1044-00002 · Client 1044 · Post-Withdrawal Advisory

memo-harborstone-extension-strategy.docx DOCUMENT M&A / Corporate

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MEMORANDUM

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT

From: Sophie Tremblay, Senior Associate, Banking & Finance, Calderwood & Harkness LLP

To: 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

CC: Ian Blackwood, Partner, Banking & Finance, Calderwood & Harkness LLP

Date: August 10, 2023

Re: Strategy for Extension of Existing Revolving Credit Facility with Harborstone National Bank — Maturity Date: November 15, 2023

Matter No.: 1044-00002

I. Executive Summary

The purpose of this memorandum is to advise Thalassa Shipping & Logistics SA ("TSL" or the "Borrower") on the recommended strategy for approaching Harborstone National Bank ("Harborstone") to negotiate a short-term maturity extension of the existing $125,000,000 senior secured revolving credit facility (the "Existing RCF") beyond its current maturity date of November 15, 2023. This memorandum sets forth our analysis of the relevant contractual mechanics, the proposed extension structure and key commercial terms, the anticipated timeline and documentation requirements, cost estimates, and our recommendations for next steps.

The need for this extension arises from the recent and unexpected disruption to TSL's long-term refinancing plans. On July 18, 2023, Meridian Atlantic Bank N.A. ("Meridian Atlantic" or "MAB") publicly announced that it is exiting shipping and maritime finance globally as part of a broader strategic review and portfolio rationalization. The following day, on July 19, 2023, Meridian Atlantic delivered formal notice to TSL withdrawing from the $150,000,000 senior secured revolving credit facility refinancing mandate that had been awarded to Meridian Atlantic in April 2023. As a result of this withdrawal, the proposed replacement facility — which was expected to refinance and replace the Existing RCF well in advance of its November 15, 2023 maturity — will not close on the originally anticipated timeline, and indeed will not proceed at all under Meridian Atlantic's sponsorship.

In the weeks following Meridian Atlantic's withdrawal, Calderwood & Harkness LLP ("C&H") and TSL's management team undertook a concerted effort to identify alternative arrangers capable of delivering a replacement facility on a comparable timeline. Outreach was made to four institutions: Nordkapp Maritime Finance AG, Clearwater Commercial Lending LLC, iniaia Merchant Bank SA, and Baltic Strait Capital GmbH. As reported in detail in C&H's letter to Ms. Vassiliou dated August 7, 2023, each of these institutions either declined to participate or offered terms that were materially inferior to the Existing RCF and the proposed Meridian Atlantic facility in one or more critical respects (pricing, tenor, collateral requirements, or commitment size). None of the alternative lenders was in a position to commit to a closing timeline prior to November 15, 2023, even under an accelerated mandate.

In light of these developments, TSL instructed Calderwood & Harkness on August 14, 2023 to wind down the Meridian Atlantic refinancing matter. Accordingly, the strategic focus must now shift to protecting TSL's existing liquidity position by extending the Harborstone facility for a sufficient period to allow TSL to pursue alternative long-term refinancing in an orderly fashion and without the pressure of an imminent maturity.

Time is the critical variable. As of the date of this memorandum, only approximately 97 days remain until the November 15, 2023 maturity date. Harborstone will require meaningful lead time for internal credit committee review and approval of any extension request, and documentation will need to be negotiated, executed, and delivered prior to the maturity date. Every day of delay compresses the available window and increases execution risk.

Our primary recommendation is that TSL management initiate contact with Philip Rennert, Director, Structured Shipping Finance at Harborstone National Bank, as soon as practicable, and ideally no later than the week of August 14, 2023. The remainder of this memorandum provides the detailed analysis and supporting rationale for this recommendation.

II. Background — The Existing Harborstone Revolving Credit Facility

A. Facility Overview

The Existing RCF is governed by that certain Credit Agreement dated as of November 15, 2018 (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"), entered into among TSL as Borrower, the Guarantors (as defined below), and Harborstone National Bank, in its capacity as Administrative Agent and sole lender.

The principal terms of the Existing RCF are summarized as follows:

The transition from LIBOR to SOFR as the applicable benchmark was addressed comprehensively in the Second Amendment dated March 1, 2022, in accordance with the Alternative Reference Rates Committee ("ARRC") recommended hardwired fallback provisions. The Second Amendment incorporated a SOFR-based interest rate framework with a credit spread adjustment intended to approximate the economic equivalence of the former LIBOR-based pricing, consistent with market practice at that time for shipping finance facilities. No other material economic or covenant terms were modified in the Second Amendment.

The First Amendment, dated June 30, 2020, was entered into during the early stages of the COVID-19 pandemic and provided certain temporary covenant relief measures, including a limited waiver of the minimum liquidity covenant and a temporary adjustment to the maximum leverage ratio through December 31, 2020. Those temporary measures expired by their terms, and the original covenant levels have been reinstated and in effect since January 1, 2021.

The collateral package securing the Existing RCF — consisting of first-priority ship mortgages on designated fleet vessels, assignments of earnings from the mortgaged vessels' charters and contracts of affreightment, assignments of hull and machinery and protection and indemnity insurances, and pledges of the equity interests in the vessel-owning subsidiaries — is substantially similar in structure to the collateral package that had been contemplated for the proposed Meridian Atlantic replacement facility.

B. Current Utilization and Financial Standing

TSL's financial performance and balance sheet position provide a strong foundation for the extension request. Based on publicly available information and the financial data reviewed by C&H in connection with the Meridian Atlantic refinancing, key financial metrics are summarized as follows:

• FY2022 Revenue: Approximately $620 million, reflecting strong charter rates across both the dry bulk and tanker segments.

• FY2022 EBITDA: Approximately $145 million, demonstrating robust operating profitability and substantial debt service capacity relative to the $125 million Existing RCF.

• Total Fleet Value: Approximately $1.2 billion (based on an aggregate fleet of 40 vessels, comprising 28 dry bulk carriers and 12 tankers), per the most recent available independent desktop appraisals completed in Q1 2023.

• Fleet Utilization: TSL's fleet utilization rates have remained consistently above industry averages, supported by a diversified mix of time charters, voyage charters, and contracts of affreightment with creditworthy counterparties.

We note that current financial covenant compliance under the Existing Credit Agreement should be confirmed with Mr. Pantazis prior to approaching Harborstone. It is imperative that TSL be in full compliance with all financial covenants at the time the extension request is made, as any existing default or event of default — or any default that would result from the proposed amendment — would almost certainly preclude Harborstone from approving the extension. Based on our review of the FY2022 financial data in connection with the Meridian Atlantic refinancing, we have no reason to believe that TSL is not in compliance, but formal confirmation is essential.

TSL's relationship with Harborstone, and specifically with Philip Rennert, Director, Structured Shipping Finance, has been collaborative and constructive over the five-year term of the Existing RCF. The two prior amendments were negotiated and documented without material difficulty, and we are not aware of any disputes, contentious issues, or strained communications between TSL and Harborstone during the facility's life. A strong existing lender relationship is one of the most important factors in securing a favorable extension, and TSL is well-positioned in this regard.

C. Reason the Existing RCF Was Being Refinanced

The refinancing with Meridian Atlantic was undertaken for two principal strategic objectives:

(a) Refinance and replace the Existing RCF before its November 15, 2023 maturity, thereby eliminating the near-term maturity risk and securing committed revolving credit availability for an additional five-year period; and

(b) Provide incremental revolving capacity of $25,000,000 ($150,000,000 proposed facility less $125,000,000 existing facility) for general corporate purposes and working capital, supporting TSL's fleet expansion and operational needs.

The proposed Meridian Atlantic facility offered several advantages over the Existing RCF, including competitive SOFR-based pricing in the range of SOFR + 225 to 325 basis points (on a leverage-based pricing grid), improved covenant flexibility (including higher permitted leverage ratios and more generous basket and exception provisions), a fresh five-year tenor with a maturity in approximately mid-2028, and the institutional depth and maritime sector expertise of Meridian Atlantic's shipping finance platform.

As noted above, the Meridian Atlantic refinancing is no longer proceeding. No credit documentation was executed, no commitments were funded, and no fees (other than C&H's professional fees) were paid in connection with that proposed transaction. The refinancing mandate has been formally wound down.

III. Proposed Extension — Structure and Key Terms

A. Type of Amendment

We recommend that TSL seek a Third Amendment to the Existing Credit Agreement (the "Extension Amendment"), limited in scope to extending the maturity date and making only such conforming changes as are strictly necessary or reasonably appropriate in connection therewith.

The extension should be structured as a straightforward maturity extension rather than a full-scale amendment and restatement of the Existing Credit Agreement. This approach offers several significant advantages:

• Minimized negotiation time: By limiting the scope of the amendment to the maturity date and closely related provisions (such as any corresponding date references, extension fee provisions, and potentially minor pricing adjustments), TSL avoids the protracted and resource-intensive process of renegotiating the full suite of representations, covenants, events of default, and other operative provisions that would accompany a comprehensive amendment and restatement.

• Reduced documentation costs: A focused amendment will require substantially less drafting, review, and negotiation time from all parties and their respective counsel, resulting in lower legal fees for both TSL and Harborstone (with Harborstone's outside counsel fees typically borne by TSL as borrower).

• Simplified credit committee process: A narrow amendment request is more likely to receive expeditious treatment by Harborstone's internal credit committee than a request that involves fundamental changes to multiple economic or structural terms. Given the compressed timeline (approximately 97 days to maturity), simplifying the credit approval process is a significant strategic benefit.

• Preservation of favorable terms: By avoiding a broad renegotiation, TSL preserves the benefit of the existing covenant package, definitions, and operational flexibility provisions that have served TSL well over the five-year term and that were negotiated at a time when market conditions may have been more favorable to borrowers.

To the extent possible, TSL should resist any effort by Harborstone to use the extension as an opportunity to reopen substantive economic or covenant terms beyond what is reasonably necessary. If Harborstone seeks broader changes as a condition of the extension, each such request should be evaluated carefully against TSL's operational needs and the available alternatives.

B. Proposed Extension Period

We recommend that TSL request an initial extension of 12 months, extending the maturity date from November 15, 2023 to November 15, 2024. A 12-month extension would provide TSL with adequate runway to evaluate the shipping finance market, identify and engage an appropriate replacement arranger, negotiate and document a new long-term revolving credit facility, and complete a refinancing in an orderly fashion without the pressure of an artificially compressed timeline.

Based on our experience with shipping finance refinancing transactions of comparable size and complexity, a period of 9 to 12 months is typically required from mandate award to closing, inclusive of credit committee approvals, due diligence, documentation negotiation, and the satisfaction of conditions precedent (including vessel appraisals, flag state and registry filings, and the execution and recording of ship mortgages across multiple jurisdictions). A 12-month extension therefore provides a reasonable — but not excessive — buffer.

