1044-00002 · Client 1044 · Correspondence/Lender Negotiations

letter-sc-to-mab-syndication-comments.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP Attorneys at Law

425 Park Avenue New York, NY 10022 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com

June 5, 2023

Catherine Hsiang Relationship Manager Meridian Atlantic Bank, National Association 600 Lexington Avenue, 38th Floor New York, NY 10022

Re: Thalassa Shipping & Logistics SA — $150,000,000 Senior Secured Revolving Credit Facility; Comments on Draft Confidential Information Memorandum

C&H Matter No. 1044-00002

Dear Ms. Hsiang:

1. Introduction and Purpose

Calderwood & Harkness LLP ("C&H" or "we") acts as counsel to Thalassa Shipping & Logistics SA ("Thalassa" or "TSL") in connection with the proposed $150,000,000 senior secured revolving credit facility (the "Facility") for which Meridian Atlantic Bank, National Association ("Meridian Atlantic" or "MAB") is acting as Sole Lead Arranger, Sole Bookrunner, and Administrative Agent pursuant to the Mandate and Fee Letter dated February 14, 2023, as executed between Thalassa and Meridian Atlantic (the "Mandate Letter").

We write in reference to the draft Confidential Information Memorandum (the "CIM") prepared by Meridian Atlantic and transmitted to our offices on May 22, 2023, for distribution to prospective syndicate lenders, namely: Nordkapp Maritime Finance AG ("Nordkapp"), Clearwater Commercial Lending LLC ("Clearwater"), and Eastbourne Capital Partners LLP ("Eastbourne," and together with Nordkapp and Clearwater, the "Prospective Lenders"). We understand that Meridian Atlantic intends to distribute the CIM to the Prospective Lenders as part of the formal syndication process for the Facility and that the CIM will serve as the primary information package upon which the Prospective Lenders will make their credit decisions.

This letter sets forth Thalassa's comments on the draft CIM, organized by section and topic area. Our comments focus principally on: (a) the accuracy of the business description of Thalassa and its subsidiaries; (b) fleet information, vessel valuation data, and collateral descriptions; (c) the presentation of financial data and projections; and (d) the characterization of key transaction terms, including proposed financial covenants and syndicate allocations. In addition, we identify certain specific factual corrections and clarifications and address confidentiality and disclaimer language.

The comments set forth herein are based upon a thorough review conducted by the undersigned, Ian Blackwood (Partner, Banking & Finance), together with Sophie Tremblay (Senior Associate) and Daniel Obi (Associate) of C&H's Banking & Finance group. Our review has been coordinated with, and incorporates the input of, Thalassa's management team, including Chief Executive Officer Elena Vassiliou, Chief Financial Officer Dimitrios Pantazis, and General Counsel Aris Komnenidis, each of whom has reviewed the draft CIM and provided factual comments and corrections. A separate redlined markup of the draft CIM, reflecting specific textual changes, accompanies this letter or will follow under separate cover, as noted in the Enclosure section below.

We appreciate the constructive working relationship between Meridian Atlantic and Thalassa in connection with the arrangement and syndication of the Facility, and we submit these comments in the spirit of ensuring that the CIM presents an accurate and complete picture of the Borrower and the proposed transaction for the benefit of all parties.

2. General Comments

2.1 Borrower Identification and Corporate Information

We request that Meridian Atlantic confirm that the full legal name of the Borrower is consistently rendered throughout the CIM as "Thalassa Shipping & Logistics SA." Upon our review of the draft CIM, we identified several instances in which the Borrower's name is abbreviated without prior definition — for example, references to "Thalassa S&L" on page 4 of the draft and "TSL SA" on page 17 — each of which should be conformed to either the full legal name or the defined abbreviations "Thalassa" or "TSL" upon first use. Consistent use of defined terms throughout the CIM is important not only for readability but also to avoid any ambiguity as to the identity of the Borrower entity, particularly given the multi-entity corporate structure discussed further below.

For the avoidance of doubt, we confirm the following corporate information, which should be accurately reflected in the CIM:

• Entity Type: Société Anonyme (Anonimi Etairia) organized and existing under the laws of the Hellenic Republic.

• Headquarters and Registered Office: 14 Akti Miaouli, Piraeus 185 35, Greece.

• Greek Tax Identification Number (AFM): 094728361.

• General Electronic Commercial Registry (GEMI) Registration No.: 143209501000.

• Founder & Chairman of the Board of Directors: Nikolaos Karadimitriou. We note that Mr. Karadimitriou's role should be properly described as "Founder & Chairman" throughout the CIM. Several references in the draft describe him only as "Chairman" without acknowledging his role as the company's founder, which is relevant context for Prospective Lenders in understanding the company's governance and history.

• Chief Executive Officer: Elena Vassiliou.

• Chief Financial Officer: Dimitrios Pantazis.

In addition, we request that the CIM include a reference to Thalassa's independent auditors, Hawthorne & Garrett LLP, with their registered address at 130 Kifissias Avenue, Marousi, Athens 151 25, Greece. The audited financial statements that form the basis of the financial data presentation in the CIM were prepared and audited by Hawthorne & Garrett, and identification of the auditors is standard practice in syndication materials of this nature. Including this reference will provide Prospective Lenders with comfort regarding the source and reliability of the financial information presented and will facilitate any independent verification the Prospective Lenders or their advisors may wish to undertake.

2.2 Confidentiality and Disclaimer Language

We note that Thalassa requests a careful review of the confidentiality and disclaimer sections of the CIM (currently appearing on the inside cover page and on pages ii through iv of the draft) to ensure that such sections are consistent with the terms and conditions of the Mandate Letter, including, in particular, the confidentiality undertakings set forth in Section 8 thereof.

Specifically, Thalassa requests confirmation that any "big boy" language — i.e., language purporting to disclaim the Sole Lead Arranger's responsibility for the accuracy or completeness of information contained in the CIM — is appropriately limited and does not extend beyond the scope of disclaimers customarily included in syndication information packages for transactions of this type and size. While Thalassa acknowledges that it is standard market practice for the arranger to include certain disclaimers regarding forward-looking statements and the Borrower's responsibility for the accuracy of information provided to the arranger, such disclaimers should not be drafted in a manner that could be interpreted as relieving Meridian Atlantic of its obligations under the Mandate Letter to exercise reasonable care in the preparation and presentation of the CIM.

Furthermore, we confirm that the CIM should restrict distribution solely to the three identified Prospective Lenders — Nordkapp, Clearwater, and Eastbourne — and their respective legal and financial advisors, subject in each case to the execution by each recipient of a confidentiality undertaking in form and substance satisfactory to Thalassa and Meridian Atlantic. The draft CIM does not currently include a specific reference to the identity of permitted recipients. We recommend that a distribution list be included, either on the inside cover or as an appendix, and that the confidentiality legend expressly prohibit redistribution to any party not identified on such list without the prior written consent of Thalassa.

3. Comments on Business Description

3.1 Overview of Thalassa's Business

The CIM's description of Thalassa's principal business activities requires certain revisions and clarifications to ensure accuracy and completeness. We recommend that the business overview section state as follows: Thalassa is the owner and operator of a diversified fleet of 28 dry bulk carriers and 12 tankers, comprising a total fleet of 40 vessels. In addition to vessel ownership and operation, Thalassa provides integrated maritime logistics services, including voyage chartering, time chartering, freight forwarding, and port logistics coordination, across the Mediterranean, Black Sea, and transatlantic trade routes.

We confirm that the total fleet size as of the date of this letter is 40 vessels, consisting of 28 dry bulk carriers and 12 tankers. We note that page 8 of the draft CIM contains a reference to a fleet of "42 vessels," which appears to be an error. We request that this figure be corrected to 40. In addition, the vessel classification table on page 9 lists 30 dry bulk carriers rather than 28, which is likewise inaccurate and should be corrected. Thalassa's management has confirmed that no vessel acquisitions or dispositions have occurred since the information was provided to Meridian Atlantic, and we are unaware of any pending transactions that would affect the vessel count.

With respect to fleet valuation, the CIM should note that the aggregate fair market value of Thalassa's entire fleet of 40 vessels, as appraised in the first quarter of 2023, is approximately $1.2 billion. The appraisals were conducted by Seastone Maritime Advisors Ltd. on a desktop basis as part of Thalassa's routine fleet valuation process and should be distinguished from the formal independent appraisals of the Mortgaged Vessels being prepared in connection with the Facility (as discussed in Section 4 below). The CIM should be clear that the $1.2 billion figure represents total fleet value and not the value of the collateral package for the Facility.

