1044-00002 · Client 1044 · Correspondence/Lender Negotiations

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CALDERWOOD & HARKNESS LLP

Counselors at Law

425 Park Avenue New York, NY 10022

Telephone: (212) 556-4000 Facsimile: (212) 556-4001 www.calderwoodharkness.com

April 18, 2023

VIA EMAIL AND FIRST CLASS MAIL

Priya Subramanian, Esq. Whitmore, Jennings & Alcott LLP 51 West 52nd Street New York, NY 10019

Re: Thalassa Shipping & Logistics SA — $150,000,000 Senior Secured Revolving Credit Facility; Draft Credit Agreement circulated by WJA on April 5, 2023

C&H Matter No.: 1044-00002

Dear Ms. Subramanian:

We write on behalf of our client, Thalassa Shipping & Logistics SA ("TSL" or the "Borrower"), a société anonyme organized and existing under the laws of the Hellenic Republic, with its principal offices and registered headquarters located at 14 Akti Miaouli, Piraeus 185 35, Greece. As you are aware, Calderwood & Harkness LLP ("C&H") serves as outside counsel to TSL in connection with the proposed $150,000,000 Senior Secured Revolving Credit Facility (the "Facility") described in the initial draft Credit Agreement (the "Draft Credit Agreement" or the "Draft") prepared by your firm on behalf of Meridian Atlantic Bank, National Association ("Meridian Atlantic" or "MAB"), in its capacities as Administrative Agent and Sole Lead Arranger, and the proposed syndicate lenders, namely Nordkapp Maritime Finance AG, Clearwater Commercial Lending LLC, and Eastbourne Capital Partners LLP (collectively with Meridian Atlantic, the "Lenders").

This letter supplements our comprehensive redline markup of the Draft Credit Agreement, which was delivered to your attention via email on April 14, 2023. That markup encompasses eight hundred forty-seven (847) individual comments across two hundred ten (210) pages of marked-up text, and we consider it to constitute the Borrower's full initial set of comments on the Draft. However, given the complexity and significance of certain issues identified in our review, the Borrower believes it is helpful to provide this supplemental letter addressing three key substantive areas where the Borrower's position diverges materially from the Lender's initial draft and where we believe focused discussion will be most productive in advancing the negotiation toward mutually acceptable terms. These three areas are:

(1) the definition of "Material Adverse Change" (or "Material Adverse Effect") set forth in Section 1.01 of the Draft Credit Agreement;

(2) the mandatory prepayment triggers set forth in Section 2.11 of the Draft Credit Agreement; and

(3) the restricted payments basket set forth in Section 7.06 of the Draft Credit Agreement.

For each of these areas, we set forth below the Lender's draft position as reflected in the April 5 Draft, the Borrower's proposed revisions, and supporting references to relevant precedent and market practice. We trust that this letter, together with the detailed redline markup, will provide a constructive basis for the next round of negotiations and the preparation of a revised draft.

I. Material Adverse Change ("MAC") Definition

A. Overview of Lender's Draft Position

Section 1.01 of the Draft Credit Agreement defines "Material Adverse Change" (which term is used interchangeably with "Material Adverse Effect" throughout the Draft) in language that is, in our view, considerably broader than current market practice would warrant for a credit facility of this type, size, and credit quality. Specifically, the Draft defines a "Material Adverse Change" to include any event, condition, development, change, occurrence, or circumstance that:

(i) has had, or could reasonably be expected to have, a material adverse effect on the business, operations, assets, liabilities, prospects, or financial condition of the Borrower and its subsidiaries, taken as a whole;

(ii) has had, or could reasonably be expected to have, a material adverse effect on the ability of the Borrower or any Guarantor to perform any of its respective payment or other material obligations under or in connection with the Credit Agreement, the Notes, the Guaranty, or any other Loan Document; or

(iii) has had, or could reasonably be expected to have, a material adverse effect on the rights and remedies of the Administrative Agent and the Lenders under or in connection with the Loan Documents.

We wish to highlight two features of this definition that are of particular concern to the Borrower.