Alternative — Minimum 6-Month Extension: If Harborstone is unwilling to grant a full 12-month extension, a minimum extension of 6 months (to May 15, 2024) should be TSL's floor position. However, we caution that a 6-month extension introduces meaningful refinancing execution risk, as it would require TSL to identify, engage, and close with a replacement lender within a compressed timeframe during a period in which the shipping finance market remains in flux following Meridian Atlantic's exit.

Further Extension Option: Ideally, the extension period should include an option for TSL to request one additional 6-month extension (extending the maturity to November 15, 2024 in the case of an initial 6-month extension, or to May 15, 2025 in the case of an initial 12-month extension), subject to Harborstone's consent (not to be unreasonably withheld, conditioned, or delayed) and confirmation that no default or event of default exists at the time of the request. The inclusion of such an option would provide TSL with additional flexibility in the event that the long-term refinancing market does not improve within the initial extension period.

C. Facility Size

We recommend that TSL seek to maintain the existing $125,000,000 revolving commitment in its current amount. The full commitment amount supports TSL's working capital requirements, operational liquidity needs, and the financial covenant calculations under the Existing Credit Agreement.

TSL may alternatively consider offering a modest commitment reduction — for example, to $100,000,000 — if Harborstone requires such a reduction as a condition of granting the extension. A reduction in commitment size reduces Harborstone's credit exposure and may facilitate credit committee approval. However, any reduction must be carefully evaluated against the following considerations:

• TSL's current and projected utilization of the revolving facility, including seasonal and cyclical variations in working capital needs;

• The impact on TSL's minimum liquidity covenant and other financial covenant calculations;

• The potential signaling effect to the market and to prospective replacement lenders if TSL's committed credit availability is reduced; and

• TSL's ability to meet operational cash requirements, including vessel operating expenses, charter hire obligations, drydocking and maintenance costs, and scheduled debt service on other indebtedness (if any), from operating cash flow and any reduced revolving availability.

We recommend that Mr. Pantazis prepare a detailed liquidity analysis modeling various commitment reduction scenarios ($125M, $115M, $100M) against TSL's projected cash flows and working capital needs for the extension period, so that TSL can establish an informed floor for any commitment reduction negotiation.

D. Anticipated Pricing Adjustments

It is highly likely that Harborstone will seek a pricing increase as consideration for the extension, reflecting several factors:

(i) Current market conditions in shipping finance: The pricing environment for shipping finance facilities has tightened since the Existing RCF was originally executed in November 2018. Credit spreads have widened, and the exit of a major platform lender (Meridian Atlantic) from the sector has further reduced competitive pressure on remaining lenders.

(ii) Extension risk premium: Lenders customarily require a pricing premium for maturity extensions, reflecting the additional credit risk associated with extending the tenor beyond the originally agreed maturity and the lender's opportunity cost of maintaining the commitment during the extension period.

(iii) Borrower-specific circumstances: The fact that TSL's originally planned refinancing with Meridian Atlantic fell through, and that TSL's subsequent outreach to four alternative lenders was unsuccessful, may be perceived by Harborstone as reducing TSL's negotiating leverage and warranting a higher risk premium.

Based on our review of recent comparable extension transactions in the shipping and maritime finance sector, we estimate that Harborstone may seek a margin increase in the range of 25 to 75 basis points over the current applicable margin. This would move the all-in pricing from the existing SOFR + applicable CSA + 250 basis points to approximately SOFR + 275 to 325 basis points (inclusive of the credit spread adjustment).

TSL should be prepared to negotiate within this range. The pricing on the proposed Meridian Atlantic facility — which was structured as SOFR + 225 to 325 basis points on a leverage-based pricing grid — provides a useful reference point, though Harborstone's extension premium may push the effective rate toward the upper end of, or modestly above, the Meridian Atlantic range given the circumstances. A margin of SOFR + CSA + 275 to 300 basis points would, in our view, represent a commercially reasonable outcome for TSL.

E. Extension Fee

Standard market practice for revolving credit facility maturity extensions is to pay an upfront extension fee, typically in the range of 15 to 50 basis points on the total commitment amount. This fee compensates the lender for the credit risk and administrative cost of extending the facility and is payable at closing of the Extension Amendment.

On a $125,000,000 commitment, the fee implications are as follows:

We recommend that TSL budget for a fee in the range of 25 to 35 basis points ($312,500 to $437,500) and negotiate downward from any higher initial ask by Harborstone. A fee in this range is consistent with prevailing market practice for extensions of bilateral shipping finance facilities and reflects the relative simplicity and limited scope of the proposed amendment.

In addition to the extension fee, Harborstone may request an enhancement to its annual administrative agent fee. The current administrative agent fee under the Existing Credit Agreement should be confirmed and reviewed prior to the extension negotiation. We anticipate that any increase, if requested, would be modest (in the range of $5,000 to $15,000 per annum), and TSL should be prepared to accept a reasonable increase in this regard.

F. Financial Covenants

Our strong recommendation is that the existing financial covenant package under the Existing Credit Agreement remain unchanged in the Extension Amendment. The covenants were negotiated and agreed upon for the five-year term of the facility, and TSL has maintained a strong compliance record throughout. Reopening the covenant package introduces negotiation risk, potential operational constraints, and documentation complexity that are disproportionate to the limited scope of a maturity extension.

However, we acknowledge that Harborstone may seek some degree of covenant tightening as a condition of the extension, particularly given that the extension increases the lender's credit exposure period. If Harborstone insists on covenant modifications, TSL should resist material changes but may consider modest adjustments in the following areas as part of a broader commercial negotiation:

• A step-down in the maximum permitted leverage ratio (e.g., from [4.50x] to [4.25x] or [4.00x]), provided that TSL's current and projected leverage remains comfortably within the revised threshold;

• A step-up in the minimum liquidity covenant (e.g., from [$25,000,000] to [$30,000,000] or [$35,000,000]), provided that TSL's cash and liquidity position supports the higher threshold without constraining operations; and

• Potentially, a new or enhanced reporting requirement (e.g., monthly rather than quarterly financial reporting, or additional fleet utilization and charter coverage reporting).

TSL's current FY2022 EBITDA of approximately $145 million, measured against the $125,000,000 facility commitment, provides meaningful covenant headroom. Confirming FY2023 interim financial results — particularly Q2 2023 — will be important for establishing TSL's compliance position and demonstrating to Harborstone that any existing or proposed covenant levels are being met with comfortable margin.

G. Collateral

The existing collateral package should remain in place for the extension period. The first-priority ship mortgages on the currently designated mortgaged vessels, the assignments of earnings and insurances, and the share pledges of vessel-owning subsidiaries collectively provide Harborstone with a robust security package that has been in place since the inception of the facility.

Harborstone may request updated vessel appraisals as a condition of the extension. In this regard, we note that Seastone Maritime Advisors completed independent desktop appraisals on July 10, 2023, in connection with the proposed Meridian Atlantic refinancing. Those appraisals reflected an aggregate fair market value of approximately $780 million for the 18 vessels that were designated as "Mortgaged Vessels" under the proposed Meridian Atlantic facility structure. While the specific vessel pool mortgaged under the Existing Credit Agreement may differ from the pool contemplated for the Meridian Atlantic facility, the Seastone appraisals may serve as a useful starting point and could potentially be relied upon by Harborstone (or refreshed at modest cost) if the appraisal date is sufficiently recent.

If Harborstone requires additional collateral — for example, mortgages on additional vessels beyond those currently designated — TSL should evaluate such a request in light of the following considerations:

• The total fleet value of approximately $1.2 billion provides substantial asset coverage relative to the $125 million facility;

• The number and identity of currently unencumbered vessels, and any impact on TSL's operational flexibility from encumbering additional tonnage;

• The cost and timing of executing and recording additional ship mortgages across the relevant flag state registries; and

• Whether additional collateral is truly necessary to secure Harborstone's credit approval, or whether it represents an opportunistic request that can be negotiated away.

We recommend that TSL agree to provide updated appraisals if requested, but resist providing additional collateral unless absolutely necessary to secure the extension on otherwise acceptable terms.

IV. Consent and Amendment Mechanics Under the Existing Credit Agreement

A. Required Consents

A significant advantage of the Existing RCF structure is that Harborstone National Bank is the sole lender under the Existing Credit Agreement. This feature dramatically simplifies the consent and amendment mechanics that would otherwise apply to a maturity extension.

In a typical syndicated credit facility, an extension of the maturity date is classified as a "fundamental" or "sacred right" amendment — that is, an amendment affecting a term so critical that it requires the consent of each affected lender, rather than merely the consent of the "Required Lenders" (typically defined as lenders holding a specified percentage, often 50% or 66⅔%, of the outstanding commitments or loans). In a syndicated facility, this unanimous consent requirement can represent a formidable practical obstacle, as obtaining the affirmative consent of every lender in the syndicate — including lenders with small positions, lenders that may have purchased their participations on the secondary market, and lenders that may have their own institutional reasons for declining to extend — is a time-consuming, uncertain, and often expensive process that frequently requires the payment of consent fees to individual lenders.

Because the Existing RCF is a bilateral facility with Harborstone as the sole lender, none of these syndicated facility complications apply. There is no multi-lender voting requirement, no "Required Lenders" threshold to satisfy, and no holdout lender risk. Harborstone, acting in its dual capacity as both Administrative Agent and sole Lender, can approve the Extension Amendment through a single internal credit committee approval process, without the need to coordinate among multiple institutions.

This structural simplicity is one of the strongest features of the current situation and should meaningfully reduce both the timeline and the execution risk associated with the extension.

B. Amendment Documentation

The Extension Amendment would be documented as a Third Amendment to Credit Agreement, to be executed by the following parties:

1. Thalassa Shipping & Logistics SA, as Borrower;

2. Thalassa Dry Bulk Holdings Ltd., as Guarantor;

3. Thalassa Tanker Operations Ltd., as Guarantor;

4. Thalassa Logistics International Ltd., as Guarantor; and

5. Harborstone National Bank, as Administrative Agent and sole Lender.

Each Guarantor will need to execute either a reaffirmation of its guarantee obligations under the Existing Credit Agreement or a separate consent and acknowledgment as part of the amendment documentation. This is standard practice to confirm that each Guarantor's guarantee obligations remain in full force and effect following the amendment, notwithstanding the extension of the maturity date and any other modifications to the underlying credit terms. Failure to obtain Guarantor reaffirmations could create an argument — however technical — that the guarantees do not extend to the post-extension obligations, which would undermine the credit support structure.