3.2 Subsidiary and Guarantor Structure

The CIM should accurately describe the three proposed subsidiary guarantors of the Facility. Based on our review, certain details regarding the jurisdiction of organization and the respective roles of these entities require correction or clarification. The proposed subsidiary guarantors are as follows:

(a) Thalassa Dry Bulk Holdings Ltd. — A private limited company organized under the laws of the Republic of Cyprus (Registration No. HE 387412). Thalassa Dry Bulk Holdings serves as the intermediate holding company for TSL's dry bulk fleet, holding 100% of the equity interests in each of the single-purpose vessel-owning subsidiaries that own the 28 dry bulk carriers in the fleet.

(b) Thalassa Tanker Operations Ltd. — A private limited company organized under the laws of the Republic of the marshall Islands (Entity No. 104927). Thalassa Tanker Operations is the operating subsidiary responsible for the commercial and technical management of TSL's tanker fleet of 12 vessels.

(c) Thalassa Logistics International Ltd. — A private limited company organized under the laws of the Republic of Cyprus (Registration No. HE 401856). Thalassa Logistics International is the integrated logistics and chartering subsidiary of TSL, through which the company conducts its freight forwarding, voyage chartering brokerage, and port logistics operations.

We note that the organizational chart appearing on page 12 of the draft CIM incorrectly identifies Thalassa Tanker Operations Ltd. as a Cypriot entity. As indicated above, Thalassa Tanker Operations is organized under the laws of the Republic of the marshall Islands, and the organizational chart should be corrected accordingly. Similarly, the organizational chart should confirm that both Thalassa Dry Bulk Holdings Ltd. and Thalassa Logistics International Ltd. are Cypriot entities. Accurate jurisdictional identification is essential for Prospective Lenders to assess the enforceability of guarantees, the availability of legal opinions, and the applicability of relevant regulatory frameworks.

We further note that Pavlopoulos & Drakos Law Firm, located at 22 Filellinon Street, Athens 105 57, Greece, is advising Thalassa on Greek corporate and maritime law matters in connection with the Facility, including with respect to the registration and enforcement of ship mortgages under Greek law. The corporate structure section of the CIM should be consistent with the representations and warranties set forth in Article V of the near-final credit agreement currently being negotiated with Whitmore, Jennings & Alcott LLP ("WJA"), which serves as counsel to Meridian Atlantic and the proposed syndicate lenders. Any discrepancies between the CIM and the credit agreement regarding the corporate structure, jurisdictions of organization, or subsidiary ownership chain should be identified and reconciled before the CIM is finalized.

3.3 Insurance and Risk Management

The CIM includes a section on insurance and risk management at pages 15 through 17, which Thalassa considers an important component of the information package given the significance of adequate insurance coverage to the credit profile of a shipping borrower. We request the following revisions and additions to that section:

First, the CIM should reference Trident Marine Insurance Brokers Ltd. (Lloyd's Building, One Lime Street, London EC3M 7HA, United Kingdom) as Thalassa's fleet insurance broker. Trident has served as Thalassa's insurance broker since 2016 and is responsible for placing and administering all hull and machinery, protection and indemnity ("P&I"), and war risk insurance for the fleet. Identification of the broker will provide Prospective Lenders with a point of reference for insurance-related inquiries.

Second, we request that the CIM accurately describe the types and categories of insurance coverage maintained by Thalassa for its fleet, including, without limitation: (i) P&I club coverage through the Dunmore Casualty Group (for the dry bulk fleet) and the Adriatic Assurance (for the tanker fleet); (ii) hull and machinery insurance; and (iii) war risk insurance and loss-of-hire coverage. However, we caution that the CIM should not mischaracterize or overstate specific coverage limits, deductible amounts, or policy terms. Any specific monetary figures relating to insurance coverage that Meridian Atlantic proposes to include in the CIM should be verified directly with Thalassa's CFO, Dimitrios Pantazis, who can confirm the accuracy of such figures in coordination with Trident. Given the commercially sensitive nature of insurance pricing and coverage terms, Thalassa would prefer that coverage details be described in general terms in the CIM, with specific policy information to be made available to Prospective Lenders through the virtual data room on a need-to-know basis.

4. Comments on Fleet Information and Collateral Description

4.1 Total Fleet

As set forth in Section 3.1 above, Thalassa's total fleet consists of 40 vessels: 28 dry bulk carriers and 12 tankers. The aggregate fair market value of the total fleet is approximately $1.2 billion based on the Q1 2023 desktop appraisals. We reiterate that all fleet count references in the CIM should be corrected to reflect these confirmed figures.

4.2 Mortgaged Vessels

The Facility contemplates first-priority ship mortgages on 18 designated vessels out of the total fleet of 40 (the "Mortgaged Vessels"). The Mortgaged Vessels have been selected by Thalassa in consultation with Meridian Atlantic based on age, value, charter profile, and flag state considerations, and are listed in Schedule 1 to the draft credit agreement. We request that the CIM include a clear and accurate list of the 18 Mortgaged Vessels, including for each vessel: (i) the vessel name; (ii) the IMO number; (iii) the year of build; (iv) the deadweight tonnage; (v) the flag state; and (vi) the name of the vessel-owning subsidiary.

The aggregate appraised fair market value of the 18 Mortgaged Vessels is approximately $780,000,000. These valuations are based on independent appraisals currently being prepared by Seastone Maritime Advisors Ltd., located at 55 Gracechurch Street, London EC3V 0EE, United Kingdom. The lead appraiser for the engagement is Duncan Fairweather, a senior managing director at Seastone with over 25 years of experience in maritime asset valuation. We note that the Seastone appraisals are expected to be delivered on or about July 10, 2023, and are not yet final as of the date of this letter. Accordingly, the CIM should indicate that the Mortgaged Vessel valuations are preliminary or pending and will be updated upon receipt of the final Seastone appraisal reports. The CIM should not present the $780,000,000 figure as a finalized or confirmed valuation without appropriate caveats.

We further request that the CIM clearly distinguish between the total fleet value of approximately $1.2 billion and the aggregate Mortgaged Vessel value of approximately $780,000,000. These are distinct figures, and any conflation of the two could create confusion among Prospective Lenders regarding the extent of the collateral package for the Facility. We recommend that the CIM include a summary table or chart that presents the total fleet value, the Mortgaged Vessel value, and the un-mortgaged fleet value side by side, with appropriate explanatory footnotes.

4.3 Collateral Coverage

The draft credit agreement under negotiation with WJA provides for a minimum collateral coverage ratio of 140% of outstanding Facility obligations. At full draw of the $150,000,000 Facility, the minimum required collateral value would therefore be $210,000,000 (calculated as 140% multiplied by $150,000,000).

Based on the expected Seastone appraisals, the aggregate Mortgaged Vessel fair market value of approximately $780,000,000 would provide a collateral coverage ratio of approximately 520% at full draw (calculated as $780,000,000 divided by $150,000,000), representing substantial headroom above the minimum 140% threshold. We believe this coverage ratio represents a significant credit strength of the transaction and should be presented clearly and prominently in the CIM.

The CIM should present the collateral coverage ratio calculation in a clear and transparent manner, ideally in tabular format, showing: (i) total commitments; (ii) minimum required collateral coverage; (iii) minimum required collateral value; (iv) aggregate Mortgaged Vessel fair market value; and (v) actual coverage ratio at full draw. In addition, the CIM should reference the role of Pinnacle Trust & Agency Services Inc. (One Liberty Plaza, 44th Floor, New York, NY 10006) as the proposed Collateral Agent and Security Trustee for the Facility. Pinnacle will hold the first-priority ship mortgages and related collateral documentation on behalf of the secured parties, and its role should be described in the collateral section of the CIM for the benefit of Prospective Lenders.

4.4 Security Package Summary

We request that the CIM's collateral summary section enumerate all components of the proposed security package for the Facility in a comprehensive and structured manner. Based on the terms currently under negotiation in the credit agreement, the security package consists of the following:

(a) First-Priority Ship Mortgages. First-priority ship mortgages on each of the 18 Mortgaged Vessels, to be registered in the applicable flag state registries. The mortgages will be governed by the law of the relevant flag state (Greek law for Greek-flagged vessels, marshall Islands law for marshall Islands-flagged vessels, and Liberian law for Liberian-flagged vessels, as applicable).

(b) Assignment of Earnings. Assignment of all earnings, hire, freight, and other income generated by or in respect of each Mortgaged Vessel, including assignment of the earnings accounts maintained by each vessel-owning subsidiary at Meridian Atlantic or such other bank as may be designated by the Administrative Agent.

