CALDERWOOD & HARKNESS LLP 600 Lexington Avenue, 38th Floor New York, New York 10022 Tel: (212) 554-7000
Fax: (212) 554-7001
www.calderwoodharkness.com
June 30, 2022
VIA EMAIL (d.karavelis@thalassasl.gr)
Ms. Dimitra Karavelis-Stavrou General Counsel & Chief Compliance Officer Thalassa Shipping & Logistics SA 14 Poseidonos Avenue Piraeus 185 31, Greece
Re: Engagement of Calderwood & Harkness LLP — Matter No. 1044-00007
Dear Ms. Karavelis-Stavrou:
We are pleased that Thalassa Shipping & Logistics SA ("Thalassa" or the "Company"), a Société Anonyme organized and existing under the laws of the Hellenic Republic, has retained Calderwood & Harkness LLP ("C&H" or the "Firm") to represent and advise the Company in connection with the matters described herein. This letter sets forth the terms and conditions under which the Firm will provide legal services to the Company.
Specifically, the Company has retained the Firm to conduct an internal review of certain payments made by Thalassa West Africa SARL ("TWA"), a subsidiary of the Company organized under the laws of Côte d'Ivoire, and Thalassa Nigeria Limited ("TNL"), a subsidiary of the Company organized under the laws of the Federal Republic of Nigeria, through or to Goldenshore Maritime Consultants Ltd. ("Goldenshore"), a company incorporated in the Republic of Ghana. This internal review will include an assessment of the Company's potential exposure under the United States Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1 et seq. (the "FCPA"), and related anti-corruption statutes of applicable jurisdictions. The foregoing is referred to collectively herein as the "Engagement."
The purpose of this letter is to confirm our mutual understanding of the terms and conditions of this Engagement and to set forth the respective rights and obligations of the parties. We ask that you review this letter carefully and, if the terms are acceptable, execute and return a copy to us as provided below.
1. SCOPE OF ENGAGEMENT
The Firm's representation of the Company in this Engagement shall encompass the following:
(a) Review of Contractual Arrangements. Review and analysis of the Port Agency and Facilitation Services Agreement dated March 1, 2018, entered into between TWA and Goldenshore (the "Goldenshore Agreement"), together with all amendments, renewals, side letters, supplements, schedules, exhibits, and related correspondence pertaining thereto.
(b) Review of Payments. Review and analysis of all payments made by TWA and TNL to Goldenshore during the period from March 2018 through the present date (and continuing through the duration of this Engagement), including: (i) commissions paid at the contractual rate of three and one-half percent (3.5%) of total port disbursements, and (ii) separately invoiced charges described as "expediting fees" or invoiced under the description "Port Expedition and Government Liaison Services" (the "Expediting Fees"). This review will include, without limitation, an examination of invoices, wire transfer records, bank statements, supporting documentation, approvals, and internal accounting treatment of such payments.
(c) Beneficial Ownership and Government Affiliations. Assessment of the identity, beneficial ownership structure, and government affiliations (if any) of Goldenshore's principals, directors, officers, shareholders, and ultimate beneficial owners, including without limitation Kofi Mensah Asante and any other individuals or entities holding a direct or indirect ownership interest in Goldenshore. This assessment will include, as appropriate, the engagement of third-party due diligence providers to conduct background checks and public records searches.
(d) Anti-Corruption Law Exposure Analysis. Analysis of the Company's potential exposure under applicable anti-corruption laws and regulations, including: (i) the FCPA (both the anti-bribery provisions and the books-and-records and internal controls provisions); (ii) the United Kingdom Bribery Act 2010 (the "U.K. Bribery Act"); and (iii) applicable local anti-corruption statutes, including the laws of the Republic of Côte d'Ivoire, the Republic of Ghana, and the Federal Republic of Nigeria, as each may be relevant to the transactions and payments under review.
(e) Coordination with Other Advisors. Coordination with forensic accountants (specifically, Northpoint Forensic Advisors LLC, which has been retained by the Company but has not yet been activated for purposes of this Engagement), local counsel in Greece (Papadakis & Lekkas LLP), local counsel in Nigeria (Okafor Bassey & Partners), and local counsel in Côte d'Ivoire (to be identified and engaged), as well as any other professional advisors, consultants, or experts as may be necessary or appropriate in connection with this Engagement. The Firm will coordinate and, as appropriate, direct the activities of such advisors in furtherance of the objectives of this Engagement.