Corporate authorizations will be required from TSL and each Guarantor entity. This will require the adoption of board resolutions (or equivalent governing body authorizations) by each entity, authorizing the execution and delivery of the Extension Amendment and related documents and appointing authorized signatories.

The anticipated closing documentation for the Extension Amendment is as follows:

1. Third Amendment to Credit Agreement

2. Guarantor Reaffirmation / Consent and Acknowledgment (signed by each of the three Guarantors)

3. Secretary's Certificate or Officer's Certificate from TSL and each Guarantor, certifying (a) attached copies of governing documents (or confirmation that previously delivered governing documents remain in effect without amendment), (b) board resolutions authorizing the amendment, and (c) incumbency of authorized signatories

4. Legal opinion from Pavlopoulos & Drakos, Greek counsel to TSL, addressing TSL's corporate authority, due authorization, execution and delivery, enforceability, and such other matters as Harborstone may reasonably require under Greek law

5. Updated compliance certificate executed by Mr. Pantazis, demonstrating that no default or event of default exists under the Existing Credit Agreement and certifying compliance with all financial covenants as of the most recent testing date

6. Updated vessel appraisals (if requested by Harborstone)

7. Bring-down of representations and warranties, confirming that all representations and warranties contained in the Existing Credit Agreement are true and correct in all material respects as of the date of the Extension Amendment (with appropriate exceptions for representations that by their terms speak as of a specific earlier date)

Depending on Harborstone's requirements and the practices of its outside counsel, additional documentation may be requested, including updated insurance certificates, bring-down searches (UCC, lien, and litigation searches), and evidence of payment of all outstanding fees and expenses. We will identify any such additional requirements early in the documentation process.

C. Conditions Precedent to Extension Effectiveness

The Extension Amendment will likely include the following standard conditions precedent to its effectiveness:

(i) No default or event of default shall exist under the Existing Credit Agreement at the time of the Extension Amendment's execution or shall result from the effectiveness of the Extension Amendment;

(ii) The representations and warranties of the Borrower and each Guarantor set forth in the Existing Credit Agreement (as amended) shall be true and correct in all material respects (or, in the case of representations and warranties that are qualified by materiality, in all respects) as of the date of the Extension Amendment, except to the extent that such representations and warranties specifically relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date;

(iii) Delivery by the Borrower and each Guarantor of all required corporate authorizations, officer's certificates, incumbency certificates, and legal opinions;

(iv) Payment by the Borrower of the extension fee and all accrued but unpaid fees and expenses (including Harborstone's outside counsel fees and any unpaid administrative agent fees); and

(v) Delivery by the Borrower of updated financial statements, including (a) the FY2022 audited financial statements of TSL (audited by Hawthorne & Garrett LLP) and (b) the most recently available interim financial statements (expected to be Q2 2023 financials), together with a current compliance certificate.

Harborstone may include additional conditions precedent depending on the circumstances, such as delivery of satisfactory updated vessel appraisals, evidence of insurance coverage in compliance with the Existing Credit Agreement, or confirmation that no material adverse change has occurred since the date of the most recent audited financial statements. We will work with TSL and Harborstone's counsel to negotiate the conditions precedent to ensure they are achievable within the proposed timeline.

V. Timeline and Process

A. Proposed Engagement Sequence

Given the approximately 97 days remaining until the November 15, 2023 maturity date, we propose the following timeline for the extension process:

Week of August 14, 2023 — Initial Outreach to Harborstone

TSL management — we recommend Mr. Pantazis and Mr. Komnenidis as the appropriate points of contact — should initiate a direct conversation with Philip Rennert at Harborstone to discuss the extension request at a high level. The initial conversation should cover the following points:

• The background to the Meridian Atlantic withdrawal and the disruption to TSL's refinancing plans;

• TSL's continued strong financial performance and covenant compliance;

• TSL's desire to extend the Existing RCF maturity for a period of 12 months (with the 6-month alternative as a fallback);

• TSL's commitment to pursuing a long-term refinancing solution during the extension period; and

• A request for Harborstone's preliminary indication of receptivity, timing for credit committee review, and any initial information requirements.

This initial conversation should be positioned as a constructive dialogue between trusted counterparties, emphasizing the parties' successful five-year relationship, TSL's strong credit profile, and the straightforward nature of the proposed amendment.

Late August 2023 — Formal Written Extension Request

Following the initial conversation and assuming a positive preliminary response from Harborstone, TSL should submit a formal written extension request to Harborstone, accompanied by the following supporting materials:

• A formal request letter from Ms. Vassiliou or Mr. Pantazis, summarizing the proposed extension terms;

• FY2022 audited financial statements (audited by Hawthorne & Garrett LLP);

• Most recent interim (Q2 2023) financial statements;

• Current compliance certificate;

• Fleet utilization and charter data;

• A summary of TSL's fleet composition, values, and employment; and

• Any additional information reasonably requested by Harborstone during the initial discussion.

September 2023 — Harborstone Credit Committee Review

Upon receipt of TSL's formal request and supporting materials, Harborstone will submit the extension for internal credit committee review and approval. Based on our experience with bilateral shipping finance facilities and existing lender relationships, we estimate a credit committee process of approximately 3 to 4 weeks from submission of a complete information package. The sole-lender structure and the existence of an established credit file on TSL should facilitate a relatively streamlined approval process.

During this period, C&H and TSL's management should remain responsive to any additional information requests or diligence queries from Harborstone or its outside counsel. Prompt and complete responses to such requests will help maintain the timeline.

October 2023 — Documentation Negotiation

Upon receipt of Harborstone's credit committee approval (anticipated in late September or early October 2023), the parties would proceed to negotiate and document the Third Amendment. Calderwood & Harkness would prepare the initial draft of the Extension Amendment and related documents (or review and comment on a draft prepared by Harborstone's outside counsel, depending on the agreed-upon process). Key documentation workstreams during this period include:

• Drafting and negotiation of the Third Amendment to Credit Agreement;

• Preparation and execution of Guarantor reaffirmations;

• Coordination with Pavlopoulos & Drakos for Greek-law legal opinions and corporate authorizations for TSL;

• Coordination of corporate authorizations for the Cyprus-incorporated Guarantors (Thalassa Dry Bulk Holdings Ltd. and Thalassa Logistics International Ltd.) and the marshall Islands-incorporated Guarantor (Thalassa Tanker Operations Ltd.);

• Preparation of officer's certificates, compliance certificates, and supporting schedules; and

• Coordination of any updated vessel appraisals, if required.

Early to Mid-November 2023 (Before November 15) — Execution and Effectiveness

The Extension Amendment should be targeted for execution and effectiveness no later than November 10, 2023, providing a modest buffer before the November 15 maturity date. All conditions precedent to effectiveness, including payment of the extension fee, delivery of all closing documents, and confirmation of no default or event of default, would need to be satisfied by this date.

B. Critical Path Items

The following items represent the critical path for the extension timeline, and delays in any of these areas could jeopardize the ability to complete the extension before the November 15, 2023 maturity:

1. Harborstone's in-principle agreement and credit committee approval: This is the longest lead-time item and the most significant execution risk. Until Harborstone's credit committee approves the extension, no documentation work can meaningfully proceed. Prompt initiation of the discussion with Philip Rennert is therefore essential.

2. Preparation of updated compliance certificate and financial package: Mr. Pantazis should begin assembling this information immediately so that it is ready for delivery to Harborstone within days of the initial discussion.

3. Corporate authorizations across multiple jurisdictions: Board resolutions and other corporate authorizations will be required from TSL (Greece) and each of the three Guarantor entities (two incorporated in Cyprus and one in the Republic of the marshall Islands). Scheduling board meetings and obtaining executed resolutions across three jurisdictions requires advance planning, particularly given potential vacation schedules and time zone considerations during the August-September period.

4. Engagement of Pavlopoulos & Drakos: We recommend confirming the availability of Theodoros Pavlopoulos and his team at Pavlopoulos & Drakos at the earliest opportunity for the Greek-law corporate authorization work and legal opinion delivery. Given the time-sensitive nature of the extension, any scheduling constraints or conflicts should be identified now. Additionally, C&H and P&D should confirm whether marshall Islands local counsel will be required for Thalassa Tanker Operations Ltd. (incorporated in the Republic of the marshall Islands), and if so, identify and engage appropriate counsel with sufficient lead time.

5. Updated vessel appraisals (if required): If Harborstone requires updated appraisals of the mortgaged vessels as a condition of the extension, TSL should engage Seastone Maritime Advisors (or an alternative appraiser acceptable to Harborstone) promptly. While desktop appraisals can typically be completed within 2 to 3 weeks, any physical inspections required would add time and cost.

C. Contingency — If Extension Is Not Achieved

While we are cautiously optimistic that Harborstone will be receptive to the extension request, TSL must also plan for the contingency that Harborstone declines the extension entirely or imposes conditions that are unacceptable. In the event that the extension is not achieved, TSL would need to consider the following alternatives:

• Accelerated search for a new revolving credit facility from alternative lenders: TSL could re-approach the shipping finance market with a fresh mandate; however, the prior outreach to Nordkapp Maritime Finance AG, Clearwater Commercial Lending LLC, iniaia Merchant Bank SA, and Baltic Strait Capital GmbH demonstrated that the current market environment is challenging, and no institution was in a position to commit to acceptable terms on the required timeline. A renewed search would need to cast a wider net and potentially involve non-traditional lenders or alternative financing structures.

• Prepayment of the Existing RCF at maturity from TSL's own cash reserves: If the Existing RCF matures without extension, all outstanding revolving loans would become due and payable on November 15, 2023, and the revolving commitment would terminate. TSL would need to assess whether it has sufficient available liquidity to repay all outstanding borrowings under the facility at maturity. Mr. Pantazis should confirm TSL's current drawn balance under the Existing RCF and model the cash flow impact of a full repayment at maturity.

• Bridge financing from alternative sources: TSL could explore short-term bridge financing from alternative lenders, private credit providers, or through other instruments (such as a sale-leaseback of one or more vessels, or a short-term secured term loan). Bridge financing, however, is typically more expensive than a revolving credit facility extension and may involve more onerous terms.

In any prepayment scenario, the minimum liquidity covenant and TSL's operational cash requirements must be carefully evaluated. We note that the proposed Meridian Atlantic facility included a minimum liquidity covenant of $30,000,000; the corresponding covenant under the Existing Credit Agreement should be confirmed to ensure that any repayment would not leave TSL in breach of its remaining financial obligations or operationally constrained.