(c) Assignment of Insurances. Assignment of all hull and machinery insurance, P&I club cover, and war risk insurance maintained in respect of each Mortgaged Vessel, together with assignment of all proceeds thereof.

(d) Pledge of Equity Interests. Pledge of 100% of the equity interests in each vessel-owning subsidiary that owns a Mortgaged Vessel, to be perfected by delivery of share certificates (or equivalent), executed stock transfer forms (or equivalent), and any required filings in the relevant jurisdiction of organization.

(e) Assignment of Time Charters. Assignment of all time charter agreements with remaining terms of 12 months or more to which any Mortgaged Vessel is subject, together with any charter hire guarantees or related instruments.

We request that the CIM present these collateral elements in the order listed above and provide sufficient detail regarding each element so that Prospective Lenders can evaluate the scope and enforceability of the security package. Where applicable, the CIM should note that the specific form and terms of each security document will be governed by the laws of the relevant jurisdiction and that local counsel legal opinions will be delivered at closing to address enforceability matters.

5. Comments on Transaction Summary and Key Terms

5.1 Facility Structure

The draft CIM contains a transaction summary section beginning at page 22, which sets forth the key terms and conditions of the proposed Facility. We request that the following information be accurately reflected in the final CIM:

• Facility Type: $150,000,000 senior secured revolving credit facility.

• Purpose: The proceeds of the Facility will be used to (i) refinance in full the existing $125,000,000 revolving credit facility of Thalassa with Harborstone National Bank (the "Existing Facility"), which matures on November 15, 2023, and (ii) provide incremental liquidity of approximately $25,000,000 (representing the difference between the $150,000,000 proposed Facility and the $125,000,000 Existing Facility) for general corporate purposes, working capital requirements, and other lawful purposes as permitted under the credit agreement.

• Existing Harborstone Facility: The Existing Facility was established pursuant to a Credit Agreement dated as of November 15, 2018, among Thalassa, as borrower, Harborstone National Bank, as administrative agent and sole lender, and the other parties thereto (as amended by the First Amendment to Credit Agreement dated as of June 30, 2020, and the Second Amendment to Credit Agreement dated as of March 1, 2022, collectively, the "Existing Credit Agreement"). The CIM should accurately describe the Existing Facility and note that full repayment and discharge of all obligations thereunder will be a condition precedent to the closing of the proposed Facility.

• Sublimits: The Facility includes a sublimit of $20,000,000 for the issuance of standby and commercial letters of credit and a sublimit of $15,000,000 for swingline loans. Letters of credit may be issued by Meridian Atlantic in its capacity as issuing bank, and swingline loans will be made available by Meridian Atlantic in its capacity as swingline lender.

• Maturity: Five years from the closing date of the Facility. The anticipated closing date is during the second or third quarter of 2023, subject to completion of definitive documentation, delivery of conditions precedent, and receipt of syndicate commitment confirmations.

• Governing Law: The credit agreement and related loan documents will be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to conflict-of-laws principles, other than Section 5-1401 of the New York General Obligations Law).

5.2 Pricing and Fees

The CIM should present the proposed pricing structure for the Facility accurately and completely. Based on our understanding of the terms currently under negotiation, the pricing is as follows:

• Interest Rate: Borrowings under the Facility will bear interest at a rate per annum equal to the applicable Term SOFR rate (as defined in the draft credit agreement, including customary credit spread adjustments) plus an applicable margin ranging from 225 basis points to 325 basis points, determined on the basis of a leverage ratio pricing grid. The specific grid levels and step-down/step-up thresholds should be set forth in the CIM in tabular format.

• Commitment Fee: An unused commitment fee of 0.375% per annum, payable quarterly in arrears, on the average daily undrawn and uncancelled commitments under the Facility. The commitment fee will step down to 0.25% per annum at any time when utilization under the Facility exceeds 50% of total commitments (i.e., when outstanding loans and letter of credit exposure exceed $75,000,000 in the aggregate).

• Upfront/Arranging Fee: An upfront fee of $750,000, equal to 0.50% of the $150,000,000 total commitments, payable at closing and allocated among the lenders on a pro rata basis (or as otherwise set forth in the fee letter).

• Administrative Agent Fee: An annual administrative agent fee of $75,000, payable to Meridian Atlantic in its capacity as Administrative Agent, in arrears on each anniversary of the closing date.

We request that Meridian Atlantic exercise care in its presentation of pricing information to ensure that any "market flex" provisions contained in the Mandate Letter or any related fee arrangements between Meridian Atlantic and Thalassa are not disclosed to the Prospective Lenders in the CIM or otherwise in a manner that could undermine syndication pricing or the competitive dynamics of the syndication process. The terms of the Mandate Letter, including any flex provisions, are confidential between Meridian Atlantic and Thalassa, and Thalassa expects that such confidentiality will be maintained throughout the syndication process.

5.3 Proposed Syndicate Allocations

We request that the CIM reflect the proposed commitment allocations among the syndicate lenders as currently contemplated. Based on discussions between Thalassa and Meridian Atlantic, the proposed allocations are as follows:

We confirm that no additional lenders beyond the four identified above are being approached or invited to participate in the Facility at this time. Thalassa understands that the syndication process is being conducted on a "club" basis and that no general market syndication is contemplated. Should Meridian Atlantic determine that additional lenders need to be approached, Thalassa expects to be consulted in advance in accordance with the terms of the Mandate Letter, including with respect to the identity and credit quality of any proposed additional lender.

5.4 Financial Covenants

The CIM should accurately reflect the proposed financial covenant levels that are currently under negotiation between Thalassa and the proposed syndicate lenders, as represented by WJA. We note that these covenant levels remain subject to final agreement and have been the subject of ongoing discussions, including the negotiation call that took place on or about May 22, 2023, and the issues list circulated by WJA on May 15, 2023. The proposed financial covenants are as follows:

(a) Maximum Consolidated Net Leverage Ratio: 4.50 to 1.00, stepping down to 4.00 to 1.00 commencing with the first fiscal quarter ending on or after the third anniversary of the closing date.

(b) Minimum Consolidated Interest Coverage Ratio: 3.00 to 1.00, tested as of the end of each fiscal quarter for the trailing four fiscal quarter period.

(c) Minimum Liquidity: $30,000,000, measured as the sum of unrestricted cash and cash equivalents of the Borrower and its subsidiaries on a consolidated basis plus available undrawn commitments under the Facility, tested as of the last business day of each calendar month.

(d) Maximum Capital Expenditures: $80,000,000 per fiscal year, with customary carryforward provisions for unused amounts (subject to a cap) and exclusions for maintenance capital expenditures below a specified de minimis threshold, each as set forth in the draft credit agreement.

We emphasize that these financial covenant levels remain subject to final negotiation and agreement between the Borrower and the Lenders. Accordingly, the CIM should characterize the covenants as "proposed" or "indicative" rather than "agreed" or "final." Presenting these covenants as if they have been finalized when they have not could create misleading expectations among the Prospective Lenders and could complicate the ongoing negotiation process. We request that the CIM include a footnote or parenthetical to this effect.

6. Comments on Financial Data Presentation

6.1 FY2022 Audited Financial Statements

We request that the CIM accurately reflect Thalassa's audited financial results for the fiscal year ended December 31, 2022, as reported in the audited consolidated financial statements of Thalassa and its subsidiaries. The key figures, which should be consistent with the audited financials, are as follows:

• Revenue: Approximately $620,000,000.

• EBITDA: Approximately $145,000,000. For the avoidance of doubt, EBITDA as presented in the CIM should be calculated consistently with the definition of "Consolidated EBITDA" set forth in the draft credit agreement, which includes customary add-backs for non-cash charges, restructuring costs, and certain other items, as applicable.

The CIM should cite Hawthorne & Garrett LLP as the independent auditors responsible for auditing Thalassa's consolidated financial statements and should note that such financial statements were prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. Prospective Lenders should be made aware of the accounting framework under which the financial statements were prepared, as this may affect their own internal credit analysis and reporting requirements.

In addition, the CIM should include appropriate disclaimers regarding any forward-looking financial projections or estimates included therein, including a statement that such projections are based on management assumptions and estimates that are inherently uncertain and that actual results may differ materially from projected results. Such disclaimers are standard market practice and should be included prominently in the financial data section of the CIM.