First, the inclusion of "prospects" within clause (i) is overbroad and not standard in shipping finance facilities. The term "prospects" introduces an inherently speculative and forward-looking element into the MAC definition, which is particularly problematic in the context of international maritime shipping — an industry characterized by well-known cyclical fluctuations in freight rates, charter rates, vessel values, and trade volumes. The inclusion of "prospects" effectively allows the Administrative Agent to invoke the MAC clause based not on any actual adverse change in the Borrower's business or financial condition, but rather on subjective assessments of what might happen to the Borrower's future business environment. This is neither appropriate nor consistent with the credit profile of a borrower of TSL's size and financial standing.

Second, the Draft contains no carve-outs or exclusions from the MAC definition whatsoever. The definition is entirely unqualified, meaning that any event or condition — including industry-wide downturns, changes in applicable law, macroeconomic events, natural disasters, pandemics, geopolitical conflicts, or the effects of the very transaction contemplated by the Credit Agreement — could theoretically be invoked as the basis for a MAC determination. The absence of standard exclusions is a significant departure from market practice and creates a level of uncertainty that is unacceptable to the Borrower in the context of a revolving credit facility that is intended to serve as a key liquidity resource for the Borrower's ongoing fleet operations and working capital needs.

B. Borrower's Proposed Revisions

In light of the foregoing concerns, the Borrower respectfully proposes the following revisions to the MAC definition:

1. Deletion of "Prospects." The Borrower requests that the word "prospects" be deleted from clause (i) of the MAC definition. The MAC clause should be tied to actual or reasonably expected impacts on the Borrower's current business, operations, assets, liabilities, or financial condition — not to speculative, forward-looking assessments of the Borrower's future business environment. The deletion of "prospects" is standard in credit facilities of this type and is consistent with prevailing drafting norms in both the leveraged lending market and the shipping finance market. We note that the remaining language of clause (i) — referencing the business, operations, assets, liabilities, and financial condition of the Borrower and its subsidiaries — is more than sufficient to capture any genuinely material adverse development affecting the Borrower's creditworthiness.

2. Addition of Standard Carve-Outs. The Borrower proposes the addition of the following exclusions from the MAC definition, each of which is well-established in market practice and reflects the reality that certain categories of events should not, standing alone, give rise to a MAC determination:

(a) General Economic and Market Conditions. Changes in general economic conditions, financial market conditions, or political conditions (including, without limitation, changes in interest rates, exchange rates, commodity prices, freight rates, charter rates, bunker fuel prices, or scrap steel prices) applicable to the economy or the financial, capital, or credit markets as a whole, whether in the United States, the European Union, Greece, or any other jurisdiction in which the Borrower or its subsidiaries conduct business;

(b) Shipping Industry Conditions. Changes in conditions generally affecting the international shipping industry, the dry bulk carrier market, the tanker market, or the global maritime logistics sector, including fluctuations in the Baltic Dry Index, the Baltic Clean Tanker Index, or comparable indices, and changes in vessel supply, newbuilding order volumes, and demolition rates;

(c) Changes in Law or Accounting Standards. Changes in applicable law, regulation, or rule (including tax law), or in generally accepted accounting principles (whether under U.S. GAAP or IFRS, as applicable), or in the interpretation or enforcement thereof by any governmental authority, in each case occurring after the Closing Date;

(d) Natural Disasters, Pandemics, and Force Majeure. Effects of any natural disaster, earthquake, hurricane, flood, tsunami, volcanic eruption, epidemic, pandemic (including COVID-19 and any variants or resurgences thereof), or other force majeure event;

(e) War, Hostilities, Terrorism, and Sanctions. Effects of any war (whether or not declared), armed hostilities, military action, act of terrorism, cyberattack, or the imposition, modification, or expansion of economic or trade sanctions by any governmental authority, including, without limitation, trade route disruptions relevant to TSL's Mediterranean, Black Sea, Suez Canal, and transatlantic operations, whether arising from geopolitical conflict, piracy, blockade, or governmental decree; and

(f) Announcement and Pendency of the Transactions. Effects resulting from the public announcement, disclosure, or pendency of the transactions contemplated by the Credit Agreement and the other Loan Documents, including any impact on the Borrower's relationships with its charterers, counterparties, employees, or other commercial partners attributable to such announcement, disclosure, or pendency.

