees for Enforcement

Northwind proposed the addition of a prevailing-party attorney's fees provision (proposed new Section 14.9) under which the prevailing party in any action to enforce the Settlement Agreement would be entitled to recover its reasonable attorney's fees and costs from the non-prevailing party.

TSL does not accept this provision. Our clients' position is that the consent judgment mechanism, together with the Court's retained jurisdiction for one hundred eighty (180) days following the Effective Date (as set forth in the separate Stipulation and Order Retaining Jurisdiction that the parties will jointly submit to the Court), provides Northwind with a streamlined and efficient enforcement remedy that does not require a separate attorney's fees provision. In the event of a payment default that is not cured within the ten-business-day cure period, Northwind may simply file the consent judgment — a process that requires minimal legal effort and expense.

Furthermore, a prevailing-party attorney's fees provision is inconsistent with the no-admission-of-liability and mutual-release framework that undergirds the Settlement Agreement. The settlement is intended to end this dispute, not to create new grounds for fee-shifting litigation between the parties. Each party has incurred significant legal fees in connection with this action, and the parties' agreement to bear their own costs is a customary feature of mutual-release settlements.

TSL's counter-proposal is that no attorney's fees provision be included in the Settlement Agreement. Each party shall bear its own legal fees and costs in connection with the settlement, including the negotiation and execution of the Settlement Agreement and any enforcement proceedings. The Second Draft reflects this position.

E. Representation Regarding Assignment of Claims

Northwind proposed the addition of a representation and warranty by TSL to the effect that TSL has not assigned, transferred, pledged, or otherwise conveyed any of its claims against Northwind to any third party, including specifically to Fortis Marine Underwriters Ltd. in connection with any subrogation claim.

TSL accepts the representation regarding non-assignment of claims in principle. TSL has not assigned any of its claims against Northwind to any third party, and TSL is willing to so represent in the Settlement Agreement.

However, TSL has modified Northwind's proposed language to carve out Fortis Marine Underwriters Ltd.'s existing subrogation rights under Hull and Machinery Policy No. FMU-HM-2020-4892. As you are aware, Fortis Marine, as TSL's hull and machinery insurer, possesses contractual and equitable subrogation rights that arise by operation of the insurance policy and applicable law. These subrogation rights were not created by any affirmative assignment by TSL, and they cannot be extinguished or waived by TSL without Fortis Marine's consent. The Second Draft includes language expressly preserving Fortis Marine's subrogation rights and confirming that the Settlement Agreement does not impair, waive, or modify those rights.

We note, for the avoidance of any concern on Northwind's part, that Fortis Marine's subrogation rights, to the extent they exist, would run against third parties — such as the vessel's builder, Dalian Prosperity Shipyard Co., or component manufacturers — in connection with any insured losses. TSL is not aware of any basis on which Fortis Marine would assert subrogation claims against Northwind, and TSL does not believe that such claims exist. The carve-out in the Second Draft is included solely as a matter of prudence and to ensure that TSL does not inadvertently impair its insurer's rights. This is consistent with TSL's notice obligations to Fortis Marine under the hull and machinery policy.

IV. ESCROW AGREEMENT

As you are aware, a separate draft Escrow Agreement was transmitted by this office to Hargrove, Delacroix & Stern on November 8, 2024. We have not yet received Northwind's comments on that draft. We respectfully request that Northwind provide its redline or comments on the Escrow Agreement at its earliest convenience so that both the Settlement Agreement and the Escrow Agreement can be finalized simultaneously. The two documents are interrelated, and simultaneous execution will be necessary to implement the settlement payment mechanics.

We confirm that Atlantic Fiduciary Trust Company has agreed to serve as escrow agent and has reviewed the draft escrow terms. Our contact at Atlantic Fiduciary is Martin Schreiber, Vice President, Escrow Services, located at 60 Wall Street, Suite 2800, New York, NY 10005 (telephone: (212) 732-4500; email: mschreiber@atlanticfiduciary.com). Escrow account number ESC-2024-NYK-08831 has been established and is ready to receive funds upon execution of both the Settlement Agreement and the Escrow Agreement.

We would appreciate Northwind's comments on the Escrow Agreement no later than November 18, 2024, concurrent with the deadline for comments on the Settlement Agreement Second Draft.

V. P&I CLUB APPROVAL TIMELINE

We wish to remind your office that $2,500,000 of the total $7,850,000 settlement amount will be funded by the Oceanus Mutual Protection & Indemnity Club pursuant to P&I Policy No. OCE-P&I-2020-TSL-0047. As we have previously discussed, the Oceanus P&I Club's funding of the settlement requires formal approval by the Oceanus Board of Directors.

The next scheduled meeting of the Oceanus Board at which this matter can be considered is November 22, 2024. The Oceanus P&I Club's claims handler, David Okafor, has advised us that the Board will require an execution-ready version of the Settlement Agreement for its review in advance of the meeting. Accordingly, upon finalization of the Settlement Agreement, Calderwood & Harkness will promptly transmit the execution version to Mr. Okafor for presentation to the Board.

