Contract analysis

I. INTRODUCTION This memorandum analyzes the anti-corruption representations and covenants contained in that certain Credit Agreement dated as of January 15, 2020 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among Thalassa Shipping & Logistics SA, a société anonyme organized under the laws of the Hellenic Republic (the "Borrower" or "TSL"), the lenders from ti

II. RELEVANT PROVISIONS Set forth below are the key provisions of the Credit Agreement that are implicated by the potential FCPA exposure. We have reproduced the operative language verbatim where appropriate, with our annotations following each provision. A. Section 5.18 — Anti-Corruption Laws

Section 5.18 of the Credit Agreement contains the Borrower's representation and warranty regarding compliance with anti-corruption laws. The full text of Section 5.18 is as follows: "The Borrower and its Subsidiaries have conducted their businesses in compliance with the United States Foreign Corrupt Practices Act of 1977, as amended (the 'FCPA'), the U.K. Bribery Act 2010, and all other applicable anti-corruption la

Section 4.02 of the Credit Agreement sets forth the conditions precedent to each borrowing under the Facility. Section 4.02(c) provides, in relevant part, that: Each request for a borrowing under the Facility shall constitute a representation and warranty by the Borrower that (i) the representations and warranties set forth in Article V (including, without limitation, Section 5.18) are true and correct in all materia

Section 6.10 of the Credit Agreement imposes a continuing affirmative obligation on the Borrower with respect to anti-corruption compliance. The relevant language provides: "The Borrower shall maintain in effect and enforce policies and procedures designed to promote and achieve compliance by the Borrower, its Subsidiaries, and their respective directors, officers, employees, and agents with the FCPA and all other ap

Section 8.01(d) of the Credit Agreement provides that an Event of Default occurs if: "any representation or warranty made or deemed made by the Borrower herein, in any other Loan Document, or in any certificate, document, or financial or other statement furnished at any time under or in connection with this Agreement shall prove to have been false or misleading in any material respect when made or deemed made." A mat

III. ANALYSIS A. Potential Breach of Section 5.18 The central question under Section 5.18 is whether the expediting fees paid by TWA to Goldenshore constitute "direct or indirect unlawful payment[s] to any foreign or domestic government official or employee from corporate funds" within the meaning of the representation. The factual predicate for this analysis is as follows. As detailed in the Scoping Memorandum, betw

IV. PRACTICAL CONSIDERATIONS The legal analysis set forth in Part III must be evaluated in the context of several practical considerations that will shape TSL's approach to the credit-facility issue. We address these considerations below.

1. Proactive vs. Reactive Approach to Meridian Atlantic A threshold strategic question for TSL is whether to proactively disclose the Goldenshore issue to Meridian Atlantic or to await the completion of the internal review before making any disclosure. There are legitimate arguments on both sides of this question, and the optimal approach will depend on how the factual record develops. Advantages of Proactive Disclos

2. Lender Relationship Gerald Fontaine, Managing Director, Shipping & Offshore Finance, at Meridian Atlantic Bank, National Association, has served as TSL's primary relationship manager since the Facility was executed in January 2020. Mr. Fontaine is understood to have a constructive working relationship with TSL's treasury function and has been generally supportive of TSL's borrowing needs. If and when a disclosure

3. Refinancing Risk The Facility matures on January 15, 2025, approximately 28 months from the date of this memorandum. This maturity date creates a medium-term horizon within which the credit-facility issue must be resolved. If Meridian Atlantic exercises its default remedies — including acceleration of the $74,000,000 in outstanding borrowings or termination of the Lenders' commitment — TSL would face an immediate

4. Waiver Possibility If TSL can demonstrate that it is taking prompt and meaningful remedial action, the Agent and the Required Lenders may be willing to grant a waiver of the covenant breach or to enter into a standstill agreement pursuant to which the Agent would forbear from exercising default remedies for a specified period. This is a common outcome in lender relationships where the borrower is cooperative, tran

5. Interaction with DOJ/SEC Voluntary Self-Disclosure The credit-facility analysis does not exist in isolation; it must be coordinated with TSL's broader strategy regarding potential voluntary self-disclosure to the U.S. Department of Justice's FCPA Unit and/or the Securities and Exchange Commission's Division of Enforcement. If TSL ultimately elects to pursue voluntary self-disclosure, having already addressed the c

V. RECOMMENDATIONS Based on the foregoing analysis, we make the following preliminary recommendations:

1. Defer Disclosure to Meridian Atlantic Pending Completion of the Factual Record. We recommend that TSL not make any disclosure to Meridian Atlantic, whether to Gerald Fontaine or to any other representative of the Agent or the Lender group, until the factual record developed through the internal review is sufficiently complete to support a credible and comprehensive narrative. A disclosure strategy should be develo

2. Prioritize Completion of the Internal Review. We recommend that TSL prioritize the engagement and activation of Northpoint Forensic Advisors LLC (Sandra Bellingham, CPA, CFE; 1700 K Street NW, Suite 600, Washington, DC 20006) to complete the forensic accounting workstreams that are essential to developing a complete factual record. Key outstanding document requests include TWA bank statements from Banque Equatoria

3. Prepare a Draft Waiver Request and Standstill Letter. We recommend that C&H prepare, and hold in reserve, a draft waiver request and standstill letter addressed to the Agent. The draft should reference the specific remedial actions TSL has undertaken or committed to undertake, and should request that the Agent forbear from exercising any default remedies under Section 8.02 for a specified period (we recommend requ

4. Monitor and Consider Suspending Borrowing Requests. Each additional borrowing request submitted under the Facility reaffirms the Section 5.18 representation and creates an additional potential breach point. We recommend that TSL carefully monitor all borrowing requests and consider whether it is operationally feasible to minimize or suspend further draws during the pendency of the internal review. We note that the

5. Coordinate with Papadakis & Lekkas LLP on Greek Regulatory Obligations. We recommend that C&H coordinate with Stavros Lekkas of Papadakis & Lekkas LLP (28 Vasilissis Sofias Avenue, Athens 106 74, Greece), TSL's Greek counsel, on any regulatory disclosure obligations that may arise under Greek law if a breach of the Credit Agreement is confirmed. In particular, we note that the Hellenic Capital Markets Commission m

6. Assess Nigerian Regulatory Disclosure Obligations. We recommend that C&H consider whether Okafor Bassey & Partners (Ngozi Okafor, 4th Floor, Marina Towers, 22 Marina Street, Lagos Island, Lagos, Nigeria), TSL's Nigerian counsel, should be engaged to assess whether Nigerian banking regulations or anti-corruption laws impose independent disclosure obligations on Thalassa Nigeria Limited ("TNL") with respect to its b