Contract analysis

I. Introduction and Purpose I am writing on behalf of Calderwood & Harkness LLP, counsel to Thalassa Shipping & Logistics Société Anonyme ("TSL") and its wholly-owned Delaware subsidiary, Thalassa Americas Inc. ("TAI"), under the supervision of Nathaniel Bower, the responsible partner on this engagement. The purpose of this letter is to present, on behalf of TSL and TAI, a proposed exchange of the existing mezzanine

II. Background — Current Capital Structure and Financial Position To provide full context for the proposed exchange, we summarize below the relevant features of TSL's capital structure, its current financial position, and the enterprise valuation framework that underlies the proposal. A. The Existing Mezzanine Notes The mezzanine notes held by BMC were issued on June 15, 2019, concurrently with the closing of the Sen

III. The Proposed Mezzanine Exchange A. Summary of Proposed Terms TSL proposes that BMC exchange the full outstanding principal amount of $112,300,000 of existing mezzanine notes (together with all accrued and unpaid interest thereon) for the following consideration: (a) New Second-Lien Notes: $60,000,000 in aggregate principal amount of new second-lien notes, to be issued by TSL on the terms described in Section III

1. Blended Recovery Exceeding Chapter 11 Alternative. The exchange provides BMC with a blended recovery consisting of $60,000,000 in new secured debt plus a 15% equity stake in a reorganized TSL. When the equity upside is considered alongside the new debt, the total package is intended to exceed the estimated Chapter 11 recovery of approximately 62.3% at midpoint enterprise value. We note that in a Chapter 11 scenari

2. Equity upside Participation. The 15% equity stake provides BMC with meaningful participation in the potential recovery of TSL's enterprise value. The dry-bulk shipping market is cyclical, and leading industry analysts project a recovery in charter rates beginning in late 2024 or 2025, driven by a tightening of vessel supply as the global orderbook remains at historically low levels. If charter rates recover to lev

3. Extended Maturity and Operational Runway. The extension of maturity from December 15, 2024 to June 2028 provides significantly more runway for TSL to execute on its business plan, complete the planned vessel dispositions, and benefit from a cyclical recovery in the shipping markets. Under the current maturity, the mezzanine notes would come due in less than two years under market conditions that make refinancing e

4. Avoidance of Chapter 11 Costs and Disruption. A successful out-of-court restructuring preserves going-concern value, avoids estimated administrative costs of $18,500,000 in the first twelve months of a Chapter 11 case, and mitigates operational disruption to TSL's fleet and logistics business. In-court proceedings in the maritime sector carry particular risks, including potential counterparty termination rights un

5. Improved Second-Lien Cushion Through Vessel Dispositions. As part of the broader restructuring, TSL has agreed to sell six older dry-bulk carriers (average age of approximately 18 years) within twelve months of the closing of the restructuring, for estimated aggregate proceeds of approximately $72,000,000. Net proceeds from these dispositions will be applied to prepay Term Loan A, thereby reducing the quantum of f

IV. Context Within the Broader Restructuring — RSA Framework The proposed mezzanine exchange is one component of a comprehensive out-of-court restructuring that TSL is negotiating with its principal creditor constituencies. The other major elements of the restructuring are summarized below, to provide BMC with full context regarding the overall framework. A. Senior Secured Facility Amendment TSL is in advanced negoti

V. Chapter 11 Alternative — Context for BMC While TSL strongly prefers the out-of-court restructuring path and believes it represents the value-maximizing outcome for all stakeholders, TSL has, as a matter of prudent contingency planning, prepared a comprehensive Chapter 11 plan in the event that a consensual out-of-court resolution cannot be achieved. The key parameters of the Chapter 11 contingency plan are as foll

VI. Timeline and Process Time is of the essence. The current forbearance standstill runs through March 8, 2023 (as extended pursuant to the First Amendment to Forbearance Agreement executed on January 8, 2023). While the possibility of a further extension exists, it is contingent on continued progress toward a consensual restructuring, and there can be no assurance that the senior lenders will agree to a further exte

VII. Confidentiality This letter and the proposal contained herein are strictly confidential and are being transmitted solely for purposes of settlement discussions between the parties. The contents of this letter are protected by Federal Rule of Evidence 408 and any applicable state law equivalents, and are not to be construed as an admission of any fact, liability, or obligation by TSL, TAI, or any of their respect

VIII. Invitation to Discuss and Next Steps We recognize that this is a detailed and significant proposal, and we welcome the opportunity to discuss it with you and with BMC in detail. We would propose a call or in-person meeting among Kellner & Foss, Calderwood & Harkness, and the respective financial advisors—KHP on the TSL side, and Draycott Advisory Group if engaged by the Ad Hoc Group, or any financial advisor se