The Borrower further proposes that the carve-outs set forth in clauses (a) and (b) above shall apply only to the extent that such changes, events, or conditions do not have a disproportionate effect on the Borrower and its subsidiaries, taken as a whole, relative to other similarly situated participants in the international shipping industry. This "disproportionate effect" qualifier is a well-accepted market formulation that preserves meaningful protection for the Lenders — ensuring that the MAC clause remains available where the Borrower is uniquely and differentially impacted by an industry-wide or macroeconomic event — while preventing the Lenders from invoking the MAC clause in response to broad-based market movements that affect all shipping companies equally and that do not reflect any deterioration in the Borrower's relative credit quality.

3. Materiality Qualifier Refinement. The Borrower proposes that the temporal standard embedded in the MAC definition be limited to events that "ha[ve] had" a material adverse effect, rather than the Draft's formulation of "has had or could reasonably be expected to have" a material adverse effect. The "reasonably expected" standard introduces an additional layer of uncertainty and subjectivity that is, in our view, unnecessary in light of the carve-outs and other protections already available to the Lenders under the Credit Agreement.

In the alternative, if the Lenders and the Administrative Agent insist on retention of the "reasonably expected" formulation, the Borrower proposes that this standard be modified to require that the effect be "reasonably expected to occur" (not merely "reasonably expected to have" an effect), and that any such assessment be measured against the Borrower and its subsidiaries "taken as a whole," ensuring that isolated developments affecting a single vessel, subsidiary, or contract do not give rise to a MAC determination.

C. Precedent and Market Practice Support

The Borrower's proposed revisions to the MAC definition are well-supported by prevailing market practice and industry precedent. In particular, the Borrower draws attention to the following:

The Loan Syndications & Trading Association ("LSTA") model credit agreement provisions for leveraged lending transactions include a MAC definition that contains substantially all of the carve-outs proposed by the Borrower above, including exclusions for general economic conditions, industry conditions, changes in law or accounting standards, natural disasters, pandemics, war and hostilities, and the announcement or pendency of the transactions. The LSTA model is widely regarded as the baseline for credit agreement drafting in the New York law-governed syndicated lending market, and its MAC provisions reflect a consensus view of the appropriate allocation of risk between borrowers and lenders. While the LSTA model is most directly applicable to leveraged lending transactions, its MAC formulations are regularly adapted and adopted in shipping finance facilities, particularly those documented under New York law.

In the specific context of Greek shipowner revolving credit facilities in the $100,000,000 to $250,000,000 range documented under New York law, current market practice consistently includes the types of carve-outs proposed by the Borrower. This is particularly true in facilities where the borrower is a well-established shipping company with a diversified fleet, strong historical earnings, and a demonstrated track record of debt service performance — all of which describe TSL. Industry-specific exclusions relating to freight rate fluctuations, charter rate movements, vessel value changes, and general maritime market conditions are standard in shipping finance documentation and reflect the widely understood cyclical nature of the shipping industry.

The inclusion of "prospects" as a prong of the MAC definition has been consistently rejected in borrower-favorable shipping finance documentation since at least 2018. This trend reflects a broader market evolution away from expansive, lender-protective MAC formulations and toward a more balanced approach that ties MAC determinations to demonstrable, material changes in the borrower's actual business and financial condition. We are not aware of any recent precedent in the Greek shipping finance market where a borrower of TSL's credit quality and financial profile has accepted a MAC definition that includes "prospects" as a substantive prong.

Finally, we note that TSL's credit profile provides substantial support for the Borrower's position. TSL currently operates a fleet of forty (40) vessels, consisting of twenty-eight (28) dry bulk carriers and twelve (12) tankers. The total appraised fleet value is approximately $1.2 billion. For the fiscal year ended December 31, 2022, TSL reported consolidated revenue of approximately $620 million and consolidated EBITDA of approximately $145 million. Against a proposed revolving credit facility of $150 million, the Borrower's leverage profile is conservative, and the Lenders' credit exposure is well-supported by the Borrower's asset base, cash flow generation, and earnings capacity. This credit profile mitigates the need for an expansive MAC trigger and supports the Borrower's request for a balanced, market-standard MAC definition.

II. Mandatory Prepayment Triggers

A. Overview of Lender's Draft Position

Section 2.11 of the Draft Credit Agreement sets forth a series of mandatory prepayment provisions requiring the Borrower to apply certain categories of cash receipts to the prepayment of outstanding revolving loans and, to the extent applicable, the permanent reduction of revolving commitments. While the Borrower acknowledges that mandatory prepayment provisions serve an important protective function for the Lenders, the scope and structure of the mandatory prepayment regime set forth in the Draft are, in several respects, significantly more restrictive than is customary in revolving credit facilities and are particularly ill-suited to the operational realities of an international shipping company with an active fleet management strategy.

