20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_________________________

FORM 20-F

__________________________

[_]	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
	OR
[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2014
[_]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from              to
[_]	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report: Not applicable

Commission file number 001-33922

__________________________

DRYSHIPS INC.

(Exact name of Registrant as specified in its charter)

__________________________

(Translation of Registrant's name into English)

Republic of the Marshall Islands

(Jurisdiction of incorporation or organization)

109 Kifisias Avenue and Sina Street

151 24, Marousi

Athens, Greece

(Address of principal executive offices)

Mr. George Economou

Tel: + 011 30 210-80 90-570, Fax: + 011 30 210 80 90 585

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of class	Name of exchange on which registered
Common Stock, $0.01 par value	The NASDAQ Stock Market LLC
Preferred Stock Purchase Rights	The NASDAQ Stock Market LLC

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: As of December 31, 2014, there were 669,964,321 shares of the registrant's common stock, $0.01 par value, outstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes  ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  ☐ Yes  ☒ No

Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  ☒ Yes  ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  ☒ Yes  ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definitions of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ☒                                                         Accelerated filer       ☐                                                   Non-accelerated filer  ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

US GAAP  ☒ International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ Other   ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.  ☐ Item 17  ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  ☐ Yes  ☒ No

FORWARD-LOOKING STATEMENTS

DryShips Inc. desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection therewith. This document and any other written or oral statements made by the Company or on its behalf may include forward-looking statements, which reflect its current views with respect to future events and financial performance. This document includes assumptions, expectations, projections, intentions and beliefs about future events. These statements are intended as "forward-looking statements". We caution that assumptions, expectations, projections, intentions and beliefs about future events may and often do vary from actual results and the differences can be material. When used in this document, the words "anticipate", "estimate", "project", "forecast", "plan", "potential", "may", "should", and "expect" reflect forward-looking statements.

All statements in this document that are not statements of historical fact are forward-looking statements. Forward-looking statements include, but are not limited to, such matters as:

● our future operating or financial results;

● statements about planned, pending or recent acquisitions, business strategy and expected capital spending or operating expenses, including drydocking, surveys, upgrades and insurance costs;

● our ability to procure or have access to financing, our liquidity and the adequacy of cash flow for our operations;

● our continued borrowing availability under our debt agreements and compliance with the covenants contained therein;

● our substantial leverage, including our ability to generate sufficient cash flow to service our existing debt and the incurrence of substantial indebtedness in the future;

● our ability to successfully employ both our existing and newbuilding drybulk and tanker vessels and drilling units;

● our drilling contract backlog, drilling contract commencements, drilling contract terminations, drilling contract option exercises, drilling contract revenues, drilling contract awards and rig and drillship mobilizations and performance provisions,

● our future capital expenditures and investments in the construction, acquisition and refurbishment of our vessels and drilling units (including the amount and nature thereof and the timing of completion thereof, the delivery and commencement of operations dates, expected downtime and lost revenue);

● statements about drybulk and tanker shipping market trends, charter rates and factors affecting supply and demand;

● statements about the offshore drilling market, including supply and demand, utilization rates, dayrates,

● our expectations regarding the availability of vessel and drilling unit acquisitions; and

● anticipated developments with respect to pending litigation.

The forward-looking statements in this document are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that it will achieve or accomplish these expectations, beliefs or projections described in the forward-looking statements contained in this annual report.

Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies; general market conditions, including changes in charter rates and dayrates and vessel and drilling unit values; the failure of a seller to deliver one or more vessels or drilling units; the failure of a buyer to accept delivery of one or more vessels or drilling units; inability to procure acquisition financing; repudiation, nullification, termination, modification or renegotiation of our contracts; default by one or more customers; changes in demand for drybulk commodities, oil or petroleum products; changes in demand that may affect attitudes of time charterers; scheduled and unscheduled drydocking; changes in our voyage and operating expenses, including bunker prices, dry-docking and insurance costs; complications associated with repairing and replacing equipment in remote locations; limitations on insurance coverage, such as war risk coverage, in certain areas; foreign and U.S. monetary policy and foreign currency fluctuations and devaluations; changes in governmental rules and regulations, changes in tax laws, treaties and regulations, tax assessments and liabilities for tax issues; legal and regulatory matters, including results and effects of legal proceedings; customs and environmental matters; domestic and international political conditions; potential disruption of shipping routes due to accidents; international hostilities and political events or acts by terrorists; and other factors described in "Item 3.D. Risk Factors."

TABLE OF CONTENTS

PART I		1
Item 1.	Identity of Directors, Senior Management and Advisers	1
Item 2.	Offer Statistics and Expected Timetable	1
Item 3.	Key Information	1
Item 4.	Information on the Company	39
Item 4A.	Unresolved Staff Comments	63
Item 5.	Operating and Financial Review and Prospects	64
Item 6.	Directors and Senior Management	103
Item 7.	Major Shareholders and Related Party Transactions	109
Item 8.	Financial Information	114
Item 9.	The Offer and Listing	115
Item 10.	Additional Information	116
Item 11.	Quantitative and Qualitative Disclosures about Market Risk	125
Item 12.	Description of Securities Other than Equity Securities	127
PART II		127
Item 13.	Defaults, Dividend Arrearages and Delinquencies	127
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	127
Item 15.	Controls and Procedures	127
Item 16A.	Audit Committee Financial Expert	128
Item 16B.	Code of Ethics	128
Item 16C.	Principal Accountant Fees and Services	128
Item 16D.	Exemptions from the Listing Standards for Audit Committees	129
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	129
Item 16F.	Changes in Registrant's Certifying Accountant	129
Item 16G.	Corporate Governance	129
Item 16H.	Mine Safety Disclosure	129
PART III.		130
Item 17.	Financial Statements	130
Item 18.	Financial Statements	130
Item 18.1.	Schedule I – Condensed Financial Information of Dryships Inc. (Parent Company only)	130
Item 19.	Exhibits	130

Please note in this annual report, "we", "us", "our", "DryShips" and "the Company", all refer to DryShips Inc. and its subsidiaries, unless otherwise stated or the context otherwise requires.

PART I

Item 1.      Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2.      Offer Statistics and Expected Timetable

Not applicable.

Item 3.Key Information

A.           Selected Financial Data

The following table sets forth our selected consolidated financial data and other operating data as of and for the years ended December 31, 2010, 2011, 2012, 2013 and 2014. The following information should be read in conjunction with "Item 5. Operating and Financial Review and Prospects" and the consolidated financial statements and related notes included herein. The following selected consolidated financial data are derived from our audited consolidated financial statements and the notes thereto which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP.

3.A.(i)  STATEMENT OF OPERATIONS

	Year Ended December 31,
(In thousands of U.S. dollars except per share and  share data)	2010			2011			2012			2013		2014
STATEMENT OF OPERATIONS
Total revenues	$	859,745		$	1,077,662		$	1,210,139		$	1,492,014	$	2,185,524
Voyage expenses		27,433			20,573			30,012			103,211		117,165
Vessels, drilling rigs and drillships operating expenses		190,614			373,122			649,722			609,765		844,260
Depreciation and amortization		192,891			274,281			335,458			357,372		449,792
Loss/(gain) on sale of assets, net		(9,435	)		3,357	)		1,179			—		-
Gain on contract cancellation		—			(6,202	)		—			—		-
Contract termination fees and other		—			—			41,339			33,293		1,307
Vessel impairment charge		3,588			144,688			—			43,490		38,148
Gain from vessel insurance proceeds		—			(25,064	)		—			—		-
General and administrative expenses – cash(1)		64,376			96,679			132,636			173,298		182,593
General and administrative expenses – non-cash		24,200			26,568			13,299			11,424		11,093
Legal settlements and other, net		—			—			(9,360	)		4,585		(2,013	)

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Operating income		366,078			169,660			15,854			155,576			543,179
Interest and finance costs		(66,825	)		(146,173	)		(210,128	)		(332,129	)		(411,021	)
Interest income		21,866			16,575			4,203			12,498			12,146
Gain/(loss) on interest rate swaps		(120,505	)		(68,943	)		(54,073	)		8,373			(15,528	)
Other, net		10,272			9,023			(492	)		2,245			7,067
Income/(loss) before income taxes		210,886			(19,858	)		(244,636	)		(153,437	)		135,843
Income taxes		(20,436	)		(27,428	)		(43,957	)		(44,591	)		(77,823	)
Net Income/(loss)		190,450			(47,286	)		(288,593	)		(198,028	)		58,020
Less: Net (income)/loss attribute to non-controlling interests		(2,123	)		(22,842	)		41,815			(25,065	)		(105,532	)
Net income/(loss) attributable to DryShips Inc.		188,327			(70,128	)		(246,778	)		(223,093	)		(47,512	)
Net Income/ (loss) attributable to common stockholders		172,564			(74,594	)		(246,778	)		(223,149	)		(48,209	)
Earnings/(loss) per common share attributable to DryShips Inc. common stockholders, basic	$	0.64		$	(0.21	)	$	(0.65	)	$	(0.58	)	$	(0.11	)
Weighted average number of common shares, basic		268,858,688			355,144,764			380,159,088			384,063,306			456,031,628
Earning / (loss) per common share attributable to DryShips Inc. common stockholders, diluted	$	0.61		$	(0.21	)	$	(0.65	)	$	(0.58	)	$	(0.11	)
Weighted average number of common shares, diluted		305,425,852			355,144,764			380,159,088			384,063,306			456,031,628

_______________________

(1) Cash compensation to members of our senior management and our directors amounted to $11.8 million, $6.8 million, $5.7 million, $4.8 million, and $5.8 million for the years ended December 31, 2010, 2011, 2012, 2013 and 2014, respectively.

3.A.(ii)  BALANCE SHEET AND OTHER FINANCIAL DATA

				As of and for the Year Ended December 31,
(In thousands of U.S. dollars except per share and  share data and fleet data)	2010			2011			2012			2013			2014
Total current assets	$	1,065,110			570,077			903,529			1,184,199			1,227,277
Total assets		6,984,494			8,621,689			8,878,491			10,123,692			10,371,603
Current liabilities, including current portion of long-term debt, net of deferred finance cost		935,435			756,263			1,573,529			2,171,714			1,621,760
Total long-term debt, including current portion		2,719,692			4,241,835			4,386,715			5,568,003			5,517,613
DryShips common stock		3,696			4,247			4,247			4,326			7,060
Number of shares issued		369,649,777			424,762,094			424,762,244			432,654,477			706,064,321
Total DryShips Inc. stockholders' equity		3,255,827			3,145,328			2,846,460			2,613,636			2,992,821
OTHER FINANCIAL DATA
Net cash provided by operating activities		476,801			349,205			237,529			245,980			475,108
Net cash used in investing activities		(1,680,748	)		(1,822,394	)		(389,947	)		(1,234,330	)		(754,717	)
Net cash provided by financing activities		902,308			1,332,802			243,225			1,241,542			250,709
EBITDA (1)		449,736			384,021			296,747			523,566			984,510
DRYBULK FLEET DATA:
Average number of vessels (2)		37.21			35.80			35.67			37.15			38.69
Total voyage days for drybulk carrier fleet (3)		13,430			12,831			13,027			13,442			13,889
Total calendar days for drybulk carrier fleet (4)		13,583			13,068			13,056			13,560			14,122
Drybulk carrier fleet utilization (5)		98.87	%		98.19	%		99.78	%		99.13	%		98.35	%
(In Dollars)
AVERAGE DAILY RESULTS:
Time charter equivalent (6)		32,045			26,912			15,896			12,062			12,354
Vessel operating expenses (7)		5,245			6,271			5,334			5,796			6,400
TANKER FLEET DATA:
Average number of vessels (2)		—			2.64			6.27			9.86			10.00
Total voyage days for tanker fleet (3)		—			963			2,293			3,598			3,650
Total calendar days for tanker fleet (4)		—			963			2,293			3,598			3,650
Tanker fleet utilization		—			100	%		100	%		100	%		100	%
(In Dollars)
AVERAGE DAILY RESULTS:
Time Charter Equivalent (6)		—			12,592			13,584			12,900			21,835
Vessel Operating Expenses (7)		—			9,701			7,195			7,286			7,138

 ________________________________

(1) EBITDA, a non-U.S. GAAP measure, represents net income before interest, taxes, depreciation and amortization. EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by U.S. GAAP and our calculation of EBITDA may not be comparable to that reported by other companies. EBITDA is included herein because it is a basis upon which the Company measures its operations. Please see below for a reconciliation of EBITDA to net income attributable to DryShips, the most directly comparable financial measure calculated in accordance with U.S. GAAP.

2

(2)	Average number of vessels is the number of vessels that constituted the respective fleet for the relevant period, as measured by the sum of the number of days each vessel in that fleet was a part of the fleet during the period divided by the number of calendar days in that period.
(3)	Total voyage days for the respective fleet are the total days the vessels in that fleet were in the Company's possession for the relevant period net of off-hire days associated with drydockings or special or intermediate surveys.
(4)	Calendar days are the total days the vessels in that fleet were in the Company's possession for the relevant period including off-hire days associated with major repairs, drydockings or special or intermediate surveys.
(5)	Fleet utilization is the percentage of time that the vessels in that fleet were available for revenue-generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.
(6)	Time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. The Company's method of calculating TCE is determined by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE revenues, a non-U.S. GAAP measure, provides additional meaningful information in conjunction with revenues from our vessels, the most directly comparable U.S. GAAP measure, because it assists Company's management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. TCE is also a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods. The following table reflects the calculation of our TCE rates for the periods presented.
(7)	Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.

		For the Year Ended December 31,
(U.S. dollars in thousands)	2010	2011		2012		2013		2014
Net income/(loss) attributable to DryShips Inc.	188,327	(70,128	)	(246,778	)	(223,093	)	(47,512	)
Add: Net interest expense/income	45,959	129,598		205,925		319,631		398,875
Add: Depreciation and amortization	192,891	274,281		335,458		357,372		449,792
Add: Income taxes	20,436	27,428		43,957		44,591		77,823
Add: Net income/(loss) attributable to Non controlling interests	2,123	22,842		(41,815	)	25,065		105,532
EBITDA	449,736	384,021		296,747		523,566		984,510

Drybulk Carrier Segment			Year Ended December 31,
(In thousands of U.S. dollars, except for TCE rates,
which are expressed in U.S. dollars and voyage days)	2010		2011		2012		2013		2014
Voyage revenues	457,804		365,361		227,141		191,024		205,630
Voyage expenses	(27,433	)	(20,047	)	(20,064	)	(28,886	)	(34,044	)
Time charter equivalent revenues	430,371		345,314		207,077		162,138		171,586
Total voyage days for drybulk fleet	13,430		12,831		13,027		13,442		13,889
Time charter equivalent (TCE) rate	32,045		26,912		15,896		12,062		12,354

Tanker Segment		Year Ended December 31,
(In thousands of U.S. dollars, except for TCE rates, which are
expressed in U.S. dollars and voyage days)	2010	2011		2012		2013		2014
Voyage revenues	-	12,652		41,095		120,740		162,817
Voyage expenses	-	(526	)	(9,948	)	(74,325	)	(83,121	)
Time charter equivalent revenues	-	12,126		31,147		46,415		79,696
Total voyage days for drybulk fleet	-	963		2,293		3,598		3,650
Time charter equivalent (TCE) rate	-	12,592		13,584		12,900		21,835

B.           Capitalization and Indebtedness

Not applicable.

C.           Reasons for the Offer and Use of Proceeds

Not applicable.

3

D.           Risk Factors

Some of the following risks relate principally to the industries in which we operate and our business in general. Other risks relate principally to the securities market and ownership of our common shares. The occurrence of any of the events described in this section could significantly and negatively affect our business, financial condition, operating results, cash flows or our ability to pay dividends, if any, in the future, or the trading price of our common shares.

Risk Factors Relating to the Drybulk Shipping Industry

Charterhire rates for drybulk carriers are volatile and remain significantly below their high in 2008, which has had and may continue to have an adverse effect on our revenues, earnings and profitability and our ability to comply with our loan covenants.

The degree of charterhire rate volatility among different types of drybulk vessels has varied widely; however, the prolonged downturn in the drybulk charter market has severely affected the entire drybulk shipping industry and charterhire rates for drybulk vessels have declined significantly from historically high levels. The Baltic Dry Index, or the BDI, an index published daily by the Baltic Exchange Limited, a London-based membership organization that provides daily shipping market information to the global investing community, is a daily average of charter rates for key drybulk routes, which has long been viewed as the main benchmark to monitor the movements of the drybulk vessel charter market and the performance of the overall drybulk shipping market. The BDI declined 94% in 2008 from a peak of 11,793 in May 2008 to a low of 663 in December 2008 and has remained volatile since then.  The BDI recorded an all time low of 516 on February 17, 2015 and there can be no assurance that the drybulk charter market will increase, and the market could decline further.

The decline and volatility in charter rates has been due to various factors, including the over-supply of drybulk vessels, the lack of trade financing for purchases of commodities carried by sea, which resulted in a significant decline in cargo shipments. The decline and volatility in charter rates in the drybulk market also affects the value of our drybulk vessels, which follows the trends of drybulk charter rates, and earnings on our charters, and similarly, affects our cash flows, liquidity and compliance with the covenants contained in our loan agreements.  If low charter rates in the drybulk market continue or decline further for any significant period, this could have an adverse effect on our vessel values and our ability to continue as a going concern and comply with the financial covenants in our loan agreements. In such a situation, unless our lenders were willing to provide waivers of covenant compliance or modifications to our covenants, our lenders could accelerate our debt and we could face the loss of our vessels. In addition, the decline in the drybulk carrier charter market has had and may continue to have additional adverse consequences for the drybulk shipping industry, including an absence of financing for vessels, no active secondhand market for the sale of vessels, charterers seeking to renegotiate the rates for existing time charters, and widespread loan covenant defaults in the drybulk shipping industry. Accordingly, the value of our common shares could be substantially reduced or eliminated.

Because we currently employ 21 of our vessels in the spot market and pursuant to short-term time charters, we are exposed to changes in spot market and short-term charter rates for drybulk carriers and such changes may affect our earnings and the value of our drybulk carriers at any given time. In addition, we have two vessels scheduled to come off of their current charters in 2015 for which we will be seeking new employment. We may not be able to successfully charter our vessels in the future or renew existing charters at rates sufficient to allow us to meet our obligations. Fluctuations in charter rates result from changes in the supply of and demand for vessel capacity and changes in the supply and demand for the major commodities carried by water internationally. Because the factors affecting the supply of and demand for vessels are outside of our control and are unpredictable, the nature, timing, direction and degree of changes in industry conditions are also unpredictable.

Factors that influence demand for vessel capacity include:

● supply and demand for energy resources, commodities, semi-finished and finished consumer and industrial products;

● changes in the exploration or production of energy resources, commodities, semi-finished and finished consumer and industrial products;

● the location of regional and global exploration, production and manufacturing facilities;

● the location of consuming regions for energy resources, commodities, semi-finished and finished consumer and industrial products;

● the globalization of production and manufacturing;

● global and regional economic and political conditions, including armed conflicts, terrorist activities, embargoes and strikes;

● natural disasters and other disruptions in international trade;

4

● developments in international trade;

● changes in seaborne and other transportation patterns, including the distance cargo is transported by sea;

● environmental and other regulatory developments;

● currency exchange rates; and

● weather.

The factors that influence the supply of vessel capacity include:

● the number of newbuilding deliveries;

● port and canal congestion;

● the scrapping rate of older vessels;

● vessel casualties; and

● the number of vessels that are out of service.

In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices, costs of bunkers and other operating costs, costs associated with classification society surveys, normal maintenance and insurance coverage, the efficiency and age profile of the existing drybulk fleet in the market and government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the supply of and demand for shipping capacity are outside of our control, and we may not be able to correctly assess the nature, timing and degree of changes in industry conditions.

We anticipate that the future demand for our drybulk carriers will be dependent upon continued economic growth in the world's economies, including China and India, seasonal and regional changes in demand, changes in the capacity of the global drybulk carrier fleet and the sources and supply of drybulk cargoes to be transported by sea. Given the large number of new drybulk carriers currently on order with shipyards, the capacity of the global drybulk carrier fleet seems likely to increase and economic growth may not continue. Adverse economic, political, social or other developments could have a material adverse effect on our business and operating results.

An over-supply of drybulk carrier capacity may prolong or further depress the current low charter rates and, in turn, adversely affect our profitability.

The market supply of drybulk carriers has been increasing as a result of the delivery of numerous newbuilding orders over the last few years. Newbuildings have been delivered in significant numbers since the beginning of 2006 and, as of January 1, 2015, newbuilding orders had been placed for an aggregate of more than 22% of the existing global drybulk fleet, with deliveries expected during the next three years. Due to lack of financing many analysts expect significant cancellations and/or slippage of newbuilding orders. While vessel supply will continue to be affected by the delivery of new vessels and the removal of vessels from the global fleet, either through scrapping or accidental losses, an over-supply of dry bulk carrier capacity could exacerbate the recent decrease in charter rates or prolong the period during which low charter rates prevail. Currently, some of our spot market-related time charterers are at times unprofitable due the volatility associated with dry cargo freight rates. If market conditions persist or worsen, upon the expiration or termination of our vessels' current non-spot charters, we may only be able to re-charter our vessels at reduced or unprofitable rates, or we may not be able to charter these vessels at all. The occurrence of these events could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends. Currently, two of the charters for our drybulk vessels are scheduled to expire in 2015.

The market values of our vessels may decrease, which could limit the amount of funds that we can borrow or cause us to breach certain covenants in our credit facilities and we may incur a loss if we sell vessels following a decline in their market value.

The fair market values of our vessels are related to prevailing freight charter rates. However, while the fair market values of vessels and the freight charter market have a very close relationship as the charter market moves from trough to peak, the time lag between the effect of charter rates on market values of ships can vary.

The fair market values of our vessels have generally experienced high volatility, and you should expect the market values of our vessels to fluctuate depending on a number of factors including:

● prevailing level of charter rates;

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● general economic and market conditions affecting the shipping industry;

● types and sizes of vessels;

● supply of and demand for vessels;

● other modes of transportation;

● cost of newbuildings;

● governmental and other regulations; and

● technological advances.

In addition, as vessels grow older, they generally decline in value. If the market values of our vessels, which are at relatively low levels, decrease further, we may not be in compliance with certain covenants in our credit facilities secured by mortgages on our drybulk vessels, and our lenders could accelerate our indebtedness or require us to pay down our indebtedness to a level where we are again in compliance with our loan covenants. If our indebtedness is accelerated, we may not be able to refinance our debt or obtain additional financing.

In addition, if we sell one or more of our vessels at a time when vessel prices have fallen and before we have recorded an impairment adjustment to our consolidated financial statements, the sale proceeds may be less than the vessel's carrying value on our consolidated financial statements, resulting in a loss and a reduction in earnings. Furthermore, if vessel values persist at their current levels or decline further, we may have to record an impairment adjustment in our financial statements which could adversely affect our financial results. Due to our decision to sell certain vessels and based on the agreed-upon sales price, an impairment charge of $0 and $43.5 million, for each of the years ended December 31, 2012 and 2013, respectively, was recognized. Furthermore, as a result of the impairment review for the year ended December 31, 2014 it was determnined that the carrying amount of one of our assets was not recoverable and, therefore, an impairment loss of $38.1 million was recognized.

A further economic slowdown or changes in the economic and political environment in the Asia Pacific region could exacerbate the effect of recent slowdowns in the economies of the European Union and may have a material adverse effect on our business, financial condition and results of operations.

We anticipate a significant number of the port calls made by our vessels will continue to involve the loading or discharging of drybulk commodities and oil in ports in the Asia Pacific region. As a result, any negative changes in economic conditions in any Asia Pacific country, particularly in China, may exacerbate the effect of recent slowdowns in the economies of the European Union and may have a material adverse effect on our business, financial condition and results of operations, as well as our future prospects. Before the global economic financial crisis that began in 2008, China had one of the world's fastest growing economies in terms of gross domestic product, or GDP, which had a significant impact on shipping demand. The quarterly year-over-year growth rate of China's GDP decreased to approximately 7.3% for the year ended December 31, 2014, as compared to approximately 7.7% for the year ended December 31, 2013, and continues to remain below pre-2008 levels. We cannot assure you that the Chinese economy will not experience a significant contraction in the future.  Although state-owned enterprises still account for a substantial portion of the Chinese industrial output, in general, the Chinese government is reducing the level of direct control that it exercises over the economy through state plans and other measures. There is an increasing level of freedom and autonomy in areas such as allocation of resources, production, pricing and management and a gradual shift in emphasis to a "market economy" and enterprise reform. Limited price reforms were undertaken with the result that prices for certain commodities are principally determined by market forces. Many of the reforms are unprecedented or experimental and may be subject to revision, change or abolition based upon the outcome of such experiments. If the Chinese government does not continue to pursue a policy of economic reform, the level of imports to and exports from China could be adversely affected by changes to these economic reforms by the Chinese government, as well as by changes in political, economic and social conditions or other relevant policies of the Chinese government, such as changes in laws, regulations or export and import restrictions. Notwithstanding economic reform, the Chinese government may adopt policies that favor domestic drybulk shipping and oil tanker companies and may hinder our ability to compete with them effectively. Moreover, the current economic slowdown in the economies of the European Union and other Asian countries may further adversely affect economic growth in China and elsewhere. In addition, concerns regarding the possibility of sovereign debt defaults by European Union member countries, including Greece, have disrupted financial markets throughout the world, may lead to weaker consumer demand in the European Union, the United States, and other parts of the world. The possibility of sovereign debt defaults by European Union member countries, including Greece, and the possibility of market reforms to float the Chinese renminbi, either of which development could weaken the Euro against the Chinese renminbi, could adversely affect consumer demand in the European Union. Moreover, the revaluation of the renminbi may negatively impact the United States' demand for imported goods, many of which are shipped from China. Such weak economic conditions could have a material adverse effect on our business, results of operations and financial condition and our ability to pay dividends to our stockholders. Our business, financial condition, results of operations, ability to pay dividends as well as our future prospects, will likely be materially and adversely affected by a further economic downturn in any of these countries.

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If economic conditions throughout the world do not improve, this will impede our results of operations, financial condition and cash flows.

Negative trends in the global economy that emerged in 2008 continue to adversely affect global economic conditions. In addition, the world economy is currently facing a number of new challenges, including uncertainty related to the continuing discussions in the United States regarding the federal debt ceiling and recent turmoil and hostilities in the Middle East, North Africa and other geographic areas and countries. The deterioration in the global economy has caused, and may continue to cause, a decrease in worldwide demand for certain goods and, thus, shipping.

The United States, the European Union and other parts of the world have recently been or are currently in a recession and continue to exhibit weak economic trends. The current sovereign debt crisis in certain Eurozone countries, such as Greece and Cyprus, and concerns over debt levels of certain other European Union member states and in other countries around the world, as well as concerns about international banks, have led to increased volatility in global credit and equity markets. The credit markets in the United States and Europe have experienced significant contraction, deleveraging and reduced liquidity, and the United States federal and state governments and European authorities have implemented a broad variety of governmental action and/or new regulation of the financial markets and may implement additional regulations in the future.  Securities and futures markets and the credit markets are subject to comprehensive statutes, regulations and other requirements. The United States Securities and Exchange Commission, other regulators, self-regulatory organizations and exchanges are authorized to take extraordinary actions in the event of market emergencies, and may effect changes in law or interpretations of existing laws. Global financial markets and economic conditions have been, and continue to be, severely disrupted and volatile. Credit markets and the debt and equity capital markets have been exceedingly distressed and the uncertainty surrounding the future of the credit markets in the United States and the rest of the world has resulted in reduced access to credit worldwide.

We face risks attendant to changes in economic environments, changes in interest rates, and instability in the banking and securities markets around the world, among other factors. Major market disruptions and the current adverse changes in market conditions and regulatory climate in the United States and worldwide may adversely affect our business or impair our ability to borrow amounts under our credit facilities or any future financial arrangements. We cannot predict how long the current market conditions will last. However, these recent and developing economic and governmental factors, together with the concurrent decline in charter rates and vessel values, may have a material adverse effect on our results of operations, financial condition or cash flows, and the trading price of our common shares. In the absence of available financing, we also may be unable to take advantage of business opportunities or respond to competitive pressures.

In addition, as a result of the ongoing economic turmoil in Greece resulting from the sovereign debt crisis and the related austerity measures implemented by the Greek government, our operations in Greece may be subjected to new regulations that may require us to incur new or additional compliance or other administrative costs and may require that we pay to the Greek government new taxes or other fees. We also face the risk that strikes, work stoppages, civil unrest and violence within Greece may disrupt our shoreside operations and those of our managers located in Greece.

The current state of global financial markets and current economic conditions may adversely impact our ability to obtain additional financing on acceptable terms which may hinder or prevent us from expanding our business.

Global financial markets and economic conditions have been, and continue to be, volatile. Recently, the debt and equity capital markets have been severely distressed. These issues, along with significant write-offs in the financial services sector, the re-pricing of credit risk and the current weak economic conditions, have made, and will likely continue to make, it difficult to obtain additional financing. The current state of global financial markets and current economic conditions might adversely impact our ability to issue additional equity at prices which will not be dilutive to our existing shareholders or preclude us from issuing equity at all.

Also, as a result of concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of obtaining money from the credit markets has increased as many lenders have increased margins or interest rates, enacted tighter lending standards, refused to refinance existing debt at all or on terms similar to current debt and reduced, and in some cases ceased, to provide funding to borrowers. Furthermore, certain banks that have historically been significant lenders to the shipping industry have reduced or ceased lending to the shipping industry. Due to these factors, we cannot be certain that additional financing will be available if needed and to the extent required, on acceptable terms or at all. If additional financing is not available when needed, or is available only on unfavorable terms, we may be unable to meet our obligations as they come due or we may be unable to enhance our existing business, complete additional drilling unit acquisitions or otherwise take advantage of business opportunities as they arise.

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The instability of the euro or the inability of Eurozone countries to refinance their debts could have a material adverse effect on our revenue, profitability and financial position.

As a result of the credit crisis in Europe, in particular in Greece, Italy, Ireland, Portugal and Spain, the European Commission created the European Financial Stability Facility, or the EFSF, and the European Financial Stability Mechanism, or the EFSM, to provide funding to Eurozone countries in financial difficulties that seek such support. In March 2011, the European Council agreed on the need for Eurozone countries to establish a permanent stability mechanism, the European Stability Mechanism, or the ESM, which was activated by mutual agreement, to assume the role of the EFSF and the EFSM in providing external financial assistance to Eurozone countries after June 2013. Despite these measures, concerns persist regarding the debt burden of certain Eurozone countries and their ability to meet future financial obligations and the overall stability of the euro. An extended period of adverse development in the outlook for European countries could reduce the overall demand for drybulk cargoes and oil and gas and for our services. These potential developments, or market perceptions concerning these and related issues, could affect our financial position, results of operations and cash flow.

 Charterers have been placed under significant financial pressure, thereby increasing our charter counterparty risk.

The continuing weakness in demand for drybulk shipping services and any future declines in such demand could result in financial challenges faced by our charterers and may increase the likelihood of one or more of our charterers being unable or unwilling to pay us contracted charter rates. We expect to generate most of our revenues from these charters and if our charterers fail to meet their obligations to us, we will sustain significant losses which could have a material adverse effect on our financial condition and results of operations.

Acts of piracy on ocean-going vessels have had and may continue to have an adverse effect on our business.

Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as South China Sea, Arabian Sea, Red Sea, the Gulf of Aden off the coast of Somalia, the Indian Ocean and the Gulf of Guinea. Sea piracy incidents continue to occur, particularly in the Gulf of Aden, the Indian Ocean, and increasingly in the Gulf of Guinea, with tankers particularly vulnerable to such attacks.   In February 2009, the drybulk vessel Saldanha, which is owned by our subsidiary, Team-Up Owning Company Limited, was seized by pirates while transporting coal through the Gulf of Aden.  If piracy attacks result in regions in which our vessels are deployed being characterized as "war risk" zones by insurers or Joint War Committee "war and strikes" listed areas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew and security equipment costs, including costs which may be incurred to employ onboard security armed guards, to comply with Best Management Practices for Protection against Somalia Based Piracy, or BMP4, or any updated version, could increase in such circumstances. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, detention or hijacking as a result of an act of piracy against our vessels, increased costs associated with seeking to avoid such events (including increased bunker costs resulting from vessels being rerouted or travelling at increased speeds as recommended by BMP4), or unavailability of insurance for our vessels, could have a material adverse impact on our business, financial condition, results of operations and cash flows, and ability to pay dividends, and may result in loss of revenues, increased costs and decreased cash flows to our customers, which could impair their ability to make payments to us under our charters.

Political instability, terrorist attacks and international hostilities can affect the seaborne transportation industry, which could adversely affect our business.

We conduct most of our operations outside of the United States, and our business, results of operations, cash flows, financial condition and ability to pay dividends, if any, in the future may be adversely affected by changing economic, political and government conditions in the countries and regions where our vessels are employed or registered. Moreover, we operate in a sector of the economy that is likely to be adversely impacted by the effects of political conflicts, including the current political instability in the Middle East, North Africa and other geographic countries and areas, terrorist or other attacks, war or international hostilities. Terrorist attacks such as those in New York on September 11, 2001, in London on July 7, 2005, and in Mumbai on November 26, 2008, and the continuing response of the United States and others to these attacks, as well as the threat of future terrorist attacks around the world, continues to cause uncertainty in the world's financial markets and may affect our business, operating results and financial condition. Continuing conflicts and recent developments in the Middle East and North Africa, and the presence of U.S. or other armed forces in Iraq, Afghanistan and various other regions, may lead to additional acts of terrorism and armed conflict around the world, which may contribute to further economic instability in the global financial markets. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. In the past, political conflicts have also resulted in attacks on vessels, such as the attack on the MT Limburg, a vessel unaffiliated with us,in October 2002, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. Acts of terrorism and piracy have also affected vessels trading in regions such as the South China Sea and the Gulf of Aden off the coast of Somalia.  Any of these occurrences could have a material adverse impact on our operating results, revenues and costs.

Our revenues are subject to seasonal fluctuations, which could affect our operating results and our ability to pay dividends, if any, in the future.

We operate our drybulk vessels in markets that have historically exhibited seasonal variations in demand and, as a result, in charterhire rates. This seasonality may result in quarter-to-quarter volatility in our operating results, which could affect our ability to pay dividends, if any, in the future from quarter to quarter. The drybulk carrier market is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other raw materials in the northern hemisphere during the winter months. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and supplies of certain commodities. As a result, our revenues have historically been weaker during the fiscal quarters ended June 30 and September 30, and, conversely, our revenues have historically been stronger in fiscal quarters ended December 31 and March 31. This seasonality may adversely affect our operating results and our ability to pay dividends, if any, in the future.

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Rising fuel prices may adversely affect our profits.

While we do not directly bear the cost of fuel or bunkers under our time charters, fuel is a significant factor in negotiating charter rates.  Fuel is also a significant, if not the largest, expense in our shipping operations when vessels are under voyage charter. As a result, an increase in the price of fuel beyond our expectations may adversely affect our profitability at the time of charter negotiation. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by the Organization of Petroleum Exporting Countries, or OPEC, and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. Further, fuel may become much more expensive in the future, which may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail.

We are subject to international safety regulations and the failure to comply with these regulations may subject us to increased liability, may adversely affect our insurance coverage and may result in our vessels being denied access to, or detained in, certain ports.

Our business and the operation of our drybulk vessels and tankers are materially affected by government regulation in the form of international conventions, national, state and local laws and regulations in force in the jurisdictions in which the vessels operate, as well as in the country or countries of their registration. Because such conventions, laws, and regulations are often revised, we cannot predict the ultimate cost of complying with such conventions, laws and regulations or the impact thereof on the resale prices or useful lives of our vessels. Additional conventions, laws and regulations may be adopted which could limit our ability to do business or increase the cost of our doing business and which may materially adversely affect our operations. We are required by various governmental and quasi governmental agencies to obtain certain permits, licenses, certificates, and financial assurances with respect to our operations.

In addition, vessel classification societies also impose significant safety and other requirements on our vessels. In complying with current and future environmental requirements, vessel-owners and operators may also incur significant additional costs in meeting new maintenance and inspection requirements, in developing contingency arrangements for potential spills and in obtaining insurance coverage. Government regulation of vessels, particularly in the areas of safety and environmental requirements, can be expected to become stricter in the future and require us to incur significant capital expenditures on our vessels to keep them in compliance.

The operation of our vessels is affected by the requirements set forth in the United Nations' International Maritime Organization's International Management Code for the Safe Operation of Ships and Pollution Prevention, or the ISM Code. The ISM Code requires ship owners, ship managers and bareboat charterers to develop and maintain an extensive "Safety Management System" that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies. Currently, all of our vessels are ISM Code-certified and we expect that any vessels that we acquire in the future will be ISM Code-certified when delivered to us. The failure of a shipowner or bareboat charterer to comply with the ISM Code may subject it to increased liability, may invalidate existing insurance or decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports. If we are subject to increased liability for non-compliance or if our insurance coverage is adversely impacted as a result of non-compliance, it may negatively affect our ability to pay dividends, if any, in the future. If any of our vessels are denied access to, or are detained in, certain ports, this may decrease our revenues.

We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of doing business.

Our operations are subject to numerous laws and regulations in the form of international conventions and treaties, national, state and local laws and national and international regulations in force in the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownership and operation of our vessel. These regulations include, but are not limited to, the International Maritime Organization, or IMO, International Convention for the Prevention of Pollution from Ships of 1973, as from time to time amended and generally referred to as MARPOL, including designation of Emission Control Areas, or ECAs, thereunder, the IMO International Convention on Civil Liability for Oil Pollution Damage of 1969, as from time to time amended and generally referred to as CLC, the International Convention on Civil Liability for Bunker Oil Pollution Damage, or Bunker Convention, the IMO International Convention for the Safety of Life at Sea of 1974, as from time to time amended and generally referred to as SOLAS, the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or ISM Code, the IMO International Convention on Load Lines of 1966, as from time to time amended, the International Convention for the Control and Management of Ships' Ballast Water and Sediments in February 2004, or the BWM Convention, the U.S. Oil Pollution Act of 1990, or OPA, requirements of the U.S. Coast Guard, or USCG, and the U.S. Environmental Protection Agency, or EPA, the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, the U.S. Clean Water Act, the U.S. Clean Air Act, the U.S. Outer Continental Shelf Lands Act, the U.S. Maritime Transportation Security Act of 2002, or the MTSA, European Union regulations, and Brazil's National Environmental Policy Law (6938/81), Environmental Crimes Law (9605/98) and Law (9966/2000) relating to pollution in Brazilian waters.

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Compliance with such laws, regulations and standards, where applicable, may require installation of costly equipment or operational changes and may affect the resale value or useful lives of our vessels. Moreover, the manner in which these laws are enforced and interpreted is constantly evolving. We may also incur additional costs in order to comply with other existing and future regulatory obligations, including, but not limited to, costs relating to air emissions, including greenhouse gases, the management of ballast waters, maintenance and inspection, development and implementation of emergency procedures and insurance coverage or other financial assurance of our ability to address pollution incidents. These costs could have a material adverse effect on our business, results of operations, cash flows and financial condition. A failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations. Environmental laws often impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard to whether we were negligent or at fault.

Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business.

International shipping is subject to various security and customs inspections and related procedures in countries of origin, destination and trans-shipment points. Inspection procedures may result in the seizure of the contents of our vessels, delays in the loading, offloading or delivery of our vessels and the levying of customs duties, fines or other penalties against us.

It is possible that changes to inspection procedures could impose additional financial and legal obligations on us. Changes to inspection procedures could also impose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo uneconomical or impractical. Any such changes or developments may have a material adverse effect on our business, financial condition and results of operations.

Maritime claimants could arrest one or more of our vessels, which could interrupt our cash flow.

Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a claimant may seek to obtain security for its claim by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could interrupt our cash flow and require us to pay large sums of money to have the arrest or attachment lifted. In addition, in some jurisdictions, such as South Africa, under the "sister ship" theory of liability, a claimant may arrest both the vessel which is subject to the claimant's maritime lien and any "associated" vessel, which is any vessel owned or controlled by the same owner. Claimants could attempt to assert "sister ship" liability against a vessel in our fleet for claims relating to another of our vessels.

Governments could requisition our vessels during a period of war or emergency, resulting in a loss of earnings.

A government could requisition one or more of our vessels for title or for hire. Requisition for title occurs when a government takes control of a vessel and becomes her owner, while requisition for hire occurs when a government takes control of a vessel and effectively becomes her charterer at dictated charter rates. Generally, requisitions occur during periods of war or emergency, although governments may elect to requisition vessels in other circumstances. Although we would be entitled to compensation in the event of a requisition of one or more of our vessels, the amount and timing of payment would be uncertain. Government requisition of one or more of our vessels may negatively impact our revenues and reduce the amount of dividends, if any, in the future.

In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or established companies with greater resources and, as a result, we may be unable to employ our vessels profitably.

We employ our vessels in a highly competitive market that is capital intensive and highly fragmented. Competition arises primarily from other vessel owners, some of whom have substantially greater resources than we do. Competition for the transportation of drybulk cargo by sea is intense and depends on price, location, size, age, condition and the acceptability of the vessel and its operators to the charterers. Due in part to the highly fragmented market, competitors with greater resources could enter the drybulk shipping industry and operate larger fleets through consolidations or acquisitions and may be able to offer lower charter rates and higher quality vessels than we are able to offer. If we are unable to successfully compete with other drybulk shipping companies, this would have an adverse impact on our results of operations.

Risks associated with operating ocean-going vessels could affect our business and reputation, which could adversely affect our revenues and stock price.

The operation of ocean-going vessels carries inherent risks. These risks include the possibility of:

● marine disaster;

● environmental accidents;

● cargo and property losses or damage;

● business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions; and

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● piracy.

The involvement of our vessels in an environmental disaster may harm our reputation as a safe and reliable vessel owner and operator. Any of these circumstances or events could increase our costs or lower our revenues.

The shipping industry has inherent operational risks that may not be adequately covered by our insurance.

We procure insurance for our fleet against risks commonly insured against by vessel owners and operators. Our current insurance includes hull and machinery insurance, war risks insurance and protection and indemnity insurance (which includes environmental damage and pollution insurance). We may not be adequately insured against all risks or our insurers may not pay a particular claim. Even if our insurance coverage is adequate to cover our losses, we may not be able to timely obtain a replacement vessel in the event of a loss. Furthermore, in the future, we may not be able to obtain adequate insurance coverage at reasonable rates for our fleet. We may also be subject to calls, or premiums, in amounts based not only on our own claim records but also the claim records of all other members of the protection and indemnity associations through which we receive indemnity insurance coverage for tort liability. Our insurance policies also contain deductibles, limitations and exclusions which, although we believe are standard in the shipping industry, may nevertheless increase our costs.

The operation of drybulk carriers has certain unique operational risks.

The operation of certain ship types, such as drybulk carriers, has certain unique risks. With a drybulk carrier, the cargo itself and its interaction with the ship can be a risk factor. By their nature, drybulk cargoes are often heavy, dense, easily shifted, and react badly to water exposure. In addition, drybulk carriers are often subjected to battering treatment during unloading operations with grabs, jackhammers (to pry encrusted cargoes out of the hold), and small bulldozers. This treatment may cause damage to the vessel. Vessels damaged due to treatment during unloading procedures may be more susceptible to breach to the sea. Furthermore, any defects or flaws in the design of a drybulk carrier may contribute to vessel damage. Hull breaches in drybulk carriers may lead to the flooding of the vessels holds. If a drybulk carrier suffers flooding in its forward holds, the bulk cargo may become so dense and waterlogged that its pressure may buckle the vessel's bulkheads, leading to the loss of a vessel. If we are unable to adequately maintain our vessels we may be unable to prevent these events. Any of these circumstances or events could negatively impact our business, financial condition, results of operations and our ability to pay dividends, if any, in the future. In addition, the loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator.

Risk Factors Relating to the Offshore Drilling Industry

Our business in the offshore drilling sector depends on the level of activity in the offshore oil and gas industry, which is significantly affected by, among other things, volatile oil and gas prices and may be materially and adversely affected by a decline in the offshore oil and gas industry.

The offshore contract drilling industry is cyclical and volatile. Our business in the offshore drilling sector depends on the level of activity in oil and gas exploration, development and production in offshore areas worldwide. The availability of quality drilling prospects, exploration success, relative production costs, the stage of reservoir development and political and regulatory environments affect customers' drilling programs. Oil and gas prices and market expectations of potential changes in these prices also significantly affect this level of activity and demand for drilling units.

Oil and gas prices are extremely volatile and are affected by numerous factors beyond our control, including the following:

● worldwide production and demand for oil and gas and any geographical dislocations in supply and demand;

● the cost of exploring for, developing, producing and delivering oil and gas;

● expectations regarding future energy prices;

● advances in exploration, development and production technology;

● the ability of the Organization of Petroleum Exporting Countries, or OPEC, to set and maintain levels and pricing;

● the level of production in non-OPEC countries;

● government regulations;

● local and international political, economic and weather conditions;

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● domestic and foreign tax policies;

● development and exploitation of alternative fuels;

● the policies of various governments regarding exploration and development of their oil and gas reserves; and

● the worldwide military and political environment, including uncertainty or instability resulting from an escalation or additional outbreak of armed hostilities, insurrection or other crises in the Middle East or other geographic areas or further acts of terrorism in the United States, or elsewhere.

Declines in oil and gas prices for an extended period of time, or market expectations of potential decreases in these prices, could negatively affect our business in the offshore drilling sector. Crude oil inventories remain at high levels compared to historical levels, which may place downward pressure on the price of crude oil and demand for offshore drilling units. Sustained periods of low oil prices typically result in reduced exploration and drilling because oil and gas companies' capital expenditure budgets are subject to cash flow from such activities and are therefore sensitive to changes in energy prices. These changes in commodity prices can have a dramatic effect on rig demand, and periods of low demand can cause excess rig supply and intensify the competition in the industry which often results in drilling units, particularly lower specification drilling units, being idle for long periods of time. We cannot predict the future level of demand for our services or future conditions of the oil and gas industry. Any decrease in exploration, development or production expenditures by oil and gas companies could reduce our revenues and materially harm our business and results of operations.

In addition to oil and gas prices, the offshore drilling industry is influenced by additional factors, including:

● the availability of competing offshore drilling vessels and the level of newbuilding activity for drilling vessels;

● the level of costs for associated offshore oilfield and construction services;

● oil and gas transportation costs;

● the discovery of new oil and gas reserves;

● the cost of non-conventional hydrocarbons, such as the exploitation of oil sands; and

● regulatory restrictions on offshore drilling.

Any of these factors could reduce demand for our services and adversely affect our business and results of operations.

The offshore drilling industry is highly competitive with intense price competition and, as a result, we may be unable to compete successfully with other providers of contract drilling services that have greater resources than we have.