6.2 Historical Comparison and Projections

To the extent that the CIM includes any financial projections for the fiscal year ending December 31, 2023, or any subsequent periods, we request that such projections be clearly labeled as management estimates or forecasts and be visually and textually distinguished from audited historical financial data. The draft CIM currently presents certain FY2023 revenue and EBITDA estimates in the same table as FY2020, FY2021, and FY2022 audited figures without adequate differentiation. We recommend that projected figures be presented in a separate column clearly labeled "FY2023E (Unaudited Management Estimate)" or similar language, and that a footnote be added explaining the basis for the projections and cautioning that they have not been audited or reviewed by Hawthorne & Garrett or any other independent accounting firm.

Any financial ratios presented in the CIM — including, without limitation, net leverage ratio, interest coverage ratio, and debt service coverage ratio — should be calculated consistently with the definitions set forth in the draft credit agreement currently being negotiated with WJA. We understand that the WJA deal team, led by Harrison Caldwell (Partner) and Priya Subramanian (Associate), is working with C&H to finalize the financial covenant definitions, and any ratios presented in the CIM should align with the definitions as they exist in the most current draft of the credit agreement. Inconsistent ratio calculations could create confusion for Prospective Lenders and could lead to misaligned expectations regarding covenant compliance.

6.3 Existing Indebtedness

The CIM should accurately describe Thalassa's existing indebtedness, with particular emphasis on the Existing Facility with Harborstone National Bank. We confirm that the Harborstone revolving credit facility is the sole senior secured credit facility of Thalassa as of the date hereof. The key parameters of the Existing Facility are as follows:

• Type: $125,000,000 senior secured revolving credit facility.

• Maturity Date: November 15, 2023.

• Governing Agreement: Credit Agreement dated as of November 15, 2018, as amended by the First Amendment dated June 30, 2020, and the Second Amendment dated March 1, 2022.

• Lender/Agent: Harborstone National Bank (as sole lender and administrative agent).

The CIM should note that full repayment, discharge, and termination of the Existing Facility, including the release of all liens and security interests granted in connection therewith, will be a condition precedent to the closing of the proposed Facility. Thalassa's primary contact at Harborstone National Bank for purposes of coordinating the payoff and lien release process is Philip Rennert, Director, Structured Shipping Finance, Harborstone National Bank, 350 Park Avenue, 20th Floor, New York, NY 10022.

We also note that the CIM should accurately describe any other indebtedness of Thalassa and its subsidiaries, including any unsecured bilateral facilities, capital lease obligations, or other financial obligations that would be material to a Prospective Lender's credit analysis. To the extent that additional indebtedness exists, such information should be coordinated with Thalassa's CFO to ensure completeness and accuracy.

7. Specific Factual Corrections and Clarifications

In addition to the thematic comments set forth in Sections 2 through 6 above, Thalassa's management team has identified a number of specific factual corrections and clarifications that should be reflected in the revised CIM. A detailed, line-by-line redlined markup of the draft CIM is enclosed with this letter or, if not enclosed, will follow under separate cover no later than June 9, 2023. Without limiting the scope of the redlined markup, we highlight the following categories of corrections:

(a) Management Team References. All references to members of Thalassa's management team and board of directors should include accurate titles. In particular: Nikolaos Karadimitriou should be identified as "Founder & Chairman"; Elena Vassiliou should be identified as "Chief Executive Officer"; Dimitrios Pantazis should be identified as "Chief Financial Officer"; and Aris Komnenidis should be identified as "General Counsel." We have identified at least three instances in the draft CIM where management titles are incomplete or inaccurate.

(b) Vessel Counts. As noted in Section 3.1 above, references to fleet size should be corrected throughout the CIM to reflect the accurate vessel count of 40 vessels (28 dry bulk carriers and 12 tankers). The errors on pages 8 and 9 of the draft should be corrected accordingly.

(c) Jurisdictional References. The organizational chart and all textual references to the jurisdictions of organization of Thalassa's subsidiaries should be reviewed and corrected as necessary to ensure consistency with the confirmed information set forth in Section 3.2 above. In particular, the jurisdiction of organization of Thalassa Tanker Operations Ltd. should be corrected from the Republic of Cyprus to the Republic of the marshall Islands.

(d) Subsidiary Descriptions. The descriptions of each subsidiary's role and function within the Thalassa corporate group should be reviewed for accuracy and consistency with the representations in the draft credit agreement. We have identified certain discrepancies in the characterization of Thalassa Logistics International Ltd.'s business activities that should be corrected.

We request that Meridian Atlantic incorporate these corrections into the revised draft of the CIM and provide an updated version to C&H and Thalassa's management for review before the CIM is distributed to the Prospective Lenders.

8. Process and Next Steps

We wish to draw Meridian Atlantic's attention to the following key dates and milestones in the transaction process, which are relevant to the finalization and distribution of the CIM:

(a) Credit Agreement Negotiation. The credit agreement remains under active negotiation between C&H (on behalf of Thalassa) and WJA (on behalf of Meridian Atlantic and the proposed syndicate lenders). The third draft of the credit agreement was circulated by WJA on June 2, 2023. C&H's markup of the third draft will be delivered to WJA on or about June 9, 2023. The CIM should reflect the terms and conditions of the Facility as set forth in the most current draft of the credit agreement at the time of distribution, and any terms that remain subject to ongoing negotiation should be clearly identified as such.

(b) Security Documents. The forms of security documents — including the ship mortgages, pledge agreements, assignments of earnings, and assignments of insurances — are expected to be circulated by WJA in initial draft form on or about June 16, 2023. The CIM's description of the security package should be consistent with these documents as finalized.

(c) Vessel Appraisals. The formal independent appraisals of the 18 Mortgaged Vessels by Seastone Maritime Advisors Ltd. are expected to be delivered on or about July 10, 2023. The CIM should note the expected delivery date and indicate that vessel valuations will be updated upon receipt of the final appraisal reports.

(d) CIM Finalization. We request that the final CIM not be circulated to the Prospective Lenders until Thalassa has had the opportunity to review and confirm the factual accuracy of a revised draft incorporating the comments set forth in this letter and in the accompanying redlined markup. We understand the importance of timing in the syndication process and will endeavor to complete our review of any revised draft promptly upon receipt.

(e) Syndicate Commitment Confirmations. Syndicate commitment confirmations from the Prospective Lenders are targeted for mid-July 2023. We understand that the timeline for obtaining commitments may be affected by the availability of final vessel appraisals and the status of credit agreement negotiations, and we encourage Meridian Atlantic to keep Thalassa informed of any developments that may affect this timeline.

9. Reservation of Rights

The comments set forth in this letter are provided by C&H on behalf of Thalassa for the purpose of assisting Meridian Atlantic in preparing an accurate and complete CIM for distribution to the Prospective Lenders. Nothing in this letter shall constitute a waiver of any of Thalassa's rights under the Mandate Letter, the draft credit agreement, or otherwise, whether now existing or hereafter arising. Thalassa expressly reserves the right to provide additional comments, corrections, and objections upon review of revised drafts of the CIM or any other syndication materials, and the absence of a comment on any particular provision or statement in the draft CIM should not be construed as approval or acceptance of such provision or statement.

Furthermore, the comments in this letter are based on the draft CIM as received by C&H on May 22, 2023, and on the factual information available to us as of the date hereof. To the extent that circumstances change, additional information becomes available, or the terms of the Facility are modified during the course of ongoing negotiations, Thalassa reserves the right to supplement or modify the comments contained herein.

We would be pleased to discuss any of the foregoing comments at your convenience. Please do not hesitate to contact the undersigned, Ian Blackwood, at (212) 558-4127 or iblackwood@calderwoodharkness.com, or Sophie Tremblay at (212) 558-4293 or stremblay@calderwoodharkness.com, should you have any questions or wish to arrange a call to review these comments in further detail.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Ian Blackwood Partner, Banking & Finance 425 Park Avenue New York, NY 10022 Telephone: (212) 558-4127

Email: iblackwood@calderwoodharkness.com

cc: (via email)

Elena Vassiliou, Chief Executive Officer, Thalassa Shipping & Logistics SA Dimitrios Pantazis, Chief Financial Officer, Thalassa Shipping & Logistics SA Aris Komnenidis, General Counsel, Thalassa Shipping & Logistics SA Sophie Tremblay, Senior Associate, Calderwood & Harkness LLP Daniel Obi, Associate, Calderwood & Harkness LLP

Encl.: Redlined draft Confidential Information Memorandum (to follow under separate cover no later than June 9, 2023)

Lender	Proposed Commitment	Percentage of Total
Meridian Atlantic Bank, N.A. (retained commitment)	$45,000,000	30.0%
Nordkapp Maritime Finance AG	$40,000,000	26.7%
Clearwater Commercial Lending LLC	$35,000,000	23.3%
Eastbourne Capital Partners LLP	$30,000,000	20.0%
Total	$150,000,000	100.0%