We strongly recommend that the extension with Harborstone be pursued as the primary strategy, with contingency planning proceeding in parallel rather than as a primary focus. The extension represents the most efficient and least disruptive path to preserving TSL's liquidity position.

VI. Legal Fees and Costs Estimate

Meridian Atlantic Refinancing — Wind-Down Costs

Calderwood & Harkness's representation of TSL on the Meridian Atlantic refinancing (under Matter No. 1044-00002) is being wound down pursuant to TSL's instruction dated August 14, 2023. As of the date of this memorandum, the status of fees and costs on the refinancing matter is as follows:

A final invoice for the outstanding balance will be issued upon completion of the wind-down, including file organization and transfer of relevant work product that may be useful for the Harborstone extension matter.

Harborstone Extension — Estimated Costs

The Harborstone extension would constitute a separate engagement and matter number. A new engagement letter will be prepared and submitted to Mr. Komnenidis for review and execution. The anticipated cost components for the extension are as follows:

The C&H fee estimate of $75,000 to $125,000 reflects the substantially reduced scope and complexity of a limited maturity extension amendment compared to a full refinancing. The wide range reflects the possibility that Harborstone may seek modifications beyond a simple maturity extension (e.g., covenant adjustments, additional collateral, or supplemental reporting requirements), which would increase the documentation and negotiation workload. If the extension is truly limited to the maturity date and pricing, fees would likely fall toward the lower end of the range.

The total estimated cost of the extension, inclusive of the extension fee payable to Harborstone, ranges from approximately $462,500 to $727,500. While not insignificant, this cost is substantially lower than the cost of a full refinancing (which would involve arrangement fees, commitment fees, documentation costs, mortgage recording fees, and other transaction expenses typically aggregating to 1.0% to 1.5% or more of the facility amount) and represents a prudent investment in maintaining TSL's liquidity position and avoiding the risks associated with a facility maturity without a committed replacement.

VII. Recommendations and Next Steps

Based on the analysis set forth above, we recommend that TSL take the following actions, in the order and timeframes indicated:

1. Immediate outreach to Harborstone. TSL management should contact Philip Rennert, Director, Structured Shipping Finance, at Harborstone National Bank (350 Park Avenue, 20th Floor, New York, NY 10022) as soon as practicable, and ideally during the week of August 14, 2023, to discuss the extension request at a high level and gauge Harborstone's preliminary receptivity. We recommend that Mr. Pantazis and Mr. Komnenidis lead this discussion, with Ms. Vassiliou available if needed to reinforce TSL's commitment to the Harborstone relationship. The tone of the initial outreach should be transparent, collaborative, and forward-looking.

2. Prepare financial package. Mr. Pantazis should immediately begin assembling a comprehensive and current financial information package for delivery to Harborstone, including: (a) FY2022 audited financial statements (audited by Hawthorne & Garrett LLP); (b) the most recent interim financial statements (Q2 2023); (c) a current compliance certificate under the Existing Credit Agreement, demonstrating compliance with all financial covenants as of the most recent testing date; (d) fleet utilization, charter coverage, and employment data; and (e) any other financial or operational information that TSL typically provides to Harborstone in connection with its ongoing reporting obligations. This package should be ready for delivery no later than the formal written extension request in late August.

3. Confirm covenant compliance. Prior to approaching Harborstone, Mr. Pantazis should verify TSL's current compliance with all financial covenants under the Existing Credit Agreement, including the maximum leverage ratio, minimum liquidity covenant, minimum value-to-loan ratio, and any other financial maintenance tests. Any potential covenant compliance issues — however remote — should be identified and addressed internally before the extension request is made. A borrower approaching its lender for an extension while in default is in a fundamentally weaker negotiating position.

4. Engage Calderwood & Harkness for the extension matter. Upon Harborstone's in-principle agreement to proceed with the extension (or earlier, if TSL wishes to begin preparatory work), TSL should formally engage Calderwood & Harkness under a new engagement letter for the Harborstone extension matter. C&H is well-positioned to move quickly and efficiently on this engagement, given our deep familiarity with TSL's corporate structure, fleet composition, Guarantor entities, and credit documentation from the recently wound-down Meridian Atlantic refinancing matter. Relevant work product from the refinancing matter (including corporate structure charts, organizational documents, and security package analyses) can be leveraged for the extension, reducing duplicative effort and cost.

5. Engage Pavlopoulos & Drakos. Mr. Komnenidis should confirm the availability of Theodoros Pavlopoulos and his team at Pavlopoulos & Drakos for Greek-law corporate authorization work and opinion delivery in connection with the extension. Given that P&D served as Greek counsel on the Meridian Atlantic refinancing and has an existing relationship with TSL, this engagement should be straightforward. P&D's team should also be consulted regarding the need for marshall Islands local counsel for Thalassa Tanker Operations Ltd., and if such counsel is required, an appropriate firm should be identified and engaged promptly.

6. Parallel refinancing efforts. While pursuing the Harborstone extension as the immediate priority, TSL should continue to monitor and evaluate the long-term shipping finance refinancing market. Once the extension is secured and the immediate maturity pressure is relieved, TSL will be in a stronger position — both substantively and in terms of negotiating leverage — to launch a new refinancing process with the benefit of a materially longer runway (12 to 18 months rather than the current 97 days). C&H is available to assist TSL in developing and executing a refreshed refinancing strategy once the extension is in place.

7. Board communication. We recommend that Mr. Komnenidis brief TSL's Board of Directors, including Chairman Nikolaos Karadimitriou, on the extension strategy at the earliest appropriate opportunity. Board awareness and approval will be necessary in any event for the corporate authorizations required in connection with the Extension Amendment, and early communication will ensure that the Board is aligned with management's approach and prepared to act when formal approvals are needed. If a formal board meeting is required, it should be scheduled sufficiently in advance of the anticipated Extension Amendment execution date.

VIII. Conclusion

The extension of the Existing Harborstone Revolving Credit Facility represents the most realistic, cost-effective, and least disruptive path to protecting TSL's liquidity position in the near term, following the unexpected collapse of the Meridian Atlantic refinancing. While the circumstances that gave rise to this situation were beyond TSL's control, the Borrower is well-positioned to approach Harborstone from a position of creditworthiness, operational strength, and relationship goodwill.

Several factors weigh strongly in TSL's favor in the extension negotiation:

• The sole-lender structure of the Existing RCF significantly simplifies the amendment process, eliminating the multi-lender consent and holdout risks that would complicate a maturity extension in a syndicated facility.

• TSL's strong financial performance — FY2022 revenue of approximately $620 million, EBITDA of approximately $145 million, and a total fleet value of approximately $1.2 billion — demonstrates the Borrower's creditworthiness and supports a compelling case for extension.

• TSL's positive relationship history with Harborstone, including the successful negotiation of two prior amendments without material difficulty, provides a foundation of trust and mutual understanding that will facilitate constructive engagement.

• The limited scope of the proposed amendment — a straightforward maturity extension without fundamental changes to the economic terms, covenants, or collateral structure — minimizes the complexity, cost, and risk of the process.

However, time is the critical variable in this process. With the November 15, 2023 maturity date less than 100 days away, and with Harborstone's internal credit committee approval process requiring an estimated 3 to 4 weeks, every day of delay in initiating the extension discussion compresses the available window and increases the risk that the extension cannot be completed before maturity. Prompt action is essential.

Calderwood & Harkness stands ready to assist TSL in all aspects of the extension process — from the initial strategic framing of the extension request, through documentation negotiation and execution, to the ultimate closing of the Extension Amendment. We are available to discuss this memorandum and its recommendations at TSL management's earliest convenience.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Sophie Tremblay Senior Associate, Banking & Finance Calderwood & Harkness LLP 425 Park Avenue, New York, NY 10022 Athens Office: 8 Vasilissis Sofias Avenue, Athens 106 74, Greece Tel: +1 (212) 555-4820 / +30 210 555-9100

Email: s.tremblay@calderwoodharkness.com

CONFIDENTIALITY NOTICE AND DISCLAIMER

This memorandum is a privileged and confidential communication protected by the attorney-client privilege and the work product doctrine. It has been prepared by Calderwood & Harkness LLP solely for the internal use of Thalassa Shipping & Logistics SA and its designated officers and directors in connection with the matters described herein. This memorandum contains legal advice and attorney work product and is not intended for distribution to, or reliance by, any third party. No portion of this memorandum may be disclosed, reproduced, or distributed to any person or entity outside of the Borrower without the prior written consent of Calderwood & Harkness LLP. If you have received this memorandum in error, please notify the sender immediately and destroy all copies. Receipt by an unintended recipient does not constitute a waiver of the attorney-client privilege or work product protection.

Term	Detail
Facility Type	Senior secured revolving credit facility
Facility Size	$125,000,000
Original Execution Date	November 15, 2018
Maturity Date	November 15, 2023 (five-year term from original execution)
Borrower	Thalassa Shipping & Logistics SA (Greece)
Administrative Agent / Lender	Harborstone National Bank (sole lender)
Original Pricing	LIBOR + 250 basis points
Current Pricing (post-Second Amendment)	SOFR + applicable credit spread adjustment ("CSA") + 250 basis points
Guarantors	Thalassa Dry Bulk Holdings Ltd. (Cyprus); Thalassa Tanker Operations Ltd. (Republic of the marshall Islands); Thalassa Logistics International Ltd. (Cyprus)
Collateral	First-priority ship mortgages on designated fleet vessels; assignment of earnings; assignment of insurances; share pledges of vessel-owning subsidiaries
Fee (bps)	Fee Amount
15 bps	$187,500
20 bps	$250,000
25 bps	$312,500
30 bps	$375,000
35 bps	$437,500
50 bps	$625,000
Item	Amount
Total C&H fees billed to date	$412,850
Percentage of $650,000 fee cap utilized	Approximately 63.5%
Disbursements billed to date	$18,340
Outstanding balance (unbilled fees and WIP)	$56,190
Total estimated Meridian Atlantic matter cost	$487,380
Cost Component	Estimated Range

C&H fees — drafting, negotiation, and closing of Extension Amendment	$75,000 – $125,000
Pavlopoulos & Drakos fees — Greek-law corporate authorizations and legal opinion	$15,000 – $25,000
Harborstone outside counsel fees (borne by TSL as borrower, per customary terms)	$50,000 – $100,000
Extension fee payable to Harborstone (25–35 bps on $125M)	$312,500 – $437,500
Marshall Islands counsel fees (if required for Thalassa Tanker Operations Ltd.)	$5,000 – $15,000
Miscellaneous disbursements (searches, filings, appraisal costs if required)	$5,000 – $25,000
Total estimated cost of extension	$462,500 – $727,500