In order to meet this timeline, it is essential that the parties finalize the Settlement Agreement no later than November 20, 2024. If the execution version is not available for delivery to the Oceanus Board in advance of the November 22 meeting, Board approval will be delayed to the next scheduled meeting, which we understand is not until mid-January 2025. Such a delay would significantly impede the settlement process and would be contrary to both parties' expressed desire for a prompt resolution.

We therefore respectfully urge Hargrove, Delacroix & Stern to prioritize its review of the Second Draft and the Escrow Agreement, and to work with us to resolve any remaining open issues in advance of the November 20 target date.

VI. COURT FILINGS AND PENDING MOTIONS

Upon execution of the Settlement Agreement, Calderwood & Harkness will prepare the following documents for joint submission to the Court:

1. Stipulation Withdrawing TSL's Motion for Partial Summary Judgment. TSL filed its Motion for Partial Summary Judgment on September 20, 2024. Upon execution of the Settlement Agreement, the parties will jointly stipulate to the withdrawal of this motion with prejudice.

2. Joint Letter to the Court. The parties will jointly submit a letter to the Honorable Lorraine K. Chen, J.S.C. (Part 49, Supreme Court, New York County, 60 Centre Street, New York, NY 10007), advising the Court that the parties have reached a settlement of all claims in this action and requesting that the summary judgment conference currently scheduled for December 6, 2024 be taken off the Court's calendar.

3. Stipulation and Order Retaining Jurisdiction. The parties will jointly submit a proposed Stipulation and Order providing that the Court shall retain jurisdiction to enforce the terms of the Settlement Agreement for a period of one hundred eighty (180) days following the Effective Date of the Settlement Agreement (as defined therein).

4. Proposed Stipulation of discontinuance With Prejudice. Following completion of all settlement payments, the parties will jointly file a Stipulation of discontinuance With Prejudice dismissing all claims, counterclaims, and cross-claims in this action. Pursuant to the Settlement Agreement, this Stipulation shall be filed within ten (10) business days of the date on which the final settlement payment is deposited into the escrow account and confirmed.

We respectfully request Hargrove, Delacroix & Stern's confirmation that Northwind will cooperate in the preparation and joint submission of each of these filings. We are prepared to circulate initial drafts of these documents promptly upon execution of the Settlement Agreement, or earlier if your office prefers to review them in advance.

VII. LENDER NOTIFICATION

For purposes of full transparency, we wish to advise your office that TSL is obligated to notify Meridian Capital Bank AG ("Meridian") of the settlement within five (5) business days of execution of the Settlement Agreement. This notification obligation arises under Section 8.14 of the Credit Agreement dated April 1, 2019 between TSL and Meridian, which requires TSL to notify Meridian of any litigation settlement in excess of $5,000,000.

We wish to clarify that this notification is purely informational in nature and does not require Meridian's consent to or approval of the settlement. TSL will provide Meridian only such information as is strictly required under the Credit Agreement, and TSL will maintain the confidentiality of the settlement terms to the greatest extent consistent with its contractual obligations to Meridian. To the extent that the confidentiality provision of the Settlement Agreement requires that financial terms be disclosed only to enumerated permitted recipients, TSL notes that Meridian is already listed as a permitted disclosure recipient in Section 9 of the First Draft and the Second Draft.

We raise this matter for your information only and do not believe it requires any additional provisions in the Settlement Agreement.

VIII. ENCLOSURES

Enclosed with this letter are the following documents:

1. Settlement Agreement and Mutual General Release — Second Draft (clean), dated November 15, 2024.

2. Settlement Agreement and Mutual General Release — Comparison Redline, showing all changes from the First Draft (November 5, 2024) to the Second Draft (November 15, 2024).

We note that the Escrow Agreement is not enclosed, as it is currently pending Northwind's comments on the draft transmitted by this office on November 8, 2024. We look forward to receiving Northwind's redline of the Escrow Agreement at its earliest convenience.

In light of the foregoing, we respectfully request that Hargrove, Delacroix & Stern provide any remaining comments on the Second Draft no later than Monday, November 18, 2024, in order to allow the parties to finalize the execution version of the Settlement Agreement by the target date of Wednesday, November 20, 2024. As noted above, this timeline is necessary to accommodate the Oceanus P&I Club Board meeting on November 22, 2024.

I am available to arrange a call at any mutually convenient time between myself and you, and/or between my colleague Carlos Espinoza and your colleague Jason Trumbull, to discuss any remaining open points. We are confident that the limited number of open items can be resolved efficiently through direct dialogue between counsel.

TSL and Aegean Fortuna remain fully committed to finalizing this settlement expeditiously and in good faith, consistent with the terms of the mediator's Term Sheet and the parties' shared interest in bringing this matter to a close. We appreciate your and your client's continued cooperation in this process.