The offshore contract drilling industry is highly competitive with several industry participants, none of which has a dominant market share, and is characterized by high capital and maintenance requirements. Drilling contracts are traditionally awarded on a competitive bid basis. Price competition is often the primary factor in determining which qualified contractor is awarded the drilling contract, although drilling unit availability, location and suitability, the quality and technical capability of service and equipment, reputation and industry standing are key factors which are considered. Mergers among oil and natural gas exploration and production companies have reduced, and may from time to time further reduce, the number of available customers, which would increase the ability of potential customers to achieve pricing terms favorable to them.

Many of our competitors in the offshore drilling industry are significantly larger than we are and have more diverse drilling assets and significantly greater financial and other resources than we have. In addition, because of our relatively small offshore drilling fleet, we may be unable to take advantage of economies of scale to the same extent as some of our larger competitors. Given the high capital requirements that are inherent in the offshore drilling industry, we may also be unable to invest in new technologies or expand in the future as may be necessary for us to succeed in this industry, while our larger competitors with superior financial resources, and in many cases less leverage than we have, may be able to respond more rapidly to changing market demands and compete more efficiently on price for drillship and drilling rig employment. We may not be able to maintain our competitive position, and we believe that competition for contracts will continue to be intense in the future. Our inability to compete successfully in the offshore drilling industry may reduce our revenues and profitability.

An over-supply of drilling units may lead to a reduction in dayrates and therefore may materially impact our profitability.

During the recent period of high utilization and high dayrates, industry participants have increased the supply of drilling units by ordering the construction of new drilling units. Historically, this has resulted in an over-supply of drilling units and has caused a subsequent decline in utilization and dayrates when the drilling units enter the market, sometimes for extended periods of time until the units have been absorbed into the active fleet. According to industry sources, the worldwide fleet of ultra-deepwater drilling units as of February 2015 consisted of 165 units, comprised of 66 semi-submersible rigs and 99 drillships. An additional 13 semi-submersible rigs and 50 drillships were under construction or on order as of February 2015, which would bring the total fleet to 228 drilling units by the end of 2020. A relatively large number of the drilling units currently under construction have been contracted for future work, which may intensify price competition as scheduled delivery dates occur. The entry into service of these new, upgraded or reactivated drilling units will increase supply and has already led to a reduction in dayrates as drilling units are absorbed into the active fleet. In addition, the new construction of high-specification drilling units, as well as changes in our competitors' drilling unit fleets, could require us to make material additional capital investments to keep our fleet competitive. Lower utilization and dayrates could adversely affect our revenues and profitability. Prolonged periods of low utilization and dayrates could also result in the recognition of impairment charges on our drilling units if future cash flow estimates, based upon information available to management at the time, indicate that the carrying value of these drilling units may not be recoverable.

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Consolidation of suppliers may increase the cost of obtaining supplies, which may have a material adverse effect on our results of operations and financial condition.

We rely on certain third parties to provide supplies and services necessary for our offshore drilling operations, including, but not limited to, drilling equipment suppliers and catering and machinery suppliers. Recent mergers have reduced the number of available suppliers, resulting in fewer alternatives for sourcing key supplies. Such consolidation, combined with a high volume of drilling units under construction, may result in a shortage of supplies and services thereby increasing the cost of supplies and/or potentially inhibiting the ability of suppliers to deliver on time, or at all. These cost increases, delays or unavailability could have a material adverse effect on our results of operations and result in drilling unit downtime, and delays in the repair and maintenance of our drilling units.

Our international operations in the offshore drilling sector involve additional risks, including piracy, which could adversely affect our business.

Our drilling units operate throughout the world, including on the Norwegian Continental Shelf and offshore of the Falkland Islands, Brazil, Angola.  In the past our drilling units have also operated in the Gulf of Mexico, in the North Sea and offshore of Canada, Norway, the United Kingdom, Ghana, West Africa, the Ivory Coast, Greenland, West Africa, Turkey, Ireland, the Shetland Islands, the Falkland Islands, Norway, and Tanzania.  As a result of our international operations, we may be exposed to political and other uncertainties, including risks of:

● terrorist and environmental activist acts, armed hostilities, war and civil disturbances;

● acts of piracy;

● significant governmental influence over many aspects of local economies;

● seizure, nationalization or expropriation of property or equipment;

● repudiation, nullification, modification or renegotiation of contracts;

● limitations on insurance coverage, such as war risk coverage, in certain areas;

● political unrest;

● foreign and U.S. monetary policy, government debt downgrades and potential defaults and foreign currency fluctuations and devaluations;

● the inability to repatriate income or capital;

● complications associated with repairing and replacing equipment in remote locations;

● import-export quotas, wage and price controls, imposition of trade barriers;

● regulatory or financial requirements to comply with foreign bureaucratic actions;

● changing taxation policies, including confiscatory taxation;

● other forms of government regulation and economic conditions that are beyond our control; and

● governmental corruption.

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In addition, international contract drilling operations are subject to various laws and regulations in countries in which we operate, including laws and regulations relating to:

● the equipping and operation of drilling units;

● repatriation of foreign earnings;

● oil and gas exploration and development;

● taxation of offshore earnings and earnings of expatriate personnel; and

● use and compensation of local employees and suppliers by foreign contractors.

Some foreign governments favor or effectively require (i) the awarding of drilling contracts to local contractors or to drilling rigs owned by their own citizens, (ii) the use of a local agent or (iii) foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. These practices may adversely affect our ability to compete in those regions. It is difficult to predict what governmental regulations may be enacted in the future that could adversely affect the international drilling industry. The actions of foreign governments, including initiatives by OPEC, may adversely affect our ability to compete. Failure to comply with applicable laws and regulations, including those relating to sanctions and export restrictions, may subject us to criminal sanctions or civil remedies, including fines, denial of export privileges, injunctions or seizures of assets.

Our business and operations involve numerous operating hazards.

Our offshore drilling operations are subject to hazards inherent in the drilling industry, such as blowouts, reservoir damage, loss of production, loss of well control, lost or stuck drill strings, equipment defects, punch throughs, craterings, fires, explosions and pollution, including spills similar to the events on April 20, 2010 related to the Deepwater Horizon, in which we were not involved. Contract drilling and well servicing require the use of heavy equipment and exposure to hazardous conditions, which may subject us to liability claims by employees, customers and third parties. These hazards can cause personal injury or loss of life, severe damage to or destruction of property and equipment, pollution or environmental damage, claims by third parties or customers and suspension of operations. Our offshore fleet is also subject to hazards inherent in marine operations, either while on-site or during mobilization, such as capsizing, sinking, grounding, collision, damage from severe weather and marine life infestations. Operations may also be suspended because of machinery breakdowns, abnormal drilling conditions, personnel shortages or failure of subcontractors to perform or supply goods or services.

Damage to the environment could also result from our operations, particularly through spillage of fuel, lubricants or other chemicals and substances used in drilling operations, leaks and blowouts or extensive uncontrolled fires. We may also be subject to property, environmental and other damage claims by oil and gas companies. Our insurance policies and contractual indemnity rights with our customers may not adequately cover losses, and we do not have insurance coverage or rights to indemnity for all the risks to which we are exposed. Consistent with standard industry practice, our customers generally assume, and indemnify us against, well control and subsurface risks under dayrate drilling contracts, including pollution damage in connection with reservoir fluids stemming from operations under the contract, damage to the well or reservoir, loss of subsurface oil and gas and the cost of bringing the well under control. We generally indemnify our customers against pollution from substances in our control that originate from the drilling unit (e.g., diesel used onboard the unit or other fluids stored onboard the unit and above the water surface). However, our drilling contracts are individually negotiated, and the degree of indemnification we receive from the customer against the liabilities discussed above can vary from contract to contract, based on market conditions and customer requirements existing when the contract was negotiated. Notwithstanding a contractual indemnity from a customer, there can be no assurance that our customers will be financially able to indemnify us or will otherwise honor their contractual indemnity obligations. We maintain insurance coverage for property damage, occupational injury and illness, and general and marine third-party liabilities. However, pollution and environmental risks generally are not totally insurable. Furthermore, we have no insurance coverage for named storms in the Gulf of Mexico and while trading within war risks excluded areas.

Our insurance coverage relating to our offshore drilling operations may not adequately protect us from certain operational risks inherent in the drilling industry.

Our insurance relating to our offshore drilling operations is intended to cover normal risks in our current operations, including insurance against property damage, occupational injury and illness, loss of hire, certain war risks and third-party liability, including pollution liability. For example, the amount of risk we are subject to might increase regarding occupational injuries because on January 12, 2012, the U.S. Supreme Court ruled that the Longshore and Harbor Worker's Compensation Act, whose provisions are incorporated in the U.S. Outer Continental Shelf Lands Act could cover occupational injuries.

Insurance coverage may not, under certain circumstances, be available, and if available, may not provide sufficient funds to protect us from all losses and liabilities that could result from our operations. We have also obtained loss of hire insurance which becomes effective after 45 days of downtime with coverage that extends for approximately one year. This loss of hire insurance is recoverable only if there is physical damage to the rig or equipment which is caused by a peril against which we are insured. The principal risks which may not be insurable are various environmental liabilities and liabilities resulting from reservoir damage caused by our gross negligence. Moreover, our insurance provides for premium adjustments based on claims and is subject to deductibles and aggregate recovery limits. In the case of pollution liabilities, our deductible is $10,000 per event and $250,000 for protection and indemnity claims brought before any U.S. jurisdiction. Our aggregate recovery limit is $500.0 million for all claims arising out of any event covered by our protection and indemnity insurance. Our deductible is $1.5 million per hull and machinery insurance claim. In addition, insurance policies covering physical damage claims due to a named windstorm in the Gulf of Mexico generally impose strict recovery limits. Our insurance coverage may not protect fully against losses resulting from a required cessation of drilling unit operations for environmental or other reasons. Insurance may not be available to us at all or on terms acceptable to us, we may not maintain insurance or, if we are so insured, our policy may not be adequate to cover our loss or liability in all cases. The occurrence of a casualty, loss or liability against, which we may not be fully insured against, could significantly reduce our revenues, make it financially impossible for us to obtain a replacement drilling unit or to repair a damaged drilling unit, cause us to pay fines or damages which are generally not insurable and that may have priority over the payment obligations under our indebtedness or otherwise impair our ability to meet our obligations under our indebtedness and to operate profitably.

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Governmental laws and regulations, including environmental laws and regulations, may add to our costs or limit our drilling activity.

Our business in the offshore drilling industry is affected by laws and regulations relating to the energy industry and the environment in the geographic areas where we operate. The offshore drilling industry is dependent on demand for services from the oil and gas exploration and production industry, and, accordingly, we are directly affected by the adoption of laws and regulations that, for economic, environmental or other policy reasons, curtail exploration and development drilling for oil and gas. We may be required to make significant capital expenditures to comply with governmental laws and regulations. It is also possible that these laws and regulations may, in the future, add significantly to our operating costs or significantly limit drilling activity. Our ability to compete in international contract drilling markets may be limited by foreign governmental regulations that favor or require the awarding of contracts to local contractors or by regulations requiring foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. Governments in some countries are increasingly active in regulating and controlling the ownership of concessions, the exploration for oil and gas, and other aspects of the oil and gas industries. Offshore drilling in certain areas has been curtailed and, in certain cases, prohibited because of concerns over protection of the environment. Operations in less developed countries can be subject to legal systems that are not as mature or predictable as those in more developed countries, which can lead to greater uncertainty in legal matters and proceedings.

To the extent new laws are enacted or other governmental actions are taken that prohibit or restrict offshore drilling or impose additional environmental protection requirements that result in increased costs to the oil and gas industry, in general, or the offshore drilling industry, in particular, our business or prospects could be materially adversely affected. The operation of our drilling units will require certain governmental approvals, the number and prerequisites of which cannot be determined until we identify the jurisdictions in which we will operate on securing contracts for the drilling units. Depending on the jurisdiction, these governmental approvals may involve public hearings and conditions that result in costly undertakings on our part. We may not obtain such approvals or such approvals may not be obtained in a timely manner. If we fail to timely secure the necessary approvals or permits, our customers may have the right to terminate or seek to renegotiate their drilling contracts to our detriment. The amendment or modification of existing laws and regulations or the adoption of new laws and regulations curtailing or further regulating exploratory or development drilling and production of oil and gas could have a material adverse effect on our business, operating results or financial condition. Future earnings may be negatively affected by compliance with any such new legislation or regulations.

We are subject to complex laws and regulations, including environmental laws and regulations that can adversely affect the cost, manner or feasibility of doing business.

Our offshore drilling operations are subject to numerous laws and regulations in the form of international conventions and treaties, national, state and local laws and national and international regulations in force in the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownership and operation of our drilling units. These requirements include, but are not limited to, the International Convention for the Prevention of Pollution from Ships, or MARPOL, the International Convention on Civil Liability for Oil Pollution Damage of 1969, generally referred to as CLC, the International Convention on Civil Liability for Bunker Oil Pollution Damage, or Bunker Convention, the International Convention for the Safety of Life at Sea of 1974, or SOLAS, the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or ISM Code, the International Convention for the Control and Management of Ships' Ballast Water and Sediments in February 2004, or the BWM Convention, the U.S. Oil Pollution Act of 1990, or OPA, the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, the U.S. Clean Water Act, the U.S. Clean Air Act, the U.S. Outer Continental Shelf Lands Act, the U.S. Maritime Transportation Security Act of 2002, or the MTSA, European Union regulations, and Brazil's National Environmental Policy Law (6938/81), Environmental Crimes Law (9605/98) and Law (9966/2000) relating to pollution in Brazilian waters.

Compliance with such laws, regulations and standards, where applicable, may require installation of costly equipment or operational changes and may affect the resale value or useful lives of our vessels. Moreover, the manner in which these laws are enforced and interpreted is constantly evolving. We may also incur additional costs in order to comply with other existing and future regulatory obligations, including, but not limited to, costs relating to air emissions, including greenhouse gases, the management of ballast waters, maintenance and inspection, development and implementation of emergency procedures and insurance coverage or other financial assurance of our ability to address pollution incidents. These costs could have a material adverse effect on our business, results of operations, cash flows and financial condition. A failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations. Environmental laws often impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard to whether we were negligent or at fault. Under OPA, for example, owners, operators and bareboat charterers are jointly and severally strictly liable for the discharge of oil in U.S. waters, including the 200-nautical mile exclusive economic zone around the United States. An oil spill could result in significant liability, including fines, penalties and criminal liability and remediation costs for natural resource damages under other international and U.S. federal, state and local laws, as well as third-party damages. We are required to satisfy insurance and financial responsibility requirements for potential oil (including marine fuel) spills and other pollution incidents and our insurance may not be sufficient to cover all such risks. As a result, claims against us could result in a material adverse effect on our business, results of operations, cash flows and financial condition.

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Environmental laws often impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard to whether we were negligent or at fault. Under OPA, for example, owners, operators and bareboat charterers are jointly and severally strictly liable for the discharge of oil in U.S. waters, including the 200-nautical mile exclusive economic zone around the United States. An oil spill could result in significant liability, including fines, penalties and criminal liability and remediation costs for natural resource damages under other international and U.S. federal, state and local laws, as well as third-party damages. We are required to satisfy insurance and financial responsibility requirements for potential oil (including marine fuel) spills and other pollution incidents and our insurance may not be sufficient to cover all such risks. As a result, claims against us could result in a material adverse effect on our business, results of operations, cash flows and financial condition.

Although our drilling units are separately owned by our subsidiaries, under certain circumstances a parent company and all of the ship-owning affiliates in a group under common control engaged in a joint venture could be held liable for damages or debts owed by one of the affiliates, including liabilities for oil spills under OPA or other environmental laws. Therefore, it is possible that we could be subject to liability upon a judgment against us or any one of our subsidiaries.

Our drilling units could cause the release of oil or hazardous substances, especially as our drilling units age. Any releases may be large in quantity, above our permitted limits or occur in protected or sensitive areas where public interest groups or governmental authorities have special interests. Any releases of oil or hazardous substances could result in fines and other costs to us, such as costs to upgrade our drilling rigs, clean up the releases, and comply with more stringent requirements in our discharge permits. Moreover, these releases may result in our customers or governmental authorities suspending or terminating our operations in the affected area, which could have a material adverse effect on our business, results of operation and financial condition.

If we are able to obtain from our customers some degree of contractual indemnification against pollution and environmental damages in our contracts, such indemnification may not be enforceable in all instances or the customer may not be financially able to comply with its indemnity obligations in all cases. In addition, we may not be able to obtain such indemnification agreements in the future.

Our insurance coverage may not be available in the future or we may not obtain certain insurance coverage. If it is available and we have the coverage, it may not be adequate to cover our liabilities. Any of these scenarios could have a material adverse effect on our business, operating results and financial condition.

Regulation of greenhouse gases and climate change could have a negative impact on our business.

Currently, emissions of greenhouse gases from ships involved in international transport are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which entered into force in 2005 and pursuant to which adopting countries have been required to implement national programs to reduce greenhouse gas emissions. As of January 1, 2013, all ships (including drilling rigs and drillships) must comply with mandatory requirements adopted by the MEPC in July 2011 relating to greenhouse gas emissions. Currently operating ships are now required to develop and implement the Ship Energy Efficiency Management Plans, or SEEMPs, and the new ships are required to be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy Efficiency Design Index, or EEDI. These requirements could cause us to incur additional compliance costs. The IMO is also considering the implementation of market-based mechanisms to reduce greenhouse gas emissions from ships. The European Parliament and Council of Ministers are expected to endorse regulations that would require the monitoring and reporting of greenhouse gas emissions from marine vessels in 2015. In the United States, the EPA has issued a finding that greenhouse gases endanger public health and safety and has adopted regulations to limit greenhouse gas emissions from certain mobile sources and large stationary sources. The EPA enforces both the The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990), or the CAA, and the international standards found in Annex VI of MARPOL concerning marine diesel engines, their emissions, and the sulphur content in marine fuel. Any passage of climate control legislation or other regulatory initiatives by the IMO, European Union, the U.S. or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol, that restrict emissions of greenhouse gases could require us to make significant financial expenditures, including capital expenditures to upgrade our vessels, which we cannot predict with certainty at this time.

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Because our business depends on the level of activity in the offshore oil and gas industry, existing or future laws, regulations, treaties or international agreements related to greenhouse gases and climate change, including incentives to conserve energy or use alternative energy sources, could have a negative impact on our business if such laws, regulations, treaties or international agreements reduce the worldwide demand for oil and gas. In addition, such laws, regulations, treaties or international agreements could result in increased compliance costs or additional operating restrictions, which may have a negative impact on our business.

The Deepwater Horizon oil spill in the Gulf of Mexico may result in more stringent laws and regulations governing deepwater drilling, which could have a material adverse effect on our business, operating results or financial condition.

On April 20, 2010, there was an explosion and a related fire on the Deepwater Horizon, an ultra-deepwater semi-submersible drilling unit that is not connected to us, while it was servicing the Macondo well in the Gulf of Mexico. This catastrophic event resulted in the death of 11 workers and the total loss of that drilling unit, as well as the release of large amounts of oil into the Gulf of Mexico, severely impacting the environment and the region's key industries. This event is being investigated by several federal agencies, including the U.S. Department of Justice, and by the U.S. Congress, and is also the subject of numerous lawsuits. On January 11, 2011, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling released its final report, with recommendations for new regulations.

We do not currently operate our drilling units in these regions, but we may do so in the future. In any event, changes to leasing and drilling activity requirements as a result of the Deepwater Horizon incident could have a substantial impact on the offshore oil and gas industry worldwide. All drilling activity in the U.S. Gulf of Mexico must be in compliance with enhanced safety requirements contained in the Notice to Lessees 2015-N01. Effective October 22, 2012 all drilling in the U.S. Gulf of Mexico must also comply with the Final Drilling Safety Rule as adopted on August 15, 2012, which enhances safety measures for energy development on the outer continental shelf. All drilling must also comply with the Workplace Safety Rule on Safety and Environmental Management Systems. Also, on February 24, 2014, the Bureau of Ocean Energy Management, or BOEM, proposed a rule increasing the limits of liability of damages for offshore facilities under OPA based on inflation.  We continue to evaluate these requirements to ensure that our rigs and equipment are in full compliance, where applicable. Additional requirements could be forthcoming based on further recommendations by regulatory agencies investigating the Macondo well incident.

We are not able to predict the extent of future leasing plans or the likelihood, nature or extent of additional rulemaking. Nor are we able to predict when the Bureau of Ocean Energy Management (or the "BOEM") will enter into leases with our customers or when the Bureau of Safety and Environmental Enforcement, (or "BSEE"), will issue drilling permits to our customers. We are not able to predict the future impact of these events on our operations. The current and future regulatory environment in the Gulf of Mexico could impact the demand for drilling units in the Gulf of Mexico in terms of overall number of rigs in operations and the technical specification required for offshore rigs to operate in the Gulf of Mexico. It is possible that short-term potential migration of rigs from the Gulf of Mexico could adversely impact dayrates levels and fleet utilization in other regions. In addition, insurance costs across the industry have increased as a result of the Macondo well incident and certain insurance coverage has become more costly, less available, and not available at all from certain insurance companies.

Hurricanes may impact our ability to operate our drilling units in the Gulf of Mexico or other U.S. coastal waters, which could reduce our revenues and profitability.

Hurricanes Ivan, Katrina, Rita, Gustav and Ike caused damage to a number of drilling units unaffiliated with us in the U.S. Gulf of Mexico. Drilling units that moved off their locations during the hurricanes damaged platforms, pipelines, wellheads and other drilling units. BOEM and the BSEE, the U.S. organizations that issue a significant number of relevant guidelines for the drilling units' activities, have guidelines in place for tie-downs on drilling units and permanent equipment and facilities attached to outer continental shelf production platforms, and moored drilling unit fitness during hurricane season. These guidelines effectively impose requirements on the offshore oil and natural gas industry in an attempt to increase the likelihood of survival of offshore drilling units during a hurricane. The guidelines also provide for enhanced information and data requirements from oil and natural gas companies that operate properties in the Gulf of Mexico region of the Outer Continental Shelf. BOEM and BSEE may issue similar guidelines for future hurricane seasons and may take other steps that could increase the cost of operations or reduce the area of operations for our ultra-deepwater drilling units, thereby reducing their marketability. Implementation of new guidelines or regulations that may apply to ultra-deepwater drilling units may subject us to increased costs and limit the operational capabilities of our drilling units. Our drilling units do not currently operate in the Gulf of Mexico or other U.S. coastal waters but may do so in the future.

Risk Factors Relating to the Tanker Industry

If the tanker industry, which historically has been cyclical and volatile, continues to be depressed or declines further in the future, our revenues, earnings and available cash flow may be adversely affected

Historically, the tanker industry has been highly cyclical, with volatility in profitability, charter rates and asset values resulting from changes in the supply of, and demand for, tanker capacity. After reaching highs during the summer of 2008, charter rates for crude oil carriers fell dramatically in connection with the commencement of the global financial crisis and current rates continue to remain at relatively low levels compared to the rates achieved in the years preceding the global financial crisis.  Fluctuations in charter rates and tanker values result from changes in the supply of and demand for tanker capacity and changes in the supply of and demand for oil and oil products.

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The factors that influence demand for tanker capacity include:

● supply of and demand for oil and oil products;

● global and regional economic and political conditions, including developments in international trade, national oil reserves policies, fluctuations in industrial and agricultural production and armed conflicts, which, among other things, could impact the supply of oil as well as trading patterns and the demand for various types of vessels;

● regional availability of refining capacity;

● environmental and other legal and regulatory developments;

● the distance oil and oil products are to be moved by sea;

● changes in seaborne and other transportation patterns, including changes in the distances over which tanker cargoes are transported by sea;

● increases in the production of oil in areas linked by pipelines to consuming areas, the extension of existing, or the development of new, pipeline systems in markets we may serve, or the conversion of existing non-oil pipelines to oil pipelines in those markets;

● currency exchange rates;

● weather and acts of God and natural disasters;

● competition from alternative sources of energy and from other shipping companies and other modes of transport;

● international sanctions, embargoes, import and export restrictions, nationalizations, piracy and wars; and

● regulatory changes including regulations adopted by supranational authorities and/or industry bodies, such as safety and environmental regulations and requirements by major oil companies.

The factors that influence the supply of tanker capacity include:

● current and expected purchase orders for tankers;

● the number of tanker newbuilding deliveries;

● any potential delays in the delivery of newbuilding vessels and/or cancellations of newbuilding orders;

● the scrapping rate of older tankers;

● the successful implementation of the phase-out of single-hull tankers;

● technological advances in tanker design and capacity;

● tanker freight rates, which are affected by factors that may effect the rate of newbuilding, swapping and laying up of tankers;

● port and canal congestion;

● price of steel and vessel equipment;

● conversion of tankers to other uses or conversion of other vessels to tankers;

● the number of tankers that are out of service; and

● changes in environmental and other regulations that may limit the useful lives of tankers.

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The factors affecting the supply of and demand for tankers have been volatile and are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable, including those discussed above. The current global economic downturn may reduce demand for transportation of oil over longer distances and increase supply of tankers to carry that oil, which may have a material adverse effect on our business, financial condition, results of operations, and cash flows.

If the number of new ships delivered exceeds the number of tankers being scrapped and lost, tanker capacity will increase. In addition the total newbuilding order books for Suezmax and Aframax vessels scheduled to enter the fleet through 2015 currently stand at 3.4% and 6.1% respectively, and there can be no assurance that the order books will not increase further in proportion to the existing fleets. If the supply of tanker capacity increases and the demand for tanker capacity does not increase correspondingly, charter rates could materially decline and the value of our vessels could be adversely affected.

The market value of our vessels may fluctuate significantly, and we may incur losses when we sell vessels following a decline in their market value.

The fair market value of our tanker vessels may have declined recently, and may decrease further depending on a number of factors including:

● general economic and market conditions affecting the shipping industry;

● competition from other shipping companies;

● supply of and demand for tankers and the types and sizes of tankers we own;

● alternative modes of transportation;

● ages of vessels;

● cost of newbuildings;

● governmental or other regulations;

● prevailing level of charter rates; and

● technological advances.

Declines in charter rates and other market deterioration could cause the market value of our vessels to decrease significantly. We evaluate the carrying amounts of our vessels to determine if events have occurred that would require an impairment of their carrying amounts. The recoverable amount of vessels is reviewed based on events and changes in circumstances that would indicate that the carrying amount of the assets might not be recovered. The review for potential impairment indicators and projection of future cash flows related to the vessels is complex and requires us to make various estimates including future freight rates, earnings from the vessels and discount rates.  All of these items have been historically volatile.

We estimate the recoverable amount as the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.  If the recoverable amount is less than the carrying amount of the vessel, the vessel is deemed impaired.  The carrying values of our vessels may not represent their fair market value at any point in time because the new market prices of secondhand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings.  Any impairment charges incurred as a result of further declines in charter rates could negatively affect our business, financial condition or operating results.

Due to the cyclical nature of the tanker market, the market value of one or more of our vessels may at various times be lower than their book value, and sales of those vessels during those times would result in losses.  If we determine at any time that a vessel's future limited useful life and earnings require us to impair its value on our financial statements, that could result in a charge against our earnings and the reduction of our shareholders' equity.  If for any reason we sell vessels at a time when vessel prices have fallen, the sale proceeds may be at less than the vessel's carrying amount on our financial statements, with the result that we would also incur a loss and a reduction in earnings.

Declining tanker values could affect our ability to raise cash by limiting our ability to refinance vessels and thereby adversely impact our liquidity.  In addition, declining vessel values could result in the reduction in lending commitments, the pledging of unencumbered vessels as additional collateral, the requirement to repay outstanding amounts or a breach of loan covenants, which could give rise to an event of default under our credit facilities.

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Changes in the crude oil and petroleum products markets could result in decreased demand for our vessels and services.

Demand for our vessels and services in transporting crude oil and petroleum products will depend upon world and regional crude oil and petroleum products markets. Any decrease in shipments of crude oil or petroleum products in those markets could have a material adverse effect on our business, financial condition and results of operations. Historically, those markets have been volatile as a result of the many conditions and events that affect the price, production and transport of crude oil and petroleum products, including competition from alternative energy sources. In the long-term it is possible that crude oil and petroleum products demand may be reduced by an increased reliance on alternative energy sources, by a drive for increased efficiency in the use of crude oil and petroleum products as a result of environmental concerns, or by high oil prices. The recent recession affecting the U.S. and world economies may result in protracted reduced consumption of crude oil and petroleum products and a decreased demand for our vessels and lower charter rates, which could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

An over-supply of tanker capacity may prolong currently low charter rates and vessel values or lead to further reductions in charter rates, vessel values, and profitability.

The market supply of tankers is affected by a number of factors such as demand for energy resources, oil, and petroleum products, as well as strong overall economic growth in parts of the world economy including Asia. If the capacity of new ships delivered exceeds the capacity of tankers being scrapped and lost, tanker capacity will increase. In January 2015 the orderbook as a percentage of the global fleet for crude oil tankers was 11.6%, compared to a peak of just over 50.0% in 2008, according to industry sources and the order book may increase further in proportion to the existing fleet. If the supply of tanker capacity increases and if the demand for tanker capacity does not increase correspondingly, charter rates could materially decline. A reduction in charter rates and the value of our vessels may have a material adverse effect on our results of operations and available cash once we take delivery of our newbuilding tankers.

The tanker sector is highly competitive, and we may not be able to compete successfully for charters with new entrants or established companies with greater resources.

The tanker industry is highly competitive, capital intensive and highly fragmented. Competition arises primarily from other vessel owners, some of whom have substantially greater resources than we do. Competition for the transportation of petroleum products and oil can be intense and depends on price, location, size, age, condition and the acceptability of the vessel and its operators to the charterers. Due in part to the highly fragmented market, competitors with greater resources than we have could operate larger fleets than our tanker fleet and, thus, may be able to offer lower charter rates and higher quality vessels than we are able to offer. If this were to occur, we may be unable to attract new customers, which could adversely affect our business and operations.

Our operating results may be adversely affected by seasonal fluctuations in the tanker industry.

The tanker sector has historically exhibited seasonal variations in demand and, as a result, in charter rates. This seasonality may result in quarter-to-quarter volatility in our operating results. The tanker sector is typically stronger in the fall and winter months in anticipation of increased consumption of oil and petroleum products in the northern hemisphere during the winter months. As a result, our revenues from our tankers may be weaker during the fiscal quarters ended June 30 and September 30, and, conversely, revenues may be stronger in fiscal quarters ended December 31 and March 31. This seasonality could materially affect our operating results and cash available for dividends in the future.

Company Specific Risk Factors

We are not in compliance with certain financial and other covenants contained in our credit facilities relating to our shipping segments, which could adversely affect our business.

Our credit facilities require us to satisfy certain financial covenants. In general, these financial covenants require us to maintain (i) minimum liquidity; (ii) a minimum market adjusted equity ratio; (iii) a minimum interest coverage ratio; (iv) a minimum market adjusted net worth; (v) a minimum debt service coverage ratio and (vi) a minimum working capital level.  In addition, our credit facilities, which are secured by mortgages on our vessels and drillships, require us to maintain specified financial ratios, mainly to ensure that the market value of the mortgaged vessels and drillships under the applicable credit facility, determined in accordance with the terms of that facility, does not fall below a certain percentage of the outstanding amount of the loan, which we refer to as a value maintenance clause or a loan-to-value ratio.  Events beyond our control, including changes in the economic and business conditions in the international drybulk, tanker or offshore drilling markets in which we operate, may affect our ability to comply with the financial covenants and loan-to-value ratios required by our credit facilities. Our ability to maintain compliance also depends substantially on the value of our assets, our charterhire and dayrates, our ability to obtain charters and drilling contracts, our success at keeping our costs low and our ability to successfully implement our overall business strategy.

A violation of any of the financial covenants in our credit facilities, absent a waiver of the breach from our lenders, or a violation of the loan-to-value ratios in our credit facilities, if not waived by our lenders or cured by providing additional collateral or prepaying the amount of outstanding indebtedness required to eliminate the shortfall, could result in an event of default under our credit facilities that would allow all amounts outstanding thereunder to be declared immediately due and payable. In addition, all of our credit facilities relating to our drybulk and tanker fleet contain cross-acceleration or cross-default provisions that may be triggered by a default under one of our other credit facilities relating to our drybulk and tanker fleet. Furthermore, our debt agreements relating to our offshore drilling fleet also contain cross-default or cross-acceleration provisions that may be triggered by a default under one of our other debt agreements relating to our offshore drilling fleet.  If the amounts outstanding under our indebtedness relating to our drybulk and tanker fleet or our offshore drilling fleet were to be become accelerated or were to become the subject of foreclosure actions, we cannot assure you that our assets would be sufficient to repay in full the money owed to the lenders or to our other debt holders.

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As of December 31, 2014, we were in compliance with the financial covenants contained our debt agreements relating to our offshore drilling segment, but we were in breach of certain financial covenants, contained in our loan agreements relating to our shipping segments, under which a total of $259.5 million was outstanding as of December 31, 2014. Even though as of the date of this annual report, none of the lenders had declared an event of default under the relevant loan agreements for which we were not in compliance as of December 31, 2014, these breaches constitute potential events of default that may result in the lenders requiring immediate repayment of the loans. As a result of the aforementioned non-compliance and due to the cross-acceleration and cross-default provisions contained in our credit facilities relating to our drybulk and tanker fleet, all of our outstanding indebtedness relating to our drybulk and tanker fleet, amounting to approximately $1,163.3 million as of December 31, 2014, has been classified as current.  As a result, we reported a working capital deficit of $394.5 million at December 31, 2014. See Note 3 to our consolidated financial statements included in this annual report.

On March 28, 2014, we entered into a supplemental agreement relating to the loan agreement dated March 19, 2012, to amend certain financial covenants.

On April 14, 2014, we obtained a waiver letter relating to the term loan facility dated June 20, 2008, to amend certain financial covenants. The waiver is subject to definitive documentation.

On May 29, 2014, we entered into a supplemental agreement to the loan agreement dated February 14, 2012 to amend certain definitions.

On July 7, 2014, we entered into an agreement with Commerzbank under the $35.0 million Senior Secured Credit Facility dated October 2, 2007, under which we agreed to make a cash prepayment of $2.7 million to avoid a loan-to-value covenant breach.

On July 11, 2014, we entered into a supplemental agreement under the secured term loan facility dated July 23, 2008, to among other things, release the vessel Woolloomoloo from the collateral package under this loan.

On July 17, 2014, we signed a supplemental agreement under the secured term loan facility dated October 26, 2011 for a waiver of a certain financial covenant until December 31, 2014.

On July 31, 2014, we signed a supplemental agreement under the secured term loan facility dated October 24, 2012, for the relaxation of a certain financial covenant until December 31, 2014.

On November 12, 2014, we signed a supplemental agreement under the secured loan facility dated June 20, 2008 for relaxation of certain financial covenants.

On December 23, 2014, we entered into an agreement with the lender under its two Senior Secured Credit Facilities, dated October 5, 2007 and March 13, 2008. Under the terms of these agreements, among other things, the lender has agreed to waive certain financial covenants until December 31, 2014 and relax other financial covenants until maturity, and we agreed to provide a pledge over 8,775,055 Ocean Rig shares owned by us until December 31, 2014.

We are currently in negotiations with our lenders to obtain waivers of our covenant breaches and extend existing waivers of covenant breaches, or to restructure the affected debt. We cannot guarantee that we will be able to obtain our lenders' waiver or consent, or extensions of existing waivers, with respect to the aforementioned noncompliance under our credit facilities relating to our drybulk and tanker fleet, or any non-compliance with specified financial ratios or financial covenants under future financial obligations we may enter into, or that we will be able to refinance or restructure any such indebtedness.  If we fail to remedy, or obtain a waiver of, the breaches of the covenants discussed above, our lenders may accelerate our indebtedness under the relevant credit facilities, which could trigger the cross-acceleration or cross-default provisions contained in our other credit facilities relating to our drybulk and tanker fleet, under which a total of $1,163.3 million was outstanding as of December 31, 2014. If our indebtedness is accelerated, it will be very difficult in the current financing environment for us to refinance our debt or obtain additional financing and we could lose our vessels if our lenders foreclose their liens, which would impair our ability to conduct our business and continue as a going concern. Further, as discussed below, our independent registered public accounting firm has issued its opinion with an explanatory paragraph in connection with our audited financial statements included in this report that expresses substantial doubt about our ability to continue as a going concern. In addition, if the value of our vessels deteriorates significantly from their currently depressed levels, we may have to record an impairment adjustment to our financial statements, which would adversely affect our financial results and further hinder our ability to raise capital.

Moreover, in connection with any additional amendments to our credit facilities, or waivers or extensions of waivers of covenant breaches, that we obtain, or if we enter into any future credit agreements or debt instruments, our lenders may impose additional operating and financial restrictions on us. These restrictions may further restrict our ability to, among other things, fund our operations or capital needs, make acquisitions or pursue available business opportunities, which in turn may adversely affect our financial condition. In addition, our lenders may require the payment of additional fees, require prepayment of a portion of our indebtedness to them, accelerate the amortization schedule for our indebtedness and increase the margin and lending rates they charge us on our outstanding indebtedness.

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As of March 2, 2015, none of our lenders had declared an event of default under the relevant loan agreements. However, our breaches under certain of those loan agreements constitute potential events of default that may result in acceleration of such indebtedness and potential cross-acceleration or cross-default events under our other credit facilities relating to our drybulk and tanker fleet.

We expect that our lenders will not demand payment of the loans relating to our drybulk and tanker fleet under which we are in breach of certain financial and loan-to-value ratio covenants before their maturity, provided that we pay scheduled loan installments and accumulated or accrued interest as they fall due under the existing credit facilities. We plan to settle the loan interest and scheduled loan repayments with cash expected to be generated from operations and firm financing agreements that are currently in place.   We do not expect that cash on hand and cash expected to be generated from operations will be sufficient to repay our loans relating to our drybulk and tanker fleet with cross-default provisions which amounted to approximately $1,163.3 million in the aggregate as of December 31, 2014, if such debt is accelerated by our lenders, as discussed above. In such a scenario, we would have to seek to access the capital markets to fund the mandatory payments.

Our inability to comply with certain financial and other covenants under our loan agreements relating to our shipping segments and our working capital deficit raise substantial doubt about our ability to continue as a going concern.

As of December 31, 2014, we were in breach of certain financial and other covenants contained in our loan agreements relating to our shipping segments and our lenders may choose to accelerate our indebtedness relating to such segments. As a result, we reported a working capital deficit of $394.5 million at December 31, 2014. Therefore, our ability to continue as a going concern is dependent on management's ability to successfully generate revenue and enter into firm financing agreements to meet our scheduled obligations as they become due and the continued support of our lenders. These conditions raise significant doubt about our ability to continue as a going concern and, therefore, we may be unable to realize our assets and discharge our liabilities in the normal course of business. Our independent registered public accounting firm has issued its opinion with an explanatory paragraph in connection with our financial statements included in this annual report that expresses substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of our inability to continue as a going concern except for the shipping segments' bank debt and the restricted cash classification under current liabilities and current assets, respectively.

Our credit facilities impose operating and financial restrictions on us, and if we receive additional waivers of covenant breaches and/or further amend our loan agreements in the future, our lenders may impose additional operating and financial restrictions on us and/or modify the terms of our existing credit facilities.

In addition to the loan-to-value ratio requirements and financial covenants relating to our financial position, operating performance and liquidity contained in our credit facilities, our credit facilities also contain restrictions on our ability to, among other things:

● enter into other financing arrangements;

● incur or guarantee additional indebtedness;

● create or permit liens on our assets;

● consummate a merger, consolidation or sale of our all or substantially all of our assets or the shares of our subsidiaries;

● make investments;

● change the general nature of our business;

● pay dividends, redeem capital stock or subordinated indebtedness or make other restricted payments;

● incur dividend or other payment restrictions affecting the restricted subsidiaries under the indenture governing our Senior Secured Notes (as defined below);

● change the management and/or ownership of our vessels and drilling units;

● enter into transactions with affiliates;

● transfer or sell assets;

● amend, modify or change our organizational documents;

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● make capital expenditures;

● change the flag, class or management of our vessels or drilling units;

● drop below certain minimum cash deposits, as defined in our credit facilities; and

● compete effectively to the extent our competitors are subject to less onerous restrictions.

Therefore, we will need to seek permission from our lenders in order to engage in certain corporate and commercial actions that we believe would be in the best interest of our business, and a denial of permission may make it difficult for us to successfully execute our business strategy or effectively compete with companies that are not similarly restricted. Our lenders' interests may be different from our interests, and we cannot guarantee that we will be able to obtain our lenders' permission when needed. In addition to the above restrictions, our lenders may require the payment of additional fees, require prepayment of a portion of our indebtedness to them, accelerate the amortization schedule for our indebtedness and increase the interest rates they charge us on our outstanding indebtedness. These potential restrictions and requirements may limit our ability to pay dividends, if any, in the future to you, finance our future operations, make acquisitions or pursue business opportunities.

Our ability to comply with the covenants and restrictions contained in our credit facilities may be affected by economic, financial and industry conditions and other factors beyond our control. Any default under the agreements governing our indebtedness, including a default under our credit facilities, that is not waived by the required lenders, and the remedies sought by the holders of such indebtedness, could prevent us from paying dividends in the future. If we are unable to repay indebtedness, the lenders under our credit facilities could proceed against the collateral securing that indebtedness. In any such case, we may be unable to repay the amounts due under our credit facilities. This could have serious consequences to our financial condition and results of operations and could cause us to become bankrupt or insolvent. Our ability to comply with these covenants in future periods will also depend substantially on the value of our assets, our charter rates and dayrates, our ability to obtain charters and drilling contracts, our success at keeping our costs low and our ability to successfully implement our overall business strategy. Any future credit agreement or amendment or debt instrument may contain similar or more restrictive covenants.

We have substantial indebtedness, and expect to incur substantial additional indebtedness, which could adversely affect our financial health.

As of December 31, 2014, on a consolidated basis, we had $5.6 billion in aggregate principal amount of indebtedness outstanding and $0 million in additional credit available to us under our credit facilities. We expect to incur substantial additional indebtedness in order to fund the estimated remaining contractual obligations, excluding financing costs, amounting to $1.8 billion in the aggregate for our additional three newbuilding drillships as of March 2, 2015, and any further growth of our fleet.

This substantial level of debt and other obligations could have significant adverse consequences on our business and future prospects, including the following:

● we may not be able to satisfy our financial obligations under our indebtedness and our contractual and commercial commitments, which may result in possible defaults on and acceleration of such indebtedness;

● we may not be able to obtain financing in the future for working capital, capital expenditures, acquisitions, debt service requirements or other purposes;

● we may not be able to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to service the debt;

● we could become more vulnerable to general adverse economic and industry conditions, including increases in interest rates, particularly given our substantial indebtedness, some of which bears interest at variable rates;

● our ability to refinance indebtedness may be limited or the associated costs may increase;

● less leveraged competitors could have a competitive advantage because they have lower debt service requirements and, as a result, we may not be better positioned to withstand economic downturns; and

● we may be less able to take advantage of significant business opportunities and to react to changes in market or industry conditions than our competitors and our management's discretion in operating our business may be limited.

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Each of these factors may have a material and adverse effect on our financial condition and viability. Our ability to service our debt will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control. If our operating income is not sufficient to service our current or future indebtedness, we will be forced to take actions such as reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing our debt or seeking additional equity capital. Any or all of these actions may be insufficient to allow us to service our debt obligations. Further, we may not be able to effect any of these remedies on satisfactory terms, or at all. In addition, a lack of liquidity in the debt and equity markets could hinder our ability to refinance our debt or obtain additional financing on favorable terms in the future.

We may not be able to generate sufficient cash flow to meet our debt service and other obligations due to events beyond our control.

Our ability to make scheduled payments on our outstanding indebtedness will depend on our ability to generate cash from operations in the future. Our future financial and operating performance will be affected by a range of economic, financial, competitive, regulatory, business and other factors that we cannot control, such as general economic and financial conditions in the drybulk and tanker shipping and offshore drilling industries or the economy generally. In particular, our ability to generate steady cash flow will depend on our ability to secure time charters and drilling contracts at acceptable rates. Our ability to renew our existing time charters and drilling contracts or obtain new time charters and drilling contracts at acceptable charterhire and dayrates or at all will depend on the prevailing economic and competitive conditions.

Furthermore, our financial and operating performance, and our ability to service our indebtedness, is also dependent on our subsidiaries' ability to make distributions to us, whether in the form of dividends, loans or otherwise. The timing and amount of such distributions will depend on our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in our various debt agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.

If our operating cash flows are insufficient to service our debt and to fund our other liquidity needs, we may be forced to take actions such as reducing or delaying capital expenditures, selling assets, restructuring or refinancing our indebtedness, seeking additional capital, or any combination of the foregoing. We cannot assure you that any of these actions could be effected on satisfactory terms, if at all, or that they would yield sufficient funds to make required payments on our outstanding indebtedness and to fund our other liquidity needs. Also, the terms of existing or future debt agreements may restrict us from pursuing any of these actions. Furthermore, reducing or delaying capital expenditures or selling assets could impair future cash flows and our ability to service our debt in the future.

If for any reason we are unable to meet our debt service and repayment obligations, we would be in default under the terms of the agreements governing such indebtedness, which would allow creditors at that time to declare all such indebtedness then outstanding to be due and payable. This would likely in turn trigger cross-acceleration or cross-default rights among certain of our other debt agreements. Under these circumstances, lenders could compel us to apply all of our available cash to repay borrowings or they could prevent us from making payments on the notes. If the amounts outstanding under our existing and future debt agreements were to be accelerated, or were the subject of foreclosure actions, we cannot assure you that our assets would be sufficient to repay in full the money owed to the lenders or to our other debt holders.

The failure of our counterparties to meet their obligations under our time charter agreements, or their exercise of a purchase option under certain of those agreements, could cause us to suffer losses or otherwise adversely affect our business.

As of December 31, 2014, 19 of our vessels were employed under time charters and 11 of these vessels were employed by one charterer. The ability and willingness of each of our counterparties to perform its obligations under a time charter agreement with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the drybulk shipping industry and the overall financial condition of the counterparties. In addition, in challenging market conditions, there have been reports of charterers, including some of our charterers, renegotiating their charters or defaulting on their obligations under charters and our customers may fail to pay charterhire or attempt to renegotiate charter rates.

13 of the vessels in our fleet provide for charter rates that are significantly above current market rates. Should any of our counterparties under these charters fail to honor its obligations under our charter agreements, it may be difficult to secure substitute employment for such vessels, and any new charter arrangements we secure in the spot market or on time charters could be at lower rates given currently decreased charter rate levels, particularly in the drybulk carrier market. In addition under seven of our charter contracts, the charterer has the option to (i) acquire the vessels at fair market value as determined by two independent brokers, at the date that the options are exercised, less $5.0 million per vessel or, (ii) to require a cash payout of $5.0 million per charter agreement in which case the charter agreement will automatically be terminated on the date of completion of the current voyage. If our charterers fail to meet their obligations to us or attempt to renegotiate our charter agreements, or exercise their option to acquire the vessels they have on contract as applicable, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows, as well as our ability to pay dividends, if any, in the future, and comply with covenants in our credit facilities.