MEMORANDUM
PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT
From: Sophie Tremblay, Senior Associate, Banking & Finance, Calderwood & Harkness LLP
To: 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
CC: Ian Blackwood, Partner, Banking & Finance, Calderwood & Harkness LLP
Date: August 10, 2023
Re: Strategy for Extension of Existing Revolving Credit Facility with Harborstone National Bank — Maturity Date: November 15, 2023
Matter No.: 1044-00002
I. Executive Summary
The purpose of this memorandum is to advise Thalassa Shipping & Logistics SA ("TSL" or the "Borrower") on the recommended strategy for approaching Harborstone National Bank ("Harborstone") to negotiate a short-term maturity extension of the existing $125,000,000 senior secured revolving credit facility (the "Existing RCF") beyond its current maturity date of November 15, 2023. This memorandum sets forth our analysis of the relevant contractual mechanics, the proposed extension structure and key commercial terms, the anticipated timeline and documentation requirements, cost estimates, and our recommendations for next steps.
The need for this extension arises from the recent and unexpected disruption to TSL's long-term refinancing plans. On July 18, 2023, Meridian Atlantic Bank N.A. ("Meridian Atlantic" or "MAB") publicly announced that it is exiting shipping and maritime finance globally as part of a broader strategic review and portfolio rationalization. The following day, on July 19, 2023, Meridian Atlantic delivered formal notice to TSL withdrawing from the $150,000,000 senior secured revolving credit facility refinancing mandate that had been awarded to Meridian Atlantic in April 2023. As a result of this withdrawal, the proposed replacement facility — which was expected to refinance and replace the Existing RCF well in advance of its November 15, 2023 maturity — will not close on the originally anticipated timeline, and indeed will not proceed at all under Meridian Atlantic's sponsorship.
In the weeks following Meridian Atlantic's withdrawal, Calderwood & Harkness LLP ("C&H") and TSL's management team undertook a concerted effort to identify alternative arrangers capable of delivering a replacement facility on a comparable timeline. Outreach was made to four institutions: Nordkapp Maritime Finance AG, Clearwater Commercial Lending LLC, iniaia Merchant Bank SA, and Baltic Strait Capital GmbH. As reported in detail in C&H's letter to Ms. Vassiliou dated August 7, 2023, each of these institutions either declined to participate or offered terms that were materially inferior to the Existing RCF and the proposed Meridian Atlantic facility in one or more critical respects (pricing, tenor, collateral requirements, or commitment size). None of the alternative lenders was in a position to commit to a closing timeline prior to November 15, 2023, even under an accelerated mandate.
In light of these developments, TSL instructed Calderwood & Harkness on August 14, 2023 to wind down the Meridian Atlantic refinancing matter. Accordingly, the strategic focus must now shift to protecting TSL's existing liquidity position by extending the Harborstone facility for a sufficient period to allow TSL to pursue alternative long-term refinancing in an orderly fashion and without the pressure of an imminent maturity.
Time is the critical variable. As of the date of this memorandum, only approximately 97 days remain until the November 15, 2023 maturity date. Harborstone will require meaningful lead time for internal credit committee review and approval of any extension request, and documentation will need to be negotiated, executed, and delivered prior to the maturity date. Every day of delay compresses the available window and increases execution risk.
Our primary recommendation is that TSL management initiate contact with Philip Rennert, Director, Structured Shipping Finance at Harborstone National Bank, as soon as practicable, and ideally no later than the week of August 14, 2023. The remainder of this memorandum provides the detailed analysis and supporting rationale for this recommendation.
II. Background — The Existing Harborstone Revolving Credit Facility
A. Facility Overview
The Existing RCF is governed by that certain Credit Agreement dated as of November 15, 2018 (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"), entered into among TSL as Borrower, the Guarantors (as defined below), and Harborstone National Bank, in its capacity as Administrative Agent and sole lender.
The principal terms of the Existing RCF are summarized as follows:
The transition from LIBOR to SOFR as the applicable benchmark was addressed comprehensively in the Second Amendment dated March 1, 2022, in accordance with the Alternative Reference Rates Committee ("ARRC") recommended hardwired fallback provisions. The Second Amendment incorporated a SOFR-based interest rate framework with a credit spread adjustment intended to approximate the economic equivalence of the former LIBOR-based pricing, consistent with market practice at that time for shipping finance facilities. No other material economic or covenant terms were modified in the Second Amendment.
The First Amendment, dated June 30, 2020, was entered into during the early stages of the COVID-19 pandemic and provided certain temporary covenant relief measures, including a limited waiver of the minimum liquidity covenant and a temporary adjustment to the maximum leverage ratio through December 31, 2020. Those temporary measures expired by their terms, and the original covenant levels have been reinstated and in effect since January 1, 2021.
The collateral package securing the Existing RCF — consisting of first-priority ship mortgages on designated fleet vessels, assignments of earnings from the mortgaged vessels' charters and contracts of affreightment, assignments of hull and machinery and protection and indemnity insurances, and pledges of the equity interests in the vessel-owning subsidiaries — is substantially similar in structure to the collateral package that had been contemplated for the proposed Meridian Atlantic replacement facility.
B. Current Utilization and Financial Standing
TSL's financial performance and balance sheet position provide a strong foundation for the extension request. Based on publicly available information and the financial data reviewed by C&H in connection with the Meridian Atlantic refinancing, key financial metrics are summarized as follows:
•  FY2022 Revenue: Approximately $620 million, reflecting strong charter rates across both the dry bulk and tanker segments.
•  FY2022 EBITDA: Approximately $145 million, demonstrating robust operating profitability and substantial debt service capacity relative to the $125 million Existing RCF.
•  Total Fleet Value: Approximately $1.2 billion (based on an aggregate fleet of 40 vessels, comprising 28 dry bulk carriers and 12 tankers), per the most recent available independent desktop appraisals completed in Q1 2023.
•  Fleet Utilization: TSL's fleet utilization rates have remained consistently above industry averages, supported by a diversified mix of time charters, voyage charters, and contracts of affreightment with creditworthy counterparties.
We note that current financial covenant compliance under the Existing Credit Agreement should be confirmed with Mr. Pantazis prior to approaching Harborstone. It is imperative that TSL be in full compliance with all financial covenants at the time the extension request is made, as any existing default or event of default — or any default that would result from the proposed amendment — would almost certainly preclude Harborstone from approving the extension. Based on our review of the FY2022 financial data in connection with the Meridian Atlantic refinancing, we have no reason to believe that TSL is not in compliance, but formal confirmation is essential.
TSL's relationship with Harborstone, and specifically with Philip Rennert, Director, Structured Shipping Finance, has been collaborative and constructive over the five-year term of the Existing RCF. The two prior amendments were negotiated and documented without material difficulty, and we are not aware of any disputes, contentious issues, or strained communications between TSL and Harborstone during the facility's life. A strong existing lender relationship is one of the most important factors in securing a favorable extension, and TSL is well-positioned in this regard.
C. Reason the Existing RCF Was Being Refinanced
The refinancing with Meridian Atlantic was undertaken for two principal strategic objectives:
(a) Refinance and replace the Existing RCF before its November 15, 2023 maturity, thereby eliminating the near-term maturity risk and securing committed revolving credit availability for an additional five-year period; and
(b) Provide incremental revolving capacity of $25,000,000 ($150,000,000 proposed facility less $125,000,000 existing facility) for general corporate purposes and working capital, supporting TSL's fleet expansion and operational needs.
The proposed Meridian Atlantic facility offered several advantages over the Existing RCF, including competitive SOFR-based pricing in the range of SOFR + 225 to 325 basis points (on a leverage-based pricing grid), improved covenant flexibility (including higher permitted leverage ratios and more generous basket and exception provisions), a fresh five-year tenor with a maturity in approximately mid-2028, and the institutional depth and maritime sector expertise of Meridian Atlantic's shipping finance platform.
As noted above, the Meridian Atlantic refinancing is no longer proceeding. No credit documentation was executed, no commitments were funded, and no fees (other than C&H's professional fees) were paid in connection with that proposed transaction. The refinancing mandate has been formally wound down.
III. Proposed Extension — Structure and Key Terms
A. Type of Amendment
We recommend that TSL seek a Third Amendment to the Existing Credit Agreement (the "Extension Amendment"), limited in scope to extending the maturity date and making only such conforming changes as are strictly necessary or reasonably appropriate in connection therewith.
The extension should be structured as a straightforward maturity extension rather than a full-scale amendment and restatement of the Existing Credit Agreement. This approach offers several significant advantages:
•  Minimized negotiation time: By limiting the scope of the amendment to the maturity date and closely related provisions (such as any corresponding date references, extension fee provisions, and potentially minor pricing adjustments), TSL avoids the protracted and resource-intensive process of renegotiating the full suite of representations, covenants, events of default, and other operative provisions that would accompany a comprehensive amendment and restatement.
•  Reduced documentation costs: A focused amendment will require substantially less drafting, review, and negotiation time from all parties and their respective counsel, resulting in lower legal fees for both TSL and Harborstone (with Harborstone's outside counsel fees typically borne by TSL as borrower).
•  Simplified credit committee process: A narrow amendment request is more likely to receive expeditious treatment by Harborstone's internal credit committee than a request that involves fundamental changes to multiple economic or structural terms. Given the compressed timeline (approximately 97 days to maturity), simplifying the credit approval process is a significant strategic benefit.
•  Preservation of favorable terms: By avoiding a broad renegotiation, TSL preserves the benefit of the existing covenant package, definitions, and operational flexibility provisions that have served TSL well over the five-year term and that were negotiated at a time when market conditions may have been more favorable to borrowers.
To the extent possible, TSL should resist any effort by Harborstone to use the extension as an opportunity to reopen substantive economic or covenant terms beyond what is reasonably necessary. If Harborstone seeks broader changes as a condition of the extension, each such request should be evaluated carefully against TSL's operational needs and the available alternatives.
B. Proposed Extension Period
We recommend that TSL request an initial extension of 12 months, extending the maturity date from November 15, 2023 to November 15, 2024. A 12-month extension would provide TSL with adequate runway to evaluate the shipping finance market, identify and engage an appropriate replacement arranger, negotiate and document a new long-term revolving credit facility, and complete a refinancing in an orderly fashion without the pressure of an artificially compressed timeline.
Based on our experience with shipping finance refinancing transactions of comparable size and complexity, a period of 9 to 12 months is typically required from mandate award to closing, inclusive of credit committee approvals, due diligence, documentation negotiation, and the satisfaction of conditions precedent (including vessel appraisals, flag state and registry filings, and the execution and recording of ship mortgages across multiple jurisdictions). A 12-month extension therefore provides a reasonable — but not excessive — buffer.