Thank you for your attention to this matter. We look forward to hearing from you.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Douglas Carmichael Partner

Direct Dial: (212) 558-4127

Email: dcarmichael@calderwoodharkness.com

Enclosures (2)

cc: Markos Theodorakis, General Counsel, Thalassa Shipping & Logistics SA (via email)

cc: Francesca Morano, Calderwood & Harkness LLP (via email)

cc: Carlos Espinoza, Calderwood & Harkness LLP (via email)

cc: Hannah Brinkley, Calderwood & Harkness LLP (via email)

CALDERWOOD & HARKNESS LLP One Liberty Plaza, 50th Floor New York, NY 10006
Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
November 15, 2024
Via Email (mdelacroix@hdslaw.com) and Sundial Data Systems
Margaret Delacroix, Esq. Hargrove, Delacroix & Stern LLP 600 Lexington Avenue, 28th Floor New York, NY 10022
Re: 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 — Settlement Agreement Negotiations
C&H Matter No.: 1044-00006
Dear Ms. Delacroix:
I write on behalf of our clients, Thalassa Shipping & Logistics SA ("TSL") and Aegean Fortuna Shipholding Ltd. ("Aegean Fortuna" and, together with TSL, "Respondents"), in response to the redline markup of the Settlement Agreement and Mutual General Release (the "Settlement Agreement") that we received from your office on November 12, 2024 (the "HD&S Redline"). As you know, Calderwood & Harkness transmitted the first draft of the Settlement Agreement to Hargrove, Delacroix & Stern on November 5, 2024.
We have carefully reviewed each of the modifications proposed by Northwind Maritime Corporation ("Northwind") in the HD&S Redline, and I am now transmitting herewith a revised second draft of the Settlement Agreement dated November 15, 2024 (the "Second Draft"). The Second Draft incorporates those proposed changes to which our clients have agreed, as well as our counter-proposals on the remaining open items, each of which is discussed in detail below. A clean version and a comparison redline against the November 5 First Draft are enclosed for your convenience.
We wish to reiterate TSL's and Aegean Fortuna's continued commitment to finalizing the Settlement Agreement promptly and in a manner fully consistent with the terms of the mediator's term sheet executed by the parties on October 29, 2024 (the "Term Sheet") before the Honorable Gerald K. Fitzpatrick (Ret.) at Bayside Dispute Resolution Services LLC. As you are aware, time is of the essence with respect to these negotiations: the Oceanus Mutual Protection & Indemnity Club (the "Oceanus P&I Club") Board of Directors is scheduled to consider and, we anticipate, approve the settlement funding at its meeting on November 22, 2024. Accordingly, we must have a finalized, execution-ready version of the Settlement Agreement in hand no later than November 20, 2024, in order to deliver it to the Oceanus P&I Club Board in advance of that meeting. We trust that Northwind shares our interest in an expeditious resolution and will work with us to meet this timeline.
The balance of this letter addresses the HD&S Redline on a topic-by-topic basis, organized as follows: (I) changes accepted in the Second Draft; (II) changes accepted with modifications; (III) proposed changes not accepted, together with our counter-proposals; (IV) the Escrow Agreement; (V) the P&I Club approval timeline; (VI) court filings and pending motions; (VII) lender notification matters; and (VIII) enclosures.
I. AGREED CHANGES ACCEPTED IN THE SECOND DRAFT
The following proposed changes from the HD&S Redline have been accepted by TSL and Aegean Fortuna without modification and are reflected in the enclosed Second Draft.
A. Recitals and Background
TSL has accepted Northwind's proposed clarifications to the recital language in the Settlement Agreement describing the nature of the claims asserted in this action and the procedural history of the litigation. We agree that more detailed recitals provide useful context for the Settlement Agreement and will assist any court called upon to enforce its terms. Accordingly, the Second Draft incorporates Northwind's revised language in the "Whereas" clauses.
In addition, TSL has accepted Northwind's proposed expanded identification of the charter-party that is the subject of the underlying dispute. The charter-party is now referenced by its full designation — Charter-Party Reference No. NW-TSL-CP-2020-1203 — and its date of execution, December 3, 2020. These additions conform to the terminology used in the original charter-party instrument and eliminate any ambiguity regarding the scope of the agreement at issue.
TSL has further accepted Northwind's proposed addition of the vessel specifications in the recitals, which now include the following particulars: M/V Aegean Fortuna, IMO Number 9847231, Supramax dry bulk carrier, 58,200 DWT, registered under the flag of Liberia. We note that these specifications are consistent with the vessel description in the charter-party and in the verified complaint filed by Northwind in this action.
B. Definition of "Released Claims"
TSL has accepted Northwind's proposed clarification of the defined term "Released Claims" in Section 2.1 of the Settlement Agreement. The revised definition now expressly provides that the mutual general release covers all claims, counterclaims, cross-claims, and third-party claims arising out of or related to Charter-Party Reference No. NW-TSL-CP-2020-1203 and the M/V Aegean Fortuna, including without limitation TSL's counterclaim in the amount of $1,620,000 for unpaid hire. We agree that this clarification removes any potential ambiguity regarding the scope of the release and confirms that both parties' affirmative claims are encompassed within the settlement.
TSL has also accepted Northwind's proposed language expressly referencing the withheld hire period of October 1, 2022 through December 31, 2022 — the three-month period during which Northwind withheld hire payments in connection with the disputes that gave rise to this litigation. This temporal reference provides additional specificity to the release and is consistent with the factual allegations in both the complaint and TSL's counterclaim.