Our ability to renew the charters on our vessels upon the expiration or termination of our current charters, two of which are scheduled to expire in 2015, or on vessels that we may acquire in the future, the charter rates payable under any replacement charters and vessel values will depend upon, among other things, economic conditions in the sectors in which our vessels operate at that time, changes in the supply and demand for vessel capacity and changes in the supply and demand for the seaborne transportation of energy resources.

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A drop in spot charter rates may provide an incentive for some charterers to default on their charters

When we enter into a time charter, charter rates under that charter are fixed for the term of the charter. If the spot charter rates or short-term time charter rates in the drybulk shipping industry remain significantly lower than the time charter equivalent rates that some of our charterers are obligated to pay us under our existing charters, the charterers may have incentive to default under that charter or attempt to renegotiate the charter. If our charterers fail to pay their obligations, we would have to attempt to re-charter our vessels at lower charter rates, which would affect our ability to operate our vessels profitably and may affect our ability to comply with covenants contained in any loan agreements we may enter into in the future.

Some of our offshore drilling contracts may be terminated early due to certain events.

Some of our customers under our drilling contracts have the right to terminate our drilling contracts upon the payment of an early termination or cancellation fee. However, such payments may not fully compensate us for the loss of the contract. In addition, our contracts permit our customers to terminate the contracts early without the payment of any termination fees under certain circumstances, including as a result of major non-performance, longer periods of downtime or impaired performance caused by equipment or operational issues, or sustained periods of downtime due to piracy or force majeure events beyond our control.

In addition, during periods of challenging market conditions, our customers may no longer need a drilling unit that is currently under contract or may be able to obtain a comparable drilling unit at a lower dayrate. As a result, we may be subject to an increased risk of our clients seeking to renegotiate the terms of their existing contracts or repudiate their contracts, including through claims of non-performance. Our customers' ability to perform their obligations under their drilling contracts with us may also be negatively impacted by the prevailing uncertainty surrounding the development of the world economy and the credit markets. If our customers cancel some of our contracts, and we are unable to secure new contracts on a timely basis and on substantially similar terms, or if contracts are suspended for an extended period of time or if a number of our contracts are renegotiated, it could adversely affect our consolidated statement of financial position, results of operations or cash flows.

Our future contracted revenue for our fleet of drilling units may not be ultimately realized.

As of February 24, 2015, the future contracted revenue for our fleet of operating drilling units, or our drilling contract backlog, was approximately $5.2 billion under firm commitments. We may not be able to perform under our drilling contracts due to events beyond our control, and our customers may seek to cancel or renegotiate our drilling contracts for various reasons, including adverse conditions, resulting in lower daily rates. Our inability, or the inability of our customers, to perform under the respective contractual obligations may have a material adverse effect on our financial position, results of operations and cash flows.

We may be unable to secure ongoing drilling contracts, including for the Ocean Rig Santorini, our uncontracted seventh generation drillship to be delivered in June 2016, due to strong competition, and the contracts that we enter into may not provide sufficient cash flow to meet our debt service obligations with respect to our indebtedness.

Assuming no exercise of any options to extend the terms of our existing drilling contracts, our operating drilling units are contracted from the first quarter of 2015 to the third quarter of 2021.  We cannot guarantee that we will be able to secure employment for the Ocean Rig Santorini, our seventh generation drillship scheduled for delivery in June 2016 and the two new integrated design drillships scheduled for delivery in February 2017 and June 2017.

Our ability to renew the drilling contracts or obtain new drilling contracts for our drilling units, including our seventh generation drillship for which we have not yet secured employment, will depend on prevailing market conditions. We cannot guarantee we will be able to enter into new drilling contracts upon the expiration or termination of the contracts we have in place or at all or that there will not be a gap in employment between our current drilling contracts and subsequent contracts. In particular, if the price of crude oil is low, or it is expected that the price of crude oil will decrease in the future, at a time when we are seeking to arrange employment contracts for our drilling units, we may not be able to obtain employment contracts at attractive rates or at all.

If the rates we receive for the reemployment of our drilling units upon the expiration or termination of our existing drilling contracts are lower than the rates under our existing contracts, we will recognize less revenue from the operations of our drilling units. In addition, delays under existing drilling contracts could cause us to lose future contracts if a drilling unit is not available to start work at the agreed date. Our ability to meet our cash flow obligations will depend on our ability to consistently secure drilling contracts for our drilling units at sufficiently high dayrates. We cannot predict the future level of demand for our services or future conditions in the oil and gas industry. If the oil and gas companies do not continue to increase exploration, development and production expenditures, we may have difficulty securing drilling contracts, including for the seventh generation drillships under construction, or we may be forced to enter into drilling contracts at unattractive dayrates. Either of these events could impair our ability to generate sufficient cash flow to make principal and interest payments under our indebtedness and meet our capital expenditure and other obligations.

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We are dependent on spot charters and any decrease in spot charter rates in the future may adversely affect our earnings.

We currently operate a fleet of 39 drybulk vessels, of which 21 vessels are employed in the spot market, exposing us to fluctuations in spot market charter rates. In addition, we currently employ all of our tankers in the spot market. Further, we may employ in the spot market any additional vessels that we may acquire in the future or existing vessels upon the expiration of related time charters.

Although the number of vessels in our fleet that participate in the spot market will vary from time to time, we anticipate that a significant portion of our fleet will participate in this market. As a result, our financial performance will be significantly affected by conditions in the drybulk and oil tanker spot market and only our vessels that operate under fixed-rate time charters may, during the period such vessels operate under such time charters, provide a fixed source of revenue to us.

Historically, the drybulk and tanker markets have been volatile as a result of the many conditions and factors that can affect the price, supply of and demand for drybulk and tanker capacity. The recent global economic crisis may further reduce demand for transportation of drybulk cargoes and oil over longer distances and supply of drybulk vessels and tankers to carry such drybulk cargoes and oil, respectively, which may materially affect our revenues, profitability and cash flows. The spot charter market may fluctuate significantly based upon supply of and demand of vessels and cargoes. The successful operation of our vessels in the competitive spot charter market depends upon, among other things, obtaining profitable spot charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. The spot market is very volatile, and, in the past, there have been periods when spot rates have declined below the operating cost of vessels. If future spot charter rates decline, then we may be unable to operate our vessels trading in the spot market profitably, meet our obligations, including payments on indebtedness, or to pay dividends in the future. Furthermore, as charter rates for spot charters are fixed for a single voyage, which may last up to several weeks, during periods in which spot charter rates are rising, we will generally experience delays in realizing the benefits from such increases.

We depend upon the spot market in our tanker segment and any decrease in spot charter rates may adversely affect our financial condition and results of operations.

We currently employ all of our tankers in the spot market. As a result, our results of operations in our tanker segment will be significantly affected by conditions in the oil tanker spot market. The spot market is highly volatile and fluctuates based on tanker and oil supply and demand. The successful operation of our tankers in the spot market depends on, among other things, our commercial and technical manager's ability to obtain profitable charters and minimizing, to the extent possible, time spent waiting for charters and traveling unladen to pick up cargo. In the past, there have been periods when spot rates have declined below operating costs of vessels. Future spot rates may decline significantly and may not be sufficient for us to operate our tankers profitably, which would have an adverse impact on our financial condition and results of operations.

The tanker sector is currently at depressed levels and conditions in the tanker market could have an adverse effect on our business, results of operation and financial condition.

The charter markets for crude oil carriers and product tankers have deteriorated significantly since summer 2008 and are currently at depressed levels. These markets may continue to be depressed through 2015 given the significant number of newbuilding vessels scheduled to be delivered. Attractive investment opportunities in these sectors may reflect these depressed conditions, however, the return on any such investment is highly uncertain in this extremely challenging operating environment.

The tanker sector, which is intensely competitive, has unique operational risks and is highly dependent on the availability of and demand for crude oil and petroleum products as well as being significantly impacted by the availability of modern tanker capacity and the scrapping, conversion or loss of older vessels.

Our ability to maintain oil tanker industry relationships and a reputation for customer service and safety, as well as to acquire and renew charters, will depend on a number of factors, including our ability to man our vessels with experienced oil tanker crews and the ability to manage such risks. There is no assurance that we will be able to address the variety of vessel management risks in the oil tanker sector maintain commercial relationships with leading charter companies, which could adversely affect our business the oil tanker sector.

Declines in charter rates and other market deterioration could cause us to incur impairment charges.

The Company reviews for impairment long-lived assets and intangible long-lived assets held and used whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, the Company evaluates the asset for impairment loss. The impairment loss is determined by the difference between the carrying amount of the asset and the fair value of the asset. In developing estimates of future undiscounted cash flows, the Company makes assumptions and estimates about the vessels', rigs' and drillships' future performance, with the significant assumptions being related to charter and drilling rates, fleet utilization, operating expenses, capital expenditures, residual value and the estimated remaining useful life of each vessel, rig and drillship. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends as well as future expectations. The projected net operating cash flows are determined by considering the charter revenues and drilling revenues from existing time charters and drilling contracts for the fixed fleet days and an estimated daily time charter equivalent for the unfixed days. In making estimates concerning the daily time charter equivalent for the unfixed days, the Company utilizes the most recent ten year historical average for similar vessels and other available market data over the remaining estimated life of the vessel, assumed to be 25 years from the delivery of the vessel from the shipyard.

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As a result of the impairment review as of December 31, 2014, the Company determined that the carrying amounts of its assets held for use were recoverable, except for one drybulk vessel for which an impairment charge of $38.1 million was recognized, and, concluded that no further impairment loss was necessary for 2014. However, due to the Company's decision to sell certain vessels during the years and or subsequent to the balance sheet dates and based on the agreed-upon sales price, an impairment charge of $0, $43.5 million and $0 million, for each of the years ended December 31, 2012, 2013 and 2014, respectively, was recognized.

Although the Company believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective. Set forth below is an analysis that shows the impact on the Company's impairment analysis of its shipping segment, if the Company were to utilize the most recent five year, three year or one year historical average rates for similar vessels for purposes of estimating future cash flows for unfixed days over the remaining life of the vessel.

Amounts in thousand of US dollars	2014
Level of impairment	5 year			3 year			1 year
Drybulk carriers		$	704,461		$	735,691		$	735,518
Tankers			14,451			14,671			-
Total		$	718,912		$	750,362		$	735,518

Any impairment charges incurred as a result of declines in charter rates and other market deterioration could negatively affect our business, financial condition or operating results or the trading price of our common shares.

We will need to procure significant additional financing, which may be difficult to obtain on acceptable terms, in order to complete the construction of our drillships, tankers and drybulk carriers under construction.

We, through our majority-owned subsidiary, Ocean Rig UDW, have entered into contracts with Samsung Heavy Industries Co. Ltd., or Samsung, for the construction of three seventh generation drillships two of which are new integrated design drillships and all are equiped with two blow-outpreventers that are scheduled to be delivered to us in June 2016, February 2017 and June 2017, respectively. The estimated total project cost for our three seventh generation drillships, excluding financing costs, is approximately $2.1 billion, of which an aggregate of approximately $1.8 billion was outstanding as of December 31, 2014.  We expect to finance the remaining delivery payments of these seventh generation drillships with cash on hand, operating cash flow, equity financing and additional bank debt.

We cannot be certain that additional financing to complete the construction of the remaining three newbuilding drillships will be available on acceptable terms or at all.  If additional bank financing is not available when needed, or is available only on unfavorable terms, we may be unable to take delivery of one or more of our three newbuilding drillships, in which case we would be prevented from realizing potential revenues from the applicable drillship and we could lose our deposit money, which amounted to $280.2 million in the aggregate, as of December 31, 2014. We may also incur additional costs and liability to the shipyards, which may pursue claims against us under our newbuilding construction contracts and retain and sell our newbuilding drillships to third parties to the extent completed.

Construction of vessels and drilling units is subject to risks, including delays and cost overruns, which could have an adverse impact on our available cash resources and results of operations.

As of March 5, 2015, we had entered into contracts for the construction of three seventh generation drillships, two of which are new integrated design drillships and all are equiped with two blow-outpreventers, scheduled for delivery in June 2016, February 2017 and June 2017, respectively.

From time to time in the future, we may also undertake new construction projects and conversion projects. In addition, we may make significant upgrade, refurbishment, conversion and repair expenditures for our fleet from time to time, particularly as our vessels and drilling units become older. Some of these expenditures are unplanned. These projects together with our existing construction projects and other efforts of this type are subject to risks of cost overruns or delays inherent in any large construction project as a result of numerous factors, including the following:

● shipyard unavailability;

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● shortages of equipment, materials or skilled labor for completion of repairs or upgrades to our equipment;

● unscheduled delays in the delivery of ordered materials and equipment or shipyard construction;

● financial or operating difficulties experienced by equipment vendors or the shipyard;

● unanticipated actual or purported change orders;

● local customs strikes or related work slowdowns that could delay importation of equipment or materials;

● engineering problems, including those relating to the commissioning of newly designed equipment;

● design or engineering changes;

● latent damages or deterioration to the hull, equipment and machinery in excess of engineering estimates and assumptions;

● work stoppages;

● client acceptance delays;

● weather interference, storm damage or other events of force majeure;

● disputes with shipyards and suppliers;

● shipyard failures and difficulties;

● failure or delay of third-party equipment vendors or service providers;

● unanticipated cost increases; and

● difficulty in obtaining necessary permits or approvals or in meeting permit or approval conditions.

These factors may contribute to cost variations and delays in the delivery of our newbuilding vessels and drillships. Delays in the delivery of these newbuilding vessels or drillships or the inability to complete construction in accordance with their design specifications may, in some circumstances, result in a delay in contract commencement, resulting in a loss of revenue to us, and may also cause customers to renegotiate, terminate or shorten the term of a charter agreement or drilling contract, pursuant to applicable late delivery clauses. In the event of termination of one of these contracts, we may not be able to secure a replacement contract on as favorable terms. Additionally, capital expenditures for vessel or drilling unit upgrades, refurbishment and construction projects could materially exceed our planned capital expenditures. Moreover, our vessels and drilling units that may undergo upgrade, refurbishment and repair may not earn a dayrate or charterhire, respectively, during the periods they are out of service. In addition, in the event of a shipyard failure or other difficulty, we may be unable to enforce certain provisions under our newbuilding contracts such as our refund guarantee, to recover amounts paid as installments under such contracts. The occurrence of any of these events may have a material adverse effect on our results of operations, financial condition or cash flows.

In the event our counterparties do not perform under their agreements with us for the construction of our newbuilding vessels and drillships and we are unable to enforce certain refund guarantees, we may lose all or part of our investment, which would have a material adverse effect on our results of operations, financial condition and cash flows.

As of March 5, 2015, we had paid an aggregate of $280.2 million to Samsung in connection with our seventh generation drillships currently scheduled for delivery in June 2016, February 2017 and June 2017.

In the event our counterparties under the construction contracts discussed above do not perform under their agreements with us and we are unable to enforce certain refund guarantees with third party banks due to an outbreak of war, bankruptcy or otherwise, we may lose all or part of our investment, which would have a material adverse effect on our results of operations, financial condition and cash flows.

Currently, our revenues in the offshore drilling segment depend on two ultra-deepwater drilling rigs and eight drillships, which are designed to operate in harsh environments. The damage or loss of any of our drilling units could have a material adverse effect on our results of operations and financial condition.

Our revenues in the offshore drilling segment are dependent on the drilling rig Leiv Eiriksson, which is currently drilling on the Norwegian Continental Shelf, the drilling rig Eirik Raude, which is currently undergoing the acceptance testing and it is expected to commence operations for drilling offshore Falkland Islands, and the drillships Ocean Rig Corcovado, Ocean Rig Mykonos and Ocean Rig Mylos, which are currently operating offshore Brazil, Ocean Rig Olympia, Ocean Rig Poseidon and Ocean Rig Athena which are currently operating offshore Angola, the Ocean Rig Skyros and the Ocean Rig Apollo which are expected to commence drilling operations during 2015. Our drilling units may be exposed to risks inherent in deepwater drilling and operating in harsh environments that may cause damage or loss. The drilling of oil and gas wells, particularly exploratory wells where little is known of the subsurface formations involves risks, such as extreme pressure and temperature, blowouts, reservoir damage, loss of production, loss of well control, lost or stuck drill strings, equipment defects, punch throughs, craterings, fires, explosions, pollution and natural disasters such as hurricanes and tropical storms.

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In addition, offshore drilling operations are subject to perils peculiar to marine operations, either while on-site or during mobilization, including capsizing, sinking, grounding, collision, marine life infestations, and loss or damage from severe weather. The replacement or repair of a rig or drillship could take a significant amount of time, and we may not have any right to compensation for lost revenues during that time. As long as we have only ten drilling units in operation, loss of or serious damage to one of the drilling units could materially reduce our revenues for the time that drilling unit is out of operation. In view of the sophisticated design of the drilling units, we may be unable to obtain a replacement unit that could perform under the conditions that our drilling units are expected to operate, which could have a material adverse effect on our results of operations and financial condition.

Purchasing and operating secondhand vessels may result in increased operating costs and reduced fleet utilization.

While we have the right to inspect previously owned vessels prior to our purchase of them and we intend to inspect all secondhand vessels that we acquire in the future, such an inspection does not provide us with the same knowledge about their condition that we would have if these vessels had been built for and operated exclusively by us. A secondhand vessel may have conditions or defects that we were not aware of when we bought the vessel and which may require us to incur costly repairs to the vessel. These repairs may require us to put a vessel into drydock which would reduce our fleet utilization. Furthermore, we usually do not receive the benefit of warranties on secondhand vessels.

We may have difficulty managing our planned growth properly.

We intend to continue to grow our fleet. Our future growth will primarily depend on our ability to:

● locate and acquire suitable vessels and drilling units;

● identify and consummate acquisitions or joint ventures;

● enhance our customer base;

● manage our expansion; and

● obtain required financing on acceptable terms.

Growing any business by acquisition presents numerous risks, such as undisclosed liabilities and obligations, the possibility that indemnification agreements will be unenforceable or insufficient to cover potential losses and difficulties associated with imposing common standards, controls, procedures and policies, obtaining additional qualified personnel, managing relationships with customers and integrating newly acquired assets and operations into existing infrastructure. We may be unable to successfully execute our growth plans or we may incur significant expenses and losses in connection with our future growth which would have an adverse impact on our financial condition and results of operations.

If any of our vessels or drilling units fail to maintain their class certification and/or fail any annual survey, intermediate survey, drydocking or special survey, that vessel or unit would be unable to carry cargo or operate, thereby reducing our revenues and profitability and violating certain covenants under our credit facilities.

The hull and machinery of every commercial drybulk vessel, tanker and drilling unit must be classed by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and SOLAS. All of our drybulk vessels are certified as being "in class" by all the major Classification Societies (e.g., American Bureau of Shipping, Lloyd's Register of Shipping). Each of our operating drillships is certified as being "in class" by American Bureau of Shipping. The Leiv Eiriksson was credited with completing its last Special Periodical Survey in April 2011 and the Eirik Raude completed the same in 2012. Our four operating six generation drillships are due for their first Special Periodical Surveys in 2016. Our four operating seventh generation drillships are due for their first Special Periodical Surveys in 2018, 2019 and 2020.

A vessel must undergo annual surveys, intermediate surveys, drydockings and special surveys. In lieu of a special survey, a vessel's machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. Every vessel is also required to be drydocked every two to three years for inspection of the underwater parts of such vessel.

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If any vessel or drilling unit does not maintain its class and/or fails any annual survey, intermediate survey, drydocking or special survey, the vessel will be unable to carry cargo between ports, or operate, and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our credit facilities. Any such inability to carry cargo or be employed, or operate, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.

The aging of our drybulk carrier fleet may result in increased operating costs or loss of hire in the future, which could adversely affect our earnings.

In general, the cost of maintaining a vessel in good operating condition increases with the age of the vessel. As of February 24, 2015, the 39 vessels in our drybulk carrier fleet had an average age of 9.5 years. As our fleet ages we will incur increased costs. Older vessels are typically less fuel efficient and more costly to maintain than more recently constructed vessels due to improvements in engine technology. Cargo insurance rates increase with the age of a vessel, making older vessels less desirable to charterers. Governmental regulations and safety or other equipment standards related to the age of vessels may also require expenditures for alterations or the addition of new equipment to our vessels and may restrict the type of activities in which our vessels may engage. As our vessels age, market conditions may not justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives.

In addition, charterers actively discriminate against hiring older vessels. For example, Rightship, the ship vetting service founded by Rio Tinto and BHP-Billiton which has become the major vetting service in the drybulk shipping industry, ranks the suitability of vessels based on a scale of one to five stars. Most major carriers will not charter a vessel that Rightship has vetted with fewer than three stars. Rightship automatically downgrades any vessel over 18 years of age to two stars, which significantly decreases its chances of entering into a charter. Therefore, as our vessels approach and exceed 18 years of age, we may not be able to operate these vessels profitably during the remainder of their useful lives.

Our vessels and drilling units may suffer damage and we may face unexpected drydocking costs, which could adversely affect our cash flow and financial condition.

If our drybulk vessels or tankers suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs are unpredictable and can be substantial. The loss of earnings while our vessels are being repaired and repositioned, as well as the actual cost of these repairs, would decrease our earnings and reduce the amount of dividends, if any, in the future. We may not have insurance that is sufficient to cover all or any of these costs or losses and may have to pay drydocking costs not covered by our insurance.

If our drilling units suffer damage, they may need to be repaired at a yard facility. The costs of discontinued operations due to repairs are unpredictable and can be substantial. The loss of earnings while our drilling units are being repaired and repositioned, as well as the actual cost of these repairs, would decrease our earnings and reduce the amount of dividends, if any, in the future. We may not have insurance that is sufficient to cover all or any of these costs or losses and may have to pay repair costs not covered by our insurance.

We may not be able to maintain or replace our drilling units as they age.

The capital associated with the repair and maintenance of our fleet increases with age. We may not be able to maintain our existing drilling units to compete effectively in the market, and our financial resources may not be sufficient to enable us to make expenditures necessary for these purposes or to acquire or build replacement drilling units.

Our board of directors has determined to suspend the payment of cash dividends as a result of market conditions in the international shipping industry, and until such market conditions improve, it is unlikely that we will reinstate the payment of dividends.

In light of a lower freight rate environment and a highly challenged financing environment, our board of directors, beginning with the fourth quarter of 2008, has suspended our common share dividend. Our dividend policy will be assessed by the board of directors from time to time. The suspension allows us to preserve capital and use the preserved capital to capitalize on market opportunities as they may arise. Until market conditions improve, it is unlikely that we will reinstate the payment of dividends. In addition, other external factors, such as our lenders imposing restrictions on our ability to pay dividends under the terms of our loan agreements, may limit our ability to pay dividends. Further, we may not be permitted to pay dividends if we are in breach of the covenants contained in our loan agreements and any waivers related thereto.  We do not intend to obtain funds from other sources to pay dividends, if any, in the future. In addition, the declaration and payment of dividends, if any, in the future will depend on the provisions of Marshall Islands law affecting the payment of dividends. Marshall Islands law generally prohibits the payment of dividends if the company is insolvent or would be rendered insolvent upon payment of such dividend and dividends may be declared and paid out of our operating surplus; but in this case, there is no such surplus. Dividends may be declared or paid out of net profits for the fiscal year in which the dividend is declared and for the preceding fiscal year.

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We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations or pay dividends, if any, in the future.

We are a holding company and our subsidiaries conduct all of our operations and own all of our operating assets. We have no significant assets other than the equity interests in our subsidiaries. As a result, our ability to make dividend payments, if any, in the future depends on our subsidiaries and their ability to distribute funds to us. Furthermore, certain of our subsidiaries are obligated to use their surplus cash to prepay the balance on their long-term loans. If we are unable to obtain funds from our subsidiaries, our board of directors may not exercise its discretion to pay dividends in the future.

Investment in derivative instruments such as freight forward agreements could result in losses.

From time to time, we may take positions in derivative instruments including freight forward agreements, or FFAs. FFAs and other derivative instruments may be used to hedge a vessel owner's exposure to the charter market by providing for the sale of a contracted charter rate along a specified route and period of time. Upon settlement, if the contracted charter rate is less than the average of the rates, as reported by an identified index, for the specified route and period, the seller of the FFA is required to pay the buyer an amount equal to the difference between the contracted rate and the settlement rate, multiplied by the number of days in the specified period. Conversely, if the contracted rate is greater than the settlement rate, the buyer is required to pay the seller the settlement sum. If we take positions in FFAs or other derivative instruments and do not correctly anticipate charter rate movements over the specified route and time period, we could suffer losses in the settling or termination of the FFA. This could adversely affect our results of operations and cash flows.

The derivative contracts we have entered into to hedge our exposure to fluctuations in interest rates could result in higher than market interest rates and charges against our income.

As of December 31, 2014, we had entered into 24 interest rate swaps for purposes of managing our exposure to fluctuations in interest rates applicable to indebtedness under our credit facilities, which were advanced at a floating rate based on LIBOR. Our hedging strategies, however, may not be effective and we may incur substantial losses if interest rates move materially differently from our expectations. Our existing interest rate swaps as of December 31, 2014 did not, and our future derivative contracts may not, qualify for treatment as hedges for accounting purposes. We recognized fluctuations in the fair value of these contracts in our statement of operations. At December 31, 2014, the fair value of our interest rate swaps was a net liability of $29.8million.

Our financial condition could be materially adversely affected to the extent we do not hedge our exposure to interest rate fluctuations under our financing arrangements, under which loans have been advanced at a floating rate based on LIBOR and for which we have not entered into an interest rate swap or other hedging arrangement. Any hedging activities we engage in may not effectively manage our interest rate exposure or have the desired impact on our financial conditions or results of operations. See "Item 11. Quantitative and Qualitative Disclosures about Market Risk."

Because we generate most of our revenues in U.S. Dollars, but incur a significant portion of our employee salary and administrative and other expenses in other currencies, exchange rate fluctuations could have an adverse impact on our results of operations.

Our principal currency for our operations and financing is the U.S. Dollar. A substantial portion of the operating dayrates for the drilling units, our principal source of revenues, are quoted and received in U.S. Dollars; however, a portion of our revenue under our contracts with Petroleo Brasileiro S.A., or Petrobras Brazil, for the Ocean Rig Corcovado and the Ocean Rig Mykonos is, and with Repsol Sinopec Brasil S.A., or Repsol, for the Ocean Rig Mylos isreceivable in Brazilian Real. The principal currency for operating expenses is also the U.S. Dollar; however, a significant portion of employee salaries and administration expenses, as well as parts of the consumables and repair and maintenance expenses for the drilling rigs, may be paid in Norwegian Kroner, Great British Pounds, Canadian dollars, Euros or other currencies depending in part on the location of our drilling operations. For the year ended December 31, 2014, approximately 51% of our expenses were incurred in currencies other than the U.S. Dollars. This exposure to foreign currency could lead to fluctuations in net income and net revenue due to changes in the value of the U.S. Dollar relative to the other currencies. Revenues paid in foreign currencies against which the U.S. Dollar rises in value can decrease, resulting in lower U.S. Dollar denominated revenues. Expenses incurred in foreign currencies against which the U.S. Dollar falls in value can increase, resulting in higher U.S. Dollar denominated expenses. We have employed derivative instruments in order to economically hedge our currency exposure; however, we may not be successful in hedging our future currency exposure and our U.S. Dollar denominated results of operations could be materially and adversely affected upon exchange rate fluctuations determined by events outside of our control.

If volatility in LIBOR occurs, it could affect our profitability, earnings and cash flow.

LIBOR has historically been volatile, with the spread between LIBOR and the prime lending rate widening significantly at times. These conditions are the result of the disruptions in the international credit markets. Because the interest rates borne by our outstanding indebtedness fluctuate with changes in LIBOR, if this volatility were to occur, it would affect the amount of interest payable on our debt, which in turn, could have an adverse effect on our profitability, earnings and cash flow.

Furthermore, interest in most loan agreements in our industry has been based on published LIBOR rates. Recently, however, lenders have insisted on provisions that entitle the lenders, in their discretion, to replace published LIBOR as the base for the interest calculation with their cost-of-funds rate. If we are required to agree to such a provision in future loan agreements, our lending costs could increase significantly, which would have an adverse effect on our profitability, earnings and cash flow.

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An increase in interest rates would increase the cost of servicing our indebtedness and could reduce our profitability.

Our debt under certain of our credit facilities bears interest at variable rates. We may also incur indebtedness in the future with variable interest rates. As a result, an increase in market interest rates would increase the cost of servicing our indebtedness and could materially reduce our profitability and cash flows. The impact of such an increase would be more significant for us than it would be for some other companies because of our substantial indebtedness.

We depend entirely on TMS Bulkers and TMS Tankers to manage and charter our drybulk fleet and tankers fleet, respectively.

With respect to our operations in the drybulk and tanker shipping sectors, we currently have 19 employees, including our President and Chief Executive Officer, our Executive Vice President, our Chief Financial Officer and our Senior Vice President Head of Accounting and Reporting. Since January 1, 2011, we have subcontracted the commercial and technical management of our drybulk and tanker vessels, including crewing, maintenance and repair, to TMS Bulkers, and TMS Tankers Ltd., or TMS Tankers, respectively. TMS Bulkers and TMS Tankers are beneficially majority-owned by our Chairman, President and Chief Executive Officer, Mr. George Economou. The loss of the services or TMS Bulkers or TMS Tankers or their failure to perform their obligations to us could materially and adversely affect the results of our operations. Although we may have rights against TMS Bulkers and TMS Tankers if they default on their obligations to us, you will have no recourse against either of them. Further, we are required to seek approval from our lenders to change our manager.

Under our management agreements with TMS Bulkers and TMS Tankers, TMS Bulkers and TMS Tankers shall not be liable to us for any losses or damages arising in the course of its performance under the agreement unless such loss or damage is proved to have resulted from the negligence, gross negligence or willful default by TMS Bulkers and TMS Tankers, its employees or agents and in such case TMS Bulkers' and TMS Tankers' liability per incident or series of incidents is limited to a total of ten times the annual management fee payable under the relevant agreement. The management agreements further provide that TMS Bulkers and TMS Tankers shall not be liable for any of the actions of the crew, even if such actions are negligent, grossly negligent or willful, except to the extent that they are shown to have resulted from a failure by TMS Bulkers and TMS Tankers to perform their obligations with respect to management of the crew. Except to the extent of the liability cap described above, we have agreed to indemnify TMS Bulkers and TMS Tankers and their employees and agents against any losses incurred in the course of the performance of the agreement.

TMS Bulkers and TMS Tankers are privately held company and there is little or no publicly available information about them.

The ability of TMS Bulkers and TMS Tankers to continue providing services for our benefit will depend in part on their own financial strength. Circumstances beyond our control could impair TMS Bulkers' and TMS Tankers' financial strength, and because it is privately held it is unlikely that information about its financial strength would become public unless TMS Bulkers or TMS Tankers began to default on their obligations. As a result, an investor in our shares might have little advance warning of problems affecting TMS Bulkers and TMS Tankers, even though these problems could have a material adverse effect on us.

We may be unable to attract and retain qualified, skilled employees or crew necessary to operate our business.

Our success will depend in large part on our ability and the ability of TMS Bulkers and TMS Tankers to attract and retain highly skilled and qualified personnel. In crewing our vessels, we require technically skilled employees with specialized training who can perform physically demanding work. Competition to attract and retain qualified crew members is intense. If we are not able to increase our rates to compensate for any crew cost increases, it could have a material adverse effect on our business, results of operations, cash flows and financial condition. Any inability we, or TMS Bulkers or TMS Tankers, experience in the future to hire, train and retain a sufficient number of qualified employees could impair our ability to manage, maintain and grow our business, which could have a material adverse effect on our financial condition, results of operations and cash flows.

We are dependent upon key management personnel, particularly our Chairman, President and Chief Executive Officer Mr. George Economou.

Our continued operations depend to a significant extent upon the abilities and efforts of our Chairman, President and Chief Executive Officer, Mr. George Economou. The loss of Mr. Economou's services to our Company could adversely affect our discussions with our lenders and management of our fleet during this difficult economic period and, therefore, could adversely affect our business prospects, financial condition and results of operations. We do not currently, nor do we intend to, maintain "key man" life insurance on any of our personnel, including Mr. Economou.

Our Chairman, Chief Executive Officer has affiliations with TMS Bulkers and TMS Tankers which could create conflicts of interest.

Our major shareholder is controlled by Mr. George Economou, who controls four entities that, in the aggregate, were deemed to beneficially own, directly or indirectly, approximately 17.6% of our outstanding common shares as of March 2, 2015.  Mr. Economou controls TMS Bulkers and TMS Tankers. Mr. Economou is also our Chairman, Chief Executive Officer and a director of our Company. These responsibilities and relationships could create conflicts of interest between us, on the one hand, and TMS Bulkers and TMS Tankers, on the other hand. These conflicts may arise in connection with the chartering, purchase, sale and operations of the vessels in our fleet versus drybulk carriers and tankers managed by TMS Tanker and/ or other companies affiliated with TMS Bulkers or TMS Tankers and Mr. Economou.

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In particular, TMS Bulkers or TMS Tankers may give preferential treatment to vessels that are beneficially owned by related parties because Mr. Economou and members of his family may receive greater economic benefits.

Failure to attract or retain key personnel, labor disruptions or an increase in labor costs could adversely affect our operations in the offshore drilling sector.

We require highly skilled personnel to operate and provide technical services and support for our business in the offshore drilling sector worldwide. As of December 31, 2014, through the subsidiaries of Ocean Rig UDW, we employed 2,320 employees, the majority of whom are full-time crew employed on our drilling units. Under certain of our employment contracts, we are required to have a minimum number of local crew members of our drillships. We will need to recruit additional qualified personnel as we take delivery of our newbuilding drillships. Competition for the labor required for drilling operations has intensified as the number of drilling units activated, added to worldwide fleets or under construction has increased, leading to shortages of qualified personnel in the industry and creating upward pressure on wages and higher turnover. If turnover increases, we could see a reduction in the experience level of our personnel, which could lead to higher downtime, more operating incidents and personal injury and other claims, which in turn could decrease revenues and increase costs. In response to these labor market conditions, we are increasing efforts in our recruitment, training, development and retention programs as required to meet our anticipated personnel needs. If these labor trends continue, we may experience further increases in costs or limits on our offshore drilling operations.

Currently, our employees in Brazil and Norway, are covered by collective bargaining agreements. In the future, some of our employees or contracted labor may be covered by collective bargaining agreements in certain jurisdictions such as Nigeriaand the United Kingdom. As part of the legal obligations in some of these agreements, we may be required to contribute certain amounts to retirement funds and pension plans and have restricted ability to dismiss employees. In addition, many of these represented individuals could be working under agreements that are subject to salary negotiation. These negotiations could result in higher personnel costs, other increased costs or increased operating restrictions that could adversely affect our financial performance. Labor disruptions could hinder our operations from being carried out normally and if not resolved in a timely cost-effective manner, could have a material impact on our business. If we choose to cease operations in one of those countries or if the market conditions reduce the demand for our drilling services in such a country, we would incur costs, which may be material, associated with workforce reductions.

As we expand our business, we may need to improve our operating and financial systems and will need to recruit suitable employees and crew for our vessels.

Our current operating and financial systems may not be adequate as we expand the size of our fleet and our attempts to improve those systems may be ineffective. In addition, as we expand our fleet, we will need to recruit suitable additional seafarers and shoreside administrative and management personnel. We may be unable to hire suitable employees as we expand our fleet. If we or our crewing agent encounters business or financial difficulties, we may not be able to adequately staff our vessels. If we are unable to grow our financial and operating systems or to recruit suitable employees as we expand our fleet, our financial performance and our ability to pay dividends, if any, in the future may be adversely affected.

U.S. tax authorities could treat us as a "passive foreign investment company," which could have adverse U.S. federal income tax consequences to U.S. shareholders.

A foreign corporation will be treated as a "passive foreign investment company," or a PFIC, for U.S. federal income tax

purposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of "passive income" or (2) at least 50% of the average value of the corporation's assets produce or are held for the production of those types of "passive income." For purposes of these tests, "passive income" includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute "passive income." U.S. shareholders of a PFIC are subject to a disadvantageous U.S. federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.

Based on our method of operation, we do not believe that we are, have been or will be a PFIC with respect to any taxable year. In this regard, we intend to treat the gross income we derive or are deemed to derive from our time and voyage chartering activities as services income, rather than rental income. Accordingly, we believe that our income from our time and voyage chartering activities does not constitute passive income, and the assets that we own and operate in connection with the production of that income do not constitute assets that produce or are held for production of passive income.

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There is substantial legal authority supporting this position consisting of case law and U.S. Internal Revenue Service, or the IRS, pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, it should be noted that there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, no assurance can be given that the IRS or a court of law will accept this position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any future taxable year if the nature and extent of our operations changed.

If the IRS were to find that we are or have been a PFIC for any taxable year, our U.S. shareholders will face adverse U.S. federal income tax consequences and information reporting obligations. Under the PFIC rules, unless those shareholders make an election available under the Code (which election could itself have adverse consequences for such shareholders), such shareholders would be subject to U.S. federal income tax at the then prevailing income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of our common shares, as if the excess distribution or gain had been recognized ratably over the U.S. shareholder's holding period of our common shares. See "Item 10. Additional Information—E. Taxation" for a more comprehensive discussion of the U.S. federal income tax consequences to U.S. shareholders if we are treated as a PFIC.

We may have to pay tax on United States source shipping income, which would reduce our earnings.

Under the U.S. Internal Revenue Code of 1986, or the Code, 50% of the gross shipping income of a vessel-owning or -chartering corporation, such as ourselves and certain of our subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States may be subject to a 4% U.S. federal income tax without allowance for any deductions, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the Treasury Regulations promulgated thereunder.

We expect that we and each of our vessel-owning subsidiaries qualify for this statutory tax exemption and we have taken and intend to continue to take this position for U.S. federal income tax return reporting purposes. However, there are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption and thereby become subject to U.S. federal income tax on our U.S. source shipping income. For example, we would no longer qualify for exemption under Section 883 of the Code for a particular taxable year if shareholders, resident in jurisdictions other than "qualified foreign countries", with a five percent or greater interest in our common shares owned, in the aggregate, 50% or more of our outstanding common shares for more than half of the days during the taxable year. Due to the factual nature of the issues involved, it is possible that our tax-exempt status or that of any of our subsidiaries may change.

If we or our vessel-owning subsidiaries are not entitled to this exemption under Section 883 for any taxable year, we or our subsidiaries could be subject for those years to an effective 2% (i.e., 50% of 4%) U.S. federal income tax on our gross shipping income attributable to transportation that begins or ends, but that does not both begin and end, in the United States. The imposition of this taxation could have a negative effect on our business and would result in decreased earnings available for distribution to our shareholders.

A change in tax laws, treaties or regulations, or their interpretation, of any country in which we operate our drilling units could result in a high tax rate on our worldwide earnings, which could result in a significant negative impact on our earnings and cash flows from operations.

We conduct our worldwide drilling operations through various subsidiaries. Tax laws and regulations are highly complex and subject to interpretation. Consequently, we are subject to changing tax laws, treaties and regulations in and between countries in which we operate. Our income tax expense is based upon our interpretation of tax laws in effect in various countries at the time that the expense was incurred. A change in these tax laws, treaties or regulations, or in the interpretation thereof, or in the valuation of our deferred tax assets, could result in a materially higher tax expense or a higher effective tax rate on our worldwide earnings in our offshore drilling segment, and such change could be significant to our financial results. If any tax authority successfully challenges our operational structure, inter-company pricing policies or the taxable presence of our key subsidiaries in certain countries; or if the terms of certain income tax treaties are interpreted in a manner that is adverse to our structure; or if we lose a material tax dispute in any country, particularly in the United States, Canada, the United Kingdom, or Norway, our effective tax rate on our worldwide earnings from our offshore drilling operations could increase substantially and our earnings and cash flows from these operations could be materially adversely affected.

Our subsidiaries that provide services relating to drilling may be subject to taxation in the jurisdictions in which such activities are conducted. Such taxation would result in decreased earnings available to our shareholders.

Investors are encouraged to consult their own tax advisors concerning the overall tax consequences of the ownership of our common shares arising in an investor's particular situation under U.S. federal, state, local and foreign law.

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Our vessels may call on ports located in, and our drilling units may operate in, countries that are subject to restrictions imposed by the U.S. or other governments, which could adversely affect our reputation and the market for our common shares.

During the year ended December 31, 2014, none of our vessels has called on ports located in, and none of our drilling units has operated in, countries subject to sanctions and embargoes imposed by the U.S. government and other authorities or countries identified by the U.S. government or other authorities as state sponsors of terrorism, such as Cuba, Iran, Sudan and Syria; however our vessels and drilling units may call on ports or operate in these countries from time to time in the future on our charterers' instructions. The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time. In 2010, the U.S. enacted the Comprehensive Iran Sanctions Accountability and Divestment Act, or CISADA, which amended the Iran Sanctions Act. Among other things, CISADA introduced limits on the ability of companies and persons to do business or trade with Iran when such activities relate to the investment, supply or export of refined petroleum or petroleum products. In 2012, President Obama signed Executive Order 13608 which prohibits foreign persons from violating or attempting to violate, or causing a violation of any sanctions in effect against Iran or facilitating any deceptive transactions for or on behalf of any person subject to U.S. sanctions. Any persons found to be in violation of Executive Order 13608 will be deemed a foreign sanctions evader and will be banned from all contacts with the United States, including conducting business in U.S. dollars. Also in 2012, President Obama signed into law the Iran Threat Reduction and Syria Human Rights Act of 2012, or the Iran Threat Reduction Act, which created new sanctions and strengthened existing sanctions. Among other things, the Iran Threat Reduction Act intensifies existing sanctions regarding the provision of goods, services, infrastructure or technology to Iran's petroleum or petrochemical sector. The Iran Threat Reduction Act also includes a provision requiring the President of the United States to impose five or more sanctions from Section 6(a) of the Iran Sanctions Act, as amended, on a person the President determines is a controlling beneficial owner of, or otherwise owns, operates, or controls or insures a vessel that was used to transport crude oil from Iran to another country and (1) if the person is a controlling beneficial owner of the vessel, the person had actual knowledge the vessel was so used or (2) if the person otherwise owns, operates, or controls, or insures the vessel, the person knew or should have known the vessel was so used. Such a person could be subject to a variety of sanctions, including exclusion from U.S. capital markets, exclusion from financial transactions subject to U.S. jurisdiction, and exclusion of that person's vessels from U.S. ports for up to two years.

Although we believe that we have been in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation could result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business, and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. In addition, certain institutional investors may have investment policies or restrictions that prevent them from holding securities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism. The determination by these investors not to invest in, or to divest from, our common shares may adversely affect the price at which our common shares trade. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. In addition, our reputation and the market for our securities may be adversely affected if we engage in certain other activities, such as entering into charters with individuals or entities in countries subject to U.S. sanctions and embargo laws that are not controlled by the governments of those countries, or engaging in operations associated with those countries pursuant to contracts with third parties that are unrelated to those countries or entities controlled by their governments. Investor perception of the value of our common shares may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.

On November 24, 2013, the P5+1 (the United States, United Kingdom, Germany, France, Russia and China) entered into an interim agreement with Iran entitled the "Joint Plan of Action" ("JPOA"). Under the JPOA it was agreed that, in exchange for Iran taking certain voluntary measures to ensure that its nuclear program is used only for peaceful purposes, the U.S. and EU would voluntarily suspend certain sanctions for a period of six months.

On January 20, 2014, the U.S. and E.U. indicated that they would begin implementing the temporary relief measures provided for under the JPOA. These measures include, among other things, the suspension of certain sanctions on the Iranian petrochemicals, precious metals, and automotive industries from January 20, 2014 until July 20, 2014. The U.S. initially extended the JPOA until November 24, 2014, and has since extended it until June 30, 2015.  These regulations and U.S. sanctions may be amended over time, and the U.S. retains the authority to revoke the aforementioned relief if Iran fails to meet its commitments under the JPOA.

Although it is our intention to comply with the provisions of the JPOA, there can be no assurance that we will be in compliance in the future as such regulations and U.S. Sanctions may be amended over time, and the U.S. retains the authority to revoke the aforementioned relief if Iran fails to meet its commitments under the JPOA.

We may be subject to premium payment calls because we obtain some of our insurance through protection and indemnity associations.

For our drybulk and tanker vessels, we may be subject to increased premium payments, or calls, in amounts based on our claim records as well as the claim records of other members of the protection and indemnity associations in the International Group, which is comprised of 13 mutual protection and indemnity associations and insures approximately 90% of the world's commercial tonnage and through which we receive insurance coverage for tort liability, including pollution-related liability, as well as actual claims. Although there is no cap to the amount of such supplemental calls, historically, supplemental calls for our fleet have ranged from 0% to 40% of the annual insurance premiums, and in no year were such amounts material to the results of our operations. For the drilling units, we may be subject to increased premium payments, or calls, in amounts based on our claim records.

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Our customers may be involved in the handling of environmentally hazardous substances and if discharged into the ocean may subject us to pollution liability which could have a negative impact on our cash flows, results of operations and ability to pay dividends, if any, in the future.

Our operations may involve the use or handling of materials that may be classified as environmentally hazardous substances. Environmental laws and regulations applicable in the countries in which we conduct operations have generally become more stringent. Such laws and regulations may expose us to liability for the conduct of or for conditions caused by others, or for our acts that were in compliance with all applicable laws at the time such actions were taken.

While we conduct maintenance on our drilling units in an effort to prevent such releases, future releases could occur, especially as our rigs age. Such releases may be large in quantity, above our permitted limits or in protected or other areas in which public interest groups or governmental authorities have an interest. These releases could result in fines and other costs to us, such as costs to upgrade our drilling units, costs to clean up the pollution, and costs to comply with more stringent requirements in our discharge permits. Moreover, these releases may result in our customers or governmental authorities suspending or terminating our operations in the affected area, which could have a material adverse effect on our business, results of operation and financial condition.

We expect that we will be able to obtain some degree of contractual indemnification from our customers in most of our drilling contracts against pollution and environmental damages. But such indemnification may not be enforceable in all instances, the customer may not be financially capable in all cases of complying with its indemnity obligations or we may not be able to obtain such indemnification agreements in the future.

Our operating and maintenance costs with respect to our offshore drilling units will not necessarily fluctuate in proportion to changes in operating revenues, which may have a material adverse effect on our results of operations, financial condition and cash flows.

