Contract analysis

1. SOFR Benchmark and Interest Rate Mechanics — We have extensive comments on the benchmark replacement provisions, including the degree of discretion afforded to the Administrative Agent in selecting a successor benchmark rate. We believe the Borrower and Required Lenders should have consent rights over any benchmark transition.

2. Mandatory Prepayment Provisions — The Initial Draft's requirement that 100% of net cash proceeds from vessel sales be applied as mandatory prepayments, without any reinvestment period, is not consistent with market practice for shipping finance revolving credit facilities. We have proposed a 365-day reinvestment period for proceeds up to $30,000,000 per fiscal year.

3. Material Adverse Change (MAC) / Material Adverse Effect (MAE) Definition — The Initial Draft contains an unusually broad MAC definition with no express carve-outs. We have proposed carve-outs for general economic conditions, shipping industry conditions, changes in law, changes in accounting standards, seasonal fluctuations in freight rates, and the announcement effects of the contemplated transactions, in each ca

4. Change of Control — The Initial Draft defines "Change of Control" with reference to a 51% equity ownership threshold for Chairman Nikolaos Karadimitriou and provides for automatic acceleration upon a change of control event. We have proposed a reduction of the ownership threshold to 30% and a shift from automatic acceleration to an offer/put mechanism.

5. Financial Covenants — We have material comments on three of the four financial covenants. In particular, the Borrower's position on the step-down level for the consolidated net leverage ratio (4.00:1.00 versus the Initial Draft's 3.75:1.00), the minimum interest coverage ratio (3.00:1.00 versus 3.25:1.00), and the maximum capital expenditures limitation ($80,000,000 versus $65,000,000) require commercial discussio

6. Collateral Coverage and Vessel Release Mechanics — The Initial Draft does not include any mechanism for the release of Mortgaged Vessels from the collateral package. We have inserted comprehensive vessel release provisions, which we regard as essential to the Borrower's ability to manage its fleet during the term of the facility.

7. Negative Covenants — Restricted Payments — The Initial Draft's flat prohibition on dividends during any period in which leverage exceeds 3.50:1.00 is not workable for TSL given its private ownership structure and Chairman Karadimitriou's reliance on distributions from the Borrower. We have proposed a builder basket approach with a flat annual basket.

8. Conditions Precedent — The Initial Draft subjects certain documentary conditions precedent to the Administrative Agent's "sole discretion." We have proposed that all documentary conditions be satisfied to the "reasonable satisfaction" of the Administrative Agent. In addition to the foregoing commercial and legal issues, we have identified a number of structural and definitional issues in the Initial Draft that we

1. Definitional and Structural Issues 1.1 Definition of "Borrower." The definition of "Borrower" should be confirmed to refer to Thalassa Shipping & Logistics SA, a Société Anonyme (Ανώνυμη Εταιρεία) organized and existing under the laws of the Hellenic Republic, with its registered office at 14 Akti Miaouli, Piraeus 185 35, Greece. The Borrower's Greek Tax Identification Number (AFM) is 094728361, and its GEMI Regis

2. SOFR Benchmark and Interest Rate Provisions 2.1 General. The Borrower has comprehensive comments on the SOFR benchmark and interest rate provisions set forth in Article II of the Initial Draft. These comments are summarized below and are reflected in detail in the redline. 2.2 Interest Rate Structure. The interest rate structure set forth in the Initial Draft provides for interest on revolving loans at a rate per

3. Facility Structure and Sublimits 3.1 Revolving Credit Facility. The revolving credit facility in the aggregate principal amount of $150,000,000 is consistent with the Mandate and Fee Letter and the Borrower's liquidity requirements. We have no objection to the overall facility size. 3.2 Letter of Credit Sublimit. The Initial Draft provides for a letter of credit sublimit of $20,000,000 but does not identify the is

4. Purpose and Use of Proceeds 4.1 Refinancing. The primary purpose of the facility is to refinance the existing $125,000,000 revolving credit facility with Harborstone National Bank (the "Existing Facility"), which was established pursuant to a Credit Agreement dated November 15, 2018 between TSL and Harborstone National Bank, as amended by a First Amendment dated June 30, 2020 and a Second Amendment dated March 1,

5. Commitment Fee and Fee Provisions 5.1 Commitment Fee. The commitment fee is 0.375% per annum on the daily average undrawn amount of the total commitments, stepping down to 0.25% per annum during any period in which the utilization of the facility exceeds 50% of total commitments (i.e., utilization in excess of $75,000,000). The Borrower does not object to the commitment fee structure as proposed, subject to the fo

6. Maturity and Repayment 6.1 Maturity Date. The proposed maturity date is five (5) years from the closing date. Based on the anticipated closing in Q2 or Q3 2023, the maturity date would fall approximately in mid-2028. The Borrower accepts the five-year tenor, subject to the extension option described below. 6.2 Extension Option. We have proposed the insertion of a new Section 2.21 providing for an extension option

7. Mandatory Prepayment Provisions 7.1 Vessel Sale Proceeds. Section 2.12(a) of the Initial Draft requires that 100% of net cash proceeds from any sale, transfer, or other disposition of a vessel be applied as a mandatory prepayment of outstanding obligations under the facility. This requirement applies without any reinvestment right and without any de minimis or annual aggregate threshold. We have proposed substanti

8. Collateral Package 8.1 Ship Mortgages. The credit facility is secured by, among other things, first-priority ship mortgages on 18 designated vessels (the "Mortgaged Vessels") drawn from the Borrower's total fleet of 40 vessels (28 dry bulk carriers and 12 tankers). The Mortgaged Vessels have an aggregate appraised fair market value of approximately $780,000,000, as reflected in the preliminary appraisal engagement

9. Financial Covenants The Borrower has significant comments on three of the four financial covenants proposed in the Initial Draft, as well as on the absence of an equity cure provision. The Borrower's positions are supported by reference to TSL's audited financial results for the fiscal year ended December 31, 2022 (audited by Hawthorne & Garrett LLP), which reflect revenue of approximately $620,000,000 and EBITDA

10. Material Adverse Change (MAC) / Material Adverse Effect (MAE) Definition 10.1 General. We have extensively marked up the definition of "Material Adverse Change" (or "Material Adverse Effect") in Section 1.01 of the Initial Draft. The Initial Draft contains an extremely broad MAC definition that encompasses any material adverse change in or material adverse effect on (a) the business, assets, property, condition (

11. Change of Control 11.1 Definition. The Initial Draft defines "Change of Control" as any event in which Nikolaos Karadimitriou (Founder and Chairman of TSL) ceases to own, directly or indirectly, at least 51% of the voting equity interests in the Borrower. We have two principal objections to this definition. 11.2 Ownership Threshold. First, the 51% ownership threshold is not appropriate. Chairman Karadimitriou cur

12. Representations and Warranties (Article V) We have extensive comments across the representations and warranties article. The following summarizes the most significant markups: 12.1 No Litigation (Section 5.04). The "no litigation" representation has been qualified by materiality and now applies only to litigation that could reasonably be expected to result in a Material Adverse Effect. In addition, we have propos

13. Affirmative Covenants (Article VI) 13.1 Financial Reporting (Section 6.01). We have proposed the following financial reporting timeline: (a) Annual audited financial statements: within 120 days of the end of each fiscal year. The Initial Draft proposes 90 days, which we object to as insufficient given the Greek audit timeline and the engagement with Hawthorne & Garrett LLP. Under IFRS and applicable Greek corpora