C. Payment Mechanics — Wire Transfer Instructions
TSL has accepted Northwind's proposed addition to Section 5 of the Settlement Agreement requiring that wire transfer instructions be provided by Atlantic Fiduciary Trust Company in connection with the designated escrow account (Account No. ESC-2024-NYK-08831) no later than five (5) business days prior to each scheduled payment date. This advance-notice requirement is reasonable and will facilitate the timely processing of wire transfers by TSL's banking institution.
TSL has further accepted Northwind's proposed requirement that written payment confirmations be furnished to counsel for both parties within two (2) business days of each deposit into the escrow account. We understand this provision to require confirmation in the form of a wire transfer receipt or equivalent documentation from Atlantic Fiduciary Trust Company, and the Second Draft so provides.
D. Confidentiality — Permitted Disclosures
TSL has accepted Northwind's proposed additions to the list of permitted disclosures under the confidentiality provision in Section 9 of the Settlement Agreement. Specifically, Northwind has requested the addition of three categories of permitted disclosures: (i) disclosures to Northwind's auditors; (ii) disclosures to Pacific Maritime Legal Associates (Northwind's marshall Islands counsel, specifically Thomas Nauru, Esq.) for corporate formality purposes; and (iii) disclosures as required by applicable securities laws, regulations, or regulatory requirements. Each of these additions is reasonable and consistent with the purpose and structure of the confidentiality provision.
We note that these additions are fully consistent with the carve-outs that TSL included in the First Draft for disclosures to TSL's and Aegean Fortuna's own advisors and contractual counterparties, namely: (a) Meridian Capital Bank AG, in its capacity as TSL's lender; (b) the Oceanus Mutual Protection & Indemnity Club, in its capacity as TSL's P&I insurer; (c) Fortis Marine Underwriters Ltd., in its capacity as TSL's hull and machinery insurer; (d) Castellan Professional Liability Insurers Ltd., in its capacity as TSL's directors' and officers' liability insurer; (e) Lysander & Associates, TSL's auditor; and (f) Konstantinou & Rizos Law Offices, TSL's Greek local counsel. The symmetry of these permitted-disclosure carve-outs reflects the mutual and balanced nature of the confidentiality obligations.
E. Return/Destruction of discovery Materials
TSL has accepted Northwind's proposed change to Section 11 of the Settlement Agreement extending the period for return or destruction of discovery materials from forty-five (45) days to sixty (60) days following the date of the final settlement payment. We note that this sixty-day period is consistent with the time frame set forth in the Term Sheet executed at the October 29 mediation, and accordingly, we agree that the First Draft's forty-five-day period was inconsistent with the parties' mediated agreement. The Second Draft corrects this discrepancy.
TSL has also accepted Northwind's proposed addition of a certification requirement, pursuant to which counsel for each party shall provide written certification to the other party's counsel confirming that all discovery materials in that party's possession, custody, or control have been either returned to the producing party or destroyed in accordance with the Settlement Agreement. This certification shall be delivered no later than five (5) business days following the completion of the return or destruction process.
F. Representations Regarding Bankruptcy
TSL has accepted Northwind's proposed addition of a mutual representation and warranty in Section 12 of the Settlement Agreement to the effect that neither party has any pending or contemplated bankruptcy, insolvency, reorganization, receivership, or similar proceeding under any applicable domestic or foreign law, and that neither party is aware of any facts or circumstances that would reasonably be expected to give rise to any such proceeding. This representation mirrors the corresponding language in the Term Sheet and, as a mutual representation, is acceptable to our clients.
G. Miscellaneous / Boilerplate
TSL has accepted the following minor modifications to the miscellaneous provisions of the Settlement Agreement:
First, Northwind's proposed revision to the governing law clause in Section 14.1, which now provides that the Settlement Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts-of-law principles thereof. This is a standard formulation and is acceptable.
Second, Northwind's proposed addition of a severability clause (new Section 14.7), providing that if any provision of the Settlement Agreement is held to be invalid, illegal, or unenforceable, the remaining provisions shall continue in full force and effect. This is a customary provision, and its inclusion is unobjectionable.
Third, Northwind's proposed addition of counterpart execution and electronic signature provisions (new Section 14.8), permitting the Settlement Agreement to be executed in one or more counterparts, each of which shall be deemed an original, and authorizing execution by electronic signature (including Brightwater Software or similar platforms), with electronic signatures having the same legal effect as original ink signatures. Given the multi-jurisdictional nature of the parties and the desirability of prompt execution, this provision is practical and acceptable.
II. CHANGES ACCEPTED WITH MODIFICATIONS
The following proposed changes from the HD&S Redline have been accepted in principle by TSL but have been modified in the Second Draft to address specific concerns, as described below.
A. Scope of Release — Affiliates and Related Entities
Northwind proposed expanding the scope of the mutual general release in Section 2 of the Settlement Agreement to cover not only TSL and Aegean Fortuna Shipholding Ltd. (on the Respondents' side) and Northwind Maritime Corporation (on the claimant's side), but also all "affiliates, subsidiaries, parents, successors, and assigns" of each party, as well as their respective directors, officers, employees, and agents.