The Draft includes mandatory prepayment triggers tied to the following categories of cash receipts:

(i) Asset Disposition Proceeds. 100% of net proceeds from any asset disposition (including, without limitation, vessel sales), subject to a de minimis threshold of $1,000,000 per transaction;

(ii) Insurance and Condemnation Proceeds. 100% of insurance proceeds and condemnation awards (other than proceeds applied to the repair or replacement of affected vessels within a specified reinvestment period of 180 days from the date of receipt);

(iii) Extraordinary Receipts. 100% of extraordinary receipts, including settlement proceeds, indemnification payments, tax refunds above ordinary course amounts, and similar non-recurring cash receipts;

(iv) Excess Cash Flow Sweep. 50% of Excess Cash Flow in each fiscal year, calculated after deductions for debt service, maintenance CapEx, and permitted working capital adjustments;

(v) Prohibited Indebtedness. 100% of net proceeds from the incurrence of any indebtedness not otherwise permitted under the negative covenants set forth in Article VII of the Draft; and

(vi) Collateral Coverage Deficiency. If the aggregate appraised value of the Mortgaged Vessels falls below 140% of outstanding Facility obligations (the "Minimum Collateral Coverage Ratio"), the Borrower must prepay outstanding obligations or provide additional collateral within thirty (30) days of notice from the Administrative Agent.

The Borrower's specific concerns with the foregoing provisions are set forth below, together with the Borrower's proposed revisions.

B. Borrower's Proposed Revisions

1. Vessel Sale Proceeds (Clause (i)).

The Borrower raises three specific concerns with the mandatory prepayment trigger applicable to vessel sale proceeds.

De Minimis Threshold. The de minimis threshold of $1,000,000 per transaction is inadequate in the context of a $150 million revolving credit facility secured by a fleet of vessels with an aggregate appraised value of approximately $1.2 billion. The Borrower proposes that the de minimis threshold be increased to $5,000,000 per individual transaction or $10,000,000 in the aggregate per fiscal year. This revised threshold better reflects the scale of the Facility and the Borrower's fleet operations and avoids the administrative burden of mandatory prepayment obligations triggered by relatively small vessel dispositions (such as the sale of older, lower-value tonnage that may have a fair market value in the range of $1,000,000 to $5,000,000 per vessel).

Reinvestment Right. The Draft contains no reinvestment right with respect to vessel sale proceeds. This is a critical omission. The Borrower is actively engaged in a fleet renewal and modernization strategy, and the sale of older vessels is an integral component of that strategy — generating proceeds that are redeployed into the acquisition of newer, more fuel-efficient tonnage. Mandatory prepayment of all vessel sale proceeds (above the de minimis threshold) without any reinvestment right would effectively penalize the Borrower for prudent fleet management and would discourage the very asset transactions that enhance the quality of the Lenders' collateral over time.

The Borrower proposes the inclusion of a standard reinvestment right, pursuant to which net proceeds from vessel dispositions shall not trigger mandatory prepayment if the Borrower commits to reinvest such proceeds in replacement vessels, newbuilding contracts, or fleet upgrades within three hundred sixty-five (365) days from the date of receipt of such proceeds. If the Borrower has entered into a binding contract or letter of intent for such reinvestment before the expiration of the initial 365-day period but has not yet completed the reinvestment, the reinvestment period shall be automatically extended by an additional one hundred eighty (180) days. Any net proceeds not actually reinvested within the applicable reinvestment period shall be applied to prepay the revolving facility in accordance with the mandatory prepayment mechanics set forth in Section 2.11 of the Credit Agreement.

Non-Mortgaged Vessel Proceeds. The proposed Facility contemplates the mortgage of eighteen (18) of TSL's forty (40) fleet vessels as collateral for the Facility (the "Mortgaged Vessels"). The Draft, however, applies the mandatory prepayment trigger to proceeds from the sale of any vessel, including vessels that are not Mortgaged Vessels and that do not form part of the Lenders' collateral package. The Borrower submits that proceeds from the sale of non-Mortgaged Vessels should be excluded entirely from the mandatory prepayment trigger, as such sales do not diminish the Lenders' collateral position. In the alternative, if the Lenders require some protection with respect to non-Mortgaged Vessel sales, the Borrower proposes that such proceeds be subject to a separate, more generous basket — for example, exclusion of the first $25,000,000 in aggregate proceeds from non-Mortgaged Vessel sales per fiscal year, with any excess applied to mandatory prepayment.