(f) Compliance Program Assessment. Assessment of the Company's existing anti-corruption compliance program, including its policies, procedures, training, internal controls, third-party due diligence processes, and related compliance infrastructure, and the preparation of recommendations for remediation, enhancement, and strengthening of such program as may be warranted by the findings of the internal review.
(g) Voluntary Self-Disclosure Advice. Advice regarding the advisability and process of potential voluntary self-disclosure to the United States Department of Justice ("DOJ"), Criminal Division, Fraud Section, and/or the United States Securities and Exchange Commission ("SEC"), Division of Enforcement, including in connection with the pending SEC whistleblower tip bearing TCR No. 2022-WB-08341. The Firm will advise the Company on the potential benefits and risks of voluntary self-disclosure, the applicable DOJ and SEC policies governing credit for such disclosure, and the procedural steps involved.
For the avoidance of doubt, the Firm's representation in this Engagement extends to Thalassa Shipping & Logistics SA and its subsidiaries TWA and TNL, collectively as the client. The Firm does not represent, and this Engagement shall not be construed as creating an attorney-client relationship with, any individual officer, director, employee, agent, or shareholder of the Company or any of its subsidiaries. This distinction is addressed further in Section 8 below.
2. ENGAGEMENT TEAM
The following attorneys have been assigned to this Engagement and will be principally responsible for the Firm's work on behalf of the Company:
Victoria Chambers will serve as the Responsible Partner and will have overall supervisory responsibility for the conduct of this Engagement. Howard Quinn will serve as the Billing Partner and will be available to address any billing inquiries. Day-to-day management of the Engagement will be led by Jasmine Thornton, who will serve as the Lead Associate, with the support of Liam Donahue.
The Company should direct all substantive communications regarding this Engagement to Victoria Chambers or Jasmine Thornton. Billing inquiries should be directed to Howard Quinn.
Please note that additional attorneys, paralegals, and other professional staff may be assigned to this Engagement from time to time as the scope and demands of the work require. The Firm will provide notice to the Company of any material additions to or changes in the composition of the Engagement team. The assignment of additional personnel will not alter the terms of this Engagement or the applicable fee arrangements set forth herein, except that such personnel will be billed at their then-current standard hourly rates.
3. FEES AND EXPENSES
Billing Basis. The Firm will bill for its services on an hourly basis, in increments of one-tenth (1/10) of an hour. The current standard hourly rates for the attorneys assigned to this Engagement are as follows:
These rates reflect the Firm's current standard rates for matters of this nature and complexity. The Firm reserves the right to adjust its standard hourly rates on an annual basis, consistent with the Firm's general rate adjustments. The Firm will provide written notice to the Company of any such rate adjustment no fewer than thirty (30) days prior to its effective date. Any adjusted rates will apply only to services rendered on or after the effective date of the adjustment.
Volume discount. In the event that aggregate fees (exclusive of expenses and disbursements) billed under this Engagement exceed Five Hundred Thousand Dollars ($500,000) in any calendar year, a volume discount of ten percent (10%) will be applied to all fees billed in excess of that threshold for the applicable calendar year. For the avoidance of doubt, the discount shall apply only to fees, and not to out-of-pocket expenses or disbursements, and shall be calculated and credited on a calendar-year basis. Any discount for the calendar year 2022 shall be calculated based on fees billed from the commencement of this Engagement through December 31, 2022.
Expenses. In addition to professional fees, the Company will reimburse the Firm for all reasonable out-of-pocket expenses and disbursements incurred in connection with this Engagement. Such expenses may include, without limitation: (i) travel expenses (airfare, hotel, ground transportation, and meals) incurred in connection with domestic and international travel necessary for the Engagement, including travel to West Africa and Greece; (ii) document production, review, hosting, and management costs, including fees for electronic discovery platforms and vendors; (iii) translation and interpretation services; (iv) third-party vendor costs, including fees and expenses of forensic accountants (Northpoint Forensic Advisors LLC), local counsel in Greece, Nigeria, Côte d'Ivoire, and other jurisdictions, and third-party due diligence providers; (v) court filing fees, process server fees, and similar charges, if applicable; (vi) long-distance telephone, videoconference, and telecommunication charges; (vii) messenger and courier charges; and (viii) photocopying and printing costs at the Firm's standard internal rates. The Firm will endeavor to advise the Company in advance of any individual expense item expected to exceed Ten Thousand Dollars ($10,000).