TSL accepts this expansion in principle. A broadly worded release that extends to related entities, corporate affiliates, and individual officers and directors is customary in settlements of this nature and serves the parties' shared interest in achieving finality. However, TSL has made two modifications to Northwind's proposed language, both of which are reflected in the Second Draft:
First, TSL has added reciprocal language ensuring that the release running in favor of Northwind extends equally to Northwind's affiliates, including specifically any entities involved in the sub-charter arrangement with Eastbourne Bulk Carriers Ltd. As you are aware, a significant component of the underlying dispute concerned the sub-chartering of the M/V Aegean Fortuna to Eastbourne Bulk Carriers Ltd. and the allocation of responsibility for cargo damage claims arising during the sub-charter period. The release should foreclose any future claims among the parties arising from or related to the sub-charter arrangement, and the reciprocal language in the Second Draft ensures this result.
Second, TSL has added a clarifying sentence providing that the mutual release does not extend to any claims or obligations arising under separate contracts between the parties (or their respective affiliates) that are unrelated to Charter-Party Reference No. NW-TSL-CP-2020-1203 and the M/V Aegean Fortuna. This carve-out is important to preserve TSL's rights under other commercial arrangements that may exist between the parties' respective corporate families and that are wholly unrelated to the matters at issue in this litigation.
B. Consent Judgment — Cure Period
Northwind proposed in its redline that, in the event of any payment default by TSL under the Settlement Agreement, Northwind would be entitled to seek immediate entry of a consent judgment for the unpaid balance, without prior notice to or opportunity to cure by TSL.
TSL acknowledges the importance of the consent judgment mechanism, which was agreed upon in principle in the Term Sheet. However, TSL cannot accept a provision permitting immediate entry of a consent judgment without any notice or cure period. Payment delays may arise from circumstances beyond TSL's control, including wire transfer processing times, banking holidays in foreign jurisdictions, or administrative errors by intermediary banks. An immediate-entry provision would expose TSL to the risk of a judgment being entered before TSL has had any opportunity to address and remedy an inadvertent delay.
Accordingly, TSL has modified Northwind's proposed language to provide for a ten (10) business-day written notice and cure period before Northwind may seek entry of the consent judgment. Specifically, the Second Draft provides in revised Section 7.3 that: (a) upon a payment default, Northwind shall deliver written notice of such default to TSL and its counsel; (b) TSL shall have ten (10) business days from receipt of such notice to cure the default by making the required payment in full; and (c) if TSL fails to cure the default within such ten-business-day period, Northwind may file the consent judgment with the Court for the full unpaid balance, together with accrued interest at nine percent (9%) per annum (the New York statutory rate under CPLR § 5004).
This modification preserves the substance of the consent judgment mechanism agreed upon in the Term Sheet while providing TSL with a reasonable opportunity to cure any inadvertent payment delay. We submit that this is a balanced and commercially reasonable approach, and we respectfully request Northwind's agreement to this formulation.
C. Confidentiality — Scope of Restrictions
Northwind proposed in the HD&S Redline to narrow the confidentiality provision in Section 9 of the Settlement Agreement so that confidentiality obligations would apply only to the financial terms of the settlement, and not to the existence or other non-financial terms of the settlement.
TSL has considered this proposal carefully and has adopted a middle-ground approach in the Second Draft. Specifically:
The Second Draft provides that the existence of a settlement between the parties may be disclosed. This is appropriate because the Stipulation of discontinuance With Prejudice, which will be filed with the Court upon completion of the settlement payments, is a public court filing and will necessarily indicate that the action has been resolved. It would be impractical to maintain the fiction that no settlement exists once the Stipulation is filed.
However, TSL's position is that the specific financial terms of the settlement — including the total settlement amount of $7,850,000, the three-installment payment structure, the respective funding sources (namely, the Oceanus P&I Club contribution of $2,500,000 and TSL's corporate contribution of $5,350,000), and any other details regarding the payment mechanics or economic terms — must remain strictly confidential. Disclosure of these financial details could prejudice both parties in future commercial negotiations and could affect TSL's position with its insurers and lenders.
The Second Draft further provides that neither party shall make any public statement regarding the settlement — whether in press releases, on websites, in marketing materials, on social media, or otherwise — beyond confirming that the matter has been amicably resolved. We believe this approach appropriately balances Northwind's desire for flexibility in disclosing the existence of the settlement with TSL's interest in maintaining the confidentiality of the financial terms.
III. PROPOSED CHANGES NOT ACCEPTED / COUNTER-PROPOSALS
The following proposed changes from the HD&S Redline have not been accepted by TSL. In each instance, we set forth our position and, where applicable, our counter-proposal.
A. Acceleration Clause
Northwind proposed the addition of an acceleration clause (proposed new Section 7.4) providing that any default on a scheduled payment would automatically accelerate the entire remaining unpaid balance, making the full unpaid amount immediately due and payable.