Operating revenues may fluctuate as a function of changes in dayrates. However, costs for operating a drilling unit are generally fixed regardless of the dayrate being earned. Therefore, our operating and maintenance costs with respect to our offshore drilling units will not necessarily fluctuate in proportion to changes in operating revenues. In addition, should our drilling units incur idle time between contracts, we typically will not de-man those drilling units but rather use the crew to prepare the rig for its next contract. During times of reduced activity, reductions in costs may not be immediate, as portions of the crew may be required to prepare rigs for stacking, after which time the crew members are assigned to active rigs or dismissed. In addition, as our drilling units are mobilized from one geographic location to another, labor and other operating and maintenance costs can vary significantly. In general, labor costs increase primarily due to higher salary levels and inflation. Equipment maintenance expenses fluctuate depending upon the type of activity the unit is performing and the age and condition of the equipment. Contract preparation expenses vary based on the scope and length of contract preparation required and the duration of the firm contractual period over which such expenditures are incurred. If we experience increased operating costs without a corresponding increase in earnings, this may have a material adverse effect on our results of operations, financial condition and cash flows.

We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us.

We have been and may be, from time to time, involved in various litigation matters. These matters may include, among other things, contract disputes, personal injury claims, environmental claims or proceedings, asbestos and other toxic tort claims, employment matters, governmental claims for taxes or duties, and other litigation that arises in the ordinary course of our business. Although we intend to defend these matters vigorously, we cannot predict with certainty the outcome or effect of any claim or other litigation matter, and the ultimate outcome of any litigation or the potential costs to resolve them may have a material adverse effect on us. Insurance may not be applicable or sufficient in all cases and/or insurers may not remain solvent which may have a material adverse effect on our financial condition.

Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties, drilling contract terminations and an adverse effect on our business.

We may operate in a number of countries throughout the world, including countries known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977, or the FCPA. We are subject, however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees and agents may take actions determined to be in violation of such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.

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Risks Relating to Our Common Shares

Our Chairman, President and Chief Executive Officer, who may be deemed to beneficially own, directly or indirectly, approximately 17.6% of our outstanding common shares, may have the power to exert control over us, which may limit your ability to influence our actions.

As of March 2, 2015, our Chairman, President and Chief Executive Officer, Mr. George Economou, may be deemed to have beneficially owned, directly or indirectly, approximately 17.6% of our outstanding common shares and therefore may have the power to exert considerable influence over our actions. The interests of our Chairman, President and Chief Executive Officer may be different from your interests.

Future sales of our common shares could cause the market price of our common shares to decline.

The market price of our common shares could decline due to sales, or the announcements of proposed sales, of a large number of common shares in the market, including sales of common shares by our large shareholders, or the perception that these sales could occur. These sales, or the perception that these sales could occur, could also make it more difficult or impossible for us to sell equity securities in the future at a time and price that we deem appropriate to raise funds through future offerings of common shares.

Our Amended and Restated Articles of Incorporation authorize our board of directors to, among other things, issue additional shares of common or preferred stock or securities convertible or exchangeable into equity securities, without shareholder approval. We may issue such additional equity or convertible securities to raise additional capital. The issuance of any additional shares of common or preferred stock or convertible securities could be substantially dilutive to our shareholders. Moreover, to the extent that we issue restricted stock units, stock appreciation rights, options or warrants to purchase our common shares in the future and those stock appreciation rights, options or warrants are exercised or as the restricted stock units vest, our shareholders may experience further dilution. Holders of shares of our common shares have no preemptive rights that entitle such holders to purchase their pro rata share of any offering of shares of any class or series and, therefore, such sales or offerings could result in increased dilution to our shareholders.

There is no guarantee of a continuing public market for you to resell our common shares.

Our common shares commenced trading on the NASDAQ National Market, now the NASDAQ Global Market, in February 2005. Our common shares now trade on the NASDAQ Global Select Market. We cannot assure you that an active and liquid public market for our common shares will continue. The price of our common shares may be volatile and may fluctuate due to factors such as:

●            actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry;

●            mergers and strategic alliances in the drybulk shipping industry;

●            market conditions in the drybulk shipping industry and the general state of the securities markets;

●            changes in government regulation;

●            shortfalls in our operating results from levels forecast by securities analysts; and

●            announcements concerning us or our competitors.

The trading price of our common shares is below $5.00 and if it remains below that level, under stock exchange rules, our stockholders will not be able to use such shares as collateral for borrowing in margin accounts. This inability to use our common shares as collateral may depress demand as certain institutional investors are restricted from investing in shares priced below $5.00 and lead to sales of such shares creating downward pressure on and increased volatility in the market price of our common shares.

You may not be able to sell your shares of our common shares in the future at the price that you paid for them or at all.

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Anti-takeover provisions in our organizational documents could make it difficult for our stockholders to replace or remove our current board of directors or have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common shares.

Several provisions of our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws could make it difficult for our stockholders to change the composition of our board of directors in any one year, preventing them from changing the composition of management. In addition, the same provisions may discourage, delay or prevent a merger or acquisition that stockholders may consider favorable.

These provisions include:

● authorizing our board of directors to issue "blank check" preferred stock without stockholder approval;

● providing for a classified board of directors with staggered, three-year terms;

● prohibiting cumulative voting in the election of directors;

● authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of a majority of the outstanding shares of our common shares entitled to vote for the directors;

● prohibiting stockholder action by written consent unless the written consent is signed by all shareholders entitled to vote on the action;

● limiting the persons who may call special meetings of stockholders;

● establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings; and

● restricting business combinations with interested shareholders.

In addition, we have entered into a stockholders rights agreement that will make it more difficult for a third party to acquire us without the support of our board of directors. See "Item 10. Additional Information—B. Memorandum and Articles of Association—Stockholders Rights Plan."

The above anti-takeover provisions, including the provisions of our stockholders rights plan, could substantially impede the ability of public stockholders to benefit from a change in control and, as a result, may adversely affect the market price of our common shares and your ability to realize any potential change of control premium.

We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law, and as a result, shareholders may have fewer rights and protections under Marshall Islands law than under a typical jurisdiction in the United States.

Our corporate affairs are governed by our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws and by the Marshall Islands Business Corporations Act, or the BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Republic of the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the law of the Republic of the

Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain United States jurisdictions. Shareholder rights may differ as well. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions, our public shareholders may have more difficulty in protecting their interests in the face of actions by management, directors or controlling shareholders than would shareholders of a corporation incorporated in a United States jurisdiction.

Because the Public Company Accounting Oversight Board is not currently permitted to inspect our independent accounting firm, you may not benefit from such inspections.

Auditors of U.S. public companies are required by law to undergo periodic Public Company Accounting Oversight Board, or PCAOB, inspections that assess their compliance with U.S. law and professional standards in connection with performance of audits of financial statements filed with the SEC. Certain European Union countries, including Greece, do not currently permit the PCAOB to conduct inspections of accounting firms established and operating in such European Union countries, even if they are part of major international firms. Accordingly, unlike for most U.S. public companies, the PCAOB is prevented from evaluating our auditor's performance of audits and its quality control procedures, and, unlike shareholders of most U.S. public companies, we and our shareholders are deprived of the possible benefits of such inspections.

We are a "foreign private issuer", which could make our common shares less attractive to some investors or otherwise harm our stock price.

We are a "foreign private issuer," as such term is defined in Rule 405 under the Securities Act.  As a "foreign private issuer" the rules governing the information that we disclose differ from those governing U.S. corporations pursuant to the Securities and Exchange Act of 1934, as amended, or the Exchange Act. We are not required to file quarterly reports on Form 10Q or provide current reports on Form 8-K disclosing significant events within four days of their occurrence. In addition, our officers and directors are exempt from the reporting and "short-swing" profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchase and sales of our securities. Our exemption from the rules of Section 16 of the Exchange Act regarding sales of ordinary shares by insiders means that you will have less data in this regard than shareholders of U.S. companies that are subject to the Exchange Act. Moreover, we are exempt from the proxy rules, and proxy statements that we distribute will not be subject to review by the SEC. Accordingly there may be less publicly available information concerning us than there is for other U.S. public companies.  These factors could make our common shares less attractive to some investors or otherwise harm our stock price.

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Item 4.   Information on the Company

A.           History and Development of the Company

DryShips Inc., a corporation organized under the laws of the Republic of the Marshall Islands, was formed on September 9, 2004. Our principal executive offices are located at 109 Kifisias Avenue and Sina Street, Amaroussion, GR 151 24 Greece. Our telephone number at that address is 0030-210-809-0570.

Business Development

 In December 2010, Ocean Rig UDW completed the sale of an aggregate of 28,571,428 of its common shares (representing approximately 22% of Ocean Rig UDW's then outstanding common shares) in a private offering to eligible purchasers at a price of $17.50 per share, or the Ocean Rig UDW Private Placement. A company controlled by our Chairman, President and Chief Executive Officer, Mr. George Economou, purchased 2,869,428 common shares, or 2.38% of Ocean Rig UDW's then outstanding common shares, in the Ocean Rig UDW Private Placement at the offering price of $17.50 per share. We received approximately $488.3 million of net proceeds from the Ocean Rig UDW Private Placement. Following the completion of the Ocean Rig UDW Private Placement, we owned approximately 78% of the outstanding common shares of Ocean Rig UDW.

On April 27, 2011, Ocean Rig UDW completed the issuance and sale of $500.0 million aggregate principal amount of its 9.5% senior unsecured notes due 2016, or Senior Unsecured Notes, in a private offering to eligible purchasers. The net proceeds from the offering of the Senior Unsecured Notes amounted to approximately $487.5 million.

On August 26, 2011, Ocean Rig UDW commenced an offer to exchange up to 28,571,428 of its common shares that were registered under the U.S. Securities Act of 1933, as amended, or the Securities Act, pursuant to a registration statement on Form F-4 (Registration No. 333-175940), for an equivalent number of its common shares previously sold in the Ocean Rig UDW Private Placement, or the Ocean Rig UDW Exchange Offer. On September 29, 2011, an aggregate of 28,505,786 common shares were exchanged in the Ocean Rig UDW Exchange Offer.

On October 5, 2011, we completed the partial spin off of Ocean Rig UDW by distributing an aggregate of 2,967,291 common shares of Ocean Rig UDW, representing approximately a 2.25% stake in Ocean Rig UDW, after giving effect to the treatment of fractional shares, on a pro rata basis to our shareholders of record as of September 21, 2011. In lieu of fractional shares, our transfer agent aggregated all fractional shares that would otherwise be distributable to our shareholders and sold a total of 105 common shares on behalf of those shareholders who would otherwise be entitled to receive a fractional share of Ocean Rig UDW. Following the distribution, each such shareholder received a cash payment in an amount equal to its pro rata share of the total net proceeds of the sale of fractional shares. On September 19, 2011, Ocean Rig UDW's common shares commenced "when issued" trading on the NASDAQ Global Select Market under the ticker "ORIGV." Ocean Rig UDW's common shares commenced "regular way" trading on the NASDAQ Global Select Market under the ticker symbol "ORIG" on October 6, 2011.

The conditions for the mandatory conversion of 25% of our 52,238,806 outstanding shares of Series A Convertible Preferred Stock into 10,242,903 of our common shares, at the conversion price set forth in the Certificate of Designations, were met on each of December 31, 2010, March 31, 2011, July 31, 2011 and September 30, 2011, the contractual delivery dates of the Ocean Rig Corcovado, the Ocean Rig Olympia, the Ocean Rig Poseidon and the Ocean Rig Mykonos, respectively. Accordingly, we issued a total of 46,095,517 common shares in connection with the conversion of our shares of Series A Convertible Preferred Stock, including 5,123,905 common shares issued in October 2011 upon the conversion, at the conversion price set forth in the Certificate of Designations, of an aggregate of 6,532,979 dividend shares of Series A Convertible Preferred Stock accrued quarterly from July 9, 2009 through September 30, 2011 and held by each shareholder.

On November 3, 2011, the merger of Pelican Stockholdings Inc., or Pelican Stockholdings, our wholly-owned subsidiary, and OceanFreight Inc., or OceanFreight, was completed, following approval by shareholders of OceanFreight at a special meeting of shareholders held on November 3, 2011. Following the completion of the merger, OceanFreight is our wholly-owned subsidiary. We refer to this transaction as the OceanFreight acquisition. Under the terms of the merger agreement, OceanFreight shareholders received $11.25 cash and 0.52326 of a common share of Ocean Rig UDW per common share of OceanFreight previously owned. Following the closing of the OceanFreight acquisition, we transferred $33.1 million in cash and 1,541,159 common shares of Ocean Rig UDW to shareholders of OceanFreight, other than the entities controlled by Mr. Anthony Kandylidis, the Chief Executive Officer of OceanFreight, as discussed below. The common shares of Ocean Rig UDW that comprised the stock portion of the merger consideration were currently outstanding shares that were owned by us. Prior to the completion of the merger, we acquired from the entities controlled by Mr. Kandylidis all of their shares of OceanFreight, representing a majority of the outstanding shares of OceanFreight, for the same consideration per share that the OceanFreight shareholders received in the OceanFreight acquisition, which amounted to approximately $33.8 million in cash and 1,570,226 common shares of Ocean Rig UDW. Mr. Kandylidis is the Executive Vice President of Dryships Inc. as well as of Ocean Rig UDW and the son of one of our directors.

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On December 6, 2011, we announced that the board of directors of Ocean Rig UDW had approved a repurchase program through December 31, 2013 for up to a total of $500.0 million of Ocean Rig UDW's common shares and Senior Unsecured Notes. As of December 31, 2014, no repurchases had been made under the repurchase program.

On April 17, 2012, DryShips Inc. completed the sale of an aggregate of 11,500,000 common shares of Ocean Rig UDW owned by DryShips Inc. in a public offering amounting to net proceeds to us of $180.5 million. Companies affiliated with our Chairman, President and Chief Executive Officer purchased a total of 2,185,000 common shares of Ocean Rig UDW from DryShips at the public offering price of $16.25 per share.

On September 20, 2012, Drill Rigs Holdings, our majority-owned subsidiary and a wholly-owned subsidiary of Ocean Rig UDW, completed the issuance of $800 million of aggregate principal amount of Senior Secured Notes, in a private offering to eligible purchasers, or the Drill Rigs Holdings Secured Bond Offering.

On February 14, 2013, DryShips Inc. completed the sale of an aggregate of 7,500,000 common shares of Ocean Rig UDW owned by DryShips Inc. in a public offering amounting to net proceeds to us of $123.0 million.

On October 4, 2013, we filed a prospectus supplement to the universal shelf registration statement on Form F-3 filed on August 30, 2013, pursuant to an at-the-market offering for up to $200 million of our common shares. In connection with the offering, we entered into a Sales Agreement with Evercore Group L.L.C., ("Evercore"), the sales agent, dated October 4, 2013. During 2013, 6,892,233 common shares were issued and sold pursuant to the at-the-market offering, resulting in net proceeds of $23.7 million, after deducting commissions, while in 2014, 22,209,844 common shares were issued and sold pursuant to the at-the-market offering, resulting in net proceeds of $90.0 million, after deducting commissions.

On October 29, 2014, we completed the issuance of 250,000,000 of our common shares in a public offering amounting to net proceeds to us of $332.9 million.

As of March 2, 2015, we had 669,964,321 common shares outstanding and we owned 78,301,755 shares, or 59.2%, of Ocean Rig UDW's outstanding common shares.

We may sell a minority voting and economic interest in our wholly-owned subsidiary, Tankships Investment Holdings Inc., the indirect owner and operator of our oil tankers, which on February 20, 2015 filed a registration statement on Form F-1 with the SEC relating to a possible initial public offering. Alternatively, we may distribute, or spin off, a minority voting and economic interest in Tankships Investment Holdings Inc. to holders of our voting stock (including holders of our preferred shares), or complete some combination of a public offering and distribution to holders of our voting stock. There can be no assurance, however, that we will complete any such transaction, which, among other things, will be subject to market conditions.

Vessel Acquisitions and Dispositions

During 2012, we: (i) sold the drybulk vessels Avoca, Padre and Positano for an aggregate sales price of $118.0 million; (ii) took delivery of one of our newbuilding VLOCs, Fakarava, and paid construction costs of $36.4 million in the aggregate in connection with the delivery of the vessel; (iii) took delivery of our newbuilding Aframax tanker, Calida, and two of our newbuilding Suezmax tankers, Lipari and Petalidi, and paid construction costs of $135.1 million in the aggregate in connection with the delivery of the vessels; (iv) took delivery of two newbuilding Panamax vessels, the Woolloomooloo and the Raraka, and paid construction costs of $33.1 million in the aggregate in connection with the delivery of the vessels; (v) exercised the fourth of our six newbuilding drillship options under our option agreement with Samsung and, as a result, entered into a shipbuilding contract for our fourth seventh generation drillship; and novated the construction contracts relating to our two remaining newbuilding Suezmax tankers, Esperona and Blanca, to a third-party buyer for cash consideration of $21.4 million in the aggregate paid by us to the buyer and were released from all of our obligations under the construction contracts.

During 2013, we (i) took delivery of our two newbuilding Aframax tankers, Alicante and Mareta, and one newbuilding Suezmax tanker, Bordeira, and paid construction costs of an aggregate of $111.8million in connection with the delivery of the vessels;(ii) took delivery of our newbuilding VLOC's Negonego (ex. H1229) and Rangiroa (ex. H1228), respectively, and paid construction costs of an aggregate of $99.4million in connection with the delivery of the vessels;(iii) concluded two Memoranda of Agreements for the sale of two Capesize newbuildings, H1241 and H1242, for a sale price of $71.0 million in the aggregate; (iv) accepted an offer from an entity affiliated with George Economou for the novation of the shipbuilding contracts of two VLOC under construction, H1239 and H1240; and (v) through our majority owned subsidiary, Ocean Rig, took delivery of the Ocean Rig Mylos, and the Ocean Rig Skyros.

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During 2014, we (i) took delivery of one second hand Capesize vessel with an attached time charter, Raiatea (ex. Conches), for a purchase price of $53.0 million; (ii) canceled the construction of the four newbuilding Ice class Panamax vessels and received all installments previously paid to the shipyard of $11.6 million, plus interest, which resulted to a loss of $1.3 million; and (iii) through our majority owned subsidiary, Ocean Rig, took delivery of the Ocean Rig Athena.

As of March 5, 2015, we had contracts for the construction of three seventh generation drillships, two of which are new integrated design drillships and all are equiped with two blow-outpreventers, scheduled for delivery in June 2016, February 2017 and June 2017.

As of March 2, 2015, we had made pre-delivery payments of $280.2 million in the aggregate for our three seventh generation drillships under construction. The total estimated remaining construction payments for these drillships amounted to approximately $1.8 billion in the aggregate, excluding financing costs, as of March 2, 2015. We plan to finance these costs with cash on hand, operating cash flow, equity financing and additional bank debt.  We have not yet arranged financing for the remaining construction payments relating to the construction of our three seventh generation drillships. We cannot be certain that we will be able to obtain the additional financing we need to complete the acquisition of our seventh generation drillships on acceptable terms or at all.

B.           Business Overview

Overview

We are an international provider of ocean transportation services for drybulk and petroleum cargoes through our ownership and operation of drybulk carrier vessels and oil tankers and offshore drilling services through the ownership and operation by our majority-owned subsidiary, Ocean Rig UDW, of ultra-deepwater drilling units.

As of March 5, 2015, we owned a fleet of (i) 39 drybulk carriers, comprised of 13 Capesize, 24 Panamax and 2 Supramax vessels, which have a combined deadweight tonnage of approximately 4.3 million dwt and an average age of approximately 9.5 years, (ii) 10 tankers, comprisied of 4 Suezmax and 6 Aframax vessels, which have a combined deadweight tonnage of approximately 1.3 million dwt and an average age of approximatel 2.9 years and (iii) 10 drilling units, comprised of two modern, fifth generation, advanced capability ultra-deepwater semisubmersible offshore drilling rigs, our sixth generation, advanced capability ultra-deepwater drillships and four seventh generation, advanced capability ultra-deepwater drillships.

As of March 5, 2015, we had entered into contracts for the construction of three seventh generation drillships, two of which are new integrated design drillships and all are equiped with two blow-outpreventers, scheduled for delivery in June 2016, February 2017 and June 2017, respectively. See "—Our Offshore Drilling Operations—Newbuilding Drillships and Operations to Purchase Newbuilding Drillships."

Our drybulk carriers, drilling units and oil tankers operate worldwide within the trading limits imposed by our insurance terms and do not operate in areas where United States, European Union or United Nations sanctions have been imposed.

Ocean Rig UDW comprises our entire offshore drilling segment, which represented approximately 78.1% of our total assets and approximately 83.1% of our total revenues for the year ended December 31, 2014. As we have done in the past, we may, in the future, sell a minority voting and economic interest in Ocean Rig UDW in a public offering or distribute, or spin off, a minority voting and economic interest in Ocean Rig UDW to holders of our voting stock. There can be no assurance, however, that we will complete any such transaction, which, among other things, will be subject to market conditions.

In addition, we may sell a minority voting and economic interest in our wholly-owned subsidiary, Tankships Investment Holdings Inc., the indirect owner and operator of our oil tankers, which on February 20, 2015 filed a registration statement on Form F-1 with the SEC relating to a possible initial public offering. Alternatively, we may distribute, or spin off, a minority voting and economic interest in Tankships Investment Holdings Inc. to holders of our voting stock (including holders of our preferred shares), or complete some combination of a public offering and distribution to holders of our voting stock. There can be no assurance, however, that we will complete any such transaction, which, among other things, will be subject to market conditions.

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Our Fleet

Set forth below is summary information concerning our fleet as of February 24, 2015.

Drybulk Vessels

							Redelivery
	Year Built	DWT	Type	Current employment or employment upon delivery	Gross rate per day		Earliest	Latest
Capesize:
Rangiroa	2013	206,026	Capesize	T/C (1)		$23,000	May-18	Dec-23
Negonego	2013	206,097	Capesize	T/C (1)		$21,500	Mar-20	Feb-28
Fakarava	2012	206,152	Capesize	T/C		$25,000	Sept-15	Sept-20
Raiatea	2011	179,078	Capesize	T/C (1)		$23,500	Oct-19	Dec-19
Mystic	2008	170,040	Capesize	T/C		$52,310	Aug-18	Dec-18
Robusto	2006	173,949	Capesize	T/C (1)		$23,500	Jul-19	Sep-19
Cohiba	2006	174,234	Capesize	T/C (1)		$23,500	Sep-19	Nov-19
Montecristo	2005	180,263	Capesize	T/C (1)		$23,500	Jul-19	Sep-19
Flecha	2004	170,012	Capesize	T/C		$55,000	Jul-18	Nov-18
Manasota	2004	171,061	Capesize	T/C		$30,000	Jan-18	Aug-18
Partagas	2004	173,880	Capesize	T/C (1)		$23,500	Sep-19	Nov-19
Alameda	2001	170,662	Capesize	T/C		$27,500	Nov-15	Jan-16
Capri	2001	172,579	Capesize	T/C		$20,000	Jan-16	May-16
Average age based on year built/ Sum of DWT/ Total number of vessels	7.6 years	2,354,033	13

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						Redelivery
	Year Built	DWT	Type	Current employment or employment upon delivery	Gross rate per day	Earliest	Latest
Panamax:
Raraka	2012	76,037	Panamax	Spot	Spot	N/A	N/A
Woolloomooloo	2012	76,064	Panamax	Spot	Spot	N/A	N/A
Amalfi	2009	75,206	Panamax	Spot	Spot	N/A	N/A
Rapallo	2009	75,123	Panamax	T/C Index  linked	T/C Index linked	Jul-16	Sep-16
Catalina	2005	74,432	Panamax	Spot	Spot	N/A	N/A
Majorca	2005	74,477	Panamax	Spot	Spot	N/A	N/A
Ligari	2004	75,583	Panamax	Spot	Spot	N/A	N/A
Saldanha	2004	75,707	Panamax	Spot	Spot	N/A	N/A
Sorrento	2004	76,633	Panamax	T/C	$24,500	Aug-21	Dec-21
Mendocino	2002	76,623	Panamax	T/C Index  linked	T/C Index linked	Sep-16	Nov-16
Bargara	2002	74,832	Panamax	T/C Index  linked	T/C Index linked	Sep-16	Nov-16
Oregon	2002	74,204	Panamax	Spot	Spot	N/A	N/A
Ecola	2001	73,931	Panamax	Spot	Spot	N/A	N/A
Samatan	2001	74,823	Panamax	Spot	Spot	N/A	N/A
Sonoma	2001	74,786	Panamax	Spot	Spot	N/A	N/A
Capitola	2001	74,816	Panamax	Spot	Spot	N/A	N/A
Levanto	2001	73,925	Panamax	T/C Index  linked	T/C Index linked	Aug-16	Oct-16
Maganari	2001	75,941	Panamax	Spot	Spot	N/A	N/A
Coronado	2000	75,706	Panamax	Spot	Spot	N/A	N/A
Marbella	2000	72,561	Panamax	Spot	Spot	N/A	N/A
Redondo	2000	74,716	Panamax	Spot	Spot	N/A	N/A
Topeka	2000	74,716	Panamax	Spot	Spot	N/A	N/A
Ocean Crystal	1999	73,688	Panamax	Spot	Spot	N/A	N/A
Helena	1999	73,744	Panamax	Spot	Spot	N/A	N/A
Average age based on year built / Sum of DWT/ Total number of vessels	11.7 years	1,798,274	24
Supramax:
Byron	2003	51,118	Supramax	Spot	Spot	N/A	N/A
Galveston	2002	51,201	Supramax	Spot	Spot	N/A	N/A
Average age based on year built / Sum of DWT/ Total number of vessels	12.5 years	102,319	2
Totals (38)
Average age based on year built / Sum of DWT/ Total number of vessels	9.5 years	4,254,626	39

(1) Time charter includes purchase options for the charterer, see also "Item 3. Key Information—D. Risk Factors—Company Specific Risk Factors—The failure of our counterparties to meet their obligations under our time charter agreements, or their exercise of a purchase option under certain of those agreements, could cause us to suffer losses or otherwise adversely affect our business."

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Drilling Units

Drilling Unit Operating Drilling Rigs	Year Built or Scheduled Delivery/ Generation	Water Depth to the Wellhead (ft)	Drilling Depth to the Oil Field (ft)	Customer	Expected Contract Term(1)		Average Maximum Dayrate			Drilling Location
Leiv Eiriksson	2001/5th	10,000	30,000	Rig Management Norway AS(2)	Q2 2013–Q1 2016		$	545,000		Norwegian Continental Shelf
Eirik Raude	2002/5th	10,000	30,000	Premier Oil Exploration and Production Ltd.(3)	Q1 2015 – Q4 2015		$	561,350		Falkland Islands
Operating Drillships
Ocean Rig Corcovado	2011/6th	10,000	40,000	Petroleo Brasileiro S.A.	Q2 2012–Q2 2015		$	439,402	(4)	Brazil
				Petroleo Brasileiro S.A.	Q2 2015–Q2 2018		$	523,306	(5)	Brazil
Ocean Rig Olympia	2011/6th	10,000	40,000	Total E&P Angola	Q3 2012–Q3 2015	(6)	$	585,437		Angola
				ENI Angola S.p.A.(7)	Q4 2015-Q4 2015		$	355,000		Angola
Ocean Rig Poseidon	2011/6th	10,000	40,000	ENI Angola S.p.A.	Q2 2013–Q2 2016		$	690,300	(8)	Angola
				ENI Angola S.p.A.(10)	Q2 2016-Q2 2017		$	539,150		Angola
Ocean Rig Mykonos	2011/6th	10,000	40,000	Petroleo Brasileiro S.A.	Q1 2012–Q1 2015		$	433,044	(4)	Brazil
				Petroleo Brasileiro S.A.	Q1 2015–Q1 2018		$	514,090	(5)	Brazil
Ocean Rig Mylos	2013/7th	12,000	40,000	Repsol Sinopec Brasil S.A.	Q3 2013–Q3 2016		$	637,270	(9)	Brazil
Ocean Rig Skyros	2013/7th	12,000	40,000	ENI Angola S.p.A.(7)	Q2 2015-Q3 2015		$	355,000		Nigeria, Angola
				Total E&P Angola	Q4 2015-Q3 2021		$	592,834		Angola
Ocean Rig Athena	2014/7th	12,000	40,000	ConocoPhillips Angola 36 & 37 Ltd	Q1 2014–Q2 2017		$	662,523	(10)	Angola
Ocean Rig Apollo	Q1 2015/7th	12,000	40,000	Total E&P Congo	Q1 2015-Q2 2018		$	594,646	(11)	West Africa
Newbuilding Drillships
							$		(11)
Ocean Rig Santorini	Q2 2016/7th	12,000	40,000
Ocean Rig TBN#1	Q1 2017/7th	12,000	40,000
Ocean Rig TBN#2	Q2 2017/7th	12,000	40,000

(1)           Not including the exercise of any applicable options to extend the term of the contract.

(2)           Rig Management Norway is the coordinator for the consortium under the contract. The contract has a minimum duration of 1,070 days and includes three options of up to six wells each that must be exercised prior to the expiration of the firm contract period in the first quarter of 2016.

(3)           The contract has a minimum duration of 260 days and includes two options of up to eight wells each, the first of which must be exercised prior to the commencement of the contract and the other one must be exercised before the expiration of the firm and option contract period.

(4)           Approximately 20% of the maximum dayrates are service fees paid to us in Brazilian Real (R$). The maximum dayrate disclosed in this table is based on the February 24, 2015 exchange rate of R$2.87:$1.00.

(5)We have been awarded extensions of the drilling contracts for the Ocean Rig Corcovado and the Ocean Rig Mykonos by Petrobras for drilling offshore Brazil. The term of each extension is for 1,095 excluding reimbursement by Petrobras for contract related equipment upgrades. The new contracts will commence in direct continuation from the end of the current agreements with Petrobras, in the first and second quarter of 2015, respectively.

(6)           Total E&P Angola has notified us its intentions to redeliver the Ocean Rig Olympia on completion of its present well expected in the first quarter of 2015 and ahead of the contractual redelivery date of August 2015. We are presently in discussions with Total EP Angola and intend to legally defend our rights should we fail to reach an amicable solution.

(7)On January 8, 2015, we, entered into an Omnibus Agreement with ENI Angola S.p.A pursuant to which pursuant to which ENI has exercised its option to extend the contract for the drillship Ocean Rig Poseidon for a further one year until the second quarter of 2017. As part of the contract extension for the Ocean Rig Poseidon, Ocean Rig has agreed to adjust the existing dayrate of the Ocean Rig Poseidon contract in exchange for ENI agreeing to enter into two contracts (the "ENI contracts") for the employment of one or more of Ocean Rig's available drillships in West Africa starting in the first quarter of 2015 for an aggregate period of approximately 8 months. The Agreement outlined above remains subject to customary closing conditions including the approval by national authorities which we expect will be obtained before the end of the first quarter of 2015.

(8)           The maximum dayrate of $690,300 is the average maximum dayrate applicable during the initial three-year term of the contract. Under the contract, the initial maximum dayrate of $670,000 will increase annually at a rate of 3%, beginning twelve months after the commencement date, during the term of the contract. ENI has the option to extend the term of the contract by two optional periods of one-year each.

(9)           On November 4, 2013 the Ocean Rig Mylos commenced drilling operations with Repsol at an average maximum dayrate of approximately $637,270 over the initial term of the contract. Under the contract, Repsol has options to extend the contract for up to two years beyond the initial three-year contract period.

(10)         On June 7, 2014, the Ocean Rig Athena commenced drilling operations with ConocoPhillips at an average maximum dayrate of $662,523 which is the average maximum dayrate applicable during the initial three-year term of the contract. Under the contract, the initial maximum dayrate is subject to a fixed annual escalation of approximately 6% during the contract period. Under the contract, ConocoPhillips has the option to extend the initial contract period by up to two years.

(11)         The maximum dayrate of approximately $594,646 is the average maximum dayrate applicable during the initial three-year term of the contract. Under the contract, the initial maximum dayrate of $580,000 is subject to a fixed escalation of 2% during the contract period. Under the contract, the counterparty has the option to extend the initial contract period by up to two years.

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Tankers

						Redelivery
	Year Built	DWT	Type	Current employment or employment upon delivery	Gross rate per day		Earliest	Latest
Suezmax:
Bordeira	2013	158,513	Suezmax	Spot	N/A		N/A	N/A
Petalidi	2012	158,532	Suezmax	Spot	N/A		N/A	N/A
Lipari	2012	158,425	Suezmax	Spot	N/A		N/A	N/A
Vilamoura	2011	158,622	Suezmax	Spot	N/A		N/A	N/A
Aframax
Alicante	2013	115,708	Aframax	Spot	N/A		N/A	N/A
Mareta	2013	115,796	Aframax	Spot	N/A		N/A	N/A
Calida	2012	115,812	Aframax	Spot	N/A		N/A	N/A
Saga	2011	115,738	Aframax	Spot	N/A		N/A	N/A
Daytona	2011	115,896	Aframax	Spot	N/A		N/A	N/A
Belmar	2011	115,904	Aframax	Spot	N/A		N/A	N/A

Our Drybulk Operations

Management of our Drybulk Vessels

We do not employ personnel to run our vessel operating and chartering business on a day-to-day basis. Prior to January 1, 2011, Cardiff Marine Inc., or Cardiff, a company affiliated with our Chairman, President and Chief Executive Officer, Mr. George Economou, served as our technical and commercial manager pursuant to separate management agreements with each of our drybulk vessel-owning subsidiaries. Effective January 1, 2011, we entered into new management agreements with TMS Bulkers, a related party entity, that replaced our management agreements with Cardiff, on the same terms as our management agreements with Cardiff, as a result of an internal restructuring of Cardiff for the purpose of enhancing Cardiff's efficiency and the quality of its ship-management services. For a description of the terms of our management agreements with TMS Bulkers, see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Cardiff, TMS Bulkers and TMS Tankers—Management Agreements—Drybulk Vessels."

We believe that TMS Bulkers has established a reputation in the international shipping industry for operating and maintaining a fleet with high standards of performance, reliability and safety.

TMS Bulkers utilizes the same experienced personnel utilized by Cardiff in providing us with comprehensive ship management services, including technical supervision, such as repairs, maintenance and inspections, safety and quality, crewing and training as well as supply provisioning. TMS Bulkers' commercial management services include operations, chartering, sale and purchase, post-fixture administration, accounting, freight invoicing and insurance.

TMS Bulkers' completed implementation of the ISM Code, in 2010. TMS Bulkers has obtained documents of compliance for its office and safety management certificates for our vessels as required by the ISM Code and is ISO 14001 certified in recognition of its commitment to overall quality.

TMS Bulkers is beneficially owned by our Chairman, President and Chief Executive Officer, Mr. George Economou, and, under the guidance of our board of directors, manages our business as a holding company, including our own administrative functions, and we monitor TMS Bulkers' performance under the management agreements.

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Chartering of our Drybulk Vessels

We actively manage the deployment of our drybulk fleet between long-term time charters and short-term time charters or spot charters, which generally last from several weeks to several days, and long-term time charters and bareboat charters, which can last up to several years.

As of March 2, 2015, 18 of our drybulk vessels were employed under time charters and 21 of our drybulk vessels were employed in the spot market.

Time Charters

A time charter is a contract to charter a vessel for a fixed period of time at a specified or floating daily or index-based daily rate and can last from a few days to several years. Under a time charter, the charterer pays for the voyage expenses, such as port, canal and fuel costs, while the shipowner pays for vessel operating expenses, including, among other costs, crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs and costs relating to a vessel's intermediate and special surveys.

Spot Charters

A spot charter generally refers to a voyage charter or a trip charter or a short-term time charter.

Vessels operating in the spot market typically are chartered for a single voyage, which may last up to several weeks. Under a typical voyage charter in the spot market, the shipowner is paid an agreed-upon total amount on the basis of moving cargo from a loading port to a discharge port. In voyage charters, the charterer generally is responsible for any delay at the loading or discharging ports, and the shipowner is generally responsible for paying both vessel operating expenses and voyage expenses, including any bunker expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions.

Bareboat Charter

Under a bareboat charter, the vessel is chartered for a stipulated period of time, which gives the charterer possession and control of the vessel, including the right to appoint the master and the crew. Under bareboat charters, all voyage costs are paid by the charterer.

Competition

Demand for drybulk carriers fluctuates in line with the main patterns of trade of the major drybulk cargoes and varies according to changes in the supply and demand for these items. We compete with other owners of drybulk carriers in the Capesize, Panamax and Supramax size sectors. Ownership of drybulk carriers is highly fragmented and is divided among approximately 1,600 independent drybulk carrier owners. We compete for charters on the basis of price, vessel location, size, age and condition of the vessel, as well as on our reputation as an owner and operator.

Customers

Our assessment of a charterer's financial condition, creditworthiness, reliability and track record are important factors in negotiating employment for our vessels. We believe that our management team's network of relationships and more generally TMS Bulker's reputation and experience in the shipping industry  will continue to provide competitive employment opportunities for our vessels in the future.

During the year ended December 31, 2014, two of our customers accounted for more than ten percent of our total drybulk revenues: Customer A (42%), Customer B (18%).  During the year ended December 31, 2013, two of our customers accounted for more than ten percent of our total drybulk revenues: Customer C (38%), Customer D (20%). During the year ended December 31, 2012, four of our customers accounted for more than ten percent of our total drybulk revenues: Customer E (32%), Customer F (13%), Customer G (13%) and Customer H (17%). Given our exposure to, and focus on, the long-term and short-term, or spot, time charter markets, we do not foresee any one customer providing a significant percentage of our income over an extended period of time.

Seasonality

Demand for vessel capacity has historically exhibited seasonal variations and, as a result, fluctuations in charter rates. This seasonality may result in quarter-to-quarter volatility in our operating results for our vessels trading in the spot market. The drybulk carrier market is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other raw materials in the northern hemisphere during the winter months. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and supplies of certain commodities.

To the extent that we must enter into new charters or renew an existing charters for vessels in our fleet during a time when seasonal variations have reduced prevailing charter rates, our operating results may be adversely affected.

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Charterhire Rates

Charterhire rates fluctuate by varying degrees amongst the drybulk carrier size categories. The volume and pattern of trade in a small number of commodities (major bulks) affect demand for larger vessels. Because demand for larger drybulk vessels is affected by the volume and pattern of trade in a relatively small number of commodities, charterhire rates (and vessel values) of larger ships tend to be more volatile. Conversely, trade in a greater number of commodities (minor bulks) drives demand for smaller drybulk carriers. Accordingly, charter rates and vessel values for those vessels are subject to less volatility. Charterhire rates paid for drybulk carriers are primarily a function of the underlying balance between vessel supply and demand. In addition, time charter rates will vary depending on the length of the charter period and vessel-specific factors, such as container capacity, age, speed and fuel consumption. Furthermore, the pattern seen in charter rates is broadly mirrored across the different charter types and between the different drybulk carrier categories.

In the time charter market, rates vary depending on the length of the charter period and vessel specific factors such as age, speed and fuel consumption. In the voyage charter market, rates are influenced by cargo size, commodity, port dues and canal transit fees, as well as delivery and redelivery regions. In general, a larger cargo size is quoted at a lower rate per ton than a smaller cargo size. Routes with costly ports or canals generally command higher rates than routes with low port dues and no canals to transit.

Voyages with a load port within a region that includes ports where vessels usually discharge cargo or a discharge port within a region with ports where vessels load cargo also are generally quoted at lower rates, because such voyages generally increase vessel utilization by reducing the unloaded portion (or ballast leg) that is included in the calculation of the return charter to a loading area.

Within the drybulk shipping industry, the charterhire rate references most likely to be monitored are the freight rate indices issued by the Baltic Exchange, such as the BDI. These references are based on actual charterhire rates under charter entered into by market participants as well as daily assessments provided to the Baltic Exchange by a panel of major shipbrokers. The Baltic Panamax Index is the index with the longest history. The Baltic Capesize Index and Baltic Handymax Index are of more recent origin.

The BDI declined 94% in 2008 from a peak of 11,793 in May 2008 to a low of 663 in December 2008 and has remained volatile since then.  The BDI recorded an all time low of 516 on February 17, 2015, there can be no assurance that the drybulk charter market will increase, and the market could decline further.

 Vessel Prices

Drybulk vessel prices, both for newbuildings and secondhand vessels, have decreased significantly since the year ended 2008 as a result of the weakening of the drybulk shipping industry. The vessel values have also declined as a result of a slowdown in the availability of global credit. The lack of credit has resulted in the restriction to fund both vessel purchases and purchases of commodities carried by sea. There can be no assurance as to how long charterhire rates and vessel values will remain depressed or whether they will drop any further. Should the charterhire rates remain at these depressed levels for some time, our revenue and profitability will be adversely affected.

The International Drybulk Shipping Industry

Drybulk cargo is shipped in quantities and can be easily stowed in a single hold with little risk of cargo damage. According to industry sources, in 2014, approximately 4,503 million tons of cargo was transported by drybulk carriers, including iron ore, coal and grains representing 29.5%, 26.5% and 9.2% of the total drybulk trade, respectively.

The demand for drybulk carrier capacity is determined by the underlying demand for commodities transported in drybulk carriers, which in turn is influenced by trends in the global economy. Between 2001 and 2007, trade in all drybulk commodities increased from 2,237 million tons to 3,204 million tons, an increase of 43.2%. One of the main reasons for that increase in drybulk trade was the growth in imports by China of iron ore, coal and steel products during the last eight years. Chinese imports of iron ore alone increased from 92.5 million tons in 2001 to approximately 383.7 million tons in 2007. In 2008, seaborne trade in all drybulk commodities increased to 3,298 million tons. However, demand for drybulk shipping decreased dramatically in the second quarter of 2008 evidenced by the decrease in Chinese iron ore imports which decreased from a high of 119.6 million tons in the second quarter of 2008 to a low of 97.7 million tons during the fourth quarter of 2008 representing a decrease of 18.3%. In 2009, seaborne trade in all drybulk commodities increased to 3,193 million tons as demand for drybulk shipping picked up following mainly an increase in Chinese iron ore imports from 444.3 million tons in 2008 to 628.4 million tons in 2009. In 2010 and 2011, seaborne trade in all drybulk commodities increased to about 3,594 million tons and 3,828 million tons, respectively, representing an increase since 2009 of 12.6% and 16.6% respectively. During 2012, seaborne trade increased by 6.8% and Chinese iron ore imports rose by 8.5%. During 2013, seaborne trade increased by 5.4% and Chinese iron ore imports rose by 0.2%. During 2014, seaborne trade increased by 3.97% and Chinese iron ore imports rose by 14.84%. Demand for drybulk carrier capacity is also affected by the operating efficiency of the global fleet, with port congestion, which has been a feature of the market since 2004, absorbing tonnage and therefore leading to a tighter balance between supply and demand. In evaluating demand factors for drybulk carrier capacity, we believe that drybulk carriers can be the most versatile element of the global shipping fleets in terms of employment alternatives. Drybulk carriers seldom operate on round trip voyages. Rather, the norm is triangular or multi-leg voyages. Hence, trade distances assume greater importance in the demand equation.

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The global drybulk carrier fleet may be divided into five categories based on a vessel's carrying capacity. These categories consist of:

● Very Large Ore Carriers, or VLOCs, have a carrying capacity of more than 200,000 dwt and are a comparatively new sector of the drybulk carrier fleet. VLOCs are built to exploit economies of scale on long-haul iron ore routes.

● Capesize vessels, have carrying capacities of 110,000 – 199,999 dwt. These vessels generally operate along long-haul iron ore and coal trade routes. There are relatively few ports around the world with the infrastructure to accommodate vessels of this size.

● Panamax vessels, have a carrying capacity of between 60,000 and 85,000 dwt. These vessels carry coal, grains, and, to a lesser extent, minor bulks, including steel products, forest products and fertilizers. Panamax vessels are able to pass through the Panama Canal making them more versatile than larger vessels.

● Handymax vessels, have a carrying capacity of between 35,000 and 60,000 dwt. The subcategory of vessels that have a carrying capacity of between 45,000 and 60,000 dwt are called Supramax. These vessels operate along a large number of geographically dispersed global trade routes mainly carrying grains and minor bulks. Vessels below 60,000 dwt are sometimes built with on-board cranes enabling them to load and discharge cargo in countries and ports with limited infrastructure.

● Handysize vessels, have a carrying capacity of up to 35,000 dwt. These vessels carry exclusively minor bulk cargo. Increasingly, these vessels have operated along regional trading routes. Handysize vessels are well suited for small ports with length and draft restrictions that may lack the infrastructure for cargo loading and unloading.

The supply of drybulk carriers is dependent on the delivery of new vessels and the removal of vessels from the global fleet, either through scrapping or loss. The orderbook of new drybulk vessels scheduled to be delivered in 2015 represents approximately 11.25% of the world drybulk fleet as of January 1, 2015. The level of scrapping activity is generally a function of scrapping prices in relation to current and prospective charter market conditions, as well as operating, repair and survey costs. Drybulk carriers at or over 25 years old are considered to be scrapping candidate vessels.

Our Offshore Drilling Operations

Employment of our Drilling Units

The Leiv Eiriksson commenced a drilling contract in April 2013with a consortium coordinated by Rig Management Norway, or Rig Management, for the drilling of 15 wells on the Norwegian Continental Shelf at a maximum dayrate of $545,000.  We received approximately $83.0 million under the contract to cover mobilization and fuel costs as well as the cost of equipment upgrades to operate in the Norwegian Continental Shelf. The contract has a minimum duration of 1,070 days and includes three options of up to six wells each that must be exercised prior to the expiration of the firm contract period in the first quarter of 2016.

The Eirik Raude is currently undergoing the acceptance testing and it is expected to commence a six well drilling contract for drilling offshore Falkland Islands with Premier Oil Exploration and Production Ltd, or Premier, with a duration of approximately 260 days at a maximum dayrate of $561,350 under the initial term of the contract, plus a mobilization fee of $18.0 million. Under the contract, Premier has two options to extend the term of the contract by 8 additional wells each.

The Ocean Rig Corcovado is currently employed under a three-year drilling contract, plus a mobilization period with Petrobras Brazil for drilling operations offshore Brazil at a maximum dayrate of $439,402 (including service fees of $67,722 per day, based on the contracted rate in Real per day and the February 24, 2015 exchange rate of R$2.87:USD $1.00), plus a mobilization fee of $30.0 million. The contract has been extended for 1,095 at an average dayrate of $523,306, plus reimbursement by Petrobras for contract related equipment upgrades of $30.0 million.

The Ocean Rig Olympia commenced a three-year drilling contract with Total E&P Angola in July 2012 for drilling operations offshore West Africa at a maximum dayrate of $585,437, plus mobilization and demobilization fees of $9.0 million and $3.5 million, respectively, plus the cost of fuel. Total E&P Angola has notified us its intentions to redeliver the Ocean Rig Olympia on completion of its present well expected in the first quarter of 2015 and ahead of the contractual redelivery date of August 2015. We are presently in discussions with Total EP Angola and intend to legally defend our rights should we fail to reach an amicable solution. The Ocean Rig Olympia will be employed under the ENI contracts for drilling operations offshore Angola in November 2015 with an estimated backlog of approximately $21.7 million.