Invoicing and Payment. The Firm will issue invoices to the Company on a monthly basis, in arrears, reflecting all fees and expenses incurred during the preceding calendar month. Invoices will include a summary description of the services rendered and a breakdown of expenses incurred. All invoices are payable within thirty (30) days of the date of the invoice. Amounts not paid within the thirty-day period will accrue interest at the rate of one and one-half percent (1.5%) per month, or the maximum rate permitted by applicable law, whichever is less, from the due date until paid. The Firm reserves the right to suspend work on this Engagement in the event of a material arrearage in payment, upon written notice to the Company, subject to the Firm's obligations under applicable rules of professional conduct.
4. ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT
All communications between the Company and the Firm in connection with this Engagement, including oral and written communications, memoranda, reports, analyses, and other work product prepared by or at the direction of the Firm, are intended to be protected by the attorney-client privilege and the work-product doctrine, to the fullest extent permitted by applicable law.
The attorney-client privilege belongs to the Company. The Company alone has the authority to waive the attorney-client privilege with respect to any communication or document protected thereby. The Firm will not waive or disclose any privileged communication or work product without the prior written authorization of the Company, except as may be required by applicable law or by order of a court of competent jurisdiction.
In order to preserve and maintain the protections of the attorney-client privilege and the work-product doctrine, the Company agrees to take reasonable steps to safeguard the confidentiality of all privileged communications and work product, including without limitation: (i) limiting the distribution of C&H memoranda, reports, correspondence, and other communications to those individuals within the Company who have a demonstrated need to know the information contained therein in connection with their responsibilities relating to this Engagement; (ii) refraining from forwarding or copying privileged communications to individuals outside the Company, including external auditors, without prior consultation with the Firm; and (iii) marking documents received from the Firm as privileged and confidential, and storing such documents in a secure manner.
The Firm will mark all privileged documents and communications with appropriate privilege designations, including, as applicable, "PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION" and "ATTORNEY WORK PRODUCT."
The Company understands that the voluntary disclosure of privileged communications or work product to third parties may, in certain circumstances, result in a waiver of the privilege. The Firm is available to advise the Company on questions regarding the scope and application of the attorney-client privilege and the work-product doctrine as they may arise during the course of this Engagement.
5. CONFLICTS
Prior to accepting this Engagement, C&H conducted a conflicts check in accordance with the Firm's standard procedures and the requirements of the New York Rules of Professional Conduct. Based on that review, the Firm has identified no conflicts of interest that would prevent the Firm from undertaking this Engagement or that would require the informed written consent of the Company or any other client.
The Firm notes that C&H has represented, and may currently represent, Meridian Atlantic Bank, National Association, in certain unrelated commercial lending and regulatory compliance matters. The Firm has reviewed this relationship and has determined that it does not present a conflict of interest with respect to this Engagement, as the matters are wholly unrelated in subject matter, the interests of the Company and Meridian Atlantic Bank are not adverse, and no confidential information obtained in the course of the Firm's representation of Meridian Atlantic Bank is relevant to this Engagement. This determination was confirmed by the Firm's General Counsel's office on June 28, 2022 (internal reference CC-2022-1194).
The Firm will continue to monitor for potential conflicts of interest throughout the duration of this Engagement and will notify the Company promptly in writing if any actual or potential conflict arises. In the event that a conflict is identified, the Firm will work with the Company to determine an appropriate course of action, which may include the implementation of an ethical screen, the procurement of informed written consent, or, if necessary, the withdrawal of the Firm from the Engagement or the affected portion thereof.
6. DOCUMENT PRESERVATION
The Company acknowledges its obligation to preserve all documents and electronically stored information ("ESI") that are or may be potentially relevant to the matters under review in this Engagement. This obligation extends to documents and ESI in the possession, custody, or control of the Company and its subsidiaries, including TWA and TNL, regardless of the medium or format in which such documents or ESI are stored (including paper records, electronic files, emails, text messages, instant messages, voicemails, database records, and data stored on mobile devices, servers, cloud-based platforms, and backup or archival media).
The preservation obligation requires the Company to take affirmative steps to prevent the destruction, alteration, modification, or deletion of potentially relevant documents and ESI, including the suspension of any automatic deletion policies, document retention schedules, or data destruction routines that might otherwise result in the loss of potentially relevant materials.
C&H will issue a separate Document Preservation and Litigation Hold Memorandum (the "Hold Memorandum") setting forth specific and detailed preservation requirements, identifying categories of documents and ESI to be preserved, and providing guidance for the implementation and enforcement of the preservation hold. The Hold Memorandum will be delivered to the Company promptly following the execution of this engagement letter.
The Company agrees to implement and enforce the document preservation hold across Thalassa Shipping & Logistics SA, TWA, and TNL promptly upon receipt of the Hold Memorandum. The Company further agrees to designate an individual or individuals within the Company who will be responsible for overseeing compliance with the preservation hold and to cooperate with the Firm in ensuring that the hold is effectively communicated to all relevant custodians and personnel.