TSL does not accept this provision. Our clients' position is as follows:
The three-installment payment structure — $4,000,000 within thirty (30) days of the Effective Date, $2,000,000 within ninety (90) days of the Effective Date, and $1,850,000 within one hundred fifty (150) days of the Effective Date — was a material term negotiated at length during the October 29 mediation and reflected in the Term Sheet. The deferred payment arrangement was a central element of the economic bargain between the parties and was agreed upon in consideration of the total settlement amount. An automatic acceleration clause would effectively convert the negotiated installment structure into a lump-sum obligation upon the occurrence of any default, however minor or inadvertent, and would thereby fundamentally undermine the deferred payment arrangement that the parties agreed upon.
Moreover, the consent judgment mechanism (as modified with the ten-business-day cure period discussed in Section II.B above) provides Northwind with adequate and robust protection in the event of a payment default. If TSL fails to cure a payment default within the ten-business-day cure period, Northwind may seek entry of the consent judgment for the full unpaid balance, plus accrued interest at nine percent (9%) per annum. This mechanism effectively gives Northwind recourse to the entire remaining settlement amount, but only after TSL has been afforded a reasonable opportunity to cure. We respectfully submit that this protection is sufficient and that a separate automatic acceleration clause is unnecessary and would be commercially unreasonable in these circumstances.
Accordingly, the Second Draft does not include an acceleration clause. TSL's counter-proposal is as set forth in revised Section 7.3: upon a failure to cure a payment default within the ten-business-day cure period, Northwind may seek entry of the consent judgment for the full unpaid balance plus accrued interest. We believe this approach is fair to both parties and consistent with the spirit of the Term Sheet.
B. Indemnification for Third-Party Claims
Northwind proposed the addition of a new indemnification provision (proposed new Section 8) under which TSL would indemnify, defend, and hold harmless Northwind against any third-party claims arising from the M/V Aegean Fortuna's operations during the charter period (December 3, 2020 through March 15, 2023) that are not covered by the mutual release.
TSL does not accept this provision, for the following reasons:
First, the mutual general release set forth in Section 2 of the Settlement Agreement is intended to be comprehensive and final, covering all claims of any kind or nature arising out of or related to Charter-Party Reference No. NW-TSL-CP-2020-1203 and the M/V Aegean Fortuna. The release was drafted broadly, and the expanded definition of "Released Claims" (as accepted in the Second Draft, see Section I.B above) further confirms its comprehensive scope. If the release is drafted and interpreted as intended, there should be no category of charter-period operational claims that falls outside its scope. An indemnification provision for claims that are "not covered by" the release presupposes gaps in the release that should not exist.
Second, the total settlement amount of $7,850,000 was negotiated by the parties at arm's length, with the assistance of Judge Fitzpatrick, to constitute a complete and all-inclusive resolution of the dispute. The settlement amount reflects the parties' respective assessments of the value of their claims and defenses, the risks of continued litigation, and the costs of proceeding to trial. An open-ended indemnification obligation would fundamentally alter the economic bargain by exposing TSL to uncapped, unquantified future liability beyond the negotiated settlement amount. This is precisely the type of tail risk that a settlement agreement is designed to eliminate.
Third, we note for the record that TSL's protection and indemnity coverage with the Oceanus P&I Club (Policy No. OCE-P&I-2020-TSL-0047) and its hull and machinery coverage with Fortis Marine Underwriters Ltd. (Policy No. FMU-HM-2020-4892) remain in effect for any post-settlement third-party claims that may arise under those policies. To the extent that any third-party claim relating to the M/V Aegean Fortuna's operations during the charter period were to be asserted against TSL, TSL's insurance coverage would be the appropriate source of protection — not a contractual indemnification obligation running in favor of Northwind under the Settlement Agreement. Those insurance matters are separate from and independent of the settlement.
TSL's counter-proposal is to retain the comprehensive mutual release as drafted, without the additional indemnification provision. The Second Draft reflects this position.
C. Interest on Late Payments Prior to Consent Judgment
Northwind proposed that interest at the rate of nine percent (9%) per annum begin accruing on any late payment from the original scheduled due date, including during the cure period preceding any entry of a consent judgment.
TSL does not accept the accrual of interest during the cure period. The purpose of the ten-business-day cure period is to afford TSL a reasonable opportunity to remedy inadvertent payment delays without penalty. If interest begins accruing from the original due date — including during the cure period — the cure period is effectively rendered punitive rather than remedial. A payment delay of even a single business day due to, for example, an international wire transfer processing issue or a banking holiday in Greece or Liberia, would trigger interest accrual that the cure period was designed to prevent.
TSL's counter-proposal, reflected in revised Section 7.2 of the Second Draft, provides that interest at the rate of nine percent (9%) per annum shall accrue on any unpaid amount beginning on the first day after the expiration of the ten-business-day cure period. Interest shall continue to accrue until the date of payment in full. This approach ensures that TSL has a genuine opportunity to cure any inadvertent delay without penalty, while also ensuring that Northwind is compensated for any extended delay in payment following expiration of the cure period.