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 The Ocean Rig Poseidon commenced a three-year drilling contract with ENI Angola S.p.A., or ENI, in May 2013 for drilling operations offshore Angola at a maximum dayrate of $690,300, which is the average maximum dayrate applicable during the initial three-year term of the contract.  During the term of the contract, the initial maximum dayrate of $670,000 will increase annual at a rate of 3%, beginning twelve months after the commencement date.  The contract also includes a mobilization rate of $656,600 per day, plus reimbursement for the cost of fuel, and a demobilization fee of $5.0 million.  In January 2015, ENI has exercised its option to extend the contract for the drillship Ocean Rig Poseidon for a further one year until the second quarter of 2017 with an adjusted dayrate in exchange of the ENI contracts. The new average maximum dayrate, under the extension, will be $539,750.

The Ocean Rig Mykonos commenced a three-year drilling contract, plus a mobilization period, with Petrobras Brazil, on September 30, 2011, for drilling operations offshore Brazil at a maximum dayrate of $433,044(including service fees of $65,404 per day, based on the contracted rate in Real and the February 24, 2015 exchange rate of R$2.87: $1.00), plus a mobilization fee of $30.0 million. The contract is scheduled to expire in March 2015. The contract has been extended for 1,095 at an average dayrate of $514,090 , plus reimbursement by Petrobras for contract related equipment upgrades of $30.0 million.

The Ocean Rig Mylos commenced a three-year drilling contract with Repsol for drilling operations offshore Brazil in August 2013 at a maximum dayrate of $637,270, which is the average maximum dayrate applicable during the initial three-year term of the contract, plus a mobilization fee of $40.0 million. Under the contract, Repsol has options to extend the contract for one year beyond the initial three-year contract period.

The Ocean Rig Skyros , which is currently idle,will be employed under the ENI contracts for drilling operations offshore Nigeria and Angola in March 2015 with an estimated backlog of approximately $68.6 million. In November 2015, the Ocean Rig Skyros will commence its six year contract with Total for drilling operations offshore Angola. Under the contract, we are entitled to a maximum dayrate of approximately $592,834, which is the average maximum dayrate applicable during the initial six-year term of the contract, plus mobilization fees of $20 million. Under the contract, the initial maximum dayrate is subject to a fixed annual escalation of 2% during the contract period.

The Ocean Rig Athena commenced a three-year drilling contract with ConocoPhillips for drilling operations offshore Angola in March 2014 at a maximum dayrate of $662,523, which is the average maximum dayrate applicable during the initial three-year term of the contract, plus a lump-sum mobilization fee of $35.2 million, exclusive of fuel costs. Under the contract, the initial maximum dayrate is subject to a fixed annual escalation of approximately 2% during the contract period. In addition, ConocoPhillips has the option to extend the duration of the contract for two years.

We have also entered into a three-year contract with Total E&P Congo for drilling operations offshore West Africa with an estimated backlog of approximately $692.6 million, including mobilization, for the Ocean Rig Apollo, our seventh generation drillship delivered on March 5, 2015. The contract is scheduled to commence in the first quarter of 2015. In addition, Total has the option to extend the term of the contract for four periods of six months each, with the first option exercisable not less than one year before completion date.

The total contracted backlog under our drilling contracts for our drilling units, including our drilling rigs, as of February 24, 2015, was $5.2 billion. We calculate our contract backlog by multiplying the contractual dayrate under all of our employment contracts for which we have firm commitments as of February 24, 2015, by the minimum expected number of days committed under such contracts (excluding any options to extend), assuming full utilization. There can be no assurance that the counterparties to such contracts will fulfill their obligations under the contracts. See the section of this annual report entitled "Item 3. Key Information—Risk Factors—Risks Relating to Our Company—Our future contracted revenue for our fleet of drilling units may not be ultimately realized."

Unless otherwise stated, all references to maximum dayrates included in this annual report are exclusive of any applicable annual contract revenue adjustments, which generally result in the escalation of the dayrates payable under the drilling contracts.

Newbuilding Drillships

We have entered into contracts for the construction of three seventh generation drillships, two of which are new integrated design drillships and all are equiped with two blow-out preventers, scheduled for delivery in June 2016, February 2017 and June 2017, respectively, in connection with which we had made total payments of $280.2 million to Samsung, as of December 31, 2014. The estimated total project cost for these drillships is approximately $2.1 billion.

Management of Our Offshore Drilling Operations

Management Agreements

Up to October 2013, Ocean Rig's wholly-owned subsidiary, Ocean Rig AS, provided supervisory management services including onshore management, to our operating drilling rigs and drillships pursuant to separate management agreements entered into with each of the drilling unit-owning subsidiaries. In addition, Ocean Rig AS provided supervisory management services for our seventh generation drillships under construction.

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From October 2013, the above services are provided by Ocean Rig's wholly owned subsidiary, Ocean Rig Management Inc., pursuant to separate management agreements entered/to be entered with each of the drilling unit-owning subsidiaries.

Under the terms of these management agreements, Ocean Rig Management Inc, through its affiliates, is responsible for, among other things, (i) assisting in construction contract technical negotiations, (ii) securing contracts for the future employment of the drilling units, and (iii) providing commercial, technical and operational management for the drillships.

Effective  January 1, 2013, Ocean Rig Management Inc., or Ocean Rig Management, our majority-owned subsidiary and a wholly-owned subsidiary of Ocean Rig UDW, entered into a new services agreement with an affiliate of Cardiff.

Effective from September 1, 2010, DryShips Inc. entered into a consultancy agreement, or the DryShips Consultancy Agreement, with Vivid Finance Ltd., or Vivid Finance, a company controlled by our Chairman, President and Chief Executive Officer, Mr. George Economou, pursuant to which Vivid Finance provides consulting services relating to (i) the identification, sourcing, negotiation and arrangement of new loan and credit facilities, interest swap agreements, foreign currency contracts and forward exchange contracts; (ii) the raising of equity or debt in the public capital markets; and (iii) the renegotiation of existing loan facilities and other debt instruments. Effective January 1, 2013, Ocean Rig Management entered into a separate consultancy agreement, or the Ocean Rig Consultancy Agreement, with Vivid Finance, on the same terms and conditions as the DryShips Consultancy Agreement.

For more information on the services agreements discussed above, see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Cardiff, TMS Bulkers and TMS Tankers—Management Agreements—Drilling Units—Services Agreement."

Contract Drilling Services

Our contracts to provide offshore drilling services and drilling units are individually negotiated and vary in their terms and provisions. We generally obtain our contracts through competitive bidding against other contractors. The contracts for our drilling units typically provide for compensation on a "dayrate" basis under which we are paid a fixed amount for each day that the vessel is operating under a contract at full efficiency, with higher rates while the drilling unit is operating and lower rates for periods of mobilization or when drilling operations are interrupted or restricted by equipment breakdowns, adverse environmental conditions or other conditions beyond our control. Under most dayrate contracts, we pay the operating expenses of the rig or drillship, including planned rig maintenance, crew wages, insurance and the cost of supplies.

A dayrate drilling contract generally extends over a period of time covering either the drilling of a single well or group of wells or covering a stated term, as do the current contracts under which our drilling units are employed. Currently, there is no spot market for offshore drilling units. The length of shorter-term contracts is typically from 60 to 365 days and the longer-term contracts are typically from two to five years. The contract term in some instances may be extended by the client exercising options for the drilling of additional wells or for an additional term. Our contracts also typically include a provision that allows the client to extend the contract to finish drilling a well-in-progress.

From time to time, contracts with customers in the offshore drilling industry may contain terms whereby the customer has an option to cancel upon payment of an early termination payment, but where such payments may not fully compensate for the loss of the contract. Contracts also customarily provide for either automatic termination or termination at the option of the customer typically without the payment of any termination fee, under various circumstances such as major nonperformance, in the event of substantial downtime or impaired performance caused by equipment or operational issues, or sustained periods of downtime due to force majeure events. Many of these events are beyond our control.

We expect that provisions of future contracts will be similar to those in our current contracts for our drilling units. See "—Employment of our Drilling Units."

Competition

The offshore contract drilling industry is competitive with numerous industry participants, few of which at the present time have a dominant market share. The drilling industry has experienced consolidation in recent years and may experience additional consolidation, which could create additional large competitors. Many of our competitors have significantly greater financial and other resources, including more drilling units, than us. We compete with offshore drilling contractors that, as of February 2015, together have approximately 165 ultra-deepwater drilling units worldwide, defined as units with water depth capacity of 7,500 feet or more.

The offshore contract drilling industry is influenced by a number of factors, including global demand for oil and natural gas, current and anticipated prices of oil and natural gas, expenditures by oil and gas companies for exploration and development of oil and natural gas and the availability of drilling rigs. In addition, mergers among oil and natural gas exploration and production companies have reduced, and may from time to time reduce, the number of available customers.

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Drilling contracts are traditionally awarded on a competitive bid basis. Intense price competition is often the primary factor in determining which qualified contractor is awarded a contract. Customers may also consider unit availability, location and suitability, a drilling contractor's operational and safety performance record, and condition and suitability of equipment. We believe that we compete favorably with respect to these factors.

We compete on a worldwide basis, but competition may vary significantly by region at any particular time. Competition for offshore units generally takes place on a global basis, as these units are highly mobile and may be moved from one region to another, at a cost that may be substantial. Competing contractors are able to adjust localized supply and demand imbalances by moving units from areas of low utilization and dayrates to areas of greater activity and relatively higher dayrates. Significant new unit construction and upgrades of existing drilling units could also intensify price competition.

Customers

Our customers in the offshore drilling segment are generally major oil companies, integrated oil and gas companies, state-owned national oil companies and independent oil and gas companies. Ocean Rig UDW, together with its predecessor, Ocean Rig ASA, have an established history with 237 wells drilled in 20 countries for 31 different customers, as of February 2015.

For the years ended December 31, 2012, 2013 and 2014, the following customers, which represent all of our customers for the years indicated, accounted for more than 10% of our drilling revenues:

Customer	Year ended December 31, 2012		Year ended December 31, 2013		Year ended December 31, 2014
Customer A		-		-		14%
Customer B		49%		33%		18%
Customer C		18%		-		-
Customer D		12%		-		-
Customer E		-		13%		12%
Customer F		-		18%		30%
Customer G		-		12%		14%

Seasonality

In general, seasonal factors do not have a significant direct effect on our offshore drilling business as most of our drilling units are contracted for periods of at least 12 months. However, our drilling units may perform drilling operations in certain parts of the world where weather conditions during parts of the year could adversely impact the operational utilization of our drilling units and our ability to relocate units between drilling locations, and as such, limit contract opportunities in the short term. Such adverse weather could include the hurricane season for our operations in the Gulf of Mexico, the winter season in offshore Norway, and the monsoon season in Southeast Asia.

The Offshore Drilling Industry

In recent years, the international drilling market has seen an increasing trend towards deep and ultra-deepwater oil and gas exploration. As shallow water resources mature, deep and ultra-deepwater regions are expected to play an increasing role in offshore oil and gas exploration and production. According to industry sources, the industry-wide global ultra-deepwater market has seen rapid development over the last six years, with dayrates increasing from approximately $180,000 in 2004 to above $600,000 in 2008 and as of February 2015, the market level is approximately $530,000. The ultra-deepwater market rig utilization rate has been stable, above 80% since 2000 and above 97% since 2006. The operating units capable of drilling in ultra-deepwater depths of greater than 7,500 feet consist mainly of fifth, sixth and seventh generation units, and also include certain older upgraded units. The in-service ultra-deepwater fleet as of February 2015 totaled 165 units, and is expected to grow to 228 units upon the scheduled delivery of the current newbuild orderbook by the end of 2020. Historically, an increase in supply has caused a decline in utilization and dayrates until drilling units are absorbed into the market. Accordingly, dayrates have been very cyclical. We believe that the largest undiscovered offshore reserves are mostly located in ultra-deepwater fields and primarily located in the "golden triangle" between West Africa, Brazil and the Gulf of Mexico, as well as in East Africa, Australia and Southeast Asia. The location of these large offshore reserves has resulted in more than 90% of the floating drilling unit, or floater, orderbook being represented by ultra-deepwater units. Furthermore, due to increased focus on technically challenging operations and the inherent risk of developing offshore fields in ultra-deepwater, particularly in light of the Deepwater Horizon accident in the Gulf of Mexico, in which we were not involved, oil companies have already begun to show a preference for modern units more capable of drilling in these challenging environments.

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Markets

Our operations in the offshore drilling industry are geographically dispersed in oil and gas exploration and development areas worldwide. Although the cost of moving a drilling unit and the availability of drilling unit-moving vessels may cause the balance between supply and demand to vary between regions, significant variations do not tend to exist long-term because of rig mobility. Consequently, we operate in a single, global offshore drilling market. Because our drilling units are mobile assets and are able to be moved according to prevailing market conditions, we cannot predict the percentage of our offshore drilling revenues that will be derived from particular geographic or political areas in future periods.

In recent years, there has been increased emphasis by oil companies to expand their proven reserves and thus focus on exploring for hydrocarbons in deeper waters. This deepwater focus is due, in part, to technological developments that have made such exploration more feasible and cost-effective. Therefore, water-depth capability is a key component in determining rig suitability for a particular drilling project. Another distinguishing feature in some drilling market sectors is a rig's ability to operate in harsh environments, including extreme marine and climatic conditions and temperatures.

Our drilling units service the ultra-deepwater sector of the offshore drilling market. Although the term "deepwater" as used in the drilling industry to denote a particular sector of the market can vary and continues to evolve with technological improvements, we generally view the deepwater market sector as that which begins in water depths of approximately 4,500 feet and extends to the maximum water depths in which seventh generation rigs are capable of drilling, which is currently approximately 12,000 feet.

Our Tanker Operations

Management of our Tankers

Since January 1, 2011, TMS Tankers, a company controlled by our Chairman, President and Chief Executive Officer, Mr. George Economou, has provided the commercial and technical management functions of our tankers, including while our tankers were under construction, pursuant to separate management agreements entered into with TMS Tankers for each of our tankers.  For more information on our management agreements with TMS Tankers, see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Cardiff, TMS Bulkers and TMS Tankers—Management Agreements—Tankers."

TMS Tankers is beneficially owned by our Chairman, President and Chief Executive Officer, Mr. George Economou. Mr. Economou, and, under the guidance of our board of directors, manages our business as a holding company, including our own administrative functions, and we monitor TMS Tankers' performance under the management agreements. We believe that TMS Tankers has established a reputation in the international shipping industry for operating and maintaining a fleet with high standards of performance, reliability and safety.

Employment of our Tankers

We operate our tankers in the spot market. As of March 2, 2015, none of our tankers operates in pool. In the past, four of our other Aframax tankers operated in the Sigma tanker pool and three of our Suezmax tankers operated in the Blue Fin tanker pool.

TMS Tankers may seek to hedge our spot exposure through the use of freight forward agreements or other financial instruments. In addition, we may employ our tankers on fixed-rate time charters in the future. Accordingly, we actively monitor macroeconomic trends and governmental rules and regulations that may affect tanker rates in an attempt to optimize the deployment of our fleet.

Voyage Charters

Tankers operating in the spot market typically are chartered for a single voyage, which may last up to several weeks. Spot market revenues may generate increased profit margins during times when tanker rates are increasing, while tankers operating under fixed-rate time charters generally provide more predictable cash flows. Under a typical voyage charter in the spot market, the shipowner is paid on the basis of moving cargo from a loading port to a discharge port. The shipowner is responsible for paying both vessel operating costs and voyage expenses, and the charterer is responsible for any delay at the loading or discharging ports. Voyage expenses are all expenses unique to a particular voyage, including any bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Vessel operating expenses include crewing, repairs and maintenance, insurance, stores, lube oils and communication expenses. When the vessel is "off hire," or not available for service, the shipowner generally is not entitled to payment, unless the charterer is responsible for the circumstances giving rise to the lack of availability. Under a voyage charter, the shipowner is generally required, among other things, to keep the vessel seaworthy, to crew and maintain the vessel and to comply with applicable regulations.

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Pool Arrangements

To increase vessel utilization and thereby revenues, we have participated in the past, and may participate in the future, in commercial pools with other like-minded shipowners of similar modern, well-maintained vessels. By operating a large number of vessels as an integrated transportation system, commercial pools offer customers greater flexibility and a higher level of service while achieving scheduling efficiencies. Pools consist of experienced commercial owners and operators, while technical management is arranged by each shipowner. Pools negotiate charters with customers primarily in the spot market. Vessel pool arrangements provide the benefits of large-scale operating and chartering efficiencies that might not be available to smaller fleets. Under these pooling arrangements, the vessels operate under a spot charter agreement whereby the cost of bunkers and port expenses are borne by the pool and operating costs including crews, maintenance and insurance are typically paid by the owner of the vessel. Members of the pool share in the revenue generated by the entire group of vessels in the pool. When the vessel is off-hire, the vessel's owner generally is not entitled to payment for the period of off-hire, unless the charterer of a vessel in the pool is responsible for the circumstances giving rise to the lack of availability.

Each pool participant that commits vessels to the pool must be accepted into the pool in accordance with the terms and conditions of the pool agreements entered into by each of the other participants. Pool participants are responsible for, among other things:

● maintaining their pool vessels in seaworthy condition and to the agreed technical and operational standards of the pool;

● maintaining all required ISM certificates and keeping the pool vessel classed with a classification society that is a member of the International Association of Classification Societies, or the IACS;

● obtaining and maintaining a minimum number of agreed oil major approvals in accordance with the pool agreement;

● providing for inspections to insure that ship inspection reports are obtained at least every six months;

● obtaining, for its own account, in accordance with standards consistent with prudent first class owners of vessels, all relevant insurance policies for its pool vessels, including hull and machinery, protection and indemnity and war risk insurance policies; and

● providing for the technical management of its pool vessels, including all matters related to vessel seaworthiness, crewing and crew administration, victualling, maintenance and repairs, drydocking, provisioning (lube oils, stores and spare parts), compliance with class requirements and compliance with the requirements of relevant authorities.

The pool manager is responsible for the commercial management of each pool vessel, which includes, among other things:

● marketing the vessels;

● trading pattern analysis;

● handling of charters and employment contracts;

● commercial operations and payment and collection of expenses and revenues relating to commercial operations;

● handling of any post-fixture claims; and

● budgeting, accounting and performance of the pool.

The pool manager has sole authority to fix employment for the pool vessels. The pool manager has the authority to commit each pool vessel to an employment contract, on a voyage basis or on a time charter that is consistent with the pool agreement.

As of March 2, 2015, none of our tankers operated in pool. For information regarding our former pooling arrangements with the Blue Fin and Sigma tanker pools discussed above, see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Pooling Arrangements."

Time Charters

A time charter is a contract for the use of a vessel for a fixed period of time at a specified daily rate. A customer generally selects a time charter if it wants a dedicated vessel for a period of time, and the customer is commercially responsible for the use of the vessel. Under a typical time charter, the shipowner provides crewing and other services related to the vessel's operation, the cost of which is included in the daily rate, while the customer is responsible for substantially all of the voyage expenses. When the vessel is off hire, the customer generally is not required to pay the hire rate and the owner is responsible for all costs. "Hire rate" refers to the basic payment from the charterer for the use of the vessel. Hire payments may be reduced, or under some time charters the shipowner must pay liquidated damages, if the vessel does not perform to certain of its specifications, such as if the average vessel speed falls below a guaranteed level or the amount of fuel consumed to power the vessel under normal circumstances exceeds a guaranteed amount. When the vessel is "off hire," or not available for service, the charterer generally is not required to pay the hire rate, and the shipowner is responsible for all costs, including the cost of fuel bunkers, unless the charterer is responsible for the circumstances giving rise to the lack of availability. A vessel generally will be deemed to be off hire if there is an occurrence preventing the full working of the vessel.

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Customers

During the year ended December 31, 2014, one of our customers accounted for more than ten percent of our total tanker revenues. During the year ended December 31, 2013, none of our customers accounted for more than ten percent of our total tanker revenues.

No other customers accounted for more than 10% of our consolidated revenues during 2014 or 2013.

Seasonality

Historically, oil trade and therefore charter rates have increased in the winter months and eased in the summer months as demand for oil in the Northern Hemisphere has risen in colder weather and fallen in warmer weather. The tanker industry in general is less dependent on the seasonal transport of heating oil than a decade ago, as new uses for oil and oil products have developed, spreading consumption more evenly over the year. Most apparent is a higher seasonal demand during the summer months due to energy requirements for air conditioning and motor vehicles.

Competition

The market for international seaborne crude oil transportation services is highly fragmented and competitive. Seaborne crude oil transportation services generally are provided by two main types of operators: major oil company captive fleets (both private and state-owned) and independent ship-owner fleets. In addition, several owners and operators pool their vessels together on an ongoing basis, and such pools are available to customers to the same extent as independently owned and operated fleets. Many major oil companies and other oil trading companies, the primary charterers of the vessels owned or controlled by us, also operate their own vessels and use such vessels not only to transport their own crude oil but also to transport crude oil for third party charterers in direct competition with independent owners and operators in the tanker charter market. Competition for charters is intense and is based upon price, location, size, age, condition and acceptability of the vessel and its manager. Competition is also affected by the availability of other size vessels to compete in the trades in which the Company engages. Charters are to a large extent brokered through international independent brokerage houses that specialize in finding the optimal ship for any particular cargo based on the aforementioned criteria. Brokers may be appointed by the cargo shipper or the ship owner.

The International Tanker Market

International seaborne oil and petroleum products transportation services are mainly provided by two types of operators: major oil company captive fleets (both private and state-owned) and independent shipowner fleets. Both types of operators transport oil under short-term contracts (including single-voyage "spot charters") and long-term time charters with oil companies, oil traders, large oil consumers, petroleum product producers and government agencies. The oil companies own, or control through long-term time charters, approximately one third of the current world tanker capacity, while independent companies own or control the balance of the fleet. The oil companies use their fleets not only to transport their own oil, but also to transport oil for third-party charterers in direct competition with independent owners and operators in the tanker charter market.

            In the second half of 2012 average crude tanker spot freight rates were weaker as compared to historical averages. An oversupply of vessels relative to tanker demand was the main factor which weighed upon tanker rates. The oversupply is attributed to a relatively high number of new tanker deliveries over the course of the last few years, coupled with limited demolition activity mainly due to the relatively young age of the fleet. Some strength in spot tanker rates was seen towards the end of 2012 when cold winter weather in Europe and North America led to an increase in both oil demand and weather related transit delays. Rates subsequently weakened, however, in January 2013 upon easing of weather related seasonal factors and have remained mostly at depressed levels.  More recently, in 2014 and early 2015, the tanker shipping market is reported to be benefiting from rising charter rates, but still faces the problem of oversupply.

The oil transportation industry has historically been subject to regulation by national authorities and through international conventions. In recent years, however, an environmental protection regime has evolved which has a significant impact on the operations of participants in the industry in the form of increasingly more stringent inspection requirements, closer monitoring of pollution-related events, and generally higher costs and potential liabilities for the owners and operators of tankers.

In order to benefit from economies of scale, tanker charterers will typically charter the largest possible vessel to transport oil or products, consistent with port and canal dimensional restrictions and optimal cargo lot sizes. A tanker's carrying capacity is measured in deadweight tons, or dwt, which is the amount of crude oil measured in metric tons that the vessel is capable of loading. The oil tanker fleet is generally divided into the following five major types of vessels, based on vessel carrying capacity: (i) Ultra Large Crude Carrier, or ULCC, with a size range of approximately 320,000 to 450,000 dwt; (ii) Very Large Crude Carrier, or VLCC, with a size range of approximately 200,000 to 320,000 dwt; (iii) Suezmax-size range of approximately 120,000 to 200,000 dwt; (iv) Aframax-size range of approximately 80,000 to 120,000 dwt; (v) Panamax-size range of approximately 50,000 to 80,000 dwt; and (v) small tankers of less than approximately 50,000 dwt. ULCCs and VLCCs normally transport crude oil in long-haul trades, such as from the Arabian Gulf to the United States or Western Europe via Asia or the Cape of Good Hope. Suezmax tankers also engage in long-haul crude oil trades as well as in medium-haul crude oil trades, such as from West Africa to the East Coast of the United States. Aframax-size vessels generally engage in both medium-and short-haul trades of less than 1,500 miles and carry crude oil or petroleum products.  Smaller tankers mostly transport petroleum products in short-haul to medium-haul trades.

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Environmental and Other Regulations in the Shipping Industry

Government regulation and laws significantly affect the ownership and operation of our fleet. We are subject to international conventions and treaties, national, state and local laws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health and environmental protection including the storage, handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources. Compliance with such laws, regulations and other requirements entails significant expense, including vessel modifications and implementation of certain operating procedures.

A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicable national authorities such as the United States Coast Guard, harbor master or equivalent), classification societies, flag state administrations (countries of registry) and charterers, particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure to maintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of the operation of one or more of our vessels.

We believe that the heightened level of environmental and quality concerns among insurance underwriters, regulators and charterers is leading to greater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the industry. Increasing environmental concerns have created a demand for vessels that conform to the stricter environmental standards. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. We believe that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses, certificates or other authorizations necessary for the conduct of our operations. However, because such laws and regulations are frequently changed and may impose increasingly stricter requirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition, a future serious marine incident that causes significant adverse environmental impact could result in additional legislation or regulation that could negatively affect our profitability.

International Maritime Organization

The United Nations' International Maritime Organization, or the IMO, has adopted the International Convention for the Prevention of Pollution from Ships of 1973, or MARPOL. MARPOL entered into force on October 2, 1983. It has been adopted by over 150 nations, including many of the jurisdictions in which our vessels operate. MARPOL sets forth pollution-prevention requirements applicable to drybulk carriers, among other vessels, and is broken into six Annexes, each of which regulates a different source of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried, in bulk, in liquid or packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and Annex VI, lastly, relates to air emissions. Annex VI was separately adopted by the IMO in September of 1997.

Air Emissions

In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution. Effective May 2005, Annex VI sets limits on nitrogen oxide emissions from ships whose diesel engines were constructed (or underwent major conversions) on or after January 1, 2000. It also prohibits "deliberate emissions" of "ozone depleting substances," defined to include certain halons and chlorofluorocarbons. "Deliberate emissions" are not limited to times when the ship is at sea; they can for example include discharges occurring in the course of the ship's repair and maintenance. Emissions of "volatile organic compounds" from certain tankers, and the shipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls , or PCBs)) are also prohibited. Annex VI also includes a global cap on the sulfur content of fuel oil (see below). We believe that all our vessels are currently compliant in all material respects with these regulations.

The MEPC adopted amendments to Annex VI on October 10, 2008, which entered into force on July 1, 2010. The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the amount of sulfur contained in any fuel oil used on board ships. As of January 1, 2012, the amended Annex VI requires that fuel oil contain no more than 3.50% sulfur (from the current cap of 4.50%). By January 1, 2020, sulfur content must not exceed 0.50%, subject to a feasibility review to be completed no later than 2018.  The United States ratified the Annex VI amendments in October 2008, and the EPA, promulgated equivalent emissions standards in late 2009.

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Sulfur content standards are even stricter within certain Emission Control Areas, or ECAs. As of July 1, 2010, ships operating within an ECA were not permitted to use fuel with sulfur content in excess of 1.0% (from 1.50%), which was further reduced to 0.10% on January 1, 2015. Amended Annex VI establishes procedures for designating new ECAs. The Baltic Sea and the North Sea have been so designated. Effective August 1, 2012, certain coastal areas of North America were designated ECAs and on January 1, 2014, the United States Caribbean Sea was designated ECA. Ocean-going vessels in these areas will be subject to stringent emission controls and may cause us to incur additional costs.  If other ECAs are approved by the IMO or other new or more stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the EPA or the states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our operations.

As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. It makes the limits of the Energy Efficiency Design Index, or EEDI, apply to new ships, and all ships must develop and implement Ship Energy Efficiency Management Plans, or SEEMPs.

Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for new marine engines, depending on their date of installation. The U.S. Environmental Protection Agency promulgated equivalent (and in some senses stricter) emissions standards in late 2009.

We may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations may be adopted that could require the installation of expensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.

Safety Management System Requirements

The IMO also adopted the International Convention for the Safety of Life at Sea of 1974, or SOLAS, and the International Convention on Load Lines, or the LL Convention, which impose a variety of standards that regulate the design and operational features of ships. The IMO periodically revises the SOLAS and LL Convention standards. May 2012 SOLAS amendments entered into force as of January 1, 2014.  We believe that all our vessels are in substantial compliance with SOLAS and LL Convention standards. The Convention of Limitation of Liability for Maritime Claims, or LLMC, was recently amended and the amendments are expected to go into effect on June 8, 2015. The amendments alter the limits of liability for a loss of life or personal injury claim or a property claim against ship owners.

The operation of our ships is also affected by the requirements set forth in Chapter IX of SOLAS, which sets forth the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or the ISM Code. The ISM Code requires ship owners and bareboat charterers to develop and maintain an extensive "Safety Management System" that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies. We rely upon the safety management system that we and our technical manager have developed for compliance with the ISM Code.  The failure of a ship owner or bareboat charter to comply with the ISM Code may subject such party to increased liability, may decrease the availability of insurance coverage for the affected vessels, and may result in a denial of access to, or detention in, certain ports.

The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel's management with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document of compliance, issued by each flag state, under the ISM Code. We have obtained documents of compliance for our offices and safety management certificates for all of our vessels for which the certificates are required by the IMO. The document of compliance and safety management certificate are renewed as required.

Pollution Control and Liability Requirements

The IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatories to such conventions. For example, the IMO adopted the International Convention for the Control and Management of Ships' Ballast Water and Sediments, or the BWM Convention, in February 2004. The BWM Convention's implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits. The BWM Convention will not become effective until 12 months after it has been adopted by 30 states, the combined merchant fleets of which represent not less than 35% of the gross tonnage of the world's merchant shipping. To date, there has not been sufficient adoption of this standard for it to take force. Many of the implementation dates in the BWM Convention have already passed, so that once the BWM Convention enters into force, the period of installation of mandatory ballast water exchange requirements would be extremely short, with several thousand ships a year needing to install ballast water management systems, or BWMS. For this reason, on December 4, 2013, the IMO Assembly passed a resolution revising the application dates of the BWM Convention so that they are triggered by the entry into force date and not the dates originally in the BWM Convention. This, in effect, makes all vessels constructed before the entry into force date "existing vessels" and allows for the installation of a BWMS on such vessels at the first renewal survey following entry into force of the convention.  Once mid-ocean ballast exchange or ballast water treatment requirements become mandatory, the cost of compliance could increase for ocean carriers.   Although we do not believe that the costs of such compliance would be material, it is difficult to predict the overall impact of such a requirement on our operations.

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The IMO has also adopted the International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by different Protocols in 1976, 1984, and 1992, and amended in 2000, or the CLC. Under the CLC and, depending on whether the country in which the damage results is a party to the 1992 Protocol to the CLC, a vessel's registered owner is strictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain exceptions and limitations. The 1992 Protocol changed certain limits on liability, expressed using the International Monetary Fund currency unit of Special Drawing Rights. The limits on liability have since been amended so that the compensation limits on liability were raised. The right to limit liability is forfeited under the CLC where the spill is caused by the ship owner's actual fault and under the 1992 Protocol where the spill is caused by the ship owner's intentional or reckless act or omission where the ship owner knew pollution damage would probably result. The CLC requires ships covered by it to maintain insurance covering the liability of the owner in a sum equivalent to an owner's liability for a single incident.

The IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage of 2001, or the Bunker Convention, to impose strict liability on ship owners for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime (but not exceeding the amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims of 1976, as amended). With respect to non-ratifying states, liability for spills or releases of oil carried as fuel in ship's bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.

Compliance Enforcement

Noncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. As of the date of this report, each of our vessels is ISM Code certified. However, there can be no assurance that such certificates will be maintained in the future.

The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.

The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act

The U.S. Oil Pollution Act of 1990, or OPA, established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affects all "owners and operators" whose vessels trade in the United States, its territories and possessions or whose vessels operate in United States waters, which includes the United States' territorial sea and its 200 nautical mile exclusive economic zone around the United States. The United States has also enacted the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, which applies to the discharge of hazardous substances other than oil except in certain limited circumstances, whether on land or at sea. OPA and CERCLA both define "owner and operator" in the case of a vessel as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations.

Under OPA, vessel owners and operators are responsible parties who are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from oil spills from their vessels. OPA limits the liability of responsible parties with respect to tankers over 3,000 gross tons to the greater of $2,000 per gross ton or $17,088,000 per double hull tanker, and with respect to non-tank vessels, the greater of $1,000 per gross ton or $854,400 for any non-tank vessel, respectively. These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety, construction or operating regulation by a responsible party (or its agent, employee or a person acting pursuant to a contractual relationship), or a responsible party's gross negligence or willful misconduct. The limitation on liability similarly does not apply if the responsible party fails or refuses to (i) report the incident where the responsibility party knows or has reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.

CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well as damage for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing same, and health assessments or health effects studies. There is no liability if the discharge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsible person fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.

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OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law.

OPA and CERCLA both require owners and operators of vessels to establish and maintain with the U.S. Coast Guard, or USCG, evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. We have complied with the USCG's financial responsibility regulations by providing a certificate of responsibility evidencing sufficient self-insurance.

The 2010 Deepwater Horizon oil spill in the Gulf of Mexico may also result in additional regulatory initiatives or statutes, including the raising of liability caps under OPA. Compliance with any new requirements of OPA may substantially impact our cost of operations or require us to incur additional expenses to comply with any new regulatory initiatives or statutes. For example on August 15, 2012 the U.S. Bureau of Safety and Economic Enforcement, or BSEE, issued a final drilling safety rule for offshore oil and gas operations, which became effective on October 22, 2012, and strengthened the requirements for safety equipment, well control systems, and blowout prevention practices.  On February 24, 2014, the U.S. Bureau of Ocean Energy Management, or BOEM, proposed a rule increasing the limits of liability of damages for offshore facilities under the OPA based on inflation. Additional legislation or regulations applicable to the operation of our vessels that may be implemented in the future could adversely affect our business.

We currently maintain pollution liability coverage insurance in the amount of $1.0 billion per incident for each of our vessels. If the damages from a catastrophic spill were to exceed our insurance coverage it could have an adverse effect on our business and results of operation.

OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, provided they accept, at a minimum, the levels of liability established under OPA and some states have enacted legislation providing for unlimited liability for oil spills. In some cases, states which have enacted such legislation have not yet issued implementing regulations defining vessel owners' responsibilities under these laws. We intend to comply with all applicable state regulations in the ports where our vessels call. We believe that we are in substantial compliance with all applicable existing state requirements. In addition, we intend to comply with all future applicable state regulations in the ports where our vessels call.

Other Environmental Initiatives

The U.S. Clean Water Act, or CWA, prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. Furthermore, many U.S. States that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law.

The United States Environmental Protection Agency, or the EPA, has enacted rules requiring a permit regulating ballast water discharges and other discharges incidental to the normal operation of certain vessels within United States waters under the Vessel General Permit for Discharges Incidental to the Normal Operation of Vessels, or the VGP. For a new vessel delivered to an owner or operator after September 19, 2009 to be covered by the VGP, the owner must submit a Notice of Intent, or the NOI, at least 30 days before the vessel operates in United States waters. On March 28, 2013, EPA re-issued the VGP for another five years; this 2013 VGP took effect December 19, 2013. The 2013 VGP contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive species in US waters, more stringent requirements for exhaust gas scrubbers and the use of environmentally acceptable lubricants. We have submitted NOIs for our vessels where required and do not believe that the costs associated with obtaining and complying with the VGP will have a material impact on our operations.

The USCG, regulations adopted under the U.S. National Invasive Species Act, or NISA, also impose mandatory ballast water management practices for all vessels equipped with ballast water tanks entering or operating in U.S. waters which require the installation of equipment to treat ballast water before it is discharged in U.S. waters or, in the alternative, the implementation of other port facility disposal arrangements or procedures.  Vessels not complying with these regulations are restricted from entering U.S. waters. The USCG must approve any technology before it is placed on a vessel, but has not yet approved the technology necessary for vessels to meet these standards.

The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990), requires the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. Our vessels are subject to vapor control and recovery requirements for certain cargoes when loading, unloading, ballasting, cleaning and conducting other operations in regulated port areas. Our vessels that operate in such port areas with restricted cargoes are equipped with vapor recovery systems that satisfy these requirements. The CAA also requires states to draft State Implementation Plans, or SIPs, designed to attain national health-based air quality standards in each state. Although state-specific, SIPs may include regulations concerning emissions resulting from vessel loading and unloading operations by requiring the installation of vapor control equipment. As indicated above, our vessels operating in covered port areas are already equipped with vapor recovery systems that satisfy these existing requirements.

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Compliance with the EPA and other USCG regulations could require the installation of certain engineering equipment and water treatment systems to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial cost, or may otherwise restrict our vessels from entering U.S. waters.

European Union Regulations

In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, if committed with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting the discharge of a polluting substance may also lead to criminal penalties. Member States were required to enact laws or regulations to comply with the directive by the end of 2010. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims.

The European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by type, age, and flag as well as the number of times the ship has been detained. The European Union also adopted and then extended a ban on substandard ships and enacted a minimum ban period and a definitive ban for repeated offenses. The regulation also provided the European Union with greater authority and control over classification societies, by imposing more requirements on classification societies and providing for fines or penalty payments for organizations that failed to comply.

International Labour Organization

The International Labour Organization, or the ILO, is a specialized agency of the UN with headquarters in Geneva, Switzerland. The ILO has adopted the Maritime Labor Convention 2006, or the MLC 2006. A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance will be required to ensure compliance with the MLC 2006 for all ships above 500 gross tons in international trade. The MLC 2006 entered into force on August 20, 2013. The ratification of MLC 2006 requires us to develop new procedures to ensure full compliance with its requirements.

Environmental and Other Regulations in the Offshore Drilling Industry

Our offshore drilling operations include activities that are subject to numerous international, federal, state and local laws and regulations, including, the United Nations' International Maritime Organization, or IMO, International Convention for the Prevention of Pollution from Ships of 1973, as from time to time amended and generally referred to as MARPOL, including designation of Emission Control Areas thereunder, the IMO International Convention on Civil Liability for Oil Pollution Damage of 1969, as from time to time amended and generally referred to as CLC, the International Convention on Civil Liability for Bunker Oil Pollution Damage, or Bunker Convention, the IMO International Convention for the Safety of Life at Sea of 1974, as from time to time amended and generally referred to as SOLAS, the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or ISM Code, the IMO International Convention on Load Lines of 1966, as from time to time amended, the International Convention for the Control and Management of Ships' Ballast Water and Sediments in February 2004, or the BWM Convention, the U.S. Oil Pollution Act of 1990, or OPA, requirements of the U.S. Coast Guard and the U.S. Environmental Protection Agency, or EPA, the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, the U.S. Clean Water Act, the U.S. Clean Air Act, the U.S. Outer Continental Shelf Lands Act, the U.S. Maritime Transportation Security Act of 2002, or the MTSA, European Union regulations, and Brazil's National Environmental Policy Law (6938/81), Environmental Crimes Law (9605/98) and federal Law (9966/2000) relating to pollution in Brazilian waters. These laws govern the discharge of materials into the environment or otherwise relate to environmental protection. In certain circumstances, these laws may impose strict liability, rendering us liable for environmental and natural resource damages without regard to negligence or fault on our part.

The IMO adopted MARPOL Annex VI to regulate harmful air emissions from ships, which include rigs and drillships. Amendments to the Annex VI regulations which entered into force on July 1, 2010, require a progressive reduction of sulfur oxide levels in heavy bunker fuels and create more stringent nitrogen oxide emissions standards for marine engines in the future. As additional areas are designated ECAs, with stricter stricter sulfur content standards, we may incur costs to comply with these revised standards. Rigs and drillships must comply with MARPOL limits on emissions of sulfur oxide, nitrogen oxide, chlorofluorocarbons and other air pollutants, except that the MARPOL limits do not apply to emissions that are directly related to drilling, production, or processing activities. We believe that all of our drilling units are currently compliant in all material respects with these regulations.

Our drilling units are subject not only to MARPOL regulation of air emissions, but also to the Bunker Convention's strict liability for pollution damage caused by discharges of bunker fuel in jurisdictional waters of ratifying states.

Furthermore, any drillships that we may operate in United States waters, including the U.S. territorial sea and the 200 nautical mile exclusive economic zone around the United States, would have to comply with OPA and CERCLA requirements, among others, that impose liability (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges of oil or other hazardous substances, other than discharges related to drilling.

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The U.S. BSEE periodically issues guidelines for rig fitness requirements in the Gulf of Mexico and may take other steps that could increase the cost of operations or reduce the area of operations for our units, thus reducing their marketability. Implementation of BSEE guidelines or regulations may subject us to increased costs or limit the operational capabilities of our units and could materially and adversely affect our operations and financial condition.

Numerous governmental agencies issue regulations to implement and enforce the laws of the applicable jurisdiction, which often involve lengthy permitting procedures, impose difficult and costly compliance measures, particularly in ecologically sensitive areas, and subject operators to substantial injunctive relief and administrative, civil and criminal penalties for failure to comply. Changes in environmental laws and regulations occur frequently, and any changes that result in more stringent and costly compliance or limit contract drilling opportunities, including changes in response to a serious marine incident that results in significant oil pollution or otherwise causes significant adverse environmental impact, such as the April 2010 Deepwater Horizon oil spill in the Gulf of Mexico, in which we were not involved, could adversely affect our financial results. While we believe that we are in substantial compliance with the current laws and regulations, there is no assurance that compliance can be maintained in the future.

In addition to the MARPOL, OPA, and CERCLA requirements described above, our international operations are subject to various other international conventions and laws and regulations in countries in which we operate, including laws and regulations relating to the importation of and operation of drilling units and equipment, currency conversions and repatriation, oil and gas exploration and development, environmental protection, taxation of offshore earnings and earnings of expatriate personnel, the use of local employees and suppliers by foreign contractors and duties on the importation and exportation of drilling units and other equipment. New environmental or safety laws and regulations could be enacted, which could adversely affect our ability to operate in certain jurisdictions. Governments in some countries have become increasingly active in regulating and controlling the ownership of concessions and companies holding concessions, the exploration for oil and gas and other aspects of the oil and gas industries in their countries. In some areas of the world, this governmental activity has adversely affected the amount of exploration and development work done by major oil and gas companies and may continue to do so. Operations in less developed countries can be subject to legal systems that are not as mature or predictable as those in more developed countries, which can lead to greater uncertainty in legal matters and proceedings.

Implementation of new environmental laws or regulations that may apply to ultra-deepwater drilling units may subject us to increased costs or limit the operational capabilities of our drilling units and could materially and adversely affect our operations and financial condition.

Vessel Security Regulations

Since the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel security such as the U.S. Maritime Transportation Security Act of 2002 , or MTSA. To implement certain portions of the MTSA, in July 2003, the USCG issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. The regulations also impose requirements on certain ports and facilities, some of which are regulated by the EPA.

Similarly, in December 2002, amendments to SOLAS created a new chapter of the convention dealing specifically with maritime security. The new Chapter V became effective in July 2004 and imposes various detailed security obligations on vessels and port authorities, and mandates compliance with the International Ship and Port Facilities Security Code, or the ISPS Code. The ISPS Code is designed to enhance the security of ports and ships against terrorism. Amendments to SOLAS Chapter VII, made mandatory in 2004, apply to vessels transporting dangerous goods and require those vessels be in compliance with the International Maritime Dangerous Goods Code, or IMDG Code.  To trade internationally, a vessel must attain an International Ship Security Certificate, or the ISSC, from a recognized security organization approved by the vessel's flag state. Among the various requirements are:

● on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship's identity, position, course, speed and navigational status;

● on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore;

● the development of vessel security plans;

● ship identification number to be permanently marked on a vessel's hull;

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●  a continuous synopsis record kept onboard showing a vessel's history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship's identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and  

● compliance with flag state security certification requirements.

Ships operating without a valid certificate may be detained at port until it obtains an ISSC, or it may be expelled from port, or refused entry at port.

Furthermore, additional security measures could be required in the future which could have a significant financial impact on us. The USCG  regulations, intended to be aligned with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vessels have on board a valid ISSC that attests to the vessel's compliance with SOLAS security requirements and the ISPS Code. Our managers intend to implement the various security measures addressed by MTSA, SOLAS and the ISPS Code, and we intend that our fleet will comply with applicable security requirements. We have implemented the various security measures addressed by the MTSA, SOLAS and the ISPS Code.

Inspection by Classification Societies

Every seagoing vessel must be "classed" by a classification society. The classification society certifies that the vessel is "in class," signifying that the vessel has been built and maintained in accordance with the rules of the classification society and complies with applicable rules and regulations of the vessel's country of registry and the international conventions of which that country is a member. In addition, where surveys are required by international conventions and corresponding laws and ordinances of a flag state, the classification society will undertake them on application or by official order, acting on behalf of the authorities concerned.

The classification society also undertakes on request other surveys and checks that are required by regulations and requirements of the flag state. These surveys are subject to agreements made in each individual case and/or to the regulations of the country concerned.

For maintenance of the class, regular and extraordinary surveys of hull, machinery, including the electrical plant, and any special equipment classed are required to be performed as follows:

Annual Surveys: For seagoing ships, annual surveys are conducted for the hull and the machinery, including the electrical plant, and where applicable for special equipment classed, within three months before or after each anniversary date of the date of commencement of the class period indicated in the certificate.

Intermediate Surveys: Extended annual surveys are referred to as intermediate surveys and typically are conducted two and one-half years after commissioning and each class renewal. Intermediate surveys are to be carried out at or between the occasion of the second or third annual survey.

Class Renewal Surveys: Class renewal surveys, also known as special surveys, are carried out for the ship's hull, machinery, including the electrical plant, and for any special equipment classed, at the intervals indicated by the character of classification for the hull. At the special survey, the vessel is thoroughly examined, including audio-gauging to determine the thickness of the steel structures. Should the thickness be found to be less than class requirements, the classification society would prescribe steel renewals. The classification society may grant a one-year grace period for completion of the special survey. Substantial amounts of money may have to be spent for steel renewals to pass a special survey if the vessel experiences excessive wear and tear. In lieu of the special survey every four or five years, depending on whether a grace period was granted, a vessel owner has the option of arranging with the classification society for the vessel's hull or machinery to be on a continuous survey cycle, in which every part of the vessel would be surveyed within a five-year cycle.

At an owner's application, the surveys required for class renewal may be split according to an agreed schedule to extend over the entire period of class. This process is referred to as continuous class renewal.

All areas subject to survey as defined by the classification society are required to be surveyed at least once per class period, unless shorter intervals between surveys are prescribed elsewhere. The period between two subsequent surveys of each area must not exceed five years.