CALDERWOOD & HARKNESS LLP Attorneys at Law
425 Park Avenue New York, NY 10022 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
June 5, 2023
Catherine Hsiang Relationship Manager Meridian Atlantic Bank, National Association 600 Lexington Avenue, 38th Floor New York, NY 10022
Re: Thalassa Shipping & Logistics SA — $150,000,000 Senior Secured Revolving Credit Facility; Comments on Draft Confidential Information Memorandum
C&H Matter No. 1044-00002
Dear Ms. Hsiang:
1. Introduction and Purpose
Calderwood & Harkness LLP ("C&H" or "we") acts as counsel to Thalassa Shipping & Logistics SA ("Thalassa" or "TSL") in connection with the proposed $150,000,000 senior secured revolving credit facility (the "Facility") for which Meridian Atlantic Bank, National Association ("Meridian Atlantic" or "MAB") is acting as Sole Lead Arranger, Sole Bookrunner, and Administrative Agent pursuant to the Mandate and Fee Letter dated February 14, 2023, as executed between Thalassa and Meridian Atlantic (the "Mandate Letter").
We write in reference to the draft Confidential Information Memorandum (the "CIM") prepared by Meridian Atlantic and transmitted to our offices on May 22, 2023, for distribution to prospective syndicate lenders, namely: Nordkapp Maritime Finance AG ("Nordkapp"), Clearwater Commercial Lending LLC ("Clearwater"), and Eastbourne Capital Partners LLP ("Eastbourne," and together with Nordkapp and Clearwater, the "Prospective Lenders"). We understand that Meridian Atlantic intends to distribute the CIM to the Prospective Lenders as part of the formal syndication process for the Facility and that the CIM will serve as the primary information package upon which the Prospective Lenders will make their credit decisions.
This letter sets forth Thalassa's comments on the draft CIM, organized by section and topic area. Our comments focus principally on: (a) the accuracy of the business description of Thalassa and its subsidiaries; (b) fleet information, vessel valuation data, and collateral descriptions; (c) the presentation of financial data and projections; and (d) the characterization of key transaction terms, including proposed financial covenants and syndicate allocations. In addition, we identify certain specific factual corrections and clarifications and address confidentiality and disclaimer language.
The comments set forth herein are based upon a thorough review conducted by the undersigned, Ian Blackwood (Partner, Banking & Finance), together with Sophie Tremblay (Senior Associate) and Daniel Obi (Associate) of C&H's Banking & Finance group. Our review has been coordinated with, and incorporates the input of, Thalassa's management team, including Chief Executive Officer Elena Vassiliou, Chief Financial Officer Dimitrios Pantazis, and General Counsel Aris Komnenidis, each of whom has reviewed the draft CIM and provided factual comments and corrections. A separate redlined markup of the draft CIM, reflecting specific textual changes, accompanies this letter or will follow under separate cover, as noted in the Enclosure section below.
We appreciate the constructive working relationship between Meridian Atlantic and Thalassa in connection with the arrangement and syndication of the Facility, and we submit these comments in the spirit of ensuring that the CIM presents an accurate and complete picture of the Borrower and the proposed transaction for the benefit of all parties.
2. General Comments
2.1 Borrower Identification and Corporate Information
We request that Meridian Atlantic confirm that the full legal name of the Borrower is consistently rendered throughout the CIM as "Thalassa Shipping & Logistics SA." Upon our review of the draft CIM, we identified several instances in which the Borrower's name is abbreviated without prior definition — for example, references to "Thalassa S&L" on page 4 of the draft and "TSL SA" on page 17 — each of which should be conformed to either the full legal name or the defined abbreviations "Thalassa" or "TSL" upon first use. Consistent use of defined terms throughout the CIM is important not only for readability but also to avoid any ambiguity as to the identity of the Borrower entity, particularly given the multi-entity corporate structure discussed further below.
For the avoidance of doubt, we confirm the following corporate information, which should be accurately reflected in the CIM:
• Entity Type: Société Anonyme (Anonimi Etairia) organized and existing under the laws of the Hellenic Republic.
• Headquarters and Registered Office: 14 Akti Miaouli, Piraeus 185 35, Greece.
• Greek Tax Identification Number (AFM): 094728361.
• General Electronic Commercial Registry (GEMI) Registration No.: 143209501000.
• Founder & Chairman of the Board of Directors: Nikolaos Karadimitriou. We note that Mr. Karadimitriou's role should be properly described as "Founder & Chairman" throughout the CIM. Several references in the draft describe him only as "Chairman" without acknowledging his role as the company's founder, which is relevant context for Prospective Lenders in understanding the company's governance and history.
• Chief Executive Officer: Elena Vassiliou.
• Chief Financial Officer: Dimitrios Pantazis.
In addition, we request that the CIM include a reference to Thalassa's independent auditors, Hawthorne & Garrett LLP, with their registered address at 130 Kifissias Avenue, Marousi, Athens 151 25, Greece. The audited financial statements that form the basis of the financial data presentation in the CIM were prepared and audited by Hawthorne & Garrett, and identification of the auditors is standard practice in syndication materials of this nature. Including this reference will provide Prospective Lenders with comfort regarding the source and reliability of the financial information presented and will facilitate any independent verification the Prospective Lenders or their advisors may wish to undertake.
2.2 Confidentiality and Disclaimer Language
We note that Thalassa requests a careful review of the confidentiality and disclaimer sections of the CIM (currently appearing on the inside cover page and on pages ii through iv of the draft) to ensure that such sections are consistent with the terms and conditions of the Mandate Letter, including, in particular, the confidentiality undertakings set forth in Section 8 thereof.
Specifically, Thalassa requests confirmation that any "big boy" language — i.e., language purporting to disclaim the Sole Lead Arranger's responsibility for the accuracy or completeness of information contained in the CIM — is appropriately limited and does not extend beyond the scope of disclaimers customarily included in syndication information packages for transactions of this type and size. While Thalassa acknowledges that it is standard market practice for the arranger to include certain disclaimers regarding forward-looking statements and the Borrower's responsibility for the accuracy of information provided to the arranger, such disclaimers should not be drafted in a manner that could be interpreted as relieving Meridian Atlantic of its obligations under the Mandate Letter to exercise reasonable care in the preparation and presentation of the CIM.
Furthermore, we confirm that the CIM should restrict distribution solely to the three identified Prospective Lenders — Nordkapp, Clearwater, and Eastbourne — and their respective legal and financial advisors, subject in each case to the execution by each recipient of a confidentiality undertaking in form and substance satisfactory to Thalassa and Meridian Atlantic. The draft CIM does not currently include a specific reference to the identity of permitted recipients. We recommend that a distribution list be included, either on the inside cover or as an appendix, and that the confidentiality legend expressly prohibit redistribution to any party not identified on such list without the prior written consent of Thalassa.
3. Comments on Business Description
3.1 Overview of Thalassa's Business
The CIM's description of Thalassa's principal business activities requires certain revisions and clarifications to ensure accuracy and completeness. We recommend that the business overview section state as follows: Thalassa is the owner and operator of a diversified fleet of 28 dry bulk carriers and 12 tankers, comprising a total fleet of 40 vessels. In addition to vessel ownership and operation, Thalassa provides integrated maritime logistics services, including voyage chartering, time chartering, freight forwarding, and port logistics coordination, across the Mediterranean, Black Sea, and transatlantic trade routes.
We confirm that the total fleet size as of the date of this letter is 40 vessels, consisting of 28 dry bulk carriers and 12 tankers. We note that page 8 of the draft CIM contains a reference to a fleet of "42 vessels," which appears to be an error. We request that this figure be corrected to 40. In addition, the vessel classification table on page 9 lists 30 dry bulk carriers rather than 28, which is likewise inaccurate and should be corrected. Thalassa's management has confirmed that no vessel acquisitions or dispositions have occurred since the information was provided to Meridian Atlantic, and we are unaware of any pending transactions that would affect the vessel count.
With respect to fleet valuation, the CIM should note that the aggregate fair market value of Thalassa's entire fleet of 40 vessels, as appraised in the first quarter of 2023, is approximately $1.2 billion. The appraisals were conducted by Seastone Maritime Advisors Ltd. on a desktop basis as part of Thalassa's routine fleet valuation process and should be distinguished from the formal independent appraisals of the Mortgaged Vessels being prepared in connection with the Facility (as discussed in Section 4 below). The CIM should be clear that the $1.2 billion figure represents total fleet value and not the value of the collateral package for the Facility.
3.2 Subsidiary and Guarantor Structure
The CIM should accurately describe the three proposed subsidiary guarantors of the Facility. Based on our review, certain details regarding the jurisdiction of organization and the respective roles of these entities require correction or clarification. The proposed subsidiary guarantors are as follows:
(a) Thalassa Dry Bulk Holdings Ltd. — A private limited company organized under the laws of the Republic of Cyprus (Registration No. HE 387412). Thalassa Dry Bulk Holdings serves as the intermediate holding company for TSL's dry bulk fleet, holding 100% of the equity interests in each of the single-purpose vessel-owning subsidiaries that own the 28 dry bulk carriers in the fleet.
(b) Thalassa Tanker Operations Ltd. — A private limited company organized under the laws of the Republic of the marshall Islands (Entity No. 104927). Thalassa Tanker Operations is the operating subsidiary responsible for the commercial and technical management of TSL's tanker fleet of 12 vessels.
(c) Thalassa Logistics International Ltd. — A private limited company organized under the laws of the Republic of Cyprus (Registration No. HE 401856). Thalassa Logistics International is the integrated logistics and chartering subsidiary of TSL, through which the company conducts its freight forwarding, voyage chartering brokerage, and port logistics operations.
We note that the organizational chart appearing on page 12 of the draft CIM incorrectly identifies Thalassa Tanker Operations Ltd. as a Cypriot entity. As indicated above, Thalassa Tanker Operations is organized under the laws of the Republic of the marshall Islands, and the organizational chart should be corrected accordingly. Similarly, the organizational chart should confirm that both Thalassa Dry Bulk Holdings Ltd. and Thalassa Logistics International Ltd. are Cypriot entities. Accurate jurisdictional identification is essential for Prospective Lenders to assess the enforceability of guarantees, the availability of legal opinions, and the applicability of relevant regulatory frameworks.
We further note that Pavlopoulos & Drakos Law Firm, located at 22 Filellinon Street, Athens 105 57, Greece, is advising Thalassa on Greek corporate and maritime law matters in connection with the Facility, including with respect to the registration and enforcement of ship mortgages under Greek law. The corporate structure section of the CIM should be consistent with the representations and warranties set forth in Article V of the near-final credit agreement currently being negotiated with Whitmore, Jennings & Alcott LLP ("WJA"), which serves as counsel to Meridian Atlantic and the proposed syndicate lenders. Any discrepancies between the CIM and the credit agreement regarding the corporate structure, jurisdictions of organization, or subsidiary ownership chain should be identified and reconciled before the CIM is finalized.
3.3 Insurance and Risk Management
The CIM includes a section on insurance and risk management at pages 15 through 17, which Thalassa considers an important component of the information package given the significance of adequate insurance coverage to the credit profile of a shipping borrower. We request the following revisions and additions to that section:
First, the CIM should reference Trident Marine Insurance Brokers Ltd. (Lloyd's Building, One Lime Street, London EC3M 7HA, United Kingdom) as Thalassa's fleet insurance broker. Trident has served as Thalassa's insurance broker since 2016 and is responsible for placing and administering all hull and machinery, protection and indemnity ("P&I"), and war risk insurance for the fleet. Identification of the broker will provide Prospective Lenders with a point of reference for insurance-related inquiries.
Second, we request that the CIM accurately describe the types and categories of insurance coverage maintained by Thalassa for its fleet, including, without limitation: (i) P&I club coverage through the Dunmore Casualty Group (for the dry bulk fleet) and the Adriatic Assurance (for the tanker fleet); (ii) hull and machinery insurance; and (iii) war risk insurance and loss-of-hire coverage. However, we caution that the CIM should not mischaracterize or overstate specific coverage limits, deductible amounts, or policy terms. Any specific monetary figures relating to insurance coverage that Meridian Atlantic proposes to include in the CIM should be verified directly with Thalassa's CFO, Dimitrios Pantazis, who can confirm the accuracy of such figures in coordination with Trident. Given the commercially sensitive nature of insurance pricing and coverage terms, Thalassa would prefer that coverage details be described in general terms in the CIM, with specific policy information to be made available to Prospective Lenders through the virtual data room on a need-to-know basis.
4. Comments on Fleet Information and Collateral Description
4.1 Total Fleet
As set forth in Section 3.1 above, Thalassa's total fleet consists of 40 vessels: 28 dry bulk carriers and 12 tankers. The aggregate fair market value of the total fleet is approximately $1.2 billion based on the Q1 2023 desktop appraisals. We reiterate that all fleet count references in the CIM should be corrected to reflect these confirmed figures.
4.2 Mortgaged Vessels
The Facility contemplates first-priority ship mortgages on 18 designated vessels out of the total fleet of 40 (the "Mortgaged Vessels"). The Mortgaged Vessels have been selected by Thalassa in consultation with Meridian Atlantic based on age, value, charter profile, and flag state considerations, and are listed in Schedule 1 to the draft credit agreement. We request that the CIM include a clear and accurate list of the 18 Mortgaged Vessels, including for each vessel: (i) the vessel name; (ii) the IMO number; (iii) the year of build; (iv) the deadweight tonnage; (v) the flag state; and (vi) the name of the vessel-owning subsidiary.
The aggregate appraised fair market value of the 18 Mortgaged Vessels is approximately $780,000,000. These valuations are based on independent appraisals currently being prepared by Seastone Maritime Advisors Ltd., located at 55 Gracechurch Street, London EC3V 0EE, United Kingdom. The lead appraiser for the engagement is Duncan Fairweather, a senior managing director at Seastone with over 25 years of experience in maritime asset valuation. We note that the Seastone appraisals are expected to be delivered on or about July 10, 2023, and are not yet final as of the date of this letter. Accordingly, the CIM should indicate that the Mortgaged Vessel valuations are preliminary or pending and will be updated upon receipt of the final Seastone appraisal reports. The CIM should not present the $780,000,000 figure as a finalized or confirmed valuation without appropriate caveats.
We further request that the CIM clearly distinguish between the total fleet value of approximately $1.2 billion and the aggregate Mortgaged Vessel value of approximately $780,000,000. These are distinct figures, and any conflation of the two could create confusion among Prospective Lenders regarding the extent of the collateral package for the Facility. We recommend that the CIM include a summary table or chart that presents the total fleet value, the Mortgaged Vessel value, and the un-mortgaged fleet value side by side, with appropriate explanatory footnotes.
4.3 Collateral Coverage
The draft credit agreement under negotiation with WJA provides for a minimum collateral coverage ratio of 140% of outstanding Facility obligations. At full draw of the $150,000,000 Facility, the minimum required collateral value would therefore be $210,000,000 (calculated as 140% multiplied by $150,000,000).
Based on the expected Seastone appraisals, the aggregate Mortgaged Vessel fair market value of approximately $780,000,000 would provide a collateral coverage ratio of approximately 520% at full draw (calculated as $780,000,000 divided by $150,000,000), representing substantial headroom above the minimum 140% threshold. We believe this coverage ratio represents a significant credit strength of the transaction and should be presented clearly and prominently in the CIM.
The CIM should present the collateral coverage ratio calculation in a clear and transparent manner, ideally in tabular format, showing: (i) total commitments; (ii) minimum required collateral coverage; (iii) minimum required collateral value; (iv) aggregate Mortgaged Vessel fair market value; and (v) actual coverage ratio at full draw. In addition, the CIM should reference the role of Pinnacle Trust & Agency Services Inc. (One Liberty Plaza, 44th Floor, New York, NY 10006) as the proposed Collateral Agent and Security Trustee for the Facility. Pinnacle will hold the first-priority ship mortgages and related collateral documentation on behalf of the secured parties, and its role should be described in the collateral section of the CIM for the benefit of Prospective Lenders.
4.4 Security Package Summary
We request that the CIM's collateral summary section enumerate all components of the proposed security package for the Facility in a comprehensive and structured manner. Based on the terms currently under negotiation in the credit agreement, the security package consists of the following:
(a) First-Priority Ship Mortgages. First-priority ship mortgages on each of the 18 Mortgaged Vessels, to be registered in the applicable flag state registries. The mortgages will be governed by the law of the relevant flag state (Greek law for Greek-flagged vessels, marshall Islands law for marshall Islands-flagged vessels, and Liberian law for Liberian-flagged vessels, as applicable).
(b) Assignment of Earnings. Assignment of all earnings, hire, freight, and other income generated by or in respect of each Mortgaged Vessel, including assignment of the earnings accounts maintained by each vessel-owning subsidiary at Meridian Atlantic or such other bank as may be designated by the Administrative Agent.
(c) Assignment of Insurances. Assignment of all hull and machinery insurance, P&I club cover, and war risk insurance maintained in respect of each Mortgaged Vessel, together with assignment of all proceeds thereof.
(d) Pledge of Equity Interests. Pledge of 100% of the equity interests in each vessel-owning subsidiary that owns a Mortgaged Vessel, to be perfected by delivery of share certificates (or equivalent), executed stock transfer forms (or equivalent), and any required filings in the relevant jurisdiction of organization.