D. Northwind's Proposed Addition — Attorney's Fees for Enforcement
Northwind proposed the addition of a prevailing-party attorney's fees provision (proposed new Section 14.9) under which the prevailing party in any action to enforce the Settlement Agreement would be entitled to recover its reasonable attorney's fees and costs from the non-prevailing party.
TSL does not accept this provision. Our clients' position is that the consent judgment mechanism, together with the Court's retained jurisdiction for one hundred eighty (180) days following the Effective Date (as set forth in the separate Stipulation and Order Retaining Jurisdiction that the parties will jointly submit to the Court), provides Northwind with a streamlined and efficient enforcement remedy that does not require a separate attorney's fees provision. In the event of a payment default that is not cured within the ten-business-day cure period, Northwind may simply file the consent judgment — a process that requires minimal legal effort and expense.
Furthermore, a prevailing-party attorney's fees provision is inconsistent with the no-admission-of-liability and mutual-release framework that undergirds the Settlement Agreement. The settlement is intended to end this dispute, not to create new grounds for fee-shifting litigation between the parties. Each party has incurred significant legal fees in connection with this action, and the parties' agreement to bear their own costs is a customary feature of mutual-release settlements.
TSL's counter-proposal is that no attorney's fees provision be included in the Settlement Agreement. Each party shall bear its own legal fees and costs in connection with the settlement, including the negotiation and execution of the Settlement Agreement and any enforcement proceedings. The Second Draft reflects this position.
E. Representation Regarding Assignment of Claims
Northwind proposed the addition of a representation and warranty by TSL to the effect that TSL has not assigned, transferred, pledged, or otherwise conveyed any of its claims against Northwind to any third party, including specifically to Fortis Marine Underwriters Ltd. in connection with any subrogation claim.
TSL accepts the representation regarding non-assignment of claims in principle. TSL has not assigned any of its claims against Northwind to any third party, and TSL is willing to so represent in the Settlement Agreement.
However, TSL has modified Northwind's proposed language to carve out Fortis Marine Underwriters Ltd.'s existing subrogation rights under Hull and Machinery Policy No. FMU-HM-2020-4892. As you are aware, Fortis Marine, as TSL's hull and machinery insurer, possesses contractual and equitable subrogation rights that arise by operation of the insurance policy and applicable law. These subrogation rights were not created by any affirmative assignment by TSL, and they cannot be extinguished or waived by TSL without Fortis Marine's consent. The Second Draft includes language expressly preserving Fortis Marine's subrogation rights and confirming that the Settlement Agreement does not impair, waive, or modify those rights.
We note, for the avoidance of any concern on Northwind's part, that Fortis Marine's subrogation rights, to the extent they exist, would run against third parties — such as the vessel's builder, Dalian Prosperity Shipyard Co., or component manufacturers — in connection with any insured losses. TSL is not aware of any basis on which Fortis Marine would assert subrogation claims against Northwind, and TSL does not believe that such claims exist. The carve-out in the Second Draft is included solely as a matter of prudence and to ensure that TSL does not inadvertently impair its insurer's rights. This is consistent with TSL's notice obligations to Fortis Marine under the hull and machinery policy.
IV. ESCROW AGREEMENT
As you are aware, a separate draft Escrow Agreement was transmitted by this office to Hargrove, Delacroix & Stern on November 8, 2024. We have not yet received Northwind's comments on that draft. We respectfully request that Northwind provide its redline or comments on the Escrow Agreement at its earliest convenience so that both the Settlement Agreement and the Escrow Agreement can be finalized simultaneously. The two documents are interrelated, and simultaneous execution will be necessary to implement the settlement payment mechanics.
We confirm that Atlantic Fiduciary Trust Company has agreed to serve as escrow agent and has reviewed the draft escrow terms. Our contact at Atlantic Fiduciary is Martin Schreiber, Vice President, Escrow Services, located at 60 Wall Street, Suite 2800, New York, NY 10005 (telephone: (212) 732-4500; email: mschreiber@atlanticfiduciary.com). Escrow account number ESC-2024-NYK-08831 has been established and is ready to receive funds upon execution of both the Settlement Agreement and the Escrow Agreement.
We would appreciate Northwind's comments on the Escrow Agreement no later than November 18, 2024, concurrent with the deadline for comments on the Settlement Agreement Second Draft.
V. P&I CLUB APPROVAL TIMELINE
We wish to remind your office that $2,500,000 of the total $7,850,000 settlement amount will be funded by the Oceanus Mutual Protection & Indemnity Club pursuant to P&I Policy No. OCE-P&I-2020-TSL-0047. As we have previously discussed, the Oceanus P&I Club's funding of the settlement requires formal approval by the Oceanus Board of Directors.
The next scheduled meeting of the Oceanus Board at which this matter can be considered is November 22, 2024. The Oceanus P&I Club's claims handler, David Okafor, has advised us that the Board will require an execution-ready version of the Settlement Agreement for its review in advance of the meeting. Accordingly, upon finalization of the Settlement Agreement, Calderwood & Harkness will promptly transmit the execution version to Mr. Okafor for presentation to the Board.