Alternative — Minimum 6-Month Extension: If Harborstone is unwilling to grant a full 12-month extension, a minimum extension of 6 months (to May 15, 2024) should be TSL's floor position. However, we caution that a 6-month extension introduces meaningful refinancing execution risk, as it would require TSL to identify, engage, and close with a replacement lender within a compressed timeframe during a period in which the shipping finance market remains in flux following Meridian Atlantic's exit.
Further Extension Option: Ideally, the extension period should include an option for TSL to request one additional 6-month extension (extending the maturity to November 15, 2024 in the case of an initial 6-month extension, or to May 15, 2025 in the case of an initial 12-month extension), subject to Harborstone's consent (not to be unreasonably withheld, conditioned, or delayed) and confirmation that no default or event of default exists at the time of the request. The inclusion of such an option would provide TSL with additional flexibility in the event that the long-term refinancing market does not improve within the initial extension period.
C. Facility Size
We recommend that TSL seek to maintain the existing $125,000,000 revolving commitment in its current amount. The full commitment amount supports TSL's working capital requirements, operational liquidity needs, and the financial covenant calculations under the Existing Credit Agreement.
TSL may alternatively consider offering a modest commitment reduction — for example, to $100,000,000 — if Harborstone requires such a reduction as a condition of granting the extension. A reduction in commitment size reduces Harborstone's credit exposure and may facilitate credit committee approval. However, any reduction must be carefully evaluated against the following considerations:
•  TSL's current and projected utilization of the revolving facility, including seasonal and cyclical variations in working capital needs;
•  The impact on TSL's minimum liquidity covenant and other financial covenant calculations;
•  The potential signaling effect to the market and to prospective replacement lenders if TSL's committed credit availability is reduced; and
•  TSL's ability to meet operational cash requirements, including vessel operating expenses, charter hire obligations, drydocking and maintenance costs, and scheduled debt service on other indebtedness (if any), from operating cash flow and any reduced revolving availability.
We recommend that Mr. Pantazis prepare a detailed liquidity analysis modeling various commitment reduction scenarios ($125M, $115M, $100M) against TSL's projected cash flows and working capital needs for the extension period, so that TSL can establish an informed floor for any commitment reduction negotiation.
D. Anticipated Pricing Adjustments
It is highly likely that Harborstone will seek a pricing increase as consideration for the extension, reflecting several factors:
(i) Current market conditions in shipping finance: The pricing environment for shipping finance facilities has tightened since the Existing RCF was originally executed in November 2018. Credit spreads have widened, and the exit of a major platform lender (Meridian Atlantic) from the sector has further reduced competitive pressure on remaining lenders.
(ii) Extension risk premium: Lenders customarily require a pricing premium for maturity extensions, reflecting the additional credit risk associated with extending the tenor beyond the originally agreed maturity and the lender's opportunity cost of maintaining the commitment during the extension period.
(iii) Borrower-specific circumstances: The fact that TSL's originally planned refinancing with Meridian Atlantic fell through, and that TSL's subsequent outreach to four alternative lenders was unsuccessful, may be perceived by Harborstone as reducing TSL's negotiating leverage and warranting a higher risk premium.
Based on our review of recent comparable extension transactions in the shipping and maritime finance sector, we estimate that Harborstone may seek a margin increase in the range of 25 to 75 basis points over the current applicable margin. This would move the all-in pricing from the existing SOFR + applicable CSA + 250 basis points to approximately SOFR + 275 to 325 basis points (inclusive of the credit spread adjustment).
TSL should be prepared to negotiate within this range. The pricing on the proposed Meridian Atlantic facility — which was structured as SOFR + 225 to 325 basis points on a leverage-based pricing grid — provides a useful reference point, though Harborstone's extension premium may push the effective rate toward the upper end of, or modestly above, the Meridian Atlantic range given the circumstances. A margin of SOFR + CSA + 275 to 300 basis points would, in our view, represent a commercially reasonable outcome for TSL.
E. Extension Fee
Standard market practice for revolving credit facility maturity extensions is to pay an upfront extension fee, typically in the range of 15 to 50 basis points on the total commitment amount. This fee compensates the lender for the credit risk and administrative cost of extending the facility and is payable at closing of the Extension Amendment.
On a $125,000,000 commitment, the fee implications are as follows:
We recommend that TSL budget for a fee in the range of 25 to 35 basis points ($312,500 to $437,500) and negotiate downward from any higher initial ask by Harborstone. A fee in this range is consistent with prevailing market practice for extensions of bilateral shipping finance facilities and reflects the relative simplicity and limited scope of the proposed amendment.
In addition to the extension fee, Harborstone may request an enhancement to its annual administrative agent fee. The current administrative agent fee under the Existing Credit Agreement should be confirmed and reviewed prior to the extension negotiation. We anticipate that any increase, if requested, would be modest (in the range of $5,000 to $15,000 per annum), and TSL should be prepared to accept a reasonable increase in this regard.
F. Financial Covenants
Our strong recommendation is that the existing financial covenant package under the Existing Credit Agreement remain unchanged in the Extension Amendment. The covenants were negotiated and agreed upon for the five-year term of the facility, and TSL has maintained a strong compliance record throughout. Reopening the covenant package introduces negotiation risk, potential operational constraints, and documentation complexity that are disproportionate to the limited scope of a maturity extension.
However, we acknowledge that Harborstone may seek some degree of covenant tightening as a condition of the extension, particularly given that the extension increases the lender's credit exposure period. If Harborstone insists on covenant modifications, TSL should resist material changes but may consider modest adjustments in the following areas as part of a broader commercial negotiation:
•  A step-down in the maximum permitted leverage ratio (e.g., from [4.50x] to [4.25x] or [4.00x]), provided that TSL's current and projected leverage remains comfortably within the revised threshold;
•  A step-up in the minimum liquidity covenant (e.g., from [$25,000,000] to [$30,000,000] or [$35,000,000]), provided that TSL's cash and liquidity position supports the higher threshold without constraining operations; and
•  Potentially, a new or enhanced reporting requirement (e.g., monthly rather than quarterly financial reporting, or additional fleet utilization and charter coverage reporting).
TSL's current FY2022 EBITDA of approximately $145 million, measured against the $125,000,000 facility commitment, provides meaningful covenant headroom. Confirming FY2023 interim financial results — particularly Q2 2023 — will be important for establishing TSL's compliance position and demonstrating to Harborstone that any existing or proposed covenant levels are being met with comfortable margin.
G. Collateral
The existing collateral package should remain in place for the extension period. The first-priority ship mortgages on the currently designated mortgaged vessels, the assignments of earnings and insurances, and the share pledges of vessel-owning subsidiaries collectively provide Harborstone with a robust security package that has been in place since the inception of the facility.
Harborstone may request updated vessel appraisals as a condition of the extension. In this regard, we note that Seastone Maritime Advisors completed independent desktop appraisals on July 10, 2023, in connection with the proposed Meridian Atlantic refinancing. Those appraisals reflected an aggregate fair market value of approximately $780 million for the 18 vessels that were designated as "Mortgaged Vessels" under the proposed Meridian Atlantic facility structure. While the specific vessel pool mortgaged under the Existing Credit Agreement may differ from the pool contemplated for the Meridian Atlantic facility, the Seastone appraisals may serve as a useful starting point and could potentially be relied upon by Harborstone (or refreshed at modest cost) if the appraisal date is sufficiently recent.
If Harborstone requires additional collateral — for example, mortgages on additional vessels beyond those currently designated — TSL should evaluate such a request in light of the following considerations:
•  The total fleet value of approximately $1.2 billion provides substantial asset coverage relative to the $125 million facility;
•  The number and identity of currently unencumbered vessels, and any impact on TSL's operational flexibility from encumbering additional tonnage;
•  The cost and timing of executing and recording additional ship mortgages across the relevant flag state registries; and
•  Whether additional collateral is truly necessary to secure Harborstone's credit approval, or whether it represents an opportunistic request that can be negotiated away.
We recommend that TSL agree to provide updated appraisals if requested, but resist providing additional collateral unless absolutely necessary to secure the extension on otherwise acceptable terms.
IV. Consent and Amendment Mechanics Under the Existing Credit Agreement
A. Required Consents
A significant advantage of the Existing RCF structure is that Harborstone National Bank is the sole lender under the Existing Credit Agreement. This feature dramatically simplifies the consent and amendment mechanics that would otherwise apply to a maturity extension.
In a typical syndicated credit facility, an extension of the maturity date is classified as a "fundamental" or "sacred right" amendment — that is, an amendment affecting a term so critical that it requires the consent of each affected lender, rather than merely the consent of the "Required Lenders" (typically defined as lenders holding a specified percentage, often 50% or 66⅔%, of the outstanding commitments or loans). In a syndicated facility, this unanimous consent requirement can represent a formidable practical obstacle, as obtaining the affirmative consent of every lender in the syndicate — including lenders with small positions, lenders that may have purchased their participations on the secondary market, and lenders that may have their own institutional reasons for declining to extend — is a time-consuming, uncertain, and often expensive process that frequently requires the payment of consent fees to individual lenders.
Because the Existing RCF is a bilateral facility with Harborstone as the sole lender, none of these syndicated facility complications apply. There is no multi-lender voting requirement, no "Required Lenders" threshold to satisfy, and no holdout lender risk. Harborstone, acting in its dual capacity as both Administrative Agent and sole Lender, can approve the Extension Amendment through a single internal credit committee approval process, without the need to coordinate among multiple institutions.
This structural simplicity is one of the strongest features of the current situation and should meaningfully reduce both the timeline and the execution risk associated with the extension.
B. Amendment Documentation
The Extension Amendment would be documented as a Third Amendment to Credit Agreement, to be executed by the following parties:
1.  Thalassa Shipping & Logistics SA, as Borrower;
2.  Thalassa Dry Bulk Holdings Ltd., as Guarantor;
3.  Thalassa Tanker Operations Ltd., as Guarantor;
4.  Thalassa Logistics International Ltd., as Guarantor; and
5.  Harborstone National Bank, as Administrative Agent and sole Lender.
Each Guarantor will need to execute either a reaffirmation of its guarantee obligations under the Existing Credit Agreement or a separate consent and acknowledgment as part of the amendment documentation. This is standard practice to confirm that each Guarantor's guarantee obligations remain in full force and effect following the amendment, notwithstanding the extension of the maturity date and any other modifications to the underlying credit terms. Failure to obtain Guarantor reaffirmations could create an argument — however technical — that the guarantees do not extend to the post-extension obligations, which would undermine the credit support structure.