Most vessels are also dry-docked every 30 to 36 months for inspection of the underwater parts and for repairs related to inspections. If any defects are found, the classification surveyor will issue a "recommendation" which must be rectified by the ship owner within prescribed time limits.

For mobile offshore drilling units, plans are submitted to classification societies for inspections in lieu of drydocking.

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Most insurance underwriters make it a condition for insurance coverage that a vessel be certified as "in class" by a classification society which is a member of the International Association of Classification Societies. All our vessels are certified as being "in class" by all the major Classification Societies (e.g., American Bureau of Shipping, Lloyd's Register of Shipping). In December 2013, International Association of Classification Societies, or IACS, adopted new harmonized Common Structural Rules, or the Rules, which will apply to oil tankers and bulk carriers to be constructed on or after July 1, 2015.  The Rules attempt to create a level of consistency between IACS Socities.  All new and secondhand vessels that we purchase must be certified prior to their delivery under our standard purchase contracts and memorandum of agreement. If the vessel is not certified on the date of closing, we have no obligation to take delivery of the vessel.

Class Surveys—mobile offshore drilling units. Class renewal surveys, also known as special surveys or class work, are carried out for the unit's hull, machinery, drilling equipment, and for any special equipment classed, at the intervals indicated by the character of classification, normally every five years. At the special survey the unit is thoroughly examined. The classification society may grant a grace period for completion of the entire or parts of the special survey. This is normally not longer than 3 months.

Substantial amounts of money have to be spent for renewals and repairs to pass a special survey, as several spares and components have a defined lifetime of 5 to 15 years. This is accelerated if the unit experiences excessive wear and tear.

All areas subject to survey as defined by the classification society are required to be surveyed at least once per class period, unless shorter intervals between surveys are prescribed elsewhere. The period between two subsequent surveys of each area must not exceed five years.

Most insurance underwriters make it a condition for insurance coverage that a vessel be certified as "in class" by a classification society which is a member of the International Association of Classification Societies. Both our drilling rigs are certified as being "in class" by De Norske Veritas. The Leiv Eiriksson completed the 5-year class in May 2011 and the Eirik Raude completed the same in December 2012. Our four operating drillships are due for their first Special Periodical Survey in 2016 and our four seventh generation drillships are due for their first Special Periodical Survey in 2018, 2019 and 2020.

Insurance for our Drybulk Carriers and Tankers

Risk of Loss and Liability Insurance

The operation of any vessel includes risks such as mechanical failure, hull damage, collision, property loss and business interruption due to political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental incidents, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon owners, operators and demise charterers of vessels trading in the United States exclusive economic zone for certain oil pollution accidents in the United States, has made liability insurance more expensive for shipowners and operators trading in the United States market.

We maintain hull and machinery insurance, war risks insurance, protection and indemnity cover, and freight, demurrage and defense cover for our fleet in amounts that we believe to be prudent to cover normal risks in our operations. However, we may not be able to achieve or maintain this level of coverage throughout a vessel's useful life. Furthermore, while we believe that the insurance coverage that we will obtain is adequate, not all risks can be insured, and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates.

Hull & Machinery and War Risks Insurance

We maintain marine hull and machinery and war risks insurance, which includes the risk of actual or constructive total loss, for all of our vessels. Our vessels are each covered up to at least fair market value with deductibles of $100,000—$150,000 per vessel per incident. We also maintain increased value coverage for most of our vessels. Under this increased value coverage, in the event of total loss of a vessel, we will be able to recover the sum insured under the increased value policy in addition to the sum insured under the hull and machinery policy. Increased value insurance also covers excess liabilities which are not recoverable under our hull and machinery policy by reason of under insurance.

Protection and Indemnity Insurance

Protection and indemnity insurance is provided by mutual protection and indemnity associations, or P&I Associations, which insure liabilities to third parties in connection with our shipping activities. This includes third-party liability and other related expenses, including but not limited to, those resulting from the injury or death of crew, passengers and other third parties, the loss or damage to cargo, claims arising from collisions with other vessels, damage to other third-party property, pollution arising from oil or other substances and salvage, towing and other related costs, including wreck removal. Our protection and indemnity coverage is subject to and in accordance with the rules of protection and indemnity association in which the vessel is entered. Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations, or "clubs." Our coverage is limited for pollution to $1 billion and passenger and crew which is limited to $3 billion.

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Our current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident. The thirteen protection and indemnity associations that comprise the International Group insure approximately 90% of the world's commercial tonnage and have entered into a pooling agreement to reinsure each association's liabilities. As a member of a protection and indemnity association, which is a member of the International Group, we are subject to calls payable to the associations based on the group's claim records as well as the claim records of all other members of the individual associations and members of the pool of protection and indemnity associations comprising the International Group.

Insurance for our Offshore Drilling Units

We maintain insurance for our drilling units in accordance with industry standards. Our insurance is intended to cover normal risks in our current operations, including insurance against property damage, loss of hire, war risk and third-party liability, including pollution liability. The insurance coverage is established according to the Norwegian Marine Insurance Plan of 1996, version 2010, but excluding collision liabilities which are covered by the Protection and Indemnity insurance. We have obtained insurance for the full assessed market value of our drilling units, as assessed by rig brokers. Our insurance provides for premium adjustments based on claims and is subject to deductibles and aggregate recovery limits. In the case of pollution liabilities, our deductible is $10,000 per event and in the case of other hull and machinery claims, our deductible is $1.5 million per event. Our insurance coverage may not protect fully against losses resulting from a required cessation of drilling unit operations for environmental or other reasons. We also have loss of hire insurance cover for approximately one year which becomes effective after 45 days. This loss of hire insurance is recoverable only if there is physical damage to the rig or equipment which is caused by a peril against which we are insured. The principal risks which may not be insurable are various environmental liabilities and liabilities resulting from reservoir damage caused by our negligence. In addition, insurance may not be available to us at all or on terms acceptable to us, and there is no guarantee that even if we are insured, our policy will be adequate to cover our loss or liability in all cases. We plan to maintain insurance for our seventh generation drillships upon their delivery to us in accordance with the Norwegian Marine Insurance Plan of 1996, version 2010. This insurance would also be intended to cover normal risks in our current operations, including insurance against property damage, loss of hire and war risks. Third-party liability, including pollution liability and collision liability, is covered under our protection and indemnity insurance.

Permits and Authorizations

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels and drilling units. The kinds of permits, licenses and certificates required depend upon several factors, including the commodity transported, the waters in which a vessel or drilling unit operates, the nationality of a vessel's or drilling unit's crew and the age of a vessel or drilling unit. We have obtained all permits, licenses and certificates currently required to permit our vessels and drilling units to operate. Additional laws and regulations, environmental or otherwise, may be adopted which could limit our ability to do business or increase the cost of us doing business.

C.           Organizational Structure

As of March 2, 2015, we owned all of our drybulk and tanker vessels through our wholly-owned subsidiaries and we owned our drilling units through our majority-owned subsidiary, Ocean Rig UDW. As of March 2, 2015, we owned approximately 59.2% of the outstanding common shares of Ocean Rig UDW. Please see Exhibit 8.1 to this annual report for a list of our significant subsidiaries.

We may sell a minority voting and economic interest in our wholly-owned subsidiary, Tankships Investment Holdings Inc., the indirect owner and operator of our oil tankers, which on February 20, 2015 filed a registration statement on Form F-1 with the SEC relating to a possible initial public offering. Alternatively, we may distribute, or spin off, a minority voting and economic interest in Tankships Investment Holdings Inc. to holders of our voting stock (including holders of our preferred shares), or complete some combination of a public offering and distribution to holders of our voting stock. There can be no assurance, however, that we will complete any such transaction, which, among other things, will be subject to market conditions.

D.           Property, Plant and Equipment

We do not own any real property. We maintain our principal executive offices at 109 Kifisias Avenue and Sina Street, Amaroussion, GR 151 24 Greece.

Through our subsidiaries, we lease office space from unaffiliated third parties in Nicosia, Cyprus; Stavanger, Norway; Houston, Texas; Aberdeen, United Kingdom; Accra, Ghana and Rio de Janeiro, Brazil.

Our interests in our drybulk and tanker vessels and drilling units in our fleet are our only material properties. See "—B. Business Overview—Our Fleet."  Also see "—B. Business Overview—Environmental and Other Regulations in the Shipping Industry" for a description of environmental issues that may impact the use of our fleet.

Item 4A. Unresolved Staff Comments

None.

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Item 5.   Operating and Financial Review and Prospects

A.           Operating Results

The following management's discussion and analysis of our financial condition and results of operations should be read in conjunction with our historical consolidated financial statements and accompanying notes included elsewhere in this report. This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth in "Item 3. Key Information—Risk Factors."

Our Drybulk Carrier Segment

Factors Affecting Our Results of Operations—Drybulk Carrier Segment

We charter our drybulk carriers to customers primarily pursuant to time charters. Under our time charters, the charterer typically pays us a fixed daily charterhire rate and bears all voyage expenses, including the cost of bunkers (fuel oil) and port and canal charges. We remain responsible for paying the chartered vessel's operating expenses, including the cost of crewing, insuring, repairing and maintaining the vessel, the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses, and we also pay commissions to one or more unaffiliated ship brokers and to in-house brokers associated with the charterer for the arrangement of the relevant charter. The vessels in our fleet are employed on long term time charters and in the spot market. We believe that the important measures for analyzing trends in the results of our operations consist of the following:

● Calendar days. We define calendar days as the total number of days in a period during which each vessel in our fleet was in our possession including off-hire days associated with major repairs, drydockings or special or intermediate surveys. Calendar days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during that period.

● Voyage days. We define voyage days as the total number of days in a period during which each vessel in our fleet was in our possession net of off-hire days associated with drydockings or special or intermediate surveys. The shipping industry uses voyage days (also referred to as available days) to measure the number of days in a period during which vessels are available to generate revenues.

● Fleet utilization. We calculate fleet utilization by dividing the number of our voyage days during a period by the number of our calendar days during that period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons such as scheduled repairs, vessel upgrades, drydockings or special or intermediate surveys.

● Spot charter rates. Spot charter rates are volatile and fluctuate on a seasonal and year to year basis. Fluctuations are caused by imbalances in the availability of cargoes for shipment and the number of vessels available at any given time to transport these cargoes.

● TCE rates. We define TCE rates as our voyage and time charter revenues less voyage expenses during a period divided by the number of our available days during the period, which is consistent with industry standards. TCE rate, a non-U.S. GAAP measure, provides additional meaningful information in conjunction with revenues from our drybulk carriers, the most directly comparable U.S. GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. TCE rate is also a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts.

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The following table reflects our voyage days, calendar days, fleet utilization and TCE rates for our drybulk carrier segment for the periods indicated.

(Dollars in thousands except Average number of vessels)

	Year Ended December 31,
		2010		2011		2012		2013		2014
Average number of vessels		37.21		35.80		35.67		37.15		38.69
Total voyage days for fleet		13,430		12,831		13,027		13,442		13,889
Total calendar days for fleet		13,583		13,068		13,056		13,560		14,122
Fleet Utilization		98.87	%	98.19	%	99.78	%	99.13	%	98.35	%
Time charter equivalent		32,045		26,912		15,896		12,062		12,354

Voyage Revenues

Our voyage revenues are driven primarily by the number of vessels in our fleet, the number of voyage days during which our vessels generate revenues and the amount of daily charterhire that our vessels earn under charters, which, in turn, are affected by a number of factors, including our decisions relating to vessel acquisitions and disposals, the amount of time that we spend positioning our vessels, the amount of time that our vessels spend in drydock undergoing repairs, maintenance and upgrade work, the age, condition and specifications of our vessels, levels of supply and demand in the drybulk transportation market and other factors affecting spot market charter rates for drybulk carriers.

Vessels operating on period time charters provide more predictable cash flows, but can yield lower profit margins than vessels operating in the short-term, or spot, charter market during periods characterized by favorable market conditions. Vessels operating in the spot charter market generate revenues that are less predictable but may enable us to capture increased profit margins during periods of improvements in charter rates although we are exposed to the risk of declining charter rates, which may have a materially adverse impact on our financial performance. If we employ vessels on period time charters, future spot market rates may be higher or lower than the rates at which we have employed our vessels on period time charters.

Voyage Expenses and Voyage Expenses—Related Party

Voyage expenses and voyage expenses—related party primarily consists of commissions paid.

Vessel Operating Expenses

Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Our vessel operating expenses, which generally represent fixed costs, have historically increased as a result of the increase in the size of our fleet. Other factors beyond our control, some of which may affect the shipping industry in general, including, for instance, developments relating to market prices for insurance, may also cause these expenses to increase.

Depreciation

We depreciate our vessels on a straight-line basis over their estimated useful lives determined to be 25 years from the date of their initial delivery from the shipyard. Depreciation is based on cost less the estimated residual value.

Management Fees—Related Party

Management Agreements

Prior to January 1, 2011, Cardiff, a company controlled by our Chairman, President and Chief Executive Officer, Mr. George Economou, served as our technical and commercial manager pursuant to separate management agreements with each of our drybulk vessel-owning subsidiaries. Effective January 1, 2011, we entered into new management agreements , with TMS Bulkers, a related party, that replaced our management agreements with Cardiff, on the same terms as our management agreements with Cardiff, as a result of an internal restructuring of Cardiff for the purpose of enhancing its efficiency and the quality of its ship-management services.

For more information on the agreements discussed above, see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Cardiff, TMS Bulkers and TMS Tankers—Management Agreements—Drybulk Vessels."

Consultancy Agreement—Drybulk carrier, offshore drilling and tanker segments

We have entered into consultancy agreements with Vivid Finance Limited, or Vivid Finance, a company controlled by our Chairman, President and Chief Executive Officer, Mr. George Economou, pursuant to which Vivid Finance provides consulting services relating to (i) the identification, sourcing, negotiation and arrangement of new loan and credit facilities, interest swap agreements, foreign currency contracts and forward exchange contracts; (ii) the raising of equity or debt in the public capital markets; and (iii) the renegotiation of existing loan facilities and other debt instruments. See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Consultancy Agreements."

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General and Administrative Expenses

Our general and administrative expenses mainly include executive compensation and the fees paid to Fabiana Services S.A., or Fabiana, a related party entity incorporated in the Marshall Islands. Fabiana provides the services relating to our Chief Executive Officer and is beneficially owned by our Chief Executive Officer.

Interest and finance costs

We have historically incurred interest expense and financing costs in connection with our debt agreements. However, we intend to limit the amount of these expenses and costs by repaying our outstanding indebtedness from time to time with the net proceeds of future equity issuances.

Inflation—Drybulk Carrier, Offshore Drilling and Tanker Segments

Inflation has not had a material effect on our expenses given the current economic conditions. In the event that significant global inflationary pressures appear, these pressures could increase our operating, voyage, administrative and financing costs.

Our Offshore Drilling Segment

Factors Affecting Our Results of Operations—Offshore Drilling Segment

We charter our drilling units to customers primarily pursuant to long-term drilling contracts. Under the drilling contracts, the customer typically pays us a fixed daily rate, depending on the activity and up-time of the drilling unit. The customer bears all fuel costs and logistics costs related to transport to and from the unit. We remain responsible for paying the unit's operating expenses, including the cost of crewing, catering, insuring, repairing and maintaining the unit, the costs of spares and consumable stores and other miscellaneous expenses.

We believe that the most important measures for analyzing trends in the results of our operations consist of the following:

● Employment Days: We define employment days as the total number of days the drilling units are employed on a drilling contract.

● Dayrates or maximum dayrates: Unless otherwise stated, we define drilling dayrates as the maximum rate in U.S. Dollars possible to earn for drilling services for one 24 hour day at 100% efficiency under the drilling contract.  Such dayrate may be measured by quarter-hour, half-hour or hourly basis and may be reduced depending on the activity performed according to the drilling contract.

● Economic utilization: We measure our revenue earning performance over a period as a percentage of the maximum revenues that we could earn under our drilling contracts in such period.More specifically, all drilling contracts provide for an operating or base rate that applies for the period during which the drillship is operational and at the client's drilling location.Furthermore,drilling contracts generally provide for a general repair allowance for preventive maintenance or repair of equipment;such allowance varies from contract to contract,and we may be compensated at the full operating dayrate or at a reduced operating day rate for such general repair allowance.Inaddition,drilling contracts typically provide for situations where the drillships would operate at reduced operating dayrates,such as, among other things:a standby rate,where the drillship is prevented from commencing operations for reasons such as bad weather,waiting for customer orders, waiting on other contractors; a moving rate, where the drillship is in transit betweenl ocations; a reduced performance rate in the eventofmajor equipment failure;or a force majeure rate in the event of a force majeure that causes the suspension of operations.At these instances we are compensated with a portion of the base rate. In addition there are circumstances that due to equipment failure or other events defined in our drilling contracts, we do not earn the base rate.

● Mobilization / demobilization fees: In connection with drilling contracts, we may receive revenues for preparation and mobilization of equipment and personnel or for capital improvements to the drilling vessels, dayrate or fixed price mobilization and demobilization fees.

● Revenue: For each contract, we determine whether the contract, for accounting purposes, is a multiple element arrangement, meaning it contains both a lease element and a drilling services element, and, if so, identify all deliverables (elements). For each element we determine how and when to recognize revenue.

Term contracts: These are contracts pursuant to which we agree to operate the unit for a specified period of time. For these types of contracts, we determine whether the arrangement is a multiple element arrangement. For revenues derived from contracts that contain a lease, the lease elements are recognized as "Leasing revenues" in the statement of operations on a basis approximating straight line over the lease period. The drilling services element is recognized as "Service revenues" in the period in which the services are rendered at fair value rates.

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Revenues related to the drilling element of mobilization and direct incremental expenses of drilling services are deferred and recognized over the estimated duration of the drilling period.

Well contracts: These are contracts pursuant to which we agree to drill a certain number of wells. Revenue from dayrate based compensation for drilling operations is recognized in the period during which the services are rendered at the rates established in the contracts. All mobilization revenues, direct incremental expenses of mobilization and contributions from customers for capital improvements are initially deferred and recognized as revenues over the estimated duration of the drilling period.

Revenue from Drilling Contracts

Our drilling revenues are driven primarily by the number of drilling units in our fleet, the contractual dayrates and the utilization of the drilling units. This, in turn, is affected by a number of factors, including the amount of time that our drilling units spend on planned off-hire class work, unplanned off-hire maintenance and repair, off-hire upgrade and modification work, reduced dayrates due to reduced efficiency or non-productive time, the age, condition and specifications of our drilling units, levels of supply and demand in the rig market, the price of oil and other factors affecting the market dayrates for drilling units. Historically, industry participants have increased supply of drilling units in periods of high utilization and dayrates. This has resulted in an oversupply and caused a decline in utilization dayrates. Therefore, dayrates have historically been very cyclical.

Drilling rigs and drillships operating expenses

Drilling rigs and drillships operating expenses include crew wages and related costs, catering, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores, shore based costs and other miscellaneous expenses. Our rig operating expenses, which generally represent fixed costs, have historically increased as a result of the business climate in the offshore drilling sector. Specifically, wages and vendor supplied spares, parts and services have experienced a significant price increase over the previous two to three years. Other factors beyond our control, some of which may affect the offshore drilling industry in general, including developments relating to market prices for insurance, may also cause these expenses to increase. In addition, these rig operating expenses are higher when operating in harsh environments, though an increase in expenses is typically offset by the higher dayrates we receive when operating in these conditions.

Depreciation

We depreciate our drilling units on a straight-line basis over their estimated useful lives. Specifically, we depreciate bare-decks over 30 years and other asset parts over five to 15 years. We expense the costs associated with a five-year periodic class work.

Management Fees to Related Party

Services Agreements

On December 1, 2010, DryShips Inc. entered into the Global Services Agreement with Cardiff, effective December 21, 2010, pursuant to which we engaged Cardiff to act as consultant on matters of chartering and sale and purchase transactions for our offshore drilling units. Effective January 1, 2013, the Global Services Agreement was terminated by mutual agreement of the parties.  Also effective January 1, 2013, Ocean Rig Management Inc., or Ocean Rig Management, our majority-owned subsidiary and a wholly-owned subsidiary of Ocean Rig UDW, entered into a new services agreement with an affiliate of Cardiff.

For a description of the services agreements discussed above, see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Cardiff, TMS Bulkers and TMS Tankers—Management Agreements—Drilling Units—Services Agreement."

Management Fees of our Fleet

Up to October 2013, Ocean Rig's wholly-owned subsidiary, Ocean Rig AS, provided supervisory management services including onshore management, to our operating drilling rigs and drillships pursuant to separate management agreements entered into with each of the drilling unit-owning subsidiaries. In addition, Ocean Rig AS provided supervisory management services for our seventh generation hulls under construction.

 As from October 2013, the above services are provided by our wholly owned subsidiary, Ocean Rig Management Inc., pursuant to separate management agreements entered/to be entered with each of the drilling unit – owning subsidiaries.

Under the terms of these management agreements, Ocean Rig Management Inc., through its offices in Stavanger, Norway, Aberdeen, United Kingdom and Houston, Texas, is responsible for, among other things, (i) assisting in construction contract technical negotiations, (ii) securing contracts for the future employment of the drillships, and (iii) providing commercial, technical and operational management for the drillships.

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General and Administrative Expenses

Our general and administrative expenses mainly include the costs of our offices, including salary and related costs for members of senior management and our shore-side employees.

Interest and finance costs

As of December 31, 2014, 2013 and 2012, we had total indebtedness of $4.5 billion, $4.1 billion and $2.9 billion, respectively. We capitalize our interest on the debt we have incurred in connection with our drillships under construction.

Tanker Segment

The successful operation of our tanker vessels in spot market-related vessel pools will depend on, among other things, the age, dwt, carrying capacity, speed and fuel consumption of our vessels, which will determine the pool points we receive. The number of pool points we receive, together with, among other things, each of our vessels' operating days during the month will determine our share of the pool's net revenue. Our pool points for our vessels are calculated at the time that each respective vessel is entered into the pool and adjusted every six months. Our pool points may be reduced if certain pool requirements are not met, including if we do not maintain a minimum number of oil major approvals and if we fail to provide for ship inspection reports at least every six months. If the vessels entered into the pool in the future differ significantly in the performance characteristics relevant to the pool allocation formula, our vessels' share may be affected either positively or negatively.

Factors Affecting our Future Results of Operations—Tanker Segment

We believe that the most important measures for analyzing trends in the results of our future operations consist of the following:

● Vessel Revenues: Vessel revenues primarily include revenues from spot and pool revenues. Vessel revenues are affected by spot rates and the number of days a vessel operates. Vessel revenues are also affected by the mix of business between vessels on spot and vessels in pools. Revenues from vessels in pools are more volatile, as they are typically tied to prevailing market rates.

● Voyage related and vessel operating costs: Voyage expenses, primarily consisting of commissions, port, canal and bunker expenses that are unique to a particular charter, are paid for by the Company under voyage charter arrangements, except for commissions, which are either paid for by the Company or are deducted from the freight revenue. All voyage and vessel operating expenses are expensed as incurred, except for commissions. Commissions are deferred and amortized over the related voyage charter period to the extent revenue has been deferred since commissions are earned as the Company's revenues are earned.

● Depreciation: Depreciation expense typically consists of charges related to the depreciation of the historical cost of our fleet (less an estimated residual value) over the estimated useful lives of the vessels.

● Drydocking: We must periodically drydock each of our vessels for inspection, repairs and maintenance and any modifications to comply with industry certification or governmental requirements. Generally, each vessel is required to be drydocked every 30 months. We directly expense costs incurred during drydocking and costs for routine repairs and maintenance performed during drydocking that do not improve or extend the useful lives of the assets. The number of drydockings undertaken in a given period and the nature of the work performed determine the level of drydocking expenditures.

● Time Charter Equivalent Rates: Time charter equivalent, or TCE, rates, are a standard industry measure of the average daily revenue performance of a vessel. The TCE rate achieved on a given voyage is expressed in U.S. dollars/day and is generally calculated by subtracting voyage expenses, including bunkers and port charges, from voyage revenue and dividing the net amount (time charter equivalent revenues) by the number of days in the period.

● Revenue Days: Revenue days are the total number of calendar days our vessels were in our possession during a period, less the total number of off-hire days during the period associated with major repairs or drydockings. Consequently, revenue days represent the total number of days available for the vessel to earn revenue. Idle days, which are days when a vessel is available to earn revenue, yet is not employed, are included in revenue days. We use revenue days to show changes in net voyage revenues between periods.

● Average Number of Vessels: Historical average number of vessels consists of the average number of vessels that were in our possession during a period. We use average number of vessels primarily to highlight changes in vessel operating costs and depreciation and amortization.

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● .Commercial Pools: To increase vessel utilization to gain economies of scale and thereby revenues, we participate in commercial pools with other shipowners of similar modern, well-maintained vessels. By operating a large number of vessels as an integrated transportation system, commercial pools offer customers greater flexibility and a higher level of service while achieving scheduling efficiencies. Pools employ experienced commercial charterers and operators who have close working relationships with customers and brokers, while technical management is performed by each shipowner. Pools negotiate charters with customers primarily in the spot market. The size and scope of these pools enable them to enhance utilization rates for pool vessels by securing backhaul voyages and COAs, thus generating higher effective TCE revenues than otherwise might be obtainable in the spot market while providing a higher level of service offerings to customers.

Management Fees to Related Party

Since January 1, 2011, TMS Tankers, a company controlled by our Chairman, President and Chief Executive Officer, Mr. George Economou, has provided the commercial and technical management functions of our tankers, including technical supervision, while our tankers were under construction, pursuant to separate management agreements entered into with TMS Tankers for each of our tankers.  See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with Cardiff, TMS Bulkers and TMS Tankers—Management Agreements—Tankers."

General and Administrative Expenses

Our general and administrative expenses mainly include executive compensation and the fees paid to Fabiana, a related party entity incorporated in the Marshall Islands. Fabiana provides the services of our Chief Executive Officer and is beneficially owned by our Chief Executive Officer.

Interest and finance costs

We have historically incurred interest expense and financing costs in connection with our debt agreements. However, we intend to limit the amount of these expenses and costs by repaying our outstanding indebtedness from time to time with the net proceeds of future equity issuances.

Lack of Historical Operating Data for Vessels Before Their Acquisition

Although vessels are generally acquired free of charter, we have acquired (and may in the future acquire) some vessels with time charters. Where a vessel has been under a voyage charter, the vessel is usually delivered to the buyer free of charter. It is rare in the shipping industry for the last charterer of the vessel in the hands of the seller to continue as the first charterer of the vessel in the hands of the buyer. In most cases, when a vessel is under time charter and the buyer wishes to assume that charter, the vessel cannot be acquired without the charterer's consent and the buyer entering into a separate direct agreement (called a novation agreement) with the charterer to assume the charter. The purchase of a vessel itself does not transfer the charter because it is a separate service agreement between the vessel owner and the charterer.

Where we identify any intangible assets or liabilities associated with the acquisition of a vessel, we record all identified tangible and intangible assets or liabilities at fair value. Fair value is determined by reference to market data and the discounted amount of expected future cash flows. Where we have assumed an existing charter obligation or entered into a time charter with the existing charterer in connection with the purchase of a vessel at charter rates that are less than market charter rates, we record a liability, based on the difference between the assumed charter rate and the market charter rate for an equivalent vessel to the extent the vessel's capitalized cost would not exceed its fair value without a time charter. Conversely, where we assume an existing charter obligation or enter into a time charter with the existing charterer in connection with the purchase of a vessel at charter rates that are above market charter rates, we record an asset, based on the difference between the market charter rate for an equivalent vessel and the contracted charter rate. This determination is made at the time the vessel is delivered to us, and such assets and liabilities are amortized to revenue over the remaining period of the charter.

During 2014, 2013 and 2012, we did not acquire any vessels that were under existing bareboat or time charter contracts.

When we purchase a vessel and assume or renegotiate a related time charter, we must take the following steps before the vessel will be ready to commence operations:

● obtain the charterer's consent to us as the new owner;

● obtain the charterer's consent to a new technical manager;

● in some cases, obtain the charterer's consent to a new flag for the vessel;

● arrange for a new crew for the vessel, and where the vessel is on charter, in some cases, the crew must be approved by the charterer;

● replace all hired equipment on board, such as gas cylinders and communication equipment;

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● negotiate and enter into new insurance contracts for the vessel through our own insurance brokers;

● register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state;

● implement a new planned maintenance program for the vessel; and

● ensure that the new technical manager obtains new certificates for compliance with the safety and vessel security regulations of the flag state.

The following discussion is intended to help you understand how acquisitions of vessels affect our business and results of operations.

Our business is comprised of the following main elements:

● employment and operation of our drybulk and tanker vessels and drilling units; and

● management of the financial, general and administrative elements involved in the conduct of our business and ownership of our drybulk and tanker vessels and drilling units.

The employment and operation of our vessels require the following main components:

● vessel maintenance and repair;

● crew selection and training;

● vessel spares and stores supply;

● contingency response planning;

● onboard safety procedures auditing;

● accounting;

● vessel insurance arrangement;

● vessel chartering;

● vessel security training and security response plans (ISPS);

● obtain ISM certification and audit for each vessel within the six months of taking over a vessel;

● vessel hire management;

● vessel surveying; and

● vessel performance monitoring.

The management of financial, general and administrative elements involved in the conduct of our business and ownership of our vessels requires the following main components:

● management of our financial resources, including banking relationships, i.e., administration of bank loans and bank accounts;

● management of our accounting system and records and financial reporting;

● administration of the legal and regulatory requirements affecting our business and assets; and

● management of the relationships with our service providers and customers.

The principal factors that affect our profitability, cash flows and shareholders' return on investment include:

● Charter rates and periods of charterhire for our drybulk and tanker vessels;

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● dayrates and duration of drilling contracts;

● utilization of drilling units (earnings efficiency);

● levels of drybulk and tanker vessel and drilling unit operating expenses;

● depreciation and amortization expenses;

● financing costs; and

● fluctuations in foreign exchange rates.

Our Fleet—Illustrative Comparison of Possible Excess of Carrying Value Over Estimated Charter-Free Market Value of Certain Vessels

In "—Critical Accounting Policies—Impairment of Long Lived Assets," we discuss our policy for impairing the carrying values of our vessels. Historically, the market values of vessels have experienced volatility, which from time to time may be substantial. As a result, the charter-free market value, or basic market value, of certain of our vessels may have declined below those vessels' carrying value, even though we would not impair those vessels' carrying value under our accounting impairment policy, due to our belief that future undiscounted cash flows expected to be earned by such vessels over their operating lives would exceed such vessels' carrying amounts.

Based on: (i) the carrying value of each of our vessels as of December 31, 2014 and (ii) what we believe was the charter free market value of each of our vessels as of December 31, 2014, the aggregate carrying value of the vessels in our fleet as of December 31, 2014 exceeded their aggregate charter-free market value by approximately $750.6 million, as noted in the table below.

Based on: (i) the carrying value of each of our vessels as of December 31, 2013 and (ii) what we believe was the charter free market value of each of our vessels as of December 31, 2013, the aggregate carrying value of the vessels in our fleet as of December 31, 2013 exceeded their aggregate charter-free market value by approximately $847.5 million, as noted in the table below.

This aggregate difference between (i) the carrying value of each of our vessels and (ii) what we believe was the charter free market value of our vessels as of the relevant balance sheet date represents the approximate analysis of the amount by which we believe we would have to reduce our net income if we sold all of such vessels at December 31, 2014 and 2013, respectively, on industry standard terms, in cash transactions, and to a willing buyer where we were not under any compulsion to sell, and where the buyer was not under any compulsion to buy. For purposes of this calculation, we have assumed that these vessels would be sold at a price that reflects our estimate of their charter-free market values as of December 31, 2014 and 2013, respectively. However, as of those dates, some of our vessels were employed under time charters that we believe were above market levels. We believe that if the vessels were sold with those charters attached, we would have received a premium over their charter-free market value. However, as of December 31, 2014, December 31, 2013 and as of the date of this report, we were not and are not holding any of our vessels for sale.

Our estimates of charter-free market value assume that our vessels are all in good and seaworthy condition without need for repair and if inspected would be certified in class without notations of any kind. Our estimates are based on information available from various industry sources, including:

● reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values;

● news and industry reports of similar vessel sales;

● news and industry reports of sales of vessels that are not similar to our vessels where we have made certain adjustments in an attempt to derive information that can be used as part of our estimates;

● approximate market values for our vessels or similar vessels that we have received from shipbrokers, whether solicited or unsolicited, or that shipbrokers have generally disseminated;

● offers that we may have received from potential purchasers of our vessels; and

● vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and various other shipping industry participants and observers.

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As we obtain information from various industry and other sources, our estimates of basic market value are inherently uncertain. In addition, vessel values are highly volatile; as such, our estimates may not be indicative of the current or future charter-free market value of our vessels or prices that we could achieve if we were to sell them. We also refer you to the risk factor in "Item 3. Key Information—D. Risk Factors— Risk Factors Relating to the Drybulk Shipping Industry—The market values of our vessels may decrease, which could limit the amount of funds that we can borrow or trigger certain financial covenants under our current or future credit facilities and or we may incur a loss if we sell vessels following a decline in their market value" and the discussion included in "Item 4. Information on the Company—B. Business Overview—Our Drybulk Operations—Vessel Prices."

Drybulk Vessels	Dwt		Year Built		Carrying Value December 31, 2013 (in millions) ****			Carrying Value December 31, 2014 (in millions) ****
Montecristo		180,263		2005		33.9	**		32.2	**
Cohiba		174,234		2006		34.3	**		32.7	**
Robusto		173,949		2006		34.3	**		32.7	**
Partagas		173,880		2004		30.3	**		28.7	**
Capri		172,579		2001		108.0	**		99.9	**
Manasota		171,061		2004		56.0	**		52.6	**
Alameda		170,662		2001		47.2	**		44.0	**
Mystic		170,040		2008		117.8	**		112.1	**
Flecha		170,012		2004		119.6	**		112.3	**
Sorrento		76,633		2004		65.8	**		61.8	**
Mendocino		76,623		2002		29.5	**		27.5	**
Maganari		75,941		2001		21.0	**		19.5	**
Saldanha		75,707		2004		54.6	**		51.1	**
Coronado		75,706		2000		26.3	**		24.2	**
Ligari		75,583		2004		31.7	**		29.7	**
Rapallo		75,123		2009		29.3	**		28.0	**
Amalfi		75,206		2009		37.8	**		36.2	**
Bargara		74,832		2002		33.6	**		31.2	**
Samatan		74,823		2001		48.2	**		44.5	**
Capitola		74,816		2001		33.6	**		31.2	**
Sonoma		74,786		2001		27.0	**		25.1	**
Majorca		74,477		2005		39.1	**		36.8	**
Redondo		74,716		2000		26.5	**		24.5	**
Topeka		74,716		2000		17.1	**		15.9	**
Catalina		74,432		2005		35.1	**		33.2	**
Oregon		74,204		2002		47.1	**		43.7	**
Levanto		73,925		2001		35.3	**		32.7	**
Ecola		73,931		2001		27.1	**		25.2	**
Helena		73,744		1999		15.9	**		14.6	**
Ocean Crystal		73,688		1999		19.6	**		17.9	**
Marbella		72,561		2000		30.4	**		28.0	**
Galveston		51,201		2002		52.4	**		10.5	**
Byron		51,118		2003		43.8	**		40.9	**
Wooloomooloo		76,064		2012		32.7	**		31.5	**
Raraka		76,037		2012		32.8	**		31.5	**
Fakarava		206,152		2012		49.9	**		48.1	**
Rangiroa		206,026		2013		54.1	**		52.2	**
Negonego		206,097		2013		53.1	**		51.2	**
Raiatea		179,078		2011		-			53.2
Total for drybulk vessels		4,254,626			$	1,631.8		$	1,548.8

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	Dwt		Year Built		Carrying Value December 31, 2013 (in millions) ****			Carrying Value December 31, 2014 (in millions) ***
Drybulk vessels under construction
Ice – class Panamax 1		75,900		2014		34.0	**		-
Ice – class Panamax 2		75,900		2014		34.0	**		-
Ice – class Panamax 3		75,900		2014		34.0	**		-
Ice – class Panamax 4		75,900		2014		34.0	**		-
Total for drybulk vessels under construction		303,600			$	136.0		$	-
Tanker vessels
Vilamoura		158,622		2011		64.2	*		61.5	*
Saga		115,738		2011		53.8	*		51.4	*
Daytona		115,896		2011		54.8	*		52.5	*
Belmar		115,904		2011		56.4	*		54.1	*
Calida		115,812		2012		57.5	*		55.2	*
Lipari		158,425		2012		68.4	*		65.7	*
Petalidi		158,532		2012		68.8	*		66.2	*
Bordeira		158,513		2013		71.3	*		68.5	*
Alicante		115,708		2013		61.7	*		59.3	*
Mareta		115,796		2013		60.8	*		58.4	*
Total for tanker vessels		1,328,946			$	617.7		$	592.8
Total		5,887,172			$	2,385.1		$	2,141.6

*  Indicates tanker vessels for which we believe, as of December 31, 2013 and 2014, the basic charter-free market value is lower than the vessel's carrying value. We believe that the aggregate carrying value of these vessels exceeds their aggregate basic charter-free market value by approximately $117.5 million and $14.7 million, respectively.

**  Indicates drybulk carriers for which we believe, as of December 31, 2013 and 2014, the basic charter-free market value is lower than the vessel's carrying value. We believe that the aggregate carrying value of these vessels exceeds their aggregate basic charter-free market value by approximately $730.0 million and $735.9 million, respectively.

*** The shipbuilding contracts were cancelled during 2014.

**** With respect to the newbuildings, the carrying value for impairment test purposes refers to the construction cost.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of those consolidated financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and conditions. On an ongoing basis, we evaluate our estimates, including those related to bad debts, materials and supplies obsolescence, investments, property and equipment, intangible assets and goodwill, income taxes, pensions and share based compensation. We base our estimates on historical experience and on varius other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have described below what we believe are our most critical accounting policies that involve a high degree of judgment and the methods of their application. For a description of all of the company's significant accounting policies, see Note 2 to the Company's consolidated financial statements.

Vessels' Depreciation

We record the value of our vessels at their cost, which consists of the contract price and any material expenses incurred upon acquisition, initial repairs, improvements, delivery expenses and other expenditures to prepare the vessel for its initial voyage. Subsequent expenditures for major improvements are also capitalized when they appreciably extend the useful life, increase the earning capacity or improve the efficiency or safety of the vessels. Depreciation begins when the vessel is ready for its intended use, on a straight-line basis over the vessel's remaining economic useful life, after considering the estimated residual value (vessel's residual value is equal to the product of its lightweight tonnage and estimated scrap rate). Secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful life. We estimate the useful life of our vessels to be 25 years from the date of initial delivery from the shipyard and the residual value of our vessels to be $250 per lightweight ton. A decrease in the useful life of a vessel or in its residual value would have the effect of increasing the annual depreciation charge. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the date such regulations become effective.

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We depreciate our vessels on a straight-line basis over their estimated useful lives, after considering their estimated residual values, based on the assumed value of the scrap steel available for recycling after demolition. Up to December 31, 2010, the assumed value of scrap steel for the purpose of estimating the residual values of vessels was calculated at $120 per lightweight ton. As from January 1, 2011, the assumed value of scrap steel for the purpose of estimating the residual values of vessels is calculated at $250 per lightweight ton. We took this decision as steel prices and related scrap values have increased substantially over the past ten years. The impact of the increase in the scrap price used in the estimation of residual values is a decrease in depreciation expense.

Drilling unit machinery and equipment, net

Drilling units are stated at historical cost less accumulated depreciation. Such costs include the cost of adding or replacing parts of drilling unit machinery and equipment when that cost is incurred, if the recognition criteria are met. The recognition criteria require that the cost incurred extends the useful life of a drilling unit. The carrying amounts of those parts that are replaced are written off and the cost of the new parts is capitalized. Depreciation is calculated on a straight- line basis over the useful life of the assets as follows: bare-deck, 30 years and other asset parts, five to 15 years. The residual values of the drilling rigs and drillships are estimated at $35 million and $50 million, respectively.

IT and office equipment are recorded at cost and are depreciated on a straight-line basis over five years.

Impairment of Long Lived Assets

The Company reviews for impairment long-lived assets and intangible long-lived assets held and used whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In this respect, the Company reviews its assets for impairment on an asset by asset basis. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, the Company evaluates the asset for impairment loss. The impairment loss is determined by the difference between the carrying amount of the asset and the fair value of the asset. The Company evaluates the carrying amounts of its vessels, rigs and drillships by obtaining vessel, rigs and drillships appraisals to determine if events have occurred that would require modification to their carrying values or useful lives. In evaluating useful lives and carrying values of long-lived assets, the Company reviews certain indicators of potential impairment, such as undiscounted projected operating cash flows, vessel sales and purchases, business plans and overall market conditions. In developing estimates of future undiscounted cash flows, the Company makes assumptions and estimates about the vessels', rigs' and drillships' future performance, with the significant assumptions being related to charter and drilling rates, fleet utilization, operating expenses, capital expenditures, residual value and the estimated remaining useful life of each vessel, rig and drillship. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends as well as future expectations. To the extent impairment indicators are present, the Company determines undiscounted projected net operating cash flows for each vessel, rig and drillship and compares them to their carrying value. The projected net operating cash flows are determined by considering the charter revenues and drilling revenues from existing time charters and drilling contracts for the fixed fleet days and an estimated daily time charter equivalent for the unfixed days. The Company estimates the daily time charter equivalent for the unfixed days based on the most recent ten year historical average for similar vessels and utilizing available market data for time charter and spot market rates and forward freight agreements over the remaining estimated life of the vessel, assumed to be 25 years from the delivery of the vessel from the shipyard, net of brokerage commissions, expected outflows for vessels' maintenance and vessel operating expenses (including planned drydocking and special survey expenditures), assuming an average annual inflation rate of 2% and fleet utilization of 98%. The salvage value used in the impairment test is estimated to be $250 per light weight ton (LWT) for vessels, and $35 million and $50 million for drilling rigs and drillships respectively, in accordance with the Company's vessels' depreciation policy. If the Company's estimate of undiscounted future cash flows for any vessel is lower than the vessel's carrying value, the carrying value is written down, by recording a charge to operations, to the vessel's fair market value if the fair market value is lower than the vessel's carrying value. The Company's analysis for the year ended December 31, 2014, which also involved sensitivity tests on the time charter rates, drilling rates and fleet utilization (being the most sensitive inputs to variances), allowing for variances ranging from 97.5% to 92.5% depending on vessel type on time charter rates, indicated an impairment loss for one of its vessels, and no impairment on any of its rigs or drillships.

            Although the Company believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective. The 10 year average rates used in the impairment testing of the Company's shipping segment as of December 31, 2014 were $30,253 for drybulk carriers and $30,290 for tankers. In comparison, based on available market data, the Company estimates the average daily time charter equivalent rates in effect as of December 31, 2014 to be $5,619 for drybulk carriers and $51,612 for tankers.

As a result of the impairment review, the Company determined that the carrying amounts of its assets held for use were recoverable, and therefore, concluded that no impairment loss was necessary for 2012 and 2013, while for 2014 the Company determnined that the carrying amount of one of its assets was not recoverable and, therefore, an impairment loss of $38.1 million was recognized. However, due to the Company's decision to sell certain vessels during the years and based on the agreed-upon sales price, an impairment charge of $0 and $43.5 million, for each of the years ended December 31, 2012 and 2013, respectively, was recognized.

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Although the Company believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective. Set forth below is an analysis that shows the impact on the Company's impairment analysis of its shipping segment, if the Company were to utilize the most recent five year, three year or one year historical average rates for similar vessels for purposes of estimating future cash flows for unfixed days over the remaining life of the vessel.

	2014
Level of impairment		5 year		3 year		1 year
Drybulk carriers	$	704,461	$	735,691	$	735,518
Tankers		14,451		14,671		-
Total	$	718,912	$	750,362	$	735,518

Any impairment charges incurred as a result of declines in charter rates and other market deterioration could negatively affect our business, financial condition or operating results or the trading price of our common shares.

There can be no assurance as to how long charter rates and vessel values will remain at their currently low levels or whether they will improve by any significant degree. Charter rates may remain at depressed levels for some time which could adversely affect the Company's revenue and profitability, and future assessments of vessel impairment. For the drilling segment, there can be no assurance as to how long drilling rates and drilling rig/drillships values will remain at their currently high levels or whether they will improve or decrease by any degree.

Revenue and Related Expenses

(i) Drybulk Carrier and Tanker vessels:

Time and bareboat charters: The Company generates its revenues from charterers for the charterhire of its vessels, which are considered to be operating lease arrangements. Vessels are chartered using time and bareboat charters and where a contract exists, the price is fixed, service is provided and collection of the related revenue is reasonably assured, revenue is recognized as it is earned ratably on a straight-line basis over the duration of the period of each time charter as adjusted for the off-hire days that the vessel spends undergoing repairs, maintenance and upgrade work depending on the condition and specification of the vessel.

Pooling Arrangements: For vessels operating in pooling arrangements, the Company earns a portion of total revenues generated by the pool, net of expenses incurred by the pool. The amount allocated to each pool participant vessel, including the Company's vessels, is determined in accordance with an agreed-upon formula, which is determined by points awarded to each vessel in the pool based on the vessel's age, design and other performance characteristics. Revenue under pooling arrangements is accounted for on the accrual basis and is recognized when an agreement with the pool exists, price is fixed, service is provided and the collectability is reasonably assured.

The allocation of such net revenue may be subject to future adjustments by the pool however, historically, such changes have not been material.

Voyage charters: Voyage charter is a charter where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified freight rate per ton. If a charter agreement exists and collection of the related revenue is reasonably assured, revenue is recognized as it is earned ratably during the duration of the period of each voyage, when a voyage agreement is in place, a voyage is deemed to commence upon the completion of discharge of the vessel's previous cargo and is deemed to end upon the completion of discharge of the current cargo. Demurrage income represents payments by a charterer to a vessel owner when loading or discharging time exceeds the stipulated time in the voyage charter and is recognized ratably as earned during the related voyage charter's duration period.

Voyage related and vessel operating costs: Voyage related and vessel operating costs are expensed as incurred. Under a time charter, specified voyage costs, such as fuel and port charges are paid by the charterer and other non-specified voyage expenses, such as commissions, are paid by the Company. Vessel operating costs including crews, maintenance and insurance are paid by the Company. Under voyage charter arrangements, voyage expenses, primarily consisting of commissions, port, canal and bunker expenses that are unique to a particular charter, are paid for by the Company, except for commissions, which are either paid for by the Company or are deducted from the freight revenue. All voyage and vessel operating expenses are expensed as incurred, except for commissions. Commissions are deferred and amortized over the related voyage charter period to the extent revenue has been deferred since commissions are earned as the Company's revenues are earned. Under a bareboat charter, the charterer assumes responsibility for all voyage and vessel operating expenses and risk of operation.