In order to meet this timeline, it is essential that the parties finalize the Settlement Agreement no later than November 20, 2024. If the execution version is not available for delivery to the Oceanus Board in advance of the November 22 meeting, Board approval will be delayed to the next scheduled meeting, which we understand is not until mid-January 2025. Such a delay would significantly impede the settlement process and would be contrary to both parties' expressed desire for a prompt resolution.
We therefore respectfully urge Hargrove, Delacroix & Stern to prioritize its review of the Second Draft and the Escrow Agreement, and to work with us to resolve any remaining open issues in advance of the November 20 target date.
VI. COURT FILINGS AND PENDING MOTIONS
Upon execution of the Settlement Agreement, Calderwood & Harkness will prepare the following documents for joint submission to the Court:
1. Stipulation Withdrawing TSL's Motion for Partial Summary Judgment. TSL filed its Motion for Partial Summary Judgment on September 20, 2024. Upon execution of the Settlement Agreement, the parties will jointly stipulate to the withdrawal of this motion with prejudice.
2. Joint Letter to the Court. The parties will jointly submit a letter to the Honorable Lorraine K. Chen, J.S.C. (Part 49, Supreme Court, New York County, 60 Centre Street, New York, NY 10007), advising the Court that the parties have reached a settlement of all claims in this action and requesting that the summary judgment conference currently scheduled for December 6, 2024 be taken off the Court's calendar.
3. Stipulation and Order Retaining Jurisdiction. The parties will jointly submit a proposed Stipulation and Order providing that the Court shall retain jurisdiction to enforce the terms of the Settlement Agreement for a period of one hundred eighty (180) days following the Effective Date of the Settlement Agreement (as defined therein).
4. Proposed Stipulation of discontinuance With Prejudice. Following completion of all settlement payments, the parties will jointly file a Stipulation of discontinuance With Prejudice dismissing all claims, counterclaims, and cross-claims in this action. Pursuant to the Settlement Agreement, this Stipulation shall be filed within ten (10) business days of the date on which the final settlement payment is deposited into the escrow account and confirmed.
We respectfully request Hargrove, Delacroix & Stern's confirmation that Northwind will cooperate in the preparation and joint submission of each of these filings. We are prepared to circulate initial drafts of these documents promptly upon execution of the Settlement Agreement, or earlier if your office prefers to review them in advance.
VII. LENDER NOTIFICATION
For purposes of full transparency, we wish to advise your office that TSL is obligated to notify Meridian Capital Bank AG ("Meridian") of the settlement within five (5) business days of execution of the Settlement Agreement. This notification obligation arises under Section 8.14 of the Credit Agreement dated April 1, 2019 between TSL and Meridian, which requires TSL to notify Meridian of any litigation settlement in excess of $5,000,000.
We wish to clarify that this notification is purely informational in nature and does not require Meridian's consent to or approval of the settlement. TSL will provide Meridian only such information as is strictly required under the Credit Agreement, and TSL will maintain the confidentiality of the settlement terms to the greatest extent consistent with its contractual obligations to Meridian. To the extent that the confidentiality provision of the Settlement Agreement requires that financial terms be disclosed only to enumerated permitted recipients, TSL notes that Meridian is already listed as a permitted disclosure recipient in Section 9 of the First Draft and the Second Draft.
We raise this matter for your information only and do not believe it requires any additional provisions in the Settlement Agreement.
VIII. ENCLOSURES
Enclosed with this letter are the following documents:
1. Settlement Agreement and Mutual General Release — Second Draft (clean), dated November 15, 2024.
2. Settlement Agreement and Mutual General Release — Comparison Redline, showing all changes from the First Draft (November 5, 2024) to the Second Draft (November 15, 2024).
We note that the Escrow Agreement is not enclosed, as it is currently pending Northwind's comments on the draft transmitted by this office on November 8, 2024. We look forward to receiving Northwind's redline of the Escrow Agreement at its earliest convenience.
In light of the foregoing, we respectfully request that Hargrove, Delacroix & Stern provide any remaining comments on the Second Draft no later than Monday, November 18, 2024, in order to allow the parties to finalize the execution version of the Settlement Agreement by the target date of Wednesday, November 20, 2024. As noted above, this timeline is necessary to accommodate the Oceanus P&I Club Board meeting on November 22, 2024.
I am available to arrange a call at any mutually convenient time between myself and you, and/or between my colleague Carlos Espinoza and your colleague Jason Trumbull, to discuss any remaining open points. We are confident that the limited number of open items can be resolved efficiently through direct dialogue between counsel.
TSL and Aegean Fortuna remain fully committed to finalizing this settlement expeditiously and in good faith, consistent with the terms of the mediator's Term Sheet and the parties' shared interest in bringing this matter to a close. We appreciate your and your client's continued cooperation in this process.
Thank you for your attention to this matter. We look forward to hearing from you.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Douglas Carmichael Partner
Direct Dial: (212) 558-4127
Email: dcarmichael@calderwoodharkness.com
Enclosures (2)
cc: Markos Theodorakis, General Counsel, Thalassa Shipping & Logistics SA (via email)
cc: Francesca Morano, Calderwood & Harkness LLP (via email)
cc: Carlos Espinoza, Calderwood & Harkness LLP (via email)
cc: Hannah Brinkley, Calderwood & Harkness LLP (via email)