Corporate authorizations will be required from TSL and each Guarantor entity. This will require the adoption of board resolutions (or equivalent governing body authorizations) by each entity, authorizing the execution and delivery of the Extension Amendment and related documents and appointing authorized signatories.
The anticipated closing documentation for the Extension Amendment is as follows:
1.  Third Amendment to Credit Agreement
2.  Guarantor Reaffirmation / Consent and Acknowledgment (signed by each of the three Guarantors)
3.  Secretary's Certificate or Officer's Certificate from TSL and each Guarantor, certifying (a) attached copies of governing documents (or confirmation that previously delivered governing documents remain in effect without amendment), (b) board resolutions authorizing the amendment, and (c) incumbency of authorized signatories
4.  Legal opinion from Pavlopoulos & Drakos, Greek counsel to TSL, addressing TSL's corporate authority, due authorization, execution and delivery, enforceability, and such other matters as Harborstone may reasonably require under Greek law
5.  Updated compliance certificate executed by Mr. Pantazis, demonstrating that no default or event of default exists under the Existing Credit Agreement and certifying compliance with all financial covenants as of the most recent testing date
6.  Updated vessel appraisals (if requested by Harborstone)
7.  Bring-down of representations and warranties, confirming that all representations and warranties contained in the Existing Credit Agreement are true and correct in all material respects as of the date of the Extension Amendment (with appropriate exceptions for representations that by their terms speak as of a specific earlier date)
Depending on Harborstone's requirements and the practices of its outside counsel, additional documentation may be requested, including updated insurance certificates, bring-down searches (UCC, lien, and litigation searches), and evidence of payment of all outstanding fees and expenses. We will identify any such additional requirements early in the documentation process.
C. Conditions Precedent to Extension Effectiveness
The Extension Amendment will likely include the following standard conditions precedent to its effectiveness:
(i) No default or event of default shall exist under the Existing Credit Agreement at the time of the Extension Amendment's execution or shall result from the effectiveness of the Extension Amendment;
(ii) The representations and warranties of the Borrower and each Guarantor set forth in the Existing Credit Agreement (as amended) shall be true and correct in all material respects (or, in the case of representations and warranties that are qualified by materiality, in all respects) as of the date of the Extension Amendment, except to the extent that such representations and warranties specifically relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date;
(iii) Delivery by the Borrower and each Guarantor of all required corporate authorizations, officer's certificates, incumbency certificates, and legal opinions;
(iv) Payment by the Borrower of the extension fee and all accrued but unpaid fees and expenses (including Harborstone's outside counsel fees and any unpaid administrative agent fees); and
(v) Delivery by the Borrower of updated financial statements, including (a) the FY2022 audited financial statements of TSL (audited by Hawthorne & Garrett LLP) and (b) the most recently available interim financial statements (expected to be Q2 2023 financials), together with a current compliance certificate.
Harborstone may include additional conditions precedent depending on the circumstances, such as delivery of satisfactory updated vessel appraisals, evidence of insurance coverage in compliance with the Existing Credit Agreement, or confirmation that no material adverse change has occurred since the date of the most recent audited financial statements. We will work with TSL and Harborstone's counsel to negotiate the conditions precedent to ensure they are achievable within the proposed timeline.
V. Timeline and Process
A. Proposed Engagement Sequence
Given the approximately 97 days remaining until the November 15, 2023 maturity date, we propose the following timeline for the extension process:
Week of August 14, 2023 — Initial Outreach to Harborstone
TSL management — we recommend Mr. Pantazis and Mr. Komnenidis as the appropriate points of contact — should initiate a direct conversation with Philip Rennert at Harborstone to discuss the extension request at a high level. The initial conversation should cover the following points:
•  The background to the Meridian Atlantic withdrawal and the disruption to TSL's refinancing plans;
•  TSL's continued strong financial performance and covenant compliance;
•  TSL's desire to extend the Existing RCF maturity for a period of 12 months (with the 6-month alternative as a fallback);
•  TSL's commitment to pursuing a long-term refinancing solution during the extension period; and
•  A request for Harborstone's preliminary indication of receptivity, timing for credit committee review, and any initial information requirements.
This initial conversation should be positioned as a constructive dialogue between trusted counterparties, emphasizing the parties' successful five-year relationship, TSL's strong credit profile, and the straightforward nature of the proposed amendment.
Late August 2023 — Formal Written Extension Request
Following the initial conversation and assuming a positive preliminary response from Harborstone, TSL should submit a formal written extension request to Harborstone, accompanied by the following supporting materials:
•  A formal request letter from Ms. Vassiliou or Mr. Pantazis, summarizing the proposed extension terms;
•  FY2022 audited financial statements (audited by Hawthorne & Garrett LLP);
•  Most recent interim (Q2 2023) financial statements;
•  Current compliance certificate;
•  Fleet utilization and charter data;
•  A summary of TSL's fleet composition, values, and employment; and
•  Any additional information reasonably requested by Harborstone during the initial discussion.
September 2023 — Harborstone Credit Committee Review
Upon receipt of TSL's formal request and supporting materials, Harborstone will submit the extension for internal credit committee review and approval. Based on our experience with bilateral shipping finance facilities and existing lender relationships, we estimate a credit committee process of approximately 3 to 4 weeks from submission of a complete information package. The sole-lender structure and the existence of an established credit file on TSL should facilitate a relatively streamlined approval process.
During this period, C&H and TSL's management should remain responsive to any additional information requests or diligence queries from Harborstone or its outside counsel. Prompt and complete responses to such requests will help maintain the timeline.
October 2023 — Documentation Negotiation
Upon receipt of Harborstone's credit committee approval (anticipated in late September or early October 2023), the parties would proceed to negotiate and document the Third Amendment. Calderwood & Harkness would prepare the initial draft of the Extension Amendment and related documents (or review and comment on a draft prepared by Harborstone's outside counsel, depending on the agreed-upon process). Key documentation workstreams during this period include:
•  Drafting and negotiation of the Third Amendment to Credit Agreement;
•  Preparation and execution of Guarantor reaffirmations;
•  Coordination with Pavlopoulos & Drakos for Greek-law legal opinions and corporate authorizations for TSL;
•  Coordination of corporate authorizations for the Cyprus-incorporated Guarantors (Thalassa Dry Bulk Holdings Ltd. and Thalassa Logistics International Ltd.) and the marshall Islands-incorporated Guarantor (Thalassa Tanker Operations Ltd.);
•  Preparation of officer's certificates, compliance certificates, and supporting schedules; and
•  Coordination of any updated vessel appraisals, if required.
Early to Mid-November 2023 (Before November 15) — Execution and Effectiveness
The Extension Amendment should be targeted for execution and effectiveness no later than November 10, 2023, providing a modest buffer before the November 15 maturity date. All conditions precedent to effectiveness, including payment of the extension fee, delivery of all closing documents, and confirmation of no default or event of default, would need to be satisfied by this date.
B. Critical Path Items
The following items represent the critical path for the extension timeline, and delays in any of these areas could jeopardize the ability to complete the extension before the November 15, 2023 maturity:
1.  Harborstone's in-principle agreement and credit committee approval: This is the longest lead-time item and the most significant execution risk. Until Harborstone's credit committee approves the extension, no documentation work can meaningfully proceed. Prompt initiation of the discussion with Philip Rennert is therefore essential.
2.  Preparation of updated compliance certificate and financial package: Mr. Pantazis should begin assembling this information immediately so that it is ready for delivery to Harborstone within days of the initial discussion.
3.  Corporate authorizations across multiple jurisdictions: Board resolutions and other corporate authorizations will be required from TSL (Greece) and each of the three Guarantor entities (two incorporated in Cyprus and one in the Republic of the marshall Islands). Scheduling board meetings and obtaining executed resolutions across three jurisdictions requires advance planning, particularly given potential vacation schedules and time zone considerations during the August-September period.
4.  Engagement of Pavlopoulos & Drakos: We recommend confirming the availability of Theodoros Pavlopoulos and his team at Pavlopoulos & Drakos at the earliest opportunity for the Greek-law corporate authorization work and legal opinion delivery. Given the time-sensitive nature of the extension, any scheduling constraints or conflicts should be identified now. Additionally, C&H and P&D should confirm whether marshall Islands local counsel will be required for Thalassa Tanker Operations Ltd. (incorporated in the Republic of the marshall Islands), and if so, identify and engage appropriate counsel with sufficient lead time.
5.  Updated vessel appraisals (if required): If Harborstone requires updated appraisals of the mortgaged vessels as a condition of the extension, TSL should engage Seastone Maritime Advisors (or an alternative appraiser acceptable to Harborstone) promptly. While desktop appraisals can typically be completed within 2 to 3 weeks, any physical inspections required would add time and cost.
C. Contingency — If Extension Is Not Achieved
While we are cautiously optimistic that Harborstone will be receptive to the extension request, TSL must also plan for the contingency that Harborstone declines the extension entirely or imposes conditions that are unacceptable. In the event that the extension is not achieved, TSL would need to consider the following alternatives:
•  Accelerated search for a new revolving credit facility from alternative lenders: TSL could re-approach the shipping finance market with a fresh mandate; however, the prior outreach to Nordkapp Maritime Finance AG, Clearwater Commercial Lending LLC, iniaia Merchant Bank SA, and Baltic Strait Capital GmbH demonstrated that the current market environment is challenging, and no institution was in a position to commit to acceptable terms on the required timeline. A renewed search would need to cast a wider net and potentially involve non-traditional lenders or alternative financing structures.
•  Prepayment of the Existing RCF at maturity from TSL's own cash reserves: If the Existing RCF matures without extension, all outstanding revolving loans would become due and payable on November 15, 2023, and the revolving commitment would terminate. TSL would need to assess whether it has sufficient available liquidity to repay all outstanding borrowings under the facility at maturity. Mr. Pantazis should confirm TSL's current drawn balance under the Existing RCF and model the cash flow impact of a full repayment at maturity.
•  Bridge financing from alternative sources: TSL could explore short-term bridge financing from alternative lenders, private credit providers, or through other instruments (such as a sale-leaseback of one or more vessels, or a short-term secured term loan). Bridge financing, however, is typically more expensive than a revolving credit facility extension and may involve more onerous terms.