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Deferred Voyage Revenue: Deferred voyage revenue primarily relates to cash advances received from charterers. These amounts are recognized as revenue over the voyage or charter period.

(ii) Drilling Units:

Revenues: The Company's services and deliverables are generally sold based upon contracts with its customers that include fixed or determinable prices. The Company recognizes revenue when delivery occurs, as directed by its customer and collectability is reasonably assured. The Company evaluates if there are multiple deliverables within its contracts and whether the agreement conveys the right to use the drill rigs and drillships for a stated period of time and meets the criteria for lease accounting, in addition to providing a drilling services element, which are generally compensated for by day rates. In connection with drilling contracts, the Company may also receive revenues for preparation and mobilization of equipment and personnel or for capital improvements to the drilling rigs or drillships and dayrate or fixed price mobilization and demobilization fees. Revenues are recorded net of agents' commissions. There are two types of drilling contracts: well contracts and term contracts.

(a) Well contracts: Well contracts are contracts under which the assignment is to drill a certain number of wells. Revenue from day-rate based compensation for drilling operations is recognized in the period during which the services are rendered at the rates established in the contracts. All mobilization revenues, direct incremental expenses of mobilization and contributions from customers for capital improvements are initially deferred and recognized as revenues over the estimated duration of the drilling period. To the extent that expenses exceed revenue to be recognized, they are expensed as incurred. Demobilization revenues and expenses are recognized over the demobilization period. All revenues for well contracts are recognized as "Service revenue" in the statement of operations.

(b) Term contracts: Term Contracts are contracts under which the assignment is to operate the unit for a specified period of time. For these types of contracts the Company determines whether the arrangement is a multiple element arrangement containing both a lease element and drilling services element. For revenues derived from contracts that contain a lease, the lease elements are recognized as "leasing revenues" in the statement of operations on a basis approximating straight line over the lease period. The drilling services element is recognized as "service revenues" in the period in which the services are rendered at estimated fair value. Revenues related to the drilling element of mobilization and direct incremental expenses of drilling services are deferred and recognized over the estimated duration of the drilling period. To the extent that expenses exceed revenue to be recognized, they are expensed as incurred. Demobilization fees and expenses are recognized over the demobilization period. Contributions from customers for capital improvements are initially deferred and recognized as revenues over the estimated duration of the drilling contract.

Financial Instruments

The Company designates its derivatives based upon guidance on accounting for derivative instruments and hedging activities which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. The guidance on accounting for certain derivative instruments and certain hedging activities requires all derivative instruments to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings unless specific hedge accounting criteria are met.

Hedge Accounting: At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy undertaken for the hedge. The documentation includes identification of the hedging instrument, hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's effectiveness in offsetting exposure to changes in the hedged item's cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in cash flows and are assessed on an ongoing basis to determine whether they actually have been highly effective throughout the financial reporting periods for which they were designated.

The Company is party to interest swap agreements where it receives a floating interest rate and pays a fixed interest rate for a certain period in exchange. Contracts which meet the strict criteria for hedge accounting are accounted for as cash flow hedges. A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognized asset or liability, or a highly probable forecasted transaction that could affect profit or loss.

The effective portion of the gain or loss on the hedging instrument is recognized directly as a component of accumulated other comprehensive income/(loss) in equity, while any ineffective portion, if any, is recognized immediately in current period earnings.

The Company discontinues cash flow hedge accounting if the hedging instrument expires and it no longer meets the criteria for hedge accounting or designation is revoked by the Company. At that time, any cumulative gain or loss on the hedging instrument recognized in equity is kept in equity until the forecasted transaction occurs. When the forecasted transaction occurs, any cumulative gain or loss on the hedging instrument is recognized in the statement of operations. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in equity is transferred to net profit or loss for the year as financial income or expense.

Other Derivatives: Changes in the fair value of derivative instruments that have not been designated as hedging instruments are reported in current period earnings.

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Selected Financial Data

Following our entry into the construction contracts for our 12 newbuilding tankers in 2010 and our acquisition of Ocean Rig ASA in 2008 and entry into the construction contracts for our four operating drillships in 2008 and 2009, we have three reportable segments, the drybulk carrier segment, tanker segment and the offshore drilling segment. We commenced consolidation of Ocean Rig ASA on May 15, 2008.

Drybulk carrier segment

The table below reflects our voyage days, calendar days, fleet utilization and TCE rates for our drybulk vessels for the periods indicated. Please see "Item 3. Key Information—A. Selected Financial Data" for information concerning the calculation of TCE rates.

	2012			2013			2014
Average number of vessels		35.67			37.15			38.69
Total voyage days for fleet		13,027			13,442			13,889
Total calendar days for fleet		13,056			13,560			14,122
Fleet Utilization		99.78	%		99.13	%		98.35	%
Time charter equivalent		15,896			12,062			12,354

Tanker segment

	2012			2013			2014
Average number of vessels		6.27			9.86			10.00
Total voyage days for fleet		2,293			3,598			3,650
Total calendar days for fleet		2,293			3,598			3,650
Fleet Utilization		100	%		100	%		100	%
Time charter equivalent		13,584			12,900			21,835

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 Year ended December 31, 2014 compared to the year ended December 31, 2013

(Expressed in thousands of U.S. Dollars)

	Year ended December 31,
	2013			2014			Change
REVENUES:
Revenues	$	1,492,014		$	2,185,524		$	693,510		46.5	%
EXPENSES:
Voyage expenses		103,211			117,165			13,954		13.5	%
Vessels, drilling rigs and drillships operating expenses		609,765			844,260			234,495		38.5	%
Depreciation and amortization		357,372			449,792			92,420		25.9	%
Loss on sale of assets, net		-			1,307			1,307		-	%
Vessel impairment charge		43,490			38,148			(5,342	)	(12.3	)%
Contract termination fees and Other		33,293			-			(33,293	)	(100	)%
General and administrative expenses		184,722			193,686			8,964		4.9	%
Legal settlements and other, net		4,585			(2,013	)		(6,598	)	(143.9	)%
Operating income		155,576			543,179			387,603		249.1	%
OTHER INCOME /(EXPENSES):
Interest and finance costs		(332,129	)		(411,021	)		(78,892	)	23.8	%
Interest income		12,498			12,146			(352	)	(2.8	)%
Gain/(loss) on interest rate swaps		8,373			(15,528	)		(23,901	)	(285.5	)%
Other, net		2,245			7,067			4,822		214.8	%
Total other expenses, net		(309,013	)		(407,336	)		(98,323	)	31.8	%
INCOME/(LOSS) BEFORE INCOME TAXES		(153,437	)		135,843			289,280		(188.5	)%
Income taxes		(44,591	)		(77,823	)		(33,232	)	74.5	%
NET INCOME/(LOSS)		(198,028	)		58,020			256,048		(129.3	)%
Less: Net (income)/loss attributable to non-controlling interests		(25,065	)		(105,532	)		(80,467	)	321.0	%
NET LOSS ATTRIBUTABLE TO DRYSHIPS INC.	$	(223,093	)	$	(47,512	)	$	175,581		(78.7	)%

Revenues

Drybulk Carrier segment

Voyage revenues increased by $14.6 million, or 7.6%, to $205.6 million for the year ended December 31, 2014, as compared to $191.0 million for the year ended December 31, 2013. An increase of $4.6 million, or 2.4%, is attributable to higher hire charter rates during the year ended December 31, 2014, as compared to the relevant period in 2013. Moreover, an additional increase of $6.7 million, or 3.5%, is attributable to the increase in the average number of vessels by 1.5 vessels,  with total voyage days increasing  by 447 days, from 13,442 days to 13,889  days, during the year ended December 31, 2014, as compared to the year ended December 31, 2013, Amortization of above market acquired time charters decreased by $3.3 million, or 1.7%, during the year ended December 31, 2014, as compared to the relevant period in 2013.

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Tanker segment

Voyage revenues increased by $42.1 million, or 34.9%, to $162.8 million for year ended December 31, 2014, as compared to $120.7 million for year ended December 31, 2013. An increase of $40.3 million, or 33.4%, is attributable to higher hire rates during the year ended December 31, 2014, as compared to the relevant period in 2013. Moreover, an additional increase of $1.8 million or 1.5% is attributable to the increase in voyage days by 52, from 3,598 days to 3,650 days, during the year ended December 31, 2014, as compared to the year ended December 31, 2013.

Offshore Drilling segment

Revenues from drilling contracts increased by $636.8 million, or 54.0%, to $1,817.1 million for the year ended December 31, 2014, as compared to $1,180.3 million for the year ended December 31, 2013. The increase is primarily attributable to the increased revenues from the Ocean Rig Mylos and the Ocean Rig Skyros, which were added to the current fleet in the third and fourth quarter of 2013, amounting to $424.2 million in aggregate, the revenue from the Ocean Rig Athena, which was added to the current fleet in the first quarter of 2014, amounting to $144.3 million and the revenue of the Ocean Rig Apollo, which contributed $0.5 million due to recharges while under construction as agreed under contract terms. Furthermore, there was an increase in revenues earned by the Ocean Rig Corcovado, the Ocean Rig Poseidon and the Leiv Eiriksson which contributed an additional $110.4 million in revenues during the year ended December 31, 2014, as compared to the same period in 2013. This increase was partly offset by the decreased revenues earned by the Ocean Rig Olympia, the Ocean Rig Mykonos and the Eirik Raude, which contributed $42.5 million less in revenues for the year ended December 31, 2014, as compared to the same period in 2013. The maximum day-rates for the contracts on which our drilling units were employed during the year ended December 31, 2014, ranged between approximately $438,000 and $690,100 per day. The maximum day rates for the contracts on which our drilling units were employed during the year ended December 31, 2013, ranged between approximately $ 431,000 and $ 670,000 per day.

Voyage expenses

Drybulk Carrier segment

Voyage expenses increased by $5.1 million or 17.6%, to $34.0 million for the year ended December 31, 2014, as compared to $28.9 million for the year ended December 31, 2013. The increase in voyage expenses is mainly due to the increased average number of vessels by approximately two as well as an increase in address and brokerage commissions and bunkers expenses for the year ended December 31, 2014.

Tanker segment

Voyage expenses increased by $8.9 million, or 12.0%, to $83.2 million for the year ended December 31, 2014, as compared to $74.3 million for the year ended December 31, 2013. The increase relates to the respective increase in voyage revenues.

Offshore Drilling segment

The Offshore Drilling segment did not incur any voyage expenses during the relevant periods.

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Vessels, drilling rigs and drillships operating expenses

Drybulk Carrier segment

Vessels operating expenses increased by $11.8 million, or 15.0%, to $90.4 million for the year ended December 31, 2014, as compared to $78.6 million for the year ended December 31, 2013. The increase is mainly due to increased drydocking expenses of $8.8 million recognized during the year ended December 31, 2014. The increase is also attributable to the increase in the average number of vessels by approximately two, the increase in various crew expenses, repairs and stores and the greek tax voluntary contribution recognized for the year ended December 31, 2014, as compared to the year ended December 31, 2013.

Tanker segment

Vessels operating expenses slightly decreased by $0.1 million, or 0.4%, to $26.1 million for the year ended December 31, 2014, as compared to $26.2 million for the year ended December 31, 2013. The decrease is mainly due to the increased initial expenses incurred during the year ended December 31, 2013, for the delivery of the vessels Alicante, Mareta, Bordeira.

Offshore Drilling segment

Drilling rigs and drillships operating expenses increased by $222.8 million, or 44.1%, to $727.8 million for the year ended December 31, 2014, compared to $505.0 million for the year ended December 31, 2013. The increase in operating expenses was mainly due to the addition of the Ocean Rig Athena to the current fleet, resulting to operating expenses amounting to $46.9million. Additionally, the significant increase is also due to the Ocean Rig Skyros and the Ocean Rig Mylos which were added to thecurrent fleet in the second and third quarter of 2013, amounting to $165.2 million. Furthermore, the Ocean Rig Olympia, theOcean Rig Mykonos the Ocean Rig Corcovado and the Leiv Eiriksson resulted to increased operating expenses amounting to$27.9 million. The total increase was partly offset by the decrease in operating expenses of the Eirik Raude which amounted to$15.0 million in aggregate, whereas the operating expenses of the Ocean Rig Poseidon remained approximately the same for theyears ended 2013 and 2014.

Depreciation and amortization expense

Drybulk Carrier segment

Depreciation and amortization expense increased by $3.1 million, or 3.2%, to $99.7 million for the year ended December 31, 2014, as compared to $96.6 million for the year ended December 31, 2013. The increase is mainly attributable to the increase in the number of vessels owned by approximately two or 4.0% vessels on average during the year ended December 31, 2014, as compared to the relevant period in 2013.

Tanker segment

Depreciation and amortization expense slightly increased by $0.3 million, or 1.2%, to $24.4 million for the year ended December 31, 2014, as compared to $24.1 million for the year ended December 31, 2013.

Offshore Drilling segment

Depreciation and amortization expense for the drilling units increased by $89.0 million, or 37.6%, to $325.7 million for the year ended December 31, 2014, as compared to $236.7 million for the year ended December 31, 2013. The increase in depreciation and amortization expense was mainly attributable to the depreciation expense of the Ocean Rig Athena which was added to the current fleet, amounting to $24.0 million as well as the increased depreciation of the Ocean Rig Mylos and Ocean Rig Skyros which were added to the fleet in the third and fourth quarter of 2013, amounting to $51.5 million. Furthermore, the Ocean Rig Mykonos, the Ocean Rig Corcovado and the Leiv Eiriksson resulted to increased depreciation expense amounting to $15.0 million in aggregate. This increase was partly offset by the decrease in depreciation expense of $1.5 million in aggregate of the Eirik Raude and the offices. The depreciation expense charged for the Ocean Rig Poseidon and Ocean Rig Olympia, remained approximately the same for the year ended December 31, 2014, as compared to the corresponding period in 2013.

Loss on contract cancellation

Drybulk Carrier segment

During the year ended December 31, 2014, we recorded a loss on contract cancellation of $1.3 million related to the cancellation of the construction of our four newbuildings. No such loss was recorded during the relevant period in 2013.

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Tanker segment

The Tanker segment did not incur any loss on contract cancellation during the relevant periods.

 Offshore Drilling segment

The Offshore Drilling segment did not incur any loss on contract cancellation during the relevant periods.

Vessel impairment charge

Drybulk Carrier segment

During the year ended December 31, 2014, we recorded an impairment loss of $38.1 million as a result of the impairment analysis performed. During the year ended December 31, 2013, we recorded an aggregate impairment loss of $43.5 million related to the sale of four of our newbuildings (Hulls 1239, 1240, 1241 & 1242).

Tanker segment

The Tanker segment did not incur any impairment loss during the relevant periods.

Offshore Drilling segment

The Offshore Drilling segment did not incur any impairment loss during the relevant periods.

Contract termination fees and other

Drybulk Carrier segment

 During the year ended December 31, 2013, contract termination fees and other were $33.3 million related to the sale of four of our newbuildings (Hulls 1239, 1240, 1241 & 1242). No such fees were recorded during the relevant period in 2014.

Tanker segment

During the year ended December 31, 2013, contract termination fees were $1.0 million related to the sale agreement of two of our newbuildings tankers. No such fees were recorded during the relevant period in 2014.

Offshore Drilling segment

The Offshore Drilling segment did not incur any contract termination fees during the relevant periods.

General and administrative expenses

Drybulk Carrier segment

General and administrative expenses increased by $3.6 million, or 8.0%, to $48.4 million for the year ended December 31, 2014, compared to $44.8 million for the year ended December 31, 2013. This increase was mainly due to the increase in management fees due to the increase in the number of vessels owned by approximately two and the increase in consultancy fees.

Tanker segment

General and administrative expenses slightly increased by $0.5 million, or 3.8%, to $13.5 million for the year ended December 31, 2014, compared to $13.0 million for the year ended December 31, 2013.

Offshore Drilling segment

General and administrative expenses increased by $4.8 million, or 3.8%, to $131.7 million for the year ended December 31, 2014, as compared to $126.9 million for year ended December 31, 2013. This increase is mainly due to increased costs for the operation of the offices in Athens and increased consultancy fees.

Legal settlements and other, net

Drybulk Carrier segment

Legal settlements and other net slightly decreased by $0.1 million, or 7.1%, to a gain of $1.3 million for the year ended December 31, 2014, compared to a gain of $1.4 million for the year ended December 31, 2013.

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Tanker segment

The Tanker segment did not incur such gains or losses during the relevant periods.

Offshore Drilling segment

A gain of $0.7 million was realized for the year ended December 31, 2014, as compared to a loss of $6.0 million during the year ended December 31, 2013, resulting to an increase of $6.7 million or 111.7%. The amount of $6.0 million (loss) in legal settlements for 2013 is mainly related to a claim settlement related to revenue under dispute of the operation of the Ocean Rig Corcovado in Greenland during 2011.The amount of $0.7 million relates to write off of claims from Samsung, cancellation fees and credit notes received during the year ended 2014.

Interest and finance costs

Drybulk Carrier segment

Interest and finance costs decreased by $1.0 million, or 1.0%, to $101.7 million for the year ended December 31, 2014, as compared to $102.7 million for the year ended December 31, 2013. The decrease is mainly due to the decrease in the bond amortization for the year ended December 31, 2014 compared to the corresponding period in 2013.

Excludes intercompany interest expense of $1.2 million.

Tanker segment

Interest and finance costs slightly decreased by $0.6 million, or 5.4% to $10.5 million for the year ended December 31, 2014, as compared to $11.1 for the year ended December 31, 2013.

Offshore Drilling segment

Interest and finance costs increased by $80.4 million, or 36.8%, to $298.8 million for year ended December 31, 2014, compared to $218.4 million for the year ended December 31, 2013. The increase is mainly due to the non- cash write offs and breakage cost fees resulting from the full repayment of the $1.35 billion senior secured credit facility totaling $22.0 million and write offs and redemption costs associated with the full refinancing of the Company's $500.0 million 9.5% senior unsecured notes due 2016 totaling to $32.6 million as well as the higher level of debt and interest rate during the year ended December 31, 2014.

Interest income

Drybulk Carrier segment

Interest income decreased by $1.9 million, or 65.5%, to $1.0 million for the year ended December 31, 2014, as compared to $2.9 million for the year ended December 31, 2013. The decrease was mainly due to a decrease in bank interest rates in time deposits during the year ended December 31, 2014, as compared to the relevant period in 2013.

Tanker segment

The Tanker segment did not earn any significant interest income during the relevant periods.

 Offshore Drilling segment

Interest income increased by $1.5 million, or 15.6%, to $11.1 million for the year ended December 31, 2014, compared to $9.6 million for the year ended December 31, 2013. The increase was mainly due to higher interest rates on our deposits and the duration of our time deposits during 2014 as compared to 2013.

Excludes intercompany interest income of $1.2 million.

Gain/(Loss) on interest rate swaps

Drybulk Carrier segment

Losses on interest rate swaps slightly decreased by $0.1 million, or 8.3%, to $1.1 million for the year ended December 31, 2014, as compared to $1.2 million for the year ended December 31, 2013, due to mark to market losses of outstanding swap positions.

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Tanker segment

A loss on interest rate swaps of $1.7 million was realized for the year ended December 31, 2014, as compared to a gain of $1.0 million for the year ended December 31, 2014. The loss for the year ended December 31, 2014, was mainly due to the adverse movement of interest rates during 2014.

Offshore Drilling segment

For the year ended December 31, 2014, the drilling segment incurred losses on interest rate swaps of $12.7 million, as compared to gains of $8.6 million for the year ended December 31, 2013. The losses for the year ended December 31, 2014 was mainly due to payments of swap's interest.

Other, net

Drybulk carrier segment

Other, net amounted to a gain of $1.6 million for the year ended December 31, 2014, compared to a loss of $0.8 million for the year ended December 31, 2013. The increase is mainly due to foreign currency exchange rate differences and an amount recovered under protection and indemnity insurance policy.

Tanker segment

Other, net amounted to a gain of $1.2 million for the year ended December 31, 2014, as compared to a loss of $0.3 million for the year ended December 31, 2013. The increase is mainly due to foreign currency exchange rate differences.

Offshore Drilling segment

Other, net increased by $1.0 million, or 30.3% to a gain of $4.3 million for year ended December 31, 2014, compared to a gain of $3.3 million for the year ended December 31, 2013. The increase is mainly due to foreign currency exchange rate differences.

Income taxes

Drybulk Carrier segment

We did not incur any income taxes on international shipping income in our Drybulk Carrier segment for the relevant periods.

Tanker segment

We did not incur any income taxes on international shipping income in our Tanker segment for the relevant periods.

Offshore Drilling segment

Income taxes increased by $33.2 million, or 74.4%, to $77.8 million for year ended December 31, 2014, compared to $44.6 million for the year ended December 31, 2013. As our drilling units operate around the world, they may become subject to taxation in many different jurisdictions. The basis for such taxation depends on the relevant regulation in the countries in which we operate. Consequently, there is no expected relationship between the income tax expense or benefit for the period and the income or loss before taxes.

Net (income)/loss attribute to non-controlling interests

Net (income)/loss attributed to non-controlling interests amounted to gain of $105.5 million for the year ended December 31, 2014, as compared to  gain of $ 25.1  million for the year ended December 31, 2013. This represents the amount of consolidated income or loss that is not attributable to DryShips Inc.

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Year ended December 31, 2013 compared to the year ended December 31, 2012

(Expressed in thousands of U.S. Dollars)

	Year ended December 31,
	2012			2013			Change
REVENUES:
Revenues	$	1,210,139		$	1,492,014		$	281,875		23.3	%
EXPENSES:
Voyage expenses		30,012			103,211			73,199		243.9	%
Vessels, drilling rigs and drillships operating expenses		649,722			609,765			(39,957	)	(6.1	)%
Depreciation and amortization		335,458			357,372			21,914		6.5	%
Loss on sale of assets, net		1,179			-			(1,179	)	(100	)%
Vessel impairment charge		-			43,490			43,490		100	%
Contract termination fees and Other		41,339			33,293			(8,046	)	(19.5	)%
General and administrative expenses		145,935			184,722			38,787		26.6	%
Legal settlements and other, net		(9,360	)		4,585			13,945		(150	)%
Operating income		15,854			155,576			139,722		881.3	%
OTHER INCOME /(EXPENSES):
Interest and finance costs		(210,128	)		(332,129	)		(122,001	)	58.1	%
Interest income		4,203			12,498			8,295		197.4	%
Gain/(loss) on interest rate swaps		(54,073	)		8,373			62,446		115.5	%
Other, net		(492	)		2,245			2,737		556.3	%
Total other expenses, net		(260,490	)		(309,013	)		(48,523	)	18.6	%
LOSS BEFORE INCOME TAXES		(244,636	)		(153,437	)		91,199		(37.3	)%
Income taxes		(43,957	)		(44,591	)		-634		1.4	%
NET LOSS		(288,593	)		(198,028	)		90,565		(31.4	)%
Less: Net (income)/loss attributable to non-controlling interests		41,815			(25,065	)		66,880		159,9	%
NET LOSS ATTRIBUTABLE TO DRYSHIPS INC.	$	(246,778	)	$	(223,093	)	$	23,685		(9.6	)%

Revenues

Drybulk Carrier segment

Voyage revenues decreased by $36.1 million, or 15.9%, to $ 191.0 million for the year ended December 31, 2013, as compared to $ 227.1 million for the year ended December 31, 2012. A decrease of $53.7 million, or 23.6%, is attributable to lower hire charter rates during the year ended December 31, 2013, as compared to the relevant period in 2012. This decrease was slightly offset by the increase of $7.9 million, or 3.5%, attributable to the increase in the average number of vessels by 1.5 vessels,  with total voyage days increasing  by 415 days, from 13,027 days to 13,442  days, during the year ended December 31, 2013, as compared to the year ended December 31, 2012, Amortization of above market acquired time charters decreased by $9.7  million, or 4.3%, during the year ended December 31, 2013, as compared to the relevant period in 2012 due to a smaller number of time charters being amortized during the year ended December 31, 2013, as compared to the corresponding period in 2012.

Tanker segment

Voyage revenues increased by $79.6 million, or 193.7%, to $120.7 million for year ended December 31, 2013, as compared to $ 41.1 million for year ended December 31, 2012. The increase is attributable to a larger fleet in the year ended 2013 comprised of ten vessels (Saga, Vilamoura, Daytona, Belmar, Calida, Petalidi, Lipari, Alicante, Mareta and  Bordeira), as compared to a fleet comprised of seven vessels (Belmar, Saga, Vilamoura, Daytona, Calida, Petalidi and Lipari) in the year ended December 31, 2012. The significant increase in revenues in 2013 is also attributable to the fact that tankers are mainly operate under voyage charter compare to the relevant period in 2012 which were under pool agreements.

Offshore Drilling segment

Revenues from drilling contracts increased by $238.4 million, or 25.3%, to $1,180.3 million for the year ended December 31, 2013, as compared to $941.9 million for the year ended December 31, 2012. The increase is primarily attributable to the revenue from equipment testing of the Ocean Rig Skyros amounting to $2.1 million; the revenue of the Ocean Rig Mylos which was added to the Company's current fleet, amounting to $41.5 million and the revenue of the Ocean Rig Athena which contributed $0.7 million due to recharges while under construction as agreed under contract terms. Furthermore, there was an increase in operation days of the Ocean Rig Mykonos, the Ocean Rig Olympia and the Ocean Rig Corcovado within the period, as a result of the decrease in mobilization days due to the mobilization of the respective drillships to their drilling locations, which contributed, in aggregate, $521.5 million of revenues during the year ended December 31, 2013, as compared to $415.2 million during the same period in 2012. This increase was partly offset by the decreased revenues earned by the Ocean Rig Poseidon, which contributed $16.0 million less in revenues for the year ended December 31, 2013, as compared to the same period in 2012. The Eirik Raude and the Leiv Eiriksson,contributed an additional $103.8 million in revenues during the year ended December 31, 2013, as compared to the same period in 2012.  The maximum dayrates for the contracts on which our drilling units were employed during the year ended December 31, 2013, ranged between approximately $431,000 and $670,000 per day. The maximum day rates for the contracts on which our drilling units were employed during the year ended December 31, 2012, ranged between approximately $ 440,000 and $ 670,000 per day.

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Voyage expenses

Drybulk Carrier segment

Voyage expenses increased by $8.8 million or 43.8%, to $28.9 million for the year ended December 31, 2013, as compared to $20.1 million for the year ended December 31, 2012. The increase in voyage expenses is due to the significant increase in bunkers expenses for the year ended December 31, 2013.

Tanker segment

Voyage expenses increased by $64.4 million, or 650.5%, to $74.3 million for the year ended December 31, 2013, as compared to $9.9 million for the year ended December 31, 2012. The increase is attributable to a larger fleet in the year ended December 31, 2013, comprised of ten vessels (Saga, Vilamoura, Daytona, Belmar, Calida, Petalidi Lipari, Alicante, Mareta and Bordeira), as compared to a fleet comprised of seven vessels (Belmar, Saga, Vilamoura Daytona, Calida, Lipari and Petalidi ) in the year ended December 31, 2012. The increase relates to the respective increase in voyage revenues and the significant increase in bunker expenses in 2013 due to the fact that tankers operated under voyage charters.

Offshore Drilling segment

The Offshore Drilling segment did not incur any voyage expenses during the relevant periods.

Vessels, drilling rigs and drillships operating expenses

Drybulk Carrier segment

Vessels operating expenses increased by $9.0 million, or 12.9%, to $78.6 million for the year ended December 31, 2013, as compared to $69.6 million for the year ended December 31, 2012. The increase is mainly due to the increase in various crew expenses, drydocking expenses, taxes, flag and insurance expenses.

Tanker segment

Vessels operating expenses increased by $9.7 million, or 58.8%, to $26.2 million for the year ended December 31, 2013, as compared to $16.5 million for the year ended December 31, 2012. The increase is attributable to a larger fleet in the year ended December 31, 2013, comprised of ten vessels (Saga, Vilamoura, Daytona, Belmar, Calida, Petalidi, Lipari. Alicante, Mareta and Bordeira),as compared to a fleet comprised of seven vessels (Belmar, Saga, Vilamoura, Daytona, Calida, Lipari and Petalidi) in the year ended December 31, 2012.

Offshore Drilling segment

Drilling rigs and drillships operating expenses decreased by $58.6 million, or 10.4%, to $505.0 million for the year ended December 31, 2013, compared to $ 563.6 million for the year ended December 31, 2012. The decrease in operating expenses was mainly due to the significant decrease of operating expenses of the Eirik Raude, the Leiv Eiriksson,the Ocean Rig Corcovado and the Ocean Rig Poseidon amounting to $79.0 million in aggregate. The total decrease was partly offset by the Ocean Rig Mykonos,the Ocean Rig Olympia mobilization and upgrades that took place during 2013;and the Ocean Rig Mylos and Ocean Rig Skyros which were added to the Company's fleet resulting in increased operating expenses of $34.2 million in aggregate for the year ended December 31, 2013.

Depreciation and amortization expense

Drybulk Carrier segment

Depreciation and amortization expense increased slightly by $1.9 million, or 2.0%, to $96.6 million for the year ended December 31, 2013, as compared to $94.7 million for the year ended December 31, 2012. The increase is mainly due to the delivery of two additional bulkers during 2013.

Tanker segment

Depreciation and amortization expense increased by $9.0 million, or 59.6%, to $24.1 million for the year ended December 31, 2013, as compared to $15.1 million for the year ended December 31, 2012. The increase is attributable to  a larger fleet of depreciable vessels for the year ended December 31, 2013, as compared to the same period of 2012.

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Offshore Drilling segment

Depreciation and amortization expense for the drilling units increased by $11.0 million, or 4.9%, to $236.7 million for the year ended December 31, 2013, as compared to $225.7 million for the year ended December 31, 2012. The increase in depreciation and amortization expense was mainly attributable to the depreciation expense of Ocean Rig Mylos and Ocean Rig Skyros which were added to the current fleet, amounting to $12.3 million as well as the increased depreciation of the Ocean Rig Mykonos, the Ocean Rig Olympia and the Leiv Eiriksson amounting to $5.6 million in aggregate and the increase in the office depreciation expense by $0.4 million. This increase was partly offset by the decrease in depreciation expense of $7.3 million in aggregate related to the depreciation of the Ocean Rig Corcovado and the Eirik Raude. The depreciation expense charged for the Ocean Rig Poseidon remained approximately the same for the year ended December 31, 2013, as compared to the corresponding period in 2012.

Vessel impairment charge

Drybulk Carrier segment

During the year ended December 31, 2013, we recorded an aggregate impairment loss of $ 43.5 million related to the sale of four of our newbuildings (Hulls 1239, 1240, 1241 & 1242). No such loss was recorded during the relevant period in 2012.

Tanker segment

The Tanker segment did not incur any impairment loss during the relevant periods.

Offshore Drilling segment

The Offshore Drilling segment did not incur any impairment loss during the relevant periods.

Loss on sale of assets, net

Drybulk Carrier segment

No loss on sale of assets incurred during 2013, while for the relevant period in 2012, there was a loss on sale of assets amounting to $1.0 million, due to the sale of three of our vessels (Avoca, Padre and Positano).

Tanker segment

The Tanker segment did not incur any asset sales during the relevant periods.

Offshore Drilling segment

Loss on asset sales amounted to $nil for the year ended December 31, 2013, while for the relevant period in 2012, there was a loss on asset disposal amounting to $0.1 million.

Contract termination fees and other

Drybulk Carrier segment

 During the year ended December 31, 2013, contract termination fees and other were $32.3 million related to the sale of four of our newbuildings (Hulls 1239, 1240, 1241 & 1242). No such fees were recorded during the relevant period in 2012.

Tanker segment

Contract termination fees and other, decreased by $40.3 million, or 97.6%, to a loss of $1.0 million for the year ended December 31, 2013, compared to a loss of $41.3 million that was recorded due to the novation agreements for the sale of the shipbuilding contracts for the newbuilding tankers Esperona and Blanca, for the year ended December 31, 2012.

Offshore Drilling segment

The Offshore Drilling segment did not incur any contract termination fees and forfeiture of vessels/ vessels under construction deposits.

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General and administrative expenses

Drybulk Carrier segment

General and administrative expenses decreased by $7.8 million, or 14.8%, to $44.8 million for the year ended December 31, 2013, compared to $52.6 million for the year ended December 31, 2012. This decrease was mainly due to the decrease in stock-based compensation and consultancy fees.

Tanker segment

General and administrative expenses increased by $3.3 million, or 34.0%, to $13.0 million for the year ended December 31, 2013, compared to $9.7 million for the year ended December 31, 2012. The increase is attributable to the increase in management fees due to a larger fleet in the year ended December 31, 2013, comprised of ten vessels as compared to a fleet comprised of seven vessels in the year ended December 31, 2012.

Offshore Drilling segment

General and administrative expenses increased by $43.3 million, or 51.8%, to $126.9 million for the year ended December 31, 2013, as compared to $83.6 million for year ended December 31, 2012. This increase is mainly due to increased costs for the operation of the offices in Athens and Angola and increased consultancy fees.

Legal settlements and other, net

Drybulk Carrier segment

Gains from legal settlements and other net decreased by $12.5 million, or 89.9%, to $1.4 million for the year ended December 31, 2013 compared to $13.9 million realized for the year ended December 31, 2012, due to the compensation received from charterers as a result of the earlier redelivery of a number of vessels and compensation received as per an option agreement related to the sale of certain receivables in 2012.

Tanker segment

The Tanker segment did not incur such gains or losses during the relevant periods.

Offshore Drilling segment

A loss of $6.0 million was realized for the year ended December 31, 2013, as compared to a loss of $4.5 million during the year ended December 31, 2012. The amount of $4.5 million (loss) in legal settlements for 2012 which is mainly related to a claim settlement related to import/export taxes duties in Angola that was settled during 2012 The amount of $6.0 million (loss) in legal settlements for 2013 is mainly related to a claim settlement related to revenue under dispute of the operation of the Ocean Rig Corcovado in Greenland during 2011.

Interest and finance costs

Drybulk Carrier segment

Interest and finance costs increased by $7.2 million, or 7.5%, to $102.7 million for the year ended December 31, 2013, as compared to $95.5 million for the year ended December 31, 2012. The increase is mainly due to the write-off of fees paid for H1241 and H1242, our newbuilding hulls that were sold and delivered to their new owners during May and June 2013, respectively, amounting to $0.8 million and the increased amortization of $4.9 million of our convertible senior notes, compared to the corresponding period in 2012.

Tanker segment

Interest and finance increased by $8.8 million, or 382.6% to $11.1million for the year ended December 31, 2013, as compared to $2.3 for the year ended December 31, 2012. The increase is mainly due to increased finance costs resulting from higher average debt due to the delivery of the vessels Alicant, Mareta and Bordeira during 2013.

Offshore Drilling segment

Interest and finance costs increased by $106.1 million, or 94.5%, to $218.4 million for year ended December 31, 2013, compared to $ 112.3 million for the year ended December 31, 2012. The increase is mainly due to the write off and breakage cost fees resulting from the full repayment of the $800.0 million secured term loan agreement and the two $495.0 million senior secured credit facilities totaling $61.1 million and increased interest expense of long term debt amounting to $54.4 million associated to the higher level of debt during the year ended December 31, 2013. Accordingly, capitalized interest and debt issuance costs increased by $20.5 million attributed to the new debt agreements  the company entered into during the year.

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Interest income

Drybulk Carrier segment

Interest income decreased by $0.7 million, or 19.4%, to $2.9 million for the year ended December 31, 2013, as compared to $3.6 million for the year ended December 31, 2012. The decrease was mainly due to a decreased average cash balance as compared to 2012.

Tanker segment

The Tanker segment did not earn any interest income during the relevant periods.

 Offshore Drilling segment

Interest income increased by $9.0 million, or 1,500.0%, to $9.6 million for the year ended December 31, 2013, compared to $0.6 million for the year ended December 31, 2012. The increase was mainly due to an increased average cash balance and higher interest rates on our deposits during 2013, as compared to 2012.

Gain/(Loss) on interest rate swaps

Drybulk Carrier segment

Losses on interest rate swaps decreased by $12.0 million, or 90.9%, to $1.2 million for the year ended December 31, 2013, as compared to $13.2 million for the year ended December 31, 2012, due to more favorable movement of interest rates.

Tanker segment

Gains on interest rate swaps increased by $4.9 million, or 125.6% to $1.0 million gain for the year ended December 31, 2013, as compared to losses amounted to $3.9 million for the year ended December 31, 2012.  The gain for the year ended December 31, 2013, was mainly due to mark to market gains of outstanding swap positions.

Offshore Drilling segment

Gains on interest rate swaps increased by $45.6 million, or 123.3%, to $8.6 million for year ended December 31, 2013, as compared to a $37.0 million loss for the year ended December 31, 2012. The gain for the year ended December 31, 2013, was mainly due to mark to market gains of outstanding swap positions.

Other, net

Drybulk carrier segment

Other, net decreased by $1.5 million, or 214.3%, to a loss of $0.8 million for the year ended December 31, 2013, compared to a gain of $ 0.7 million for the year ended December 31, 2012, due to exchange rate differences as compared to gain from the sale of $18.0 million of senior notes of Ocean Rig in the relevant period in 2012.

Tanker segment

Other, net amounted to a loss of 0.3 million for the year ended December 31, 2013, as compared to a loss of $0.08 million for the year ended December 31, 2012.

Offshore Drilling segment

Other, net increased by $4.4 million, or 400.0% to a gain of $3.3 million for year ended December 31, 2013, compared to a loss of $1.1 million for the year ended December 31, 2012. The increase is mainly due to foreign currency exchange rate differences.

Income taxes

Drybulk Carrier segment

We did not incur any income taxes on international shipping income in our Drybulk Carrier segment for the relevant periods.

Tanker segment

We did not incur any income taxes on international shipping income in our Tanker segment for the relevant periods.

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Offshore Drilling segment

Income taxes increased by $0.6 million, or 1.4%, to $44.6 million for year ended December 31, 2013, compared to $44.0 million for the year ended December 31, 2012. Because our drilling units operate around the world, they may become subject to taxation in many different jurisdictions. The basis for such taxation depends on the relevant regulation in the countries in which we operate. Consequently, there is no expected relationship between the income tax expense or benefit for the period and the income or loss before taxes.

Net (income)/loss attribute to non-controlling interests

Net (income)/loss attributed to non-controlling interests amounted to gain of $25.1 million for the year ended December 31, 2013, as compared to  loss of $ 41.8  million for the year ended December 31, 2012. This represents the amount of consolidated income or loss that is not attributable to DryShips Inc.

Recent Accounting Pronouncements

Revenue from Contracts with Customers

The Financial Accounting Standards Board ("FASB") and the International Accounting Standards Board ("IASB") (collectively, the "Boards") jointly issued a standard in May 2014 that will supersede virtually all of the existing revenue recognition guidance in U.S. GAAP and International Financial Reporting Standards ("IFRS") and is effective for annual periods beginning on or after January 1, 2017. The standard establishes a five-step model that will apply to revenue earned from a contract with a customer (with limited exceptions), regardless of the type of revenue transaction or the industry. The standard's requirements will also apply to the recognition and measurement of gains and losses on the sale of some non-financial assets that are not an output of the entity's ordinary activities (e.g., sales of property, plant and equipment or intangibles). Extensive disclosures will be required, including disaggregation of total revenue, information about performance obligations, changes in contract asset and liability account balances between periods, and key judgments and estimates. The guidance in Accounting Standard Update ("ASU") 2014-09 Revenue from Contracts with Customers (Topic 606) supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, this ASU supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. Management is in the process of accessing the impact of the new standard on Company's financial position and performance.

Going Concern

In August 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-15–Presentation of Financial Statements - Going Concern. ASU 2014-15 provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 requires an entity's management to evaluate at each reporting period based on the relevant conditions and events that are known at the date of financial statements are issued, whether there are conditions or events, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued and to disclose the necessary information. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.

B.           Liquidity and Capital Resources

Historically our principal source of funds has been equity provided by our shareholders, operating cash flow, secured and unsecured debt and certain forms of hybrid instruments, such as convertible preferred stock and convertible notes. Our principal use of funds has been capital expenditures to establish, grow and maintain the quality of our fleet, comply with international shipping standards and environmental laws and regulations, fund working capital requirements, make principal repayments and interest payments on outstanding debt facilities, and pay dividends. Our board of directors determined to suspend the payment of cash dividends beginning in the fourth quarter of 2008.

Our internally generated cash flow is directly related to our business and the market sectors in which we operate. Should the markets in which we operate deteriorate or worsen, or should we experience poor results in our operations, cash flow from operations may be reduced. As of March 2, 2015, we believe that cash on hand and internally generated cash flow will be sufficient to fund our operations (operating costs, working capital requirements and scheduled debt service requirements but not capital expenditures) for the next 12 months. Our access to debt and equity markets may be reduced or closed due to a variety of events, including a credit crisis, credit rating agency downgrades of our debt, industry conditions, general economic conditions, market conditions and market perceptions of us and our industry.

As of December 31, 2014, we had cash and cash equivalents of $566.2 million. Our cash and cash equivalents decreased by $28.9 million, or 4.9%, to $566.2 million as of December 31, 2014, compared to $595.1 million as of December 31, 2013, primarily due to payments for vessels, drilling rigs and drillships improvements and advances for drillships under construction.

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As of December 31, 2014, we had total indebtedness of $5.6 billion.  Our total indebtedness decreased by $0.1 billion, or 1.8%, to $5.6 billion as of December 31, 2014, from $5.7 billion as of December 31, 2013, mainly due to loan repayments made during 2014 which were partly offset by the $1.3 billion term loan entered by Ocean Rig UDW in July 2014 and the $167 and $200 million credit facilities entered by Dryships Inc in October and November 2014, respectively.

As of December 31, 2014, we were not in compliance with certain financial and loan-to-value covenants contained in the loan agreements relating to our shipping segments, while we were in full compliance with the financial covenants contained in the debt agreements relating to our offshore drilling segment. See "—Breach of Covenants under Secured Credit Facilities."

Working capital is equal to current assets minus current liabilities, including the current portion of long-term debt. Our working capital deficit was $394.5 million as of December 31, 2014, compared to a working capital deficit of $987.5 million as of December 31, 2013. The deficit decrease is mainly due to the increase in trade accounts receivable and the decrease in the current portion of long term debt. If we were not in breach of certain of our loan covenants contained in our loan agreements relating to our shipping segments, and the Company had not classified the relevant bank loans under which a total of $1,163.3 million was outstanding as of December 31, 2014, as current liabilities, our working capital would be a surplus of $314.4 million.

Our practice has been to acquire drybulk carriers, drilling units and tankers using a combination of funds received from equity investors and bank debt secured by mortgages on our assets. Our business is capital intensive and its future success will depend on our ability to maintain a high-quality fleet through the acquisition of newer vessels and the selective sale of older vessels. These acquisitions will be principally subject to management's expectation of future market conditions as well as our ability to acquire vessels on favorable terms.

As of December 31, 2014, we had entered into contracts for the construction of three seventh generation, ultra-deepwater drillships, scheduled for delivery in June 2016, February 2017 and June 2017, respectively. In August 2014, we agreed with the shipyard to cancel the construction of the four newbuilding Ice class Panamax vessels. In September 2014, we received in connection with the cancellation of these newbuilding contracts all installments previously paid to the shipyard plus interest.

As of December 31, 2014, the remaining purchase commitments relating to these drilling units amounted to $1.5 billion in the aggregate. We do not expect that internally generated cash flow will be sufficient to fund these commitments, which amounted to $179.2 million, $498.2 million and $864.4 million for 2015, 2016 and 2017, respectively, as of December 31, 2014. See "—Tabular Disclosure of Contractual Obligations."

As of December 31, 2014, we had made pre-delivery payments of $280.2 million in the aggregate for our three seventh generation drillships under construction. The total estimated remaining construction payments for these drillships amounted to approximately $1.8 billion in the aggregate, excluding financing costs, as of December 31, 2014. We intend to finance the three remaining seventh generation drillships scheduled for delivery June 2016, February 2017 and June 2017 with new debt or equity financing.

As of December 31, 2014, we had no available borrowing capacity under our credit facilities.

Covenants under Secured Credit Facilities

Our secured credit facilities impose operating and negative covenants on us and our subsidiaries. These covenants may limit our and our subsidiaries' ability to, among other things, without the relevant lenders' prior consent (i) pay dividends; (ii) incur additional indebtedness; (iii) change the flag, class or management of the vessel mortgaged under such facility, (iv) create or permit to exist liens on our assets, (v) make loans, (vi) make investments or capital expenditures, (vii) undergo a change in ownership or control; (viii) enter into transactions with affiliates; and (ix) sell our assets.

Certain of our secured credit facilities also subject us to certain financial covenants. In general, these financial covenants require us to maintain, among other things, (i) a minimum amount of liquidity; (ii) a minimum market adjusted equity ratio; (iii) a minimum interest coverage ratio; (iv) a minimum market adjusted net worth; (v) a minimum working capital level; (vi) maximum funded debt to capitalization ratio; (vii) a minimum tangible net worth level and (viii) a maximum ratio of total net debt to income before interest, taxes, depreciation and amortization.

 Furthermore, our secured credit facilities also require certain of our subsidiaries to maintain specified financial ratios and satisfy financial covenants, mainly to ensure that the market value of the vessel mortgaged under the applicable credit facility, determined in accordance with the terms of that facility, does not fall below a certain percentage of the outstanding amount of the loan, which we refer to as a value maintenance clause or the loan-to-value ratio.

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Breach of Covenants under Secured Credit Facilities

 Events beyond our control, including changes in the economic and business conditions in the international drybulk, tanker or offshore drilling markets in which we operate, may affect our ability to comply with the financial covenants and loan-to-value ratios required by our credit facilities. Our ability to maintain compliance with such requirements also depends substantially on the value of our assets, our charterhire and dayrates, our ability to obtain charters and drilling contracts, our success at keeping our costs low and our ability to successfully implement our overall business strategy.

A violation of any of the financial covenants in our credit facilities, absent a waiver of the breach from our lenders, or a violation of the loan-to-value ratios in our credit facilities, if not waived by our lenders or cured by providing additional collateral or prepaying the amount of outstanding indebtedness required to eliminate the shortfall, could result in an event of default under our credit facilities that would allow all amounts outstanding thereunder to be declared immediately due and payable. In addition, all of our credit facilities relating to our drybulk and tanker fleet contain cross-acceleration or cross-default provisions that may be triggered by a default under one of our other credit facilities relating to our drybulk and tanker fleet. Furthermore, our debt agreements relating to our offshore drilling fleet also contain cross-default or cross-acceleration provisions that may be triggered by a default under one of our other debt agreements relating to our offshore drilling fleet.  If the amounts outstanding under our indebtedness relating to our drybulk and tanker fleet or our offshore drilling fleet were to be become accelerated or were to become the subject of foreclosure actions, we cannot assure you that our assets would be sufficient to repay in full the money owed to the lenders or to our other debt holders.