(e) Assignment of Time Charters. Assignment of all time charter agreements with remaining terms of 12 months or more to which any Mortgaged Vessel is subject, together with any charter hire guarantees or related instruments.
We request that the CIM present these collateral elements in the order listed above and provide sufficient detail regarding each element so that Prospective Lenders can evaluate the scope and enforceability of the security package. Where applicable, the CIM should note that the specific form and terms of each security document will be governed by the laws of the relevant jurisdiction and that local counsel legal opinions will be delivered at closing to address enforceability matters.
5. Comments on Transaction Summary and Key Terms
5.1 Facility Structure
The draft CIM contains a transaction summary section beginning at page 22, which sets forth the key terms and conditions of the proposed Facility. We request that the following information be accurately reflected in the final CIM:
• Facility Type: $150,000,000 senior secured revolving credit facility.
• Purpose: The proceeds of the Facility will be used to (i) refinance in full the existing $125,000,000 revolving credit facility of Thalassa with Harborstone National Bank (the "Existing Facility"), which matures on November 15, 2023, and (ii) provide incremental liquidity of approximately $25,000,000 (representing the difference between the $150,000,000 proposed Facility and the $125,000,000 Existing Facility) for general corporate purposes, working capital requirements, and other lawful purposes as permitted under the credit agreement.
• Existing Harborstone Facility: The Existing Facility was established pursuant to a Credit Agreement dated as of November 15, 2018, among Thalassa, as borrower, Harborstone National Bank, as administrative agent and sole lender, and the other parties thereto (as amended by the First Amendment to Credit Agreement dated as of June 30, 2020, and the Second Amendment to Credit Agreement dated as of March 1, 2022, collectively, the "Existing Credit Agreement"). The CIM should accurately describe the Existing Facility and note that full repayment and discharge of all obligations thereunder will be a condition precedent to the closing of the proposed Facility.
• Sublimits: The Facility includes a sublimit of $20,000,000 for the issuance of standby and commercial letters of credit and a sublimit of $15,000,000 for swingline loans. Letters of credit may be issued by Meridian Atlantic in its capacity as issuing bank, and swingline loans will be made available by Meridian Atlantic in its capacity as swingline lender.
• Maturity: Five years from the closing date of the Facility. The anticipated closing date is during the second or third quarter of 2023, subject to completion of definitive documentation, delivery of conditions precedent, and receipt of syndicate commitment confirmations.
• Governing Law: The credit agreement and related loan documents will be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to conflict-of-laws principles, other than Section 5-1401 of the New York General Obligations Law).
5.2 Pricing and Fees
The CIM should present the proposed pricing structure for the Facility accurately and completely. Based on our understanding of the terms currently under negotiation, the pricing is as follows:
• Interest Rate: Borrowings under the Facility will bear interest at a rate per annum equal to the applicable Term SOFR rate (as defined in the draft credit agreement, including customary credit spread adjustments) plus an applicable margin ranging from 225 basis points to 325 basis points, determined on the basis of a leverage ratio pricing grid. The specific grid levels and step-down/step-up thresholds should be set forth in the CIM in tabular format.
• Commitment Fee: An unused commitment fee of 0.375% per annum, payable quarterly in arrears, on the average daily undrawn and uncancelled commitments under the Facility. The commitment fee will step down to 0.25% per annum at any time when utilization under the Facility exceeds 50% of total commitments (i.e., when outstanding loans and letter of credit exposure exceed $75,000,000 in the aggregate).
• Upfront/Arranging Fee: An upfront fee of $750,000, equal to 0.50% of the $150,000,000 total commitments, payable at closing and allocated among the lenders on a pro rata basis (or as otherwise set forth in the fee letter).
• Administrative Agent Fee: An annual administrative agent fee of $75,000, payable to Meridian Atlantic in its capacity as Administrative Agent, in arrears on each anniversary of the closing date.
We request that Meridian Atlantic exercise care in its presentation of pricing information to ensure that any "market flex" provisions contained in the Mandate Letter or any related fee arrangements between Meridian Atlantic and Thalassa are not disclosed to the Prospective Lenders in the CIM or otherwise in a manner that could undermine syndication pricing or the competitive dynamics of the syndication process. The terms of the Mandate Letter, including any flex provisions, are confidential between Meridian Atlantic and Thalassa, and Thalassa expects that such confidentiality will be maintained throughout the syndication process.
5.3 Proposed Syndicate Allocations
We request that the CIM reflect the proposed commitment allocations among the syndicate lenders as currently contemplated. Based on discussions between Thalassa and Meridian Atlantic, the proposed allocations are as follows:
We confirm that no additional lenders beyond the four identified above are being approached or invited to participate in the Facility at this time. Thalassa understands that the syndication process is being conducted on a "club" basis and that no general market syndication is contemplated. Should Meridian Atlantic determine that additional lenders need to be approached, Thalassa expects to be consulted in advance in accordance with the terms of the Mandate Letter, including with respect to the identity and credit quality of any proposed additional lender.
5.4 Financial Covenants
The CIM should accurately reflect the proposed financial covenant levels that are currently under negotiation between Thalassa and the proposed syndicate lenders, as represented by WJA. We note that these covenant levels remain subject to final agreement and have been the subject of ongoing discussions, including the negotiation call that took place on or about May 22, 2023, and the issues list circulated by WJA on May 15, 2023. The proposed financial covenants are as follows:
(a) Maximum Consolidated Net Leverage Ratio: 4.50 to 1.00, stepping down to 4.00 to 1.00 commencing with the first fiscal quarter ending on or after the third anniversary of the closing date.
(b) Minimum Consolidated Interest Coverage Ratio: 3.00 to 1.00, tested as of the end of each fiscal quarter for the trailing four fiscal quarter period.
(c) Minimum Liquidity: $30,000,000, measured as the sum of unrestricted cash and cash equivalents of the Borrower and its subsidiaries on a consolidated basis plus available undrawn commitments under the Facility, tested as of the last business day of each calendar month.
(d) Maximum Capital Expenditures: $80,000,000 per fiscal year, with customary carryforward provisions for unused amounts (subject to a cap) and exclusions for maintenance capital expenditures below a specified de minimis threshold, each as set forth in the draft credit agreement.
We emphasize that these financial covenant levels remain subject to final negotiation and agreement between the Borrower and the Lenders. Accordingly, the CIM should characterize the covenants as "proposed" or "indicative" rather than "agreed" or "final." Presenting these covenants as if they have been finalized when they have not could create misleading expectations among the Prospective Lenders and could complicate the ongoing negotiation process. We request that the CIM include a footnote or parenthetical to this effect.
6. Comments on Financial Data Presentation
6.1 FY2022 Audited Financial Statements
We request that the CIM accurately reflect Thalassa's audited financial results for the fiscal year ended December 31, 2022, as reported in the audited consolidated financial statements of Thalassa and its subsidiaries. The key figures, which should be consistent with the audited financials, are as follows:
• Revenue: Approximately $620,000,000.
• EBITDA: Approximately $145,000,000. For the avoidance of doubt, EBITDA as presented in the CIM should be calculated consistently with the definition of "Consolidated EBITDA" set forth in the draft credit agreement, which includes customary add-backs for non-cash charges, restructuring costs, and certain other items, as applicable.
The CIM should cite Hawthorne & Garrett LLP as the independent auditors responsible for auditing Thalassa's consolidated financial statements and should note that such financial statements were prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. Prospective Lenders should be made aware of the accounting framework under which the financial statements were prepared, as this may affect their own internal credit analysis and reporting requirements.
In addition, the CIM should include appropriate disclaimers regarding any forward-looking financial projections or estimates included therein, including a statement that such projections are based on management assumptions and estimates that are inherently uncertain and that actual results may differ materially from projected results. Such disclaimers are standard market practice and should be included prominently in the financial data section of the CIM.
6.2 Historical Comparison and Projections
To the extent that the CIM includes any financial projections for the fiscal year ending December 31, 2023, or any subsequent periods, we request that such projections be clearly labeled as management estimates or forecasts and be visually and textually distinguished from audited historical financial data. The draft CIM currently presents certain FY2023 revenue and EBITDA estimates in the same table as FY2020, FY2021, and FY2022 audited figures without adequate differentiation. We recommend that projected figures be presented in a separate column clearly labeled "FY2023E (Unaudited Management Estimate)" or similar language, and that a footnote be added explaining the basis for the projections and cautioning that they have not been audited or reviewed by Hawthorne & Garrett or any other independent accounting firm.