In any prepayment scenario, the minimum liquidity covenant and TSL's operational cash requirements must be carefully evaluated. We note that the proposed Meridian Atlantic facility included a minimum liquidity covenant of $30,000,000; the corresponding covenant under the Existing Credit Agreement should be confirmed to ensure that any repayment would not leave TSL in breach of its remaining financial obligations or operationally constrained.
We strongly recommend that the extension with Harborstone be pursued as the primary strategy, with contingency planning proceeding in parallel rather than as a primary focus. The extension represents the most efficient and least disruptive path to preserving TSL's liquidity position.
VI. Legal Fees and Costs Estimate
Meridian Atlantic Refinancing — Wind-Down Costs
Calderwood & Harkness's representation of TSL on the Meridian Atlantic refinancing (under Matter No. 1044-00002) is being wound down pursuant to TSL's instruction dated August 14, 2023. As of the date of this memorandum, the status of fees and costs on the refinancing matter is as follows:
A final invoice for the outstanding balance will be issued upon completion of the wind-down, including file organization and transfer of relevant work product that may be useful for the Harborstone extension matter.
Harborstone Extension — Estimated Costs
The Harborstone extension would constitute a separate engagement and matter number. A new engagement letter will be prepared and submitted to Mr. Komnenidis for review and execution. The anticipated cost components for the extension are as follows:
The C&H fee estimate of $75,000 to $125,000 reflects the substantially reduced scope and complexity of a limited maturity extension amendment compared to a full refinancing. The wide range reflects the possibility that Harborstone may seek modifications beyond a simple maturity extension (e.g., covenant adjustments, additional collateral, or supplemental reporting requirements), which would increase the documentation and negotiation workload. If the extension is truly limited to the maturity date and pricing, fees would likely fall toward the lower end of the range.
The total estimated cost of the extension, inclusive of the extension fee payable to Harborstone, ranges from approximately $462,500 to $727,500. While not insignificant, this cost is substantially lower than the cost of a full refinancing (which would involve arrangement fees, commitment fees, documentation costs, mortgage recording fees, and other transaction expenses typically aggregating to 1.0% to 1.5% or more of the facility amount) and represents a prudent investment in maintaining TSL's liquidity position and avoiding the risks associated with a facility maturity without a committed replacement.
VII. Recommendations and Next Steps
Based on the analysis set forth above, we recommend that TSL take the following actions, in the order and timeframes indicated:
1.  Immediate outreach to Harborstone. TSL management should contact Philip Rennert, Director, Structured Shipping Finance, at Harborstone National Bank (350 Park Avenue, 20th Floor, New York, NY 10022) as soon as practicable, and ideally during the week of August 14, 2023, to discuss the extension request at a high level and gauge Harborstone's preliminary receptivity. We recommend that Mr. Pantazis and Mr. Komnenidis lead this discussion, with Ms. Vassiliou available if needed to reinforce TSL's commitment to the Harborstone relationship. The tone of the initial outreach should be transparent, collaborative, and forward-looking.
2.  Prepare financial package. Mr. Pantazis should immediately begin assembling a comprehensive and current financial information package for delivery to Harborstone, including: (a) FY2022 audited financial statements (audited by Hawthorne & Garrett LLP); (b) the most recent interim financial statements (Q2 2023); (c) a current compliance certificate under the Existing Credit Agreement, demonstrating compliance with all financial covenants as of the most recent testing date; (d) fleet utilization, charter coverage, and employment data; and (e) any other financial or operational information that TSL typically provides to Harborstone in connection with its ongoing reporting obligations. This package should be ready for delivery no later than the formal written extension request in late August.
3.  Confirm covenant compliance. Prior to approaching Harborstone, Mr. Pantazis should verify TSL's current compliance with all financial covenants under the Existing Credit Agreement, including the maximum leverage ratio, minimum liquidity covenant, minimum value-to-loan ratio, and any other financial maintenance tests. Any potential covenant compliance issues — however remote — should be identified and addressed internally before the extension request is made. A borrower approaching its lender for an extension while in default is in a fundamentally weaker negotiating position.
4.  Engage Calderwood & Harkness for the extension matter. Upon Harborstone's in-principle agreement to proceed with the extension (or earlier, if TSL wishes to begin preparatory work), TSL should formally engage Calderwood & Harkness under a new engagement letter for the Harborstone extension matter. C&H is well-positioned to move quickly and efficiently on this engagement, given our deep familiarity with TSL's corporate structure, fleet composition, Guarantor entities, and credit documentation from the recently wound-down Meridian Atlantic refinancing matter. Relevant work product from the refinancing matter (including corporate structure charts, organizational documents, and security package analyses) can be leveraged for the extension, reducing duplicative effort and cost.
5.  Engage Pavlopoulos & Drakos. Mr. Komnenidis should confirm the availability of Theodoros Pavlopoulos and his team at Pavlopoulos & Drakos for Greek-law corporate authorization work and opinion delivery in connection with the extension. Given that P&D served as Greek counsel on the Meridian Atlantic refinancing and has an existing relationship with TSL, this engagement should be straightforward. P&D's team should also be consulted regarding the need for marshall Islands local counsel for Thalassa Tanker Operations Ltd., and if such counsel is required, an appropriate firm should be identified and engaged promptly.
6.  Parallel refinancing efforts. While pursuing the Harborstone extension as the immediate priority, TSL should continue to monitor and evaluate the long-term shipping finance refinancing market. Once the extension is secured and the immediate maturity pressure is relieved, TSL will be in a stronger position — both substantively and in terms of negotiating leverage — to launch a new refinancing process with the benefit of a materially longer runway (12 to 18 months rather than the current 97 days). C&H is available to assist TSL in developing and executing a refreshed refinancing strategy once the extension is in place.
7.  Board communication. We recommend that Mr. Komnenidis brief TSL's Board of Directors, including Chairman Nikolaos Karadimitriou, on the extension strategy at the earliest appropriate opportunity. Board awareness and approval will be necessary in any event for the corporate authorizations required in connection with the Extension Amendment, and early communication will ensure that the Board is aligned with management's approach and prepared to act when formal approvals are needed. If a formal board meeting is required, it should be scheduled sufficiently in advance of the anticipated Extension Amendment execution date.
VIII. Conclusion
The extension of the Existing Harborstone Revolving Credit Facility represents the most realistic, cost-effective, and least disruptive path to protecting TSL's liquidity position in the near term, following the unexpected collapse of the Meridian Atlantic refinancing. While the circumstances that gave rise to this situation were beyond TSL's control, the Borrower is well-positioned to approach Harborstone from a position of creditworthiness, operational strength, and relationship goodwill.
Several factors weigh strongly in TSL's favor in the extension negotiation:
•  The sole-lender structure of the Existing RCF significantly simplifies the amendment process, eliminating the multi-lender consent and holdout risks that would complicate a maturity extension in a syndicated facility.
•  TSL's strong financial performance — FY2022 revenue of approximately $620 million, EBITDA of approximately $145 million, and a total fleet value of approximately $1.2 billion — demonstrates the Borrower's creditworthiness and supports a compelling case for extension.
•  TSL's positive relationship history with Harborstone, including the successful negotiation of two prior amendments without material difficulty, provides a foundation of trust and mutual understanding that will facilitate constructive engagement.
•  The limited scope of the proposed amendment — a straightforward maturity extension without fundamental changes to the economic terms, covenants, or collateral structure — minimizes the complexity, cost, and risk of the process.
However, time is the critical variable in this process. With the November 15, 2023 maturity date less than 100 days away, and with Harborstone's internal credit committee approval process requiring an estimated 3 to 4 weeks, every day of delay in initiating the extension discussion compresses the available window and increases the risk that the extension cannot be completed before maturity. Prompt action is essential.
Calderwood & Harkness stands ready to assist TSL in all aspects of the extension process — from the initial strategic framing of the extension request, through documentation negotiation and execution, to the ultimate closing of the Extension Amendment. We are available to discuss this memorandum and its recommendations at TSL management's earliest convenience.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Sophie Tremblay Senior Associate, Banking & Finance Calderwood & Harkness LLP 425 Park Avenue, New York, NY 10022 Athens Office: 8 Vasilissis Sofias Avenue, Athens 106 74, Greece Tel: +1 (212) 555-4820 / +30 210 555-9100
Email: s.tremblay@calderwoodharkness.com
CONFIDENTIALITY NOTICE AND DISCLAIMER
This memorandum is a privileged and confidential communication protected by the attorney-client privilege and the work product doctrine. It has been prepared by Calderwood & Harkness LLP solely for the internal use of Thalassa Shipping & Logistics SA and its designated officers and directors in connection with the matters described herein. This memorandum contains legal advice and attorney work product and is not intended for distribution to, or reliance by, any third party. No portion of this memorandum may be disclosed, reproduced, or distributed to any person or entity outside of the Borrower without the prior written consent of Calderwood & Harkness LLP. If you have received this memorandum in error, please notify the sender immediately and destroy all copies. Receipt by an unintended recipient does not constitute a waiver of the attorney-client privilege or work product protection.
Term | Detail
Facility Type | Senior secured revolving credit facility
Facility Size | $125,000,000
Original Execution Date | November 15, 2018
Maturity Date | November 15, 2023 (five-year term from original execution)
Borrower | Thalassa Shipping & Logistics SA (Greece)
Administrative Agent / Lender | Harborstone National Bank (sole lender)
Original Pricing | LIBOR + 250 basis points
Current Pricing (post-Second Amendment) | SOFR + applicable credit spread adjustment ("CSA") + 250 basis points
Guarantors | Thalassa Dry Bulk Holdings Ltd. (Cyprus); Thalassa Tanker Operations Ltd. (Republic of the marshall Islands); Thalassa Logistics International Ltd. (Cyprus)
Collateral | First-priority ship mortgages on designated fleet vessels; assignment of earnings; assignment of insurances; share pledges of vessel-owning subsidiaries
Fee (bps) | Fee Amount
15 bps | $187,500
20 bps | $250,000
25 bps | $312,500
30 bps | $375,000
35 bps | $437,500
50 bps | $625,000
Item | Amount
Total C&H fees billed to date | $412,850
Percentage of $650,000 fee cap utilized | Approximately 63.5%
Disbursements billed to date | $18,340
Outstanding balance (unbilled fees and WIP) | $56,190
Total estimated Meridian Atlantic matter cost | $487,380
Cost Component | Estimated Range
C&H fees — drafting, negotiation, and closing of Extension Amendment | $75,000 – $125,000
Pavlopoulos & Drakos fees — Greek-law corporate authorizations and legal opinion | $15,000 – $25,000
Harborstone outside counsel fees (borne by TSL as borrower, per customary terms) | $50,000 – $100,000
Extension fee payable to Harborstone (25–35 bps on $125M) | $312,500 – $437,500
Marshall Islands counsel fees (if required for Thalassa Tanker Operations Ltd.) | $5,000 – $15,000
Miscellaneous disbursements (searches, filings, appraisal costs if required) | $5,000 – $25,000
Total estimated cost of extension | $462,500 – $727,500

MEMORANDUM

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP

CONFIDENTIALITY NOTICE AND DISCLAIMER

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