2. Insurance and Condemnation Proceeds (Clause (ii)).

The Borrower proposes two revisions to the mandatory prepayment trigger applicable to insurance proceeds and condemnation awards.

Reinvestment Period. The Draft provides for a reinvestment period of one hundred eighty (180) days from the date of receipt of insurance or condemnation proceeds. This period is insufficient given the practical realities of vessel repair, drydocking, and replacement in the international shipping industry. Major hull damage requiring drydock repair may take six to nine months to complete, depending on shipyard availability and the complexity of the repair work. The procurement of a replacement vessel — whether through secondhand purchase or newbuilding order — involves lead times that routinely exceed 180 days. Accordingly, the Borrower proposes that the reinvestment period be extended to two hundred seventy (270) days from the date of receipt, which provides a more realistic timeframe for the Borrower to complete repair or replacement activities while still ensuring that idle insurance proceeds are ultimately applied to debt reduction if not reinvested.

Small Casualty Exclusion. Insurance recoveries for minor casualties, partial losses, and routine damage claims are a regular feature of international shipping operations. Requiring mandatory prepayment in connection with every insurance recovery, regardless of size, is administratively burdensome and inconsistent with the character of a revolving credit facility. The Borrower proposes that insurance proceeds below $2,500,000 per casualty event be excluded from the mandatory prepayment trigger and instead be retained by the Borrower for general corporate purposes, including application to vessel maintenance and repair.

3. Excess Cash Flow Sweep (Clause (iv)).

The Borrower objects to the inclusion of an excess cash flow sweep in the Credit Agreement on fundamental structural grounds. Excess cash flow sweeps are a characteristic feature of term loan B facilities — particularly in the leveraged finance context — where the borrower's cash flows are the primary source of repayment for a fully funded, amortizing term loan. In a revolving credit facility, by contrast, the borrower draws and repays revolving loans on a revolving basis as its working capital and liquidity needs require. The imposition of an excess cash flow sweep on a revolving facility creates a structural mismatch: it effectively requires the borrower to reduce outstanding revolving loans at a time when the borrower may need revolving availability to fund ongoing operations, seasonal working capital fluctuations, or fleet investment. Excess cash flow sweeps are not customary in revolving credit facilities, and the Borrower is not aware of precedent for such a provision in shipping finance revolvers of comparable size and credit quality.

In the alternative, if the Lenders and the Administrative Agent insist on the inclusion of an excess cash flow sweep mechanism, the Borrower proposes the following modifications to mitigate the operational impact of such a provision:

(a) Reduced Sweep Percentage. The sweep percentage should be reduced from 50% to 25% of Excess Cash Flow in each fiscal year, reflecting a more appropriate balance between Lender protection and Borrower operational flexibility.

(b) Leverage-Based Step-Down. The ECF sweep should step down to 0% (i.e., no sweep) in any fiscal year in which the Borrower's consolidated net leverage ratio (as defined in the Credit Agreement) is at or below 3.00 to 1.00 as of the last day of such fiscal year. This step-down recognizes that the Borrower's cash flow generation at lower leverage levels poses no incremental credit risk to the Lenders and that the Borrower should not be penalized for strong performance.

(c) Expanded Deductions in ECF Calculation. The definition of "Excess Cash Flow" should include deductions for (x) voluntary prepayments of revolving loans and other funded indebtedness made during the applicable fiscal year (to the extent not financed with the proceeds of other indebtedness), (y) growth CapEx (as distinguished from maintenance CapEx) incurred or committed during the applicable fiscal year, and (z) the aggregate consideration paid for permitted acquisitions (including vessel acquisitions) consummated during the applicable fiscal year.

The Borrower further notes that the proposed Credit Agreement includes a maximum capital expenditures covenant of $80,000,000 per fiscal year, which provides meaningful discipline on the Borrower's investment spending and offers substantial protection to the Lenders against excessive cash outflows. The CapEx covenant, together with the financial covenants (leverage ratio, interest coverage ratio, and minimum liquidity), provides a comprehensive framework for protecting the Lenders' credit position without the need for a duplicative and structurally inappropriate ECF sweep.