7. TERMINATION
Either party may terminate this Engagement upon thirty (30) days' prior written notice to the other party. In the event of termination by either party, the Company will remain responsible for the payment of all fees earned and expenses incurred by the Firm through the effective date of termination, including any fees and expenses reflected on invoices issued prior to or after the date of termination but relating to services rendered or expenses incurred through the effective date of termination.
Notwithstanding any termination, the Firm's obligations under applicable rules of professional conduct with respect to post-termination matters shall survive, including without limitation the Firm's obligations regarding the protection of client confidences and secrets, the return of client files and property, and the provision of reasonable cooperation in connection with the transition of the Engagement to successor counsel. Upon termination, the Firm will, at the Company's request, promptly deliver to the Company or its designee copies of all client files, documents, and work product in the Firm's possession relating to this Engagement, subject to the Firm's right to retain copies of such materials for its own records and as may be required by applicable law or rules of professional conduct.
8. LIMITATION OF ENGAGEMENT
The Engagement is limited in scope to the matters described in Section 1 above. The Firm is not engaged to provide legal advice or representation to the Company on any other matter, including but not limited to general corporate matters, tax planning or compliance, mergers and acquisitions, securities offerings, commercial contracts, employment matters, regulatory filings (other than as expressly contemplated by Section 1(g)), or any other legal matter not specifically described in Section 1. Any expansion of the scope of this Engagement or retention of the Firm for additional matters shall require a separate written agreement between the parties.
As stated in Section 1 above, this Engagement does not constitute a representation of any individual officer, director, employee, agent, or shareholder of the Company or any of its subsidiaries. Without limiting the generality of the foregoing, the Firm does not represent, and this Engagement shall not be construed as creating an attorney-client relationship with, any of the following individuals: Nikolaos Karavelis, Chairman of the Board of Directors; Dimitra Karavelis-Stavrou, General Counsel and Chief Compliance Officer; Alexandros Fitsakis, Chief Financial Officer; Cédric Anouma, Managing Director of TWA; or Emeka Obiora, Country Manager of TNL. Each such individual is encouraged to consult with his or her own independent legal counsel regarding any personal legal exposure or rights that may arise in connection with the matters under review. If, during the course of this Engagement, the Firm conducts interviews of any of the foregoing individuals or any other Company personnel, the Firm may provide "Upjohn" or corporate Miranda warnings to clarify that the Firm represents only the Company and not the individual being interviewed.
9. GOVERNING LAW
This engagement letter and the terms and conditions set forth herein shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict-of-laws principles. Any disputes arising out of or relating to this engagement letter or the Firm's representation of the Company hereunder shall be submitted to the exclusive jurisdiction of the state and federal courts located in the County of New York, State of New York, and the parties hereby consent to the personal jurisdiction of such courts.
We are committed to providing the Company with the highest quality of legal representation in this important matter. We look forward to working with you and your team to bring this review to a thorough and successful conclusion.
Please confirm your agreement to the terms of this engagement by countersigning in the space provided below and returning a copy of this fully executed letter to the undersigned by email at v.chambers@calderwoodharkness.com. This letter may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.
If you have any questions regarding the terms of this letter or any other aspect of this Engagement, please do not hesitate to contact me directly at (212) 554-7128.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Victoria Chambers
Title: Partner, White Collar Defense & Investigations
COUNTERSIGNATURE
AGREED AND ACCEPTED:
The undersigned, on behalf of Thalassa Shipping & Logistics SA, hereby confirms that she has read and understood the terms and conditions set forth in this engagement letter, that she is duly authorized to execute this letter on behalf of the Company, and that the Company agrees to be bound by the terms hereof.
THALASSA SHIPPING & LOGISTICS SA
By: ________
Name: Dimitra Karavelis-Stavrou
Title: General Counsel & Chief Compliance Officer
Date: June 30, 2022
| Name | Role | Position | Practice Group |
| Victoria Chambers | Responsible Partner | Partner | White Collar Defense & Investigations |
| Howard Quinn | Billing Partner | Partner | White Collar Defense & Investigations |
| Jasmine Thornton | Lead Associate | Senior Associate | White Collar Defense & Investigations |
| Liam Donahue | Working Associate | Associate | White Collar Defense & Investigations |
| Category | Standard Hourly Rate | ||
| Partners | $1,450.00 per hour | ||
| Senior Associates | $975.00 per hour | ||
| Associates | $725.00 per hour |