Any financial ratios presented in the CIM — including, without limitation, net leverage ratio, interest coverage ratio, and debt service coverage ratio — should be calculated consistently with the definitions set forth in the draft credit agreement currently being negotiated with WJA. We understand that the WJA deal team, led by Harrison Caldwell (Partner) and Priya Subramanian (Associate), is working with C&H to finalize the financial covenant definitions, and any ratios presented in the CIM should align with the definitions as they exist in the most current draft of the credit agreement. Inconsistent ratio calculations could create confusion for Prospective Lenders and could lead to misaligned expectations regarding covenant compliance.
6.3 Existing Indebtedness
The CIM should accurately describe Thalassa's existing indebtedness, with particular emphasis on the Existing Facility with Harborstone National Bank. We confirm that the Harborstone revolving credit facility is the sole senior secured credit facility of Thalassa as of the date hereof. The key parameters of the Existing Facility are as follows:
• Type: $125,000,000 senior secured revolving credit facility.
• Maturity Date: November 15, 2023.
• Governing Agreement: Credit Agreement dated as of November 15, 2018, as amended by the First Amendment dated June 30, 2020, and the Second Amendment dated March 1, 2022.
• Lender/Agent: Harborstone National Bank (as sole lender and administrative agent).
The CIM should note that full repayment, discharge, and termination of the Existing Facility, including the release of all liens and security interests granted in connection therewith, will be a condition precedent to the closing of the proposed Facility. Thalassa's primary contact at Harborstone National Bank for purposes of coordinating the payoff and lien release process is Philip Rennert, Director, Structured Shipping Finance, Harborstone National Bank, 350 Park Avenue, 20th Floor, New York, NY 10022.
We also note that the CIM should accurately describe any other indebtedness of Thalassa and its subsidiaries, including any unsecured bilateral facilities, capital lease obligations, or other financial obligations that would be material to a Prospective Lender's credit analysis. To the extent that additional indebtedness exists, such information should be coordinated with Thalassa's CFO to ensure completeness and accuracy.
7. Specific Factual Corrections and Clarifications
In addition to the thematic comments set forth in Sections 2 through 6 above, Thalassa's management team has identified a number of specific factual corrections and clarifications that should be reflected in the revised CIM. A detailed, line-by-line redlined markup of the draft CIM is enclosed with this letter or, if not enclosed, will follow under separate cover no later than June 9, 2023. Without limiting the scope of the redlined markup, we highlight the following categories of corrections:
(a) Management Team References. All references to members of Thalassa's management team and board of directors should include accurate titles. In particular: Nikolaos Karadimitriou should be identified as "Founder & Chairman"; Elena Vassiliou should be identified as "Chief Executive Officer"; Dimitrios Pantazis should be identified as "Chief Financial Officer"; and Aris Komnenidis should be identified as "General Counsel." We have identified at least three instances in the draft CIM where management titles are incomplete or inaccurate.
(b) Vessel Counts. As noted in Section 3.1 above, references to fleet size should be corrected throughout the CIM to reflect the accurate vessel count of 40 vessels (28 dry bulk carriers and 12 tankers). The errors on pages 8 and 9 of the draft should be corrected accordingly.
(c) Jurisdictional References. The organizational chart and all textual references to the jurisdictions of organization of Thalassa's subsidiaries should be reviewed and corrected as necessary to ensure consistency with the confirmed information set forth in Section 3.2 above. In particular, the jurisdiction of organization of Thalassa Tanker Operations Ltd. should be corrected from the Republic of Cyprus to the Republic of the marshall Islands.
(d) Subsidiary Descriptions. The descriptions of each subsidiary's role and function within the Thalassa corporate group should be reviewed for accuracy and consistency with the representations in the draft credit agreement. We have identified certain discrepancies in the characterization of Thalassa Logistics International Ltd.'s business activities that should be corrected.
We request that Meridian Atlantic incorporate these corrections into the revised draft of the CIM and provide an updated version to C&H and Thalassa's management for review before the CIM is distributed to the Prospective Lenders.
8. Process and Next Steps
We wish to draw Meridian Atlantic's attention to the following key dates and milestones in the transaction process, which are relevant to the finalization and distribution of the CIM:
(a) Credit Agreement Negotiation. The credit agreement remains under active negotiation between C&H (on behalf of Thalassa) and WJA (on behalf of Meridian Atlantic and the proposed syndicate lenders). The third draft of the credit agreement was circulated by WJA on June 2, 2023. C&H's markup of the third draft will be delivered to WJA on or about June 9, 2023. The CIM should reflect the terms and conditions of the Facility as set forth in the most current draft of the credit agreement at the time of distribution, and any terms that remain subject to ongoing negotiation should be clearly identified as such.
(b) Security Documents. The forms of security documents — including the ship mortgages, pledge agreements, assignments of earnings, and assignments of insurances — are expected to be circulated by WJA in initial draft form on or about June 16, 2023. The CIM's description of the security package should be consistent with these documents as finalized.
(c) Vessel Appraisals. The formal independent appraisals of the 18 Mortgaged Vessels by Seastone Maritime Advisors Ltd. are expected to be delivered on or about July 10, 2023. The CIM should note the expected delivery date and indicate that vessel valuations will be updated upon receipt of the final appraisal reports.
(d) CIM Finalization. We request that the final CIM not be circulated to the Prospective Lenders until Thalassa has had the opportunity to review and confirm the factual accuracy of a revised draft incorporating the comments set forth in this letter and in the accompanying redlined markup. We understand the importance of timing in the syndication process and will endeavor to complete our review of any revised draft promptly upon receipt.
(e) Syndicate Commitment Confirmations. Syndicate commitment confirmations from the Prospective Lenders are targeted for mid-July 2023. We understand that the timeline for obtaining commitments may be affected by the availability of final vessel appraisals and the status of credit agreement negotiations, and we encourage Meridian Atlantic to keep Thalassa informed of any developments that may affect this timeline.
9. Reservation of Rights
The comments set forth in this letter are provided by C&H on behalf of Thalassa for the purpose of assisting Meridian Atlantic in preparing an accurate and complete CIM for distribution to the Prospective Lenders. Nothing in this letter shall constitute a waiver of any of Thalassa's rights under the Mandate Letter, the draft credit agreement, or otherwise, whether now existing or hereafter arising. Thalassa expressly reserves the right to provide additional comments, corrections, and objections upon review of revised drafts of the CIM or any other syndication materials, and the absence of a comment on any particular provision or statement in the draft CIM should not be construed as approval or acceptance of such provision or statement.
Furthermore, the comments in this letter are based on the draft CIM as received by C&H on May 22, 2023, and on the factual information available to us as of the date hereof. To the extent that circumstances change, additional information becomes available, or the terms of the Facility are modified during the course of ongoing negotiations, Thalassa reserves the right to supplement or modify the comments contained herein.
We would be pleased to discuss any of the foregoing comments at your convenience. Please do not hesitate to contact the undersigned, Ian Blackwood, at (212) 558-4127 or iblackwood@calderwoodharkness.com, or Sophie Tremblay at (212) 558-4293 or stremblay@calderwoodharkness.com, should you have any questions or wish to arrange a call to review these comments in further detail.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Ian Blackwood Partner, Banking & Finance 425 Park Avenue New York, NY 10022 Telephone: (212) 558-4127
Email: iblackwood@calderwoodharkness.com
cc: (via email)
Elena Vassiliou, Chief Executive Officer, Thalassa Shipping & Logistics SA Dimitrios Pantazis, Chief Financial Officer, Thalassa Shipping & Logistics SA Aris Komnenidis, General Counsel, Thalassa Shipping & Logistics SA Sophie Tremblay, Senior Associate, Calderwood & Harkness LLP Daniel Obi, Associate, Calderwood & Harkness LLP
Encl.: Redlined draft Confidential Information Memorandum (to follow under separate cover no later than June 9, 2023)
Lender | Proposed Commitment | Percentage of Total
Meridian Atlantic Bank, N.A. (retained commitment) | $45,000,000 | 30.0%
Nordkapp Maritime Finance AG | $40,000,000 | 26.7%
Clearwater Commercial Lending LLC | $35,000,000 | 23.3%
Eastbourne Capital Partners LLP | $30,000,000 | 20.0%
Total | $150,000,000 | 100.0%

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

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