4. Collateral Coverage Deficiency (Clause (vi)).

The Borrower accepts the Minimum Collateral Coverage Ratio of 140% and the thirty (30) day cure period in principle. These provisions are consistent with market practice in ship finance facilities and appropriately protect the Lenders against a decline in the value of the Mortgaged Vessels.

However, the Borrower proposes that the cure right available to the Borrower upon the occurrence of a collateral coverage deficiency be expanded to include three alternative remedies, exercisable at the Borrower's sole election:

(a) Prepayment. The Borrower may prepay outstanding revolving loans in an amount sufficient to restore the collateral coverage ratio to at least 140%;

(b) Additional Vessel Mortgages. The Borrower may grant first-priority ship mortgages on one or more additional, previously unencumbered vessels from TSL's fleet, in favor of the Administrative Agent for the benefit of the Lenders, in an aggregate appraised value sufficient to restore the collateral coverage ratio to at least 140%; or

(c) Cash Collateral. The Borrower may pledge additional cash collateral in a segregated account in favor of the Administrative Agent, in an amount sufficient to restore the collateral coverage ratio to at least 140%.

This triple-cure mechanism provides the Borrower with maximum flexibility to address a collateral coverage deficiency in the manner that is least disruptive to its operations and liquidity position at the relevant time, while ensuring that the Lenders' collateral position is fully restored within the specified cure period.

The Borrower notes that the eighteen (18) Mortgaged Vessels are expected to have an aggregate fair market value of approximately $780 million, based on preliminary appraisals to be delivered by Seastone Maritime Advisors Ltd. in connection with the Closing. At full draw of the $150,000,000 Facility, this would result in a collateral coverage ratio of approximately 520% ($780,000,000 ÷ $150,000,000 = 5.20x), which provides a substantial cushion above the 140% Minimum Collateral Coverage Ratio. To breach the 140% threshold at full draw, the aggregate value of the Mortgaged Vessels would need to decline by approximately 73% from current levels — an extraordinarily unlikely scenario given the diversity and quality of the Mortgaged Vessel fleet. The minimum collateral value required to maintain compliance at full draw is $210,000,000 (140% × $150,000,000), representing a decline of approximately $570,000,000 from current appraised values. This extraordinary cushion further supports the reasonableness of the Borrower's request for a flexible, multi-option cure mechanism.

C. Precedent and Market Practice Support

The Borrower's proposed revisions to the mandatory prepayment provisions are consistent with customary practice in revolving credit facilities and, in particular, with established norms in the shipping finance market.

As an initial matter, it is well-recognized in the syndicated lending market that mandatory prepayment mechanics in revolving credit facilities are structurally distinct from those in term loan facilities. Revolving credit facilities are designed to provide borrowers with ongoing access to committed liquidity, and mandatory prepayment provisions that effectively convert a revolving facility into a cash sweep mechanism undermine this fundamental purpose. Accordingly, asset sale prepayment triggers in revolving facilities are typically subject to more generous reinvestment rights and higher de minimis thresholds than those applicable to term loans, and excess cash flow sweeps are generally not included in revolving credit facilities at all.

Excess cash flow sweeps are atypical in investment-grade or near-investment-grade shipping revolvers. TSL's credit profile — with a net leverage ratio well below 4.00x, strong and consistent EBITDA generation, and a diversified, high-value fleet — places the Borrower in a credit tier where excess cash flow sweep mechanisms are rarely imposed. The inclusion of such a provision in the Draft appears to reflect a term loan-oriented approach to mandatory prepayment that is not appropriate for this revolving facility structure.

Vessel reinvestment rights are standard in maritime lending transactions and serve the dual purpose of permitting fleet renewal (which benefits the Lenders through improved collateral quality) and avoiding the perverse incentive of discouraging borrowers from disposing of older, less valuable tonnage. The 365-day reinvestment period (with a 180-day extension for binding commitments) proposed by the Borrower is within the range of market practice for shipping finance facilities.

Finally, the proposed collateral coverage ratio of 140% already provides significant lender protection, and the triple-cure mechanism — permitting the Borrower to restore compliance through prepayment, additional vessel mortgages, or cash collateral, at the Borrower's election — is market standard in ship finance documentation. This approach recognizes that the most efficient and least disruptive cure mechanism may vary depending on market conditions, the Borrower's liquidity position, and the availability of unencumbered vessels at the time a deficiency arises.

III. Restricted Payments Basket

A. Overview of Lender's Draft Position

Section 7.06 of the Draft Credit Agreement imposes a broad restriction on the ability of the Borrower and its subsidiaries to declare, make, or pay any dividend, distribution, or other restricted payment (including share repurchases and redemptions), subject to only two narrow exceptions:

(a) distributions among wholly-owned subsidiaries of the Borrower; and

(b) tax distributions in an amount not to exceed the actual tax liabilities of equity holders attributable to the Borrower's income, calculated on a pass-through basis.

The Draft contains no general restricted payments basket, no builder basket, and no leverage-based exception. The effect of the Draft's restricted payments provisions is to impose a full lockup on distributions from the Borrower to its equity holders absent the prior written consent of the Required Lenders. This is an extraordinarily restrictive approach that is neither warranted by the Borrower's credit profile nor consistent with market practice for facilities of this nature.

B. Borrower's Proposed Revisions

The Borrower proposes a multi-tiered restricted payments framework that provides the Borrower with appropriate distribution flexibility while maintaining meaningful protections for the Lenders through the imposition of Event of Default and pro forma financial covenant compliance conditions. The Borrower's proposed framework includes the following components:

1. General Restricted Payments Basket. The Borrower proposes a general basket permitting restricted payments in an aggregate amount not to exceed $15,000,000 per fiscal year, subject to satisfaction of the following conditions at the time of, and after giving pro forma effect to, each such payment:

(i) no Event of Default shall exist or would result from the making of such payment; and

(ii) after giving pro forma effect to such payment, the Borrower shall be in compliance with all financial covenants set forth in Section 7.11 of the Credit Agreement, including: (A) the maximum consolidated net leverage ratio of 4.50 to 1.00 (stepping down to 4.00 to 1.00 in the third year of the Facility and thereafter); (B) the minimum consolidated interest coverage ratio of 3.00 to 1.00; and (C) minimum liquidity (defined as unrestricted cash and cash equivalents plus available undrawn revolving commitments) of not less than $30,000,000.

The $15,000,000 annual basket represents approximately 10% of the Borrower's FY2022 EBITDA and is a measured amount that provides the Borrower with the ability to make regular distributions to its equity holders without materially impacting the Borrower's liquidity or debt service capacity.

2. Leverage-Based Exception. In addition to the general basket, the Borrower proposes an unlimited restricted payments capacity available at any time when the Borrower's pro forma consolidated net leverage ratio is at or below 3.00 to 1.00. This threshold represents a full turn of leverage below the maximum covenant level of 4.00 to 1.00 (as in effect in Year 3 and thereafter) and signals a credit profile at which the Borrower's distribution activity does not pose a meaningful risk to the Lenders' credit position. This unlimited capacity shall be subject to the Borrower's compliance, after giving pro forma effect to the proposed payment, with the minimum liquidity covenant of $30,000,000. The leverage-based exception is a widely accepted market formulation in both leveraged lending and investment-grade credit facilities and is particularly appropriate here given the Borrower's conservative leverage profile.

3. Builder Basket. The Borrower proposes a cumulative "builder basket" permitting restricted payments funded from retained excess cash flow, commencing with the fiscal year ending December 31, 2023 (the first full fiscal year following the expected Closing Date). The builder basket would have an initial "starter amount" of $10,000,000, which is available from and after the Closing Date without regard to actual excess cash flow generation, and would grow on a cumulative basis by the addition of a specified percentage of Excess Cash Flow (as defined in the Credit Agreement) for each completed fiscal year. Utilization of the builder basket would be subject to the same Event of Default and pro forma financial covenant compliance conditions applicable to the general basket. The builder basket provides the Borrower with a mechanism to share the benefits of strong financial performance with its equity holders, while the pro forma covenant compliance conditions ensure that such distributions do not impair the Borrower's ability to service its debt obligations or maintain adequate liquidity.

4. Share Repurchase Basket. The Borrower proposes a specific basket for share repurchases, redemptions, or other equity repurchase transactions in an aggregate amount not to exceed $5,000,000 per fiscal year. This basket is particularly relevant to TSL's equity management needs, including potential repurchases from members of the Karadimitriou family and other existing equity holders. This basket would be subject to the standard Event of Default and pro forma financial covenant compliance conditions.

5. Intercompany Dividends. The Borrower requests express confirmation in the Credit Agreement that dividends and distributions from the Borrower's wholly-owned subsidiary Guarantors — specifically, Thalassa Dry Bulk Holdings Ltd. (organized under the laws of the Republic of Cyprus), Thalassa Tanker Operations Ltd. (organized under the laws of the Republic of the marshall Islands), and Thalassa Logistics International Ltd. (organized under the laws of the Republic of Cyprus) — Upstream to TSL are unrestricted and not subject to any basket, cap, or condition. These entities are wholly-owned subsidiaries and designated Guarantors under the Facility, and their ability to dividend cash and other assets upstream to TSL is essential for the Borrower's centralized cash management, treasury operations, and servicing of its obligations under the Credit Agreement. Restrictions on intercompany dividends from Guarantor subsidiaries to the Borrower would create an operational impediment that serves no credit-protective purpose, as all dividended amounts remain within the Borrower's consolidated group and available for debt service.

C. Precedent and Market Practice Support

The Borrower's proposed restricted payments framework is consistent with standard practice in shipping finance revolving credit facilities, where borrowers customarily maintain operational flexibility for dividend payments, equity distributions, and fleet reinvestment.

A full distribution lockup of the type set forth in the Draft is inconsistent with the credit profile of a borrower with FY2022 EBITDA of approximately $145 million against a $150 million revolving facility. At these levels, the Borrower's net leverage ratio is well below the proposed maximum covenant level, and the Borrower's cash flow generation provides ample capacity for both debt service and regular distributions. A distribution lockup is typically reserved for highly leveraged borrowers with limited free cash flow and tight debt service coverage — conditions that do not apply to TSL.

TSL is a privately held Greek shipping company, founded and controlled by Nikolaos Karadimitriou (Founder and Chairman). For privately held companies of this nature, distribution flexibility is essential to maintain equity holder support, fund the personal financial needs of the principal equity holders, and ensure the continued willingness of equity holders to reinvest in and support the growth of the business. A complete distribution lockup risks alienating the equity holders and undermining their commitment to the enterprise — an outcome that serves neither the Borrower's nor the Lenders' long-term interests.

The general restricted payments basket ($15,000,000 per fiscal year), the leverage-based exception (unlimited at or below 3.00x net leverage), the builder basket, and the share repurchase basket are all standard components of restricted payments provisions in credit facilities governed by New York law. These provisions, together with the Event of Default and pro forma financial covenant compliance conditions, provide a balanced framework that protects the Lenders while preserving the Borrower's operational flexibility.

IV. Process and Next Steps

We respectfully request that Whitmore, Jennings & Alcott LLP, Meridian Atlantic, and the Lenders consider the foregoing positions in preparing the next draft of the Credit Agreement. The Borrower believes that each of the proposed revisions set forth in this letter is reasonable, well-supported by market practice, and consistent with the overall credit profile and risk characteristics of this transaction.

Calderwood & Harkness is available for a negotiation call to discuss the foregoing items, as well as any other open points arising from our April 14 redline markup, at the convenience of your firm and Meridian Atlantic. We are flexible on scheduling and would suggest a call during the week of April 24, 2023, if that is agreeable. Please do not hesitate to contact the undersigned or Ian Blackwood to arrange a mutually convenient time.

As noted above, this letter supplements but does not replace our comprehensive redline markup of the Draft Credit Agreement delivered on April 14, 2023, which contains eight hundred forty-seven (847) individual comments across the full two hundred ten (210) pages of the Draft. The redline markup constitutes the Borrower's complete initial set of comments, and the parties should refer to that markup for the Borrower's positions on all provisions of the Draft not specifically addressed in this letter.

This letter is not intended to be exhaustive of all of the Borrower's comments, concerns, or proposed revisions with respect to the Draft Credit Agreement or the transactions contemplated thereby. The Borrower expressly reserves all rights to raise additional issues, propose additional revisions, and assert additional positions in connection with subsequent drafts of the Credit Agreement and the other Loan Documents.

We anticipate that a revised draft of the Credit Agreement will be circulated by Whitmore, Jennings & Alcott LLP in due course, and we look forward to continuing to work with your firm and Meridian Atlantic toward the timely completion of this transaction.

Very truly yours,