As of December 31, 2014, we were in compliance with the financial covenants contained our debt agreements relating to our offshore drilling segment, but we were in breach of certain financial covenants, contained in certain of our loan agreements relating to our shipping segments, under which a total of $259.5 million was outstanding as of December 31, 2014.  Even though as of the date of this annual report, none of the lenders had declared an event of default under the relevant loan agreements for which we were not in compliance as of December 31, 2014, these breaches constitute potential events of default (also known as technical defaults) and may result in the lenders requiring immediate repayment of the loans. As a result of the aforementioned non-compliance as of December 31, 2014 and due to the cross-acceleration and cross-default provisions contained in our credit facilities relating to our drybulk and tanker fleet, all of our outstanding indebtedness relating to our drybulk and tanker fleet, amounting to approximately $1,163.3 million as of December 31, 2014, has been classified as current.  As a result, we reported a working capital deficit of $394.5 million at December 31, 2014. Our independent registered public accounting firm has issued its opinion with an explanatory paragraph in connection with our financial statements included in this annual report that expresses substantial doubt about our ability to continue as a going concern.  See Note 3 to our consolidated financial statements included in this annual report.

In addition, on November 18, 2013, we signed a Supplemental Agreement with HSH Nordbank, as Agent, for an amendment of certain terms under our $628.8 million credit facility dated March 31, 2006, as amended. Under the terms of this agreement on November 21, 2013, the lending syndicate led by HSH applied our previously pledged restricted cash of $55.0 million against the next five quarterly installments. In addition, the lending syndicate has agreed to relax various financial covenants through the end of 2014. On November 22, 2013, the pledge of 7,800,000 shares of Ocean Rig, which were previously pledged to the lenders under our $628.8 million senior and junior loan agreements dated March 31, 2006, were released back us.  Furthermore, we have entered into an amendment to one of our credit facilities to reduce the loan-to-value ratio required to be maintained under the facility until 2016. There can be no assurance that we will be in compliance with the loan-to-value ratios contained in these credit facilities when the share pledge expires or the original covenant comes back into effect or that the relevant lenders would permit further amendments to the collateral arrangements with respect to future breaches of the loan-to-value ratios.

We are currently in negotiations with our lenders to obtain waivers of our covenant breaches and extend existing waivers of covenant breaches, or to restructure the affected debt. We cannot guarantee that we will be able to obtain our lenders' waiver or consent, or extensions of existing waivers, with respect to the aforementioned noncompliance under our credit facilities relating to our drybulk and tanker fleet, or any non-compliance with specified financial ratios or financial covenants under future financial obligations we may enter into, or that we will be able to refinance or restructure any such indebtedness.  If we fail to remedy, or obtain a waiver of, the breaches of the covenants discussed above, our lenders may accelerate our indebtedness under the relevant credit facilities, which could trigger the cross-acceleration or cross-default provisions contained in our other credit facilities relating to our drybulk and tanker fleet, under which a total of $1,163.3 million was outstanding as of December 31, 2014. If our indebtedness is accelerated, it will be very difficult in the current financing environment for us to refinance our debt or obtain additional financing and we could lose our vessels if our lenders foreclose their liens. In addition, if the value of our vessels deteriorates significantly from their currently depressed levels, we may have to record an impairment adjustment to our financial statements, which would adversely affect our financial results and further hinder our ability to raise capital.

Moreover, in connection with any additional amendments to our credit facilities, or waivers or extensions of waivers of covenant breaches, that we obtain, or if we enter into any future credit agreements or debt instruments, our lenders may impose additional operating and financial restrictions on us. These restrictions may further restrict our ability to, among other things, fund our operations or capital needs, make acquisitions or pursue available business opportunities, which in turn may adversely affect our financial condition. In addition, our lenders may require the payment of additional fees, require prepayment of a portion of our indebtedness to them, accelerate the amortization schedule for our indebtedness and increase the margin and lending rates they charge us on our outstanding indebtedness.

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We expect that our lenders will not demand payment of the loans relating to our drybulk and tanker fleet under which we are in breach of certain financial and loan-to-value ratio covenants before their maturity, provided that we pay scheduled loan installments and accumulated or accrued interest as they fall due under the existing credit facilities. We plan to settle the loan interest and scheduled loan repayments with cash expected to be generated from operations and firm financing agreements which are currently in place.  We do not expect that cash on hand and cash generated from operations will be sufficient to repay our loans relating to our drybulk and tanker fleet with cross-default provisions which amounted to approximately $1,163.3 million in the aggregate as of December 31, 2014, if such debt is accelerated by our lenders, as discussed above. In such a scenario, we would have to seek to access the capital markets to fund the mandatory payments.

Notes

Convertible Senior Notes

In November 2009, we issued $460.0 million aggregate principal amount of 5% convertible unsecured senior notes, referred to as the Convertible Senior Notes, which were due December 1, 2014, resulting in aggregate net proceeds of approximately $447.8 million after deducting underwriting commissions.

The holders could convert their Convertible Senior Notes at any time on or after June 1, 2014 prior to maturity. However, holders could also convert their Convertible Senior Notes prior to June 1, 2014 under the following circumstances: (1) if the closing price of our common shares reaches and remained at or above 130% of the conversion price of $7.19 per share of common share or 139.0821 common shares per $1,000 aggregate principal amount of Convertible Senior Notes, in effect on that last trading day for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs; (2) during the ten consecutive trading-day period after any five consecutive trading-day period in which the trading price per $1,000 principal amount of the Convertible Senior Notes for each day of that period was less than 98% of the closing price of our common shares multiplied by then applicable conversion rate; or (3) if specified distributions to holders of our common shares are made or specified corporate transactions occur. The Convertible Senior Notes were unsecured and paid interest semi-annually at a rate of 5% per annum commencing June 1, 2010.

As the Convertible Senior Notes contained a cash settlement option upon conversion at the option of the issuer, the Company applied the guidance for "Accounting for Convertible Debt Instruments That May be Settled in Cash Upon Conversion (Including Partial Cash Settlement)", and therefore, on the day of the Convertible Senior Notes issuance, bifurcated the $460.0 million principal amount of the Convertible Senior Notes into liability and the equity components of $341.2 million and $118.8 million respectively, by first determining the carrying amount of the liability component of the Convertible Senior Notes by measuring the fair value of a similar liability that did not have an associated equity component. The equity component was calculated by deducting the fair value of the liability component from the total proceeds received at issuance. Additionally, the guidance required the Company to accrete the discount of $118.8 million to the principal amount of the Convertible Senior Notes over the term of the Convertible Senior Notes.

In April 2010, we issued $220.0 million aggregate principal amount of additional Convertible Senior Notes under the indenture, as supplemented by a supplemental indenture, pursuant to which the Company previously issued $460.0 million aggregate principal amount of Convertible Senior Notes in November 2009. The terms of the Convertible Senior Notes offered in April, other than their issue date, are identical to the Notes issued in November 2009.

The full over allotment option granted was exercised and an additional $20.0 million aggregate principal amount of Convertible Senior Notes were purchased. Accordingly, $240.0 million in aggregate principal amount of Convertible Senior Notes were sold, resulting in aggregate net proceeds of approximately $237.2 million after the underwriter commissions.

In conjunction with the offering of our Convertible Senior Notes described above, we also entered into a share lending agreement with an affiliate of the underwriter of the offering, or the share borrower, pursuant to which we loaned the share borrower approximately 36.1 million of our common shares. Under the share lending agreement, the share borrower is required to return the borrowed shares when the Convertible Senior Notes are no longer outstanding. We did not receive any proceeds from the sale of the borrowed shares by the share borrower, but we did receive a nominal lending fee of $0.01 per share from the share borrower for the use of the borrowed shares.

As of December 31, 2014, the share borrower has returned a total of 36,100,000 of our common shares that it borrowed pursuant to the share lending agreements discussed above.

The fair value of the outstanding loaned shares as of December 31, 2013 and 2014, was $71.0 million and $0 million, respectively. On the day of the Convertible Senior Notes issuance, the fair value of the share lending agreement was determined to be $14.5 million for the Convertible Senior Notes, based on a 5.5% interest rate of the Convertible Senior Notes without the share lending agreement and was recorded as debt issuance cost. Amortization of the issuance costs associated with the share lending agreement recorded as interest expense during the year ended December 31, 2013 and 2014, was $3.0 million and $2.8 million, respectively, resulting in an unamortized amount of $2.7 million and $0million at December 31, 2013 and 2014, respectively.

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The total interest expense related to the Convertible Senior Notes in our consolidated statement of operations for the years ended December 31, 2013 and 2014, was $78.8 million and $76.7 million, respectively, of which $43.8 million and $45.3 million was non-cash amortization of the discount on the liability component, respectively, and $35.0 million and $31.4 million was the contractual interest to be paid semi-annually at a coupon rate of 5% per year, respectively. At December 31, 2013 and 2014, the net carrying amounts of the liability component and unamortized discount were $654.7 million and $0 million, respectively, and $45.3 million and $0 million, respectively.

The Company's interest expense associated with the $460.0 million aggregate principal amount and $240.0 million aggregate principal amount of Convertible Senior Notes is accretive based on an effective interest rate of 12% and 14%, respectively.

During November 2014, the Company has repurchased on the open market and cancelled $191.1 million principal amount of its 5% convertible notes. On November 24, 2014 the Company repaid the remaining amount of its 5% convertible notes, amounted to $508.9 million.

Senior Unsecured Notes of Ocean Rig UDW

Ocean Rig's 7.25% senior unsecured notes due 2019

On March 26, 2014, Ocean Rig issued $500.0 million aggregate principal amount of 7.25% senior unsecured notes due 2019 (the "7.25% Senior Unsecured Notes"), offered in a private placement, resulting in net proceeds of approximately $493.6 million. The 7.25% Senior Unsecured Notes are unsecured obligations and rank senior in right of payment to any future subordinated indebtedness and equally in right of payment to all of its existing and future unsecured senior indebtedness. Ocean Rig used the net proceeds from the offering ofthe 7.25% Senior Unsecured Notes, together with cash on hand and repurchased $462.3 million of its 9.5% Senior Unsecured Notes, of which $500 million  in aggregate principal amount was outstanding prior to closing of the 7.25% Senior Unsecured Notes Offering, at atender premium of 105.375%, while the remaining $37.7 million, was redeemed at a redemption price of 104.5% on May 13, 2014.

The 7.25% Senior Unsecured Notes are not guaranteed by any of the Company's subsidiaries. Upon a change of control, which occurs if 50% or more of the Company's shares are acquired by any person or group other than DryShips or its affiliates, the noteholders will have an option to require the Company to purchase all outstanding notes at a redemption price of 101% of the principal amount thereof plus accrued and unpaid interest to the date of purchase. The contractual semi-annual coupon interest rate is 7.25% per year.

Ocean Rig's 9.5% senior unsecured notes due 2016

On April 27, 2011, Ocean Rig UDW, our majority owned subsidiary, issued $500,000 aggregate principal amount of its 9.5% senior unsecured notes due 2016, referred to as the Senior Unsecured Notes, offered in a private placement, resulting in net proceeds of approximately $487.5 million. The Senior Unsecured Notes were unsecured obligations and ranked senior in right of payment to any future subordinated indebtedness and equally in right of payment to all of its existing and future unsecured senior indebtedness.

The Senior Unsecured Notes were not guaranteed by any of Ocean Rig UDW's subsidiaries. Ocean Rig UDW could redeem some or all of the Senior Unsecured Notes as follows: (i) at any time and from time to time from April 27, 2014 to April 26, 2015, at a redemption price equal to 104.5% of the aggregate principal amount, plus accrued and unpaid interest to the date of redemption; or (ii) at any time and from time to time from April 27, 2015 at a redemption price equal to 102.5% of the aggregate principal amount, plus accrued and unpaid interest to the date of redemption. Upon a change of control, which  would occur if 50% or more of Ocean Rig UDW's shares were acquired by any person or group other than DryShips or its affiliates, the noteholders would have an option to require Ocean Rig UDW to purchase all outstanding notes at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest to the date of purchase.

The total interest expense and debt amortization cost related to the Senior Unsecured Notes in our consolidated statement of operations for the years ended December 31, 2013 and 2014, was $49.8 and $0 million, respectively. The contractual semi-annual coupon interest rate is 9.5% per year.

On April 26, 2011, we agreed to purchase from three unaffiliated companies Unsecured Senior Notes of Ocean Rig UDW in the total aggregate principal amount of $75.0 million. During the period from May 19, 2011 to July 27, 2011, we sold to unaffiliated third parties our Senior Unsecured Notes with a notional amount of $57.0 million, resulting in a gain of $1.4 million. The remaining $18.0 million in aggregate principal amount of Senior Unsecured Notes were measured at fair value as of December 31, 2011 and a loss of $1.4 million was recorded in "Other comprehensive income/(loss)." During the period from March 15, 2012 to March 30, 2012, the remaining $18.0 million of senior unsecured notes were also sold to third parties with a notional amount of $18 million resulting in a gain of $0.7 million.

The 9.5% Senior Unsecured Notes were repurchased or redeemed in connection with the 7.25% Senior Unsecured Notes offering discussed above.

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Senior Secured Notes of Drill Rigs Holdings

On September 20, 2012, Drill Rigs Holdings, our majority-owned subsidiary, or the Issuer, completed the issuance of $800 million aggregate principal amount of 6.50% senior secured notes due 2017, referred to as the Senior Secured Notes, in a private offering to eligible purchasers. The Senior Secured Notes are fully and unconditionally guaranteed, on a senior secured basis, by Ocean Rig UDW and certain existing and future subsidiaries of the Issuer, or the Subsidiary Guarantors, including subsidiaries of the Issuer that holds or will hold the Leiv Eiriksson or the Eirik Raude, or certain assets related to such drilling rigs, or that is or becomes party to a drilling contract in respect of either the Leiv Eiriksson or the Eirik Raude.

The Senior Secured Notes are secured, on a first priority basis, by a security interest in the Leiv Eiriksson and the Eirik Raude and certain other assets of the Issuer and Subsidiary Guarantors, assignments of all earnings and insurance proceeds related to the two drilling rigs, and by a pledge of the stock of the Issuer and the Subsidiary Guarantors.

The Senior Secured Notes mature on October 1, 2017, and bear interest from the date of their issuance at the rate of 6.50% per annum. Interest on outstanding Senior Secured Notes is payable semi-annually in arrears, commencing on April 1, 2013. The net proceeds, after fees and expenses, of offering of Senior Secured Notes of approximately $782.0 million were used to fully repay outstanding indebtedness under our $1.04 billion senior secured credit facility described below under "—Repaid Debt Agreements—$1.04 billion secured credit facility," amounting to $487.5 million as of June 30, 2012, and for the purposes of financing offshore drilling rigs, and to pay all fees and expenses associated therewith.

The Senior Secured Notes rank equally in right of payment with all of the Issuer's existing and future senior indebtedness and senior in right of payment to any of the Issuer's existing and future subordinated indebtedness.  The guarantees of each guarantor are senior obligations of that guarantor and rank equally in right of payment with all of that guarantor's existing and future senior indebtedness, including guarantees, and senior in right of payment to all of that guarantor's existing and future subordinated indebtedness.

At any time on or after October 1, 2015, the Issuer may redeem some or all of the Senior Secured Notes at specified redemption prices, plus accrued and unpaid interest on the Senior Secured Notes redeemed.  Prior to October 1, 2015, the Issuer may, at its option, redeem up to 35% of the aggregate original principal amount of the Senior Secured Notes with the net proceeds of one or more equity offering at a price equal to 106.5% of the principal amount thereof, plus accrued and unpaid interest thereon to the date of redemption.  In addition, prior to October 1, 2015, the Issuer may redeem all or a portion of the Senior Secured Notes at a redemption price equal to 100% of the outstanding principal amount thereof, plus any accrued and unpaid interest thereon to the date of redemption, plus a "make whole" premium.  Also prior to October 1, 2015, the Issuer may, not more than once in any twelve-month period, redeem up to 10% of the original principal amount of the Senior Secured Notes at a redemption price equal to 103% of the principal amount thereof, plus any accrued and unpaid interest thereon to the date of redemption.

If a change of control, as defined in the indenture, occurs, each holder of Senior Secured Notes will have the right to require the repurchase of all or any part of its Senior Secured Notes at a price equal to 101% of their original principal amount, plus accrued and unpaid interest to the date of repurchase. In addition, the Issuer may be required to offer to use all or a portion of the net proceeds of certain asset sales to purchase some or all of the Senior Secured Notes at 100% of the principal amount thereof, plus accrued and unpaid interest thereon to the date of purchase.

The indenture governing the Senior Secured Notes, among other things, limits the ability of Ocean Rig UDW and its restricted subsidiaries thereunder, including the Issuer, to: (i) incur or guarantee additional indebtedness or issue preferred stock or disqualified capital stock; (iii) pay dividends, redeem equity interests or subordinated indebtedness or make other restricted payments; (iv) transfer or sell assets; (v) incur dividend or other payment restrictions affecting restricted subsidiaries; (vii) enter into transactions with affiliates; (ix) engage in businesses other than a business that is the same as Ocean Rig UDW's current business and any reasonably related businesses; and (viii) designate subsidiaries as unrestricted subsidiaries. In addition, the indenture governing the Senior Secured Notes also restricts the Issuer's ability and the ability of Ocean Rig UDW and the Subsidiary Guarantors to, among other things, (i) create or incur liens; (ii) consummate a merger, consolidation or sale of all or substantially all of the assets of the Issuer, Ocean Rig UDW or the Subsidiary Guarantors; and (iii) take or omit to take any actions that would adversely affect or impair in any material respect the collateral securing the Senior Secured Notes. Subject to certain exceptions, future subsidiaries of Ocean Rig UDW will become restricted subsidiaries under the indenture governing the Senior Secured Notes and, under limited circumstances, may also become guarantors of the Senior Secured Notes.

The Senior Secured Notes are listed on the Official List of the Irish Stock Exchange and trade on the Global Exchange Market of that exchange.

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Existing Credit Facilities/ Term Loans

Credit Facilities relating to Our Drybulk and Tanker Segments

$126.4 million secured term loan facility, dated July 23, 2008, as amended

We entered into a $126.4 million term loan facility to partially finance the acquisition of the drybulk vessel Flecha. In January 2012, we entered into a supplemental agreement with respect to this facility, according to which the vessel Woolloomooloo is pledged as collateral to secure the loan.

This loan bears interest at LIBOR plus a margin, and is repayable in 40 quarterly installments, plus a balloon payment payable together with the last installment in July 2018.

In August 2012, we entered into a fourth supplemental agreement to this facility to amend the minimum security cover covenant to decrease the loan-to-value ratio required under under the facility until December 31, 2016 and made a prepayment of $9.1 million. On July 11, 2014, we entered into a supplemental agreement, to among other things, release the vessel Woolloomoloo from the collateral package under this loan.

As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $42.6million and $53.2 million under this term loan facility, respectively.

$103.2 million secured term loan facility, dated June 20, 2008, as amended

We entered into this facility to partially finance the acquisition costs of the drybulk vessels Sorrento and Iguana. This loan bears interest at LIBOR plus a margin. The portion of the loan facility relating to the drybulk vessel Sorrento is repayable in 32 quarterly installments, plus a balloon payment payable together with the last installment in July 2016. The portion of the loan facility relating to the drybulk vessel Iguana was repaid following the sale of the vessel during 2010. On April 14, 2014, we obtained a waiver letter to amend certain financial covenants. The waiver is subject to definitive documentation.

On November 12, 2014, we signed a supplemental agreement under the secured loan facility dated June 20, 2008 for relaxation of certain financial covenants

As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $21.3 million and $24.3 million under this loan facility, respectively.

$125.0 million secured term loan facility, dated May 13, 2008, as amended

We entered into this facility to partially finance the acquisition cost of the drybulk vessels Capri and Positano. The loan bears interest at LIBOR plus a margin and is repayable in thirty-two quarterly installments, plus a balloon payment payable together with the last installment in June 2016.

As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $15.7million and $21.6 million under this loan facility, respectively.

$90.0 million secured term loan facility, dated May 5, 2008, as amended

We entered into this facility to partially finance the acquisition cost of the drybulk vessel Mystic.

The loan bears interest at LIBOR plus a margin, and is repayable in 15 semi-annual installments, with a balloon payment, payable together with the last installment in December 2015.

As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $30.0 million and $36.0 million under this loan facility, respectively.

$130.0 million secured term loan facility, dated March 13, 2008, as amended

We entered into this facility for working capital and general corporate purposes. The drybulk vessels Toro and Delray were initially mortgaged as collateral under this loan facility.

On August 25, 2010, we entered into a supplemental agreement, which among other things, extended the waiver period to March 31, 2012 with respect to the loan-to-value ratio required to be maintained under the facility, which requirement was reduced during the waiver period, and increased the applicable margin of the facility during the waiver period, with a scheduled reduction to the margin thereafter.

On November 29, 2010, we signed an amended and restated agreement for the substitution of the drybulk vessels Delray and Toro for the drybulk vessel Amalfi. The vessel Delray was sold in February 2010, whereas the vessel Toro was released as security for the loan facility and was replaced by the vessel Amalfi.

On August 1, 2013, the Company entered into a supplemental agreement to amend certain terms and cure a shortfall in the security cover ratio, and pledged an aggregate of 1,800,000 of its shares of Ocean Rig as additional security under the loans. The share pledge expired on December 31, 2013.

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On December 23, 2014, we entered into an agreement to, among other things, waive certain financial covenants until December 31, 2014 and relax other financial covenants until maturity. We have agreed to provide a pledge over 2,356,705 Ocean Rig shares owned by us until December 31, 2014.

The remaining loan bears interest at LIBOR plus a margin and is repayable in two quarterly installments plus a balloon payment, payable together with the last installment in March 2015.

As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $28.9 million and $30.2 million under this loan facility, respectively.

$47.0 million secured term loan facility, dated November 16, 2007, as amended

We entered into this facility to partially finance the acquisition cost of the secondhand drybulk vessel Oregon. The loan bears interest at LIBOR plus a margin, and is repayable in 32 quarterly installments, with a balloon payment, payable together with the last installment in December 2015.

As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $14.0million and $16.0 million under this loan facility, respectively.

$90.0 million secured term loan facility, dated October 5, 2007, as amended

We entered into this facility to partially finance the acquisition cost of the secondhand drybulk vessels Samatan and Galveston (ex VOC Galaxy). The loan bears interest at LIBOR plus a margin depending on corporate leverage, and is repayable in 32 quarterly installments beginning in the first quarter of 2008, with a balloon payment, payable together with the last installment in November, 2015. On August 25, 2010, we entered into a supplemental agreement, which among other things, extended the waiver period to March 31, 2012, with respect to the loan-to-value ratio required to be maintained under the facility, which requirement was reduced during the waiver period, and increased the applicable margin of the facility during the waiver period, with a scheduled reduction to the margin thereafter.

On August 1, 2013, the Company entered into a supplemental agreement to amend certain terms and cure a shortfall in the security cover ratio, and pledged an aggregate of 3,650,000 of its shares of Ocean Rig as additional security under the loans. The share pledge expired on December 31, 2013.

On December 23, 2014, we entered into an agreement to, among other things, waive certain financial covenants until December 31, 2014 and relax other financial covenants until maturity. We have agreed to provide a pledge over 6,418,350 Ocean Rig shares owned by us until December 31, 2014.

As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $53.0million and $57.0  million under this loan facility.

$35.0 million secured term loan facility, dated October 2, 2007, as amended

We entered into this facility to partially finance the acquisition cost of the secondhand drybulk vessel Byron (ex Clipper Gemini). The loan bears interest at LIBOR plus a margin, and is repayable in 36 quarterly installments beginning in the first quarter of 2008, with a balloon payment, payable together with the last installment in October 2016. On July 7, 2014, we entered into an agreement and agreed to make a cash prepayment of $2.7 million to avoid a loan-to-value covenant breach.

As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $12.8 million and $17.0 million, under this loan facility, respectively.

$518.8 million senior loan facilities and $110.0 junior loan facilities, each dated March 31, 2006, as amended

We entered into these facilities to provide us with working capital, and to partially finance the acquisition cost of certain vessels. These facilities are comprised of (i) term loan and short-term credit facilities (senior loan facility) and (ii) term loan and short-term credit facilities (junior loan facility).

The senior loan facility bears interest at LIBOR plus a margin. The term loan facility is repayable in 37 quarterly installments, with a balloon payment, payable together with the last installment on May 31, 2016. Each advance from the short term credit facility is repayable in quarterly installments with the next term loan facility installment. As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $145.1 million and $145.1 million under this loan facility, respectively.

The junior loan facility bears interest at LIBOR plus a margin. The term loan facility is repayable in 37 quarterly installments, with a balloon payment, payable together with the last installment on May 31, 2016. Each advance from the short term credit facility is repayable in quarterly installments with the next term loan facility installment. As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $29.3 million and $29.3 million under this loan facility, respectively.

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On September 29, 2010, we executed two supplemental agreements under its senior and junior facilities. As a result of the amendments in these new supplemental agreements, the Company regained full compliance with the financial and non-financial covenants under the original facilities, as amended. The Xanadu was sold in September 2010 and its outstanding balance at that date was repaid. The Primera was sold in April 2011 and its outstanding balance at that date was repaid.

On February 9, 2012, we entered into two supplemental agreements under our senior and junior facilities to provide additional security in connection with a shortfall in the security cover ratio required to be maintained under the facilities and pledged 10,000,000 of our shares of Ocean Rig UDW as additional security under the facilities. The share pledge expired on March 31, 2012.

On September 27, 2012, we entered into two additional supplemental agreements under our senior and junior facilities to provide additional security in connection with a shortfall in the security cover ratio required to be maintained under the facilities and pledged 7,800,000 of our shares of Ocean Rig UDW as additional security under the facilities. On November 22, 2013, the 7,800,000 shares of Ocean Rig were released back to the Company.

On November 18, 2013, the Company signed a Supplemental Agreement with HSH Nordbank, as Agent, for an amendment of certain terms under the Company's $628.8 million credit facility dated March 31, 2006, as amended. Under the terms of this agreement on November 21, 2013, the lending syndicate led by HSH applied our previously pledged restricted cash of $55,000 against the next five quarterly installments. In addition, the lending syndicate has agreed to relax various financial covenants through the end of 2014.

$70.0 million secured term loan facility, dated February 7, 2011

We entered into this facility to partially finance the construction and acquisition costs of our newbuilding Aframax and Suezmax tankers, Saga and Vilamoura, which were delivered on January 18, 2011 and March 23, 2011, respectively, and for financing general corporate and working capital purposes. The loan bears interest at LIBOR plus a margin and is repayable in 20 quarterly installments, with a balloon payment payable together with the last installment on February 15, 2016.

As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $52.5 million and $57.2 million under this loan facility, respectively.

$32.3 million secured term loan facility, dated April 20, 2011

We entered into this facility to partially finance the construction cost of our newbuilding Aframax tanker Daytona, which was delivered to us on April 29, 2011. The loan bears interest at LIBOR plus a margin and is repayable in 24 quarterly installments of $538,500, plus a balloon payment of $19.4 million payable concurrently with the last installment.

As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $24.8 million and $26.9 million under this loan facility, respectively.

$141.4 million secured term loan facility, dated October 26, 2011

We entered into this facility to partially finance the construction costs of the newbuilding tankers Belmar, Calida, Lipari and Petalidi. The loan bears interest at LIBOR plus a margin and is repayable (i) in 28 installments ranging from $32,500 to $37,500, plus a balloon payment ranging from $7.9 million to $9.5 million, payable together with the last installment, with respect to advances by all of the commercial lenders except one and (ii) in 40 installments ranging from $587,500 to $697,500 with respect to advances by one of the lenders.

On July 17, 2014, we signed a supplemental agreement for a waiver of a certain financial covenant until December 31, 2014.

As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $112.4 million and $123.2 million under this loan facility, respectively. As of December 31, 2012, we had drawn the full amount under this facility.

$122.6 million secured credit facility, dated February 14, 2012

We entered into this facility to partially finance the construction costs relating to the vessel Fakarava, our newbuilding VLOC delivered to us inSeptember, 2012, and the vessels Negonego and Rangiroa delivered to us in 2013 and 2013, respectively. The facility bears interest at LIBOR plus a margin and is repayable in 48 installments. The facility is secured with guarantees from Cardiff and us. We have drawn down an amount of $38.0 million related to the vessel Fakarava and an aggregate of $81.7 million related for the vessels Negonego and Rangiroa. On May 29, 2014, we entered into a supplemental agreement to amend certain definitions.

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As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $109.8 million and $115.6 million, under this loan facility, respectively.

$87.7 million secured term loan facility, dated March 19, 2012

In March 2012, we entered into an $87.7 million secured term loan facility to partially finance the construction costs of our Panamax drybulk vessel under construction, Raraka, delivered in March, 2012, and two Capesize drybulk vessels under construction, scheduled for delivery in the second quarter of 2013, which were sold in March 2013, prior to delivery and the relevant available portion of the loan was terminated. The facility bears interest at LIBOR plus a margin and is repayable in32quarterly installments plus a balloon payment payable together with the last installment. On March 28, 2014, we entered into a supplemental agreement to amend certain financial covenants.

As of December 31, 2014 and 2013, we had outstanding borrowings amounting to $15.8 million and $17.0 million, under this loan facility, respectively.

$107.7 million secured loan agreement, dated October 24, 2012

In October 2012, we entered into a $107.7 million secured loan agreement to partially finance the construction costs of our two newbuilding Aframax tankers Alicante and Mareta,delivered in January 2013, and our Suezmax tanker Bordeira, delivered in January 2013.   This loan agreement, which is available in three tranches, bears interest at LIBOR plus a margin and is repayable in 24 equal, semi-annual installments.

On July 31, 2014, we signed a supplemental agreement, for the relaxation of a certain financial covenant until December 31, 2014.

As of December 31, 2014 and 2013, we had outstanding borrowings in the amount of $88.2 million and $96.7 million, under this loan facility, respectively.

The credit facilities discussed above are secured by, among other things, mortgages over our vessels, assignments of shipbuilding contracts and refund guarantees, corporate guarantees and assignments of all freights, earnings, insurances and requisition compensation. The credit facilities contain covenants relating to our vessel-owning subsidiaries as borrowers under the loans, including restrictions on changes in management and ownership of the vessels, incurring additional financial indebtedness, creating or permitting to exist on their assets and changes in the general nature of our business; each without the relevant lenders' prior consent. In addition, under some of the credit facilities, the vessel-owning companies are not permitted to pay any dividends to us without the requisite lenders' prior consent. The credit facilities also contain certain financial covenants relating to our financial position, operating performance and liquidity.

$12.5 million Sellers Credit dated March 15, 2013

On March 15, 2013, we reached an agreement with a far eastern shipyard for a $12.5 million sellers credit to the Company. This credit was repayable to the yard in one bullet repayment two years after date of drawdown and it bears interest at LIBOR plus 300 basis points per annum. We agreed to provide a pledge of 1,602,500 shares in Ocean Rig UDW that we own, which pledge would be automatically released upon repayment of credit.

On January 8, 2015, this credit was repaid in full, we were released from our obligations and 1,602,500 shares of Ocean Rig UDW Inc. pledged by us to the shipyard were released and returned to us.

$170.0 million Senior Credit Facility dated October 29, 2014

On October 29, 2014, we entered into a senior secured credit facility with Nordea Bank for up to $170.0 million to refinance the existing indebtedness under the Company's $325.0 million Senior Credit Facility, which had a balance of $50.0 million as of October 31, 2014. This facility has a five-year term, bears interest at LIBOR plus a margin, is repayable in quarterly installments and is secured by the six vessels that secured the $325.0 million Senior Credit Facility, as well as three other vessels.

As of December 31, 2014, we had outstanding borrowings amounting to $167.1 million, under this loan facility.

$200.0 million Secured Bridge Credit Facility dated November 14, 2014

On November 14, 2014, we entered into a facility agreement with ABN AMRO, for a secured bridge credit facility in an amount of $200.0 million. The loan is repayable through a single repayment installment. In connection with the ABN AMRO facility, on November 18, 2014, as required by that facility, Ocean Rig filed a prospectus supplement covering up to 78,301,755 of its common shares held by DryShips or its pledgees. Of the shares registered, 45,129,069 Ocean Rig shares were initially pledged by us to ABN AMRO under the terms of the ABN AMRO facility which requires collateral coverage based on the prevailing 30 day Volume Weighted Average Price ("VWAP") at draw down. On January 9, 2015, we provided additional security in relation to ABN AMRO facility in the form of 8,000,000 Ocean Rig shares owned by us. On January 20 and February 2, 2015, we made two prepayments of $10.0 million and $5.0 million plus accrued interest, respectively under this loan agreement.

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As of December 31, 2014, we had outstanding borrowings amounting to $200.0 million, under this loan facility.

Credit Facilities relating to Our Offshore Drilling Segment

$1.9 billion syndicated term loan facility, dated July 12, 2013

On July 12, 2013,  Ocean Rig, through its wholly-owned subsidiaries, Drillships Financing Holding Inc. ("DFHI") and Drillships Projects Inc., entered into a $1.8 billion senior secured term loan facility, comprised of tranche B-1 term loans in an aggregate principal amount equal to $975.0 million ("Tranche B-1 Term Loans") and tranche B-2 term loans in an aggregate principal amount equal to $825.0 million ("Tranche B-2 Term Loans" and, together with the Tranche B-1 Term Loans, the "Term Loans"), with respective maturity dates in the first quarter of 2021, subject to adjustment to the third quarter of 2020 in certain circumstances and the third quarter of 2016. The Term Loans are initially guaranteed by Ocean Rig and certain existing and future subsidiaries of DFHI and are secured by certain assets of, and by a pledge of the stock of, DFHI and the subsidiary guarantors. The net proceeds of the Term Loans were used by Ocean Rig to repay in full amounts outstanding under Ocean Rig's $800.0 million secured term loan agreement and the two $495.0 million senior secured credit facilities, amounting to $1,519.2 million in aggregate .The unamortized balance of deferred finance fees associated with the repaid loans, amounting to approximately $23.3 million was written off upon the extinguishment of the related debt in July 2013. In addition, restricted cash of $131.6 million associated with the respective loans has been released upon the repayment. On July 26, 2013, Ocean Rig through its wholly-owned subsidiaries DFHI and Drillships Projects Inc entered into an incremental amendment to the $1.8 billion senior term loan for additional tranche B-1 term loans in a principal amount of $100.0 million.

On February 7, 2014, Ocean Rig and its wholly-owned subsidiaries, Drillships Financing Holding Inc. ("DFHI"), and Drillships Projects Inc., refinanced its existing short-term Tranche B-2 Term Loans with a fungible add-on to its existing long-term Tranche B-1 Term Loans.  As a result of this refinancing, the total $1.9 billion of Tranche B-1 Term Loans will mature no earlier than the third quarter of 2020.

As of December 31, 2014 and 2013, we had outstanding borrowings amounting to $1,876.3 million and $1,895.3 million under this facility, respectively.

$1.3 billion Senior Secured Term Loan B Facility

On July 25, 2014, Ocean Rig's wholly owned subsidiary, Drillships Ocean Ventures Inc., entered into a $1.3 billion Senior Secured Term Loan B ("New Term Loan B") facility to repay the $1.35 billion Senior Secured Credit Facility, which had an outstanding loan balance of approximately $1.3 billion on that date. The unamortized balance of the deferred finance fees associated with the loan repaid, amounting to approximately $19.8 million, was written off in the consolidated statement of operations upon the extinguishment of the related debt in July 2014. In addition, restricted cash of $75.0 million associated with the respective debt was released upon the repayment.  The New Term Loan B facility which is secured primarily by first priority mortgages on the vessels, Ocean Rig Mylos, Skyros and Athena, bears interest at a fixed rate and matures on July 25, 2021.

As of December 31, 2014, we had outstanding borrowings amounting to $1,296.8 million under this facility.

Repaid Credit Facilities

$1.35 billion syndicated term loan facility, dated February 28, 2013

On February 28, 2013, Drillships Ocean Ventures Inc., and a wholly-owned subsidiary of our majority-owned subsidiary Ocean Rig UDW, entered into a secured term loan facilities agreement with a syndicate of lenders and DNB Bank ASA, as facility agent and security agent, in the amount of $1.35 billion to partially finance the construction costs of the Ocean Rig Mylos, the Ocean Rig Skyros, which were delivered in the course of 2013 and the Ocean Rig Athena which was delivered in March 2014.  The facilities agreement were comprised of three term loan facilities of up to $150.0 million each (one relating to each of the aforementioned seventh generation drillships) made available by the commercial lenders, or the Commercial Facilities, three term loan facilities of up to $150.0 million each (one relating to each of the aforementioned seventh generation drillships) made available by Eksportkreditt Norge AS, or the Eksportkreditt GIEK Facilities, and three term loan facilities of up to $150.0 million each (one relating to each of the aforementioned seventh generation drillships) made available by the Export-Import Bank of Korea, or the Kexim Facilities.  All term loan facilities bore interest at LIBOR plus a margin and were repayable in quarterly installments, beginning three months after the delivery of the first drillship. The Commercial Facilities matured five years after the first drawdown date while the Eksportkreditt GIEK Facilities and Kexim Facilites matured five or eleven years after the first drawdown date at the lenders option.

The $1.35 billion secured term loan facility was secured by, among other things, a first priority mortgage over the Ocean Rig Mylos, the Ocean Rig Skyros and the Ocean Rig Athena, a first priority pledge of the borrower's and/or the guarantors' (as the case may be) earnings accounts, a first priority assignment of all earnings and insurances of the relevant vessels, a pledge of the shares of capital stock of certain of Ocean Rig UDW's subsidiaries and guarantees from Ocean Rig UDW and certain of its subsidiaries.

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Under the $1.35 secured term loan facility, Ocean Rig UDW, the borrower and certain of Ocean Rig UDW's other subsidiaries, as guarantors, were subject to certain financial covenants requiring among other things, the maintenance of (i) a minimum amount of cash and cash equivalents; (ii) a leverage ratio not to exceed specified levels; (iii) a minimum interest coverage ratio; (iv) a minimum current ratio; and (v) a minimum equity ratio. In addition, the aggregate market value of the Ocean Rig Mylos, the Ocean Rig Skyros and the Ocean Rig Athena, if delivered at the relevant time, must be greater than 140% of the total borrowings outstanding under the facility

The $1.35 billion secured term loan facility also contained other customary restrictive covenants, including restrictions on Ocean Rig UDW's ability to enter into affiliate transactions, create liens on its assets, merge or consolidate without the prior consent of the lenders, sell, lease, transfer or otherwise dispose of the collateral securing the facility other than for market value on an arm's length basis and in compliance with the terms of the facility, incur additional indebtedness or make investments.

In addition, Ocean Rig UDW could only pay dividends or make other distributions in respect of its capital stock under the $1.35 billion secured term loan facility in an amount of up to 50% of net income of each previous financial year, provided in each case that Ocean Rig UDW maintains minimum liquidity in an aggregate amount of not less than $200.0 million in cash and cash equivalents and restricted cash and maintain such level for the next 12 months following the date of the dividend payment

The $1.35 billion secured term loan facility also contained customary events of default, including non-payment of principal or interest, breach of covenants or material representations and bankruptcy and imposed insurance requirements and restrictions on the employment of the mortgaged drillships. In addition, the facility contained a cross-default provision that was triggered, among other things, when any of our other financial indebtedness in an amount equal to or in excess of $25.0 million was not paid when due or was declared to be or otherwise become due and payable prior to its specified maturity as a result of an event of default, pursuant to which our lenders could accelerate our indebtedness under the $1.35 billion secured term loan facility.

We have entered into 3 interest rate swap agreements to partly fix the interest rate payable on the principal amounts outstanding under the $1.35 billion secured term loan facility.

On August 30, 2013, Ocean Rig signed a supplemental agreement to amend certain provisions in its $1,350,000 secured term loan facility dated February 28, 2013. Under the terms of the agreement, the existing dividend restriction of up to 50% of preceding fiscal year net income amended to apply on a cumulative basis from July 1, 2013 onwards (50% of cumulative net income) and include a carve-out to pay additional dividends up to the higher of (i) $150.0 million and (ii) 5% of Ocean Rig's net tangible assets. Furthermore, the minimum interest coverage ratio requirement will be 2.0 times until June 30, 2015 and the maximum leverage ratio will be 6.5 times until June 30, 2014, 6.0 times until December 31, 2014 and 5.5 times until June 30, 2015.

As of December 31, 2013, we had outstanding borrowings amounting to $890.0 million under this facility.

On July 25, 2014, this facility was repaid in full and replaced by the $1.3 billion Senior Secured Term Loan B Facility (see above).

$325.0 million revolving credit facility and term, loan dated September 18, 2007, as amended

Upon our acquisition of OceanFreight, we issued a guarantee in connection with OceanFreight's $325.0 million senior secured credit facility entered into on September 18, 2007. The loan bears interest at LIBOR plus a margin and is comprised of the following two tranches: Tranche A is a reducing revolving credit facility in a maximum amount of $200.0 million, $199.0 million of which OceanFreight utilized prior to its acquisition by us and the outstanding balance at December 31, 2013 of $53.9 million will be reduced or repaid in four semi-annual equal installments of $8.13 million each, plus a balloon installment, in the amount of $21.4 million; Tranche B is a term loan facility in a maximum amount of $125.0 million, which was fully utilized by OceanFreight prior to its acquisition by us and the outstanding balance at December 31, 2013 of $22.6 million is repayable in four equal semi-annual installments in the amount of $5.13 million each, plus a balloon installment in the amount of $2.1 million.

On October 29, 2014, this facility was repaid in full by the $170.0 milllion Senior Credit Facility (see above).

Two $562.5 million senior secured credit facilities, amended to $495.0 million each, or the Deutsche Bank credit facilities

On July 18, 2008, Drillship Kithira Owners Inc. and Drillship Skopelos Owners Inc., majority-owned subsidiaries and the owners of our drillships, the Ocean Rig Poseidon and the Ocean Rig Mykonos, respectively, each entered into separate loan agreements with a syndicate of lenders, including Deutsche Bank AG, London Branch, in the amount of $562.5 million to partially finance the construction costs of the Ocean Rig Poseidon and the Ocean Rig Mykonos.  We refer to these facilities as the Deutsche Bank credit facilities.

On April 27, 2011, we entered into an agreement with the lenders under the Deutsche Bank credit facilities to amend these credit facilities. As a result of this restructuring, among other things, the maximum amount permitted to be drawn was reduced from $562.5 million to $495.0 million under each credit facility. These credit facilities were subsequently amended and were repaid in full with a portion of the net proceeds of the $1.9 billion Term Loans in July 2013.

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$800.0 million secured term loan facility, dated April 15, 2011

On April 15, 2011, our majority-owned subsidiary, Drillships Holdings Inc., entered into a $800.0 million senior secured term loan agreement with Nordea Bank as agent and a syndicate of lenders to fund a portion of the construction of the drillships Ocean Rig Corcovado and the Ocean Rig Olympia. The $800.0 million senior secured term loan agreement consisted of four term loans, which were all fully drawn during April 2011. On May 9, 2012, Ocean Rig UDW and Drillships Holdings Inc. signed an amendment under the $800.0 million secured term loan agreement to, among other things, terminate the guarantee by DryShips Inc. This facility was repaid in full with a portion of the net proceeds of the $1.9 billion Term Loans in July 2013.

Cash Flows

Year ended December 31, 2014 compared to year ended December 31, 2013

Our cash and cash equivalents decreased to $566.2 million as of December 31, 2014, compared to $595.1 million as of December 31, 2013, primarily due to payments for vessels, drilling rigs and drillships improvements and advances for drillships under construction. Working capital is equal to current assets minus current liabilities, including the current portion of long-term debt. Our working capital deficit was $394.5million as of December 31, 2014, compared to working capital deficit of $987.5 million as of December 31, 2013.

Net Cash Provided By Operating Activities

Net cash provided by operating activities increased by $229.1 million, or 93.1%, to $475.1 million for the year ended December 31, 2014, compared to $246.0 million for the year ended December 31, 2013. This increase is primarily attributable to the increased revenue from the drilling segment.

Net Cash Used In Investing Activities

Net cash used in investing activities was $754.7 million for the year ended December 31, 2014. The Company made payments of $296.3 million for advances for vessels and drilling units under construction and $510.3 million for vessels and drillships acquisitions and improvements. These cash outflows were offset by the decrease of $51.5 million in the amount of cash deposits required by our lenders and a decrease of 0.4 million for short term investments.

Net cash used in investing activities was $1.2 billion for the year ended December 31, 2013. The Company made payments of  $235.3 million for advances for vessels and drilling units under construction, $1.2 billion for vessels and drillships acquisitions and improvements and $0.4 million for short term investments. These cash outflows were offset by the decrease of $234.3 million in the amount of cash deposits required by our lenders.

Net Cash Provided By Financing Activities

Net cash provided by financing activities was $250.7 million for the year ended December 31, 2014, consisting mainly of the borrowings of $2.6 billion under our long term credit facilities and the net proceeds of $421.9 million in connection with the sale of our common shares, which were offset by $48.9 million in payments for financing costs, payments for dividends of $30.6 million and repayments of debt totaling $2.0 billion under our long-term credit facilities and convertible notes amounting $700 million.

Net cash provided by financing activities was $1.2 billion for the year ended December 31, 2013, consisting mainly of the borrowings of $3.0 billion under our long term credit facilities, the net proceeds of $123.0 million in connection with the sale of common shares of Ocean Rig owned by us, the net proceeds of $23.4 million in connection with the sale of our common shares and the refund of financing costs of $5.9 million, which were offset by $89.9 million in payments for financing costs and repayments of debt totaling $1.8 billion under our long-term credit facilities.

Year ended December 31, 2013 compared to year ended December 31, 2012

Our cash and cash equivalents increased to $595.1 million as of December 31, 2013, compared to $342.0 million as of December 31, 2012, primarily due to  cash provided in operating activities and the release of restricted cash. Working capital is equal to current assets minus current liabilities, including the current portion of long-term debt. Our working capital deficit was $987.5million as of December 31, 2013, compared to working capital deficit of $670.0 million as of December 31, 2012.

Net Cash Provided By Operating Activities

Net cash provided by operating activities increased by $8.5 million, or 3.6%, to $246.0 million for the year ended December 31, 2013, compared to $237.5 million for the year ended December 31, 2012. This increase is primarily attributable to the increased revenue from the drilling segment.

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Net Cash Used In Investing Activities

Net cash used in investing activities was $1.2 billion for the year ended December 31, 2013. The Company made payments of  $235.3 million for advances for vessels and drilling units under construction, $1.2 billion for vessels and drillships acquisitions and improvements and 0.4 million for short term investments. These cash outflows were offset by the decrease of $234.3 million in the amount of cash deposits required by our lenders.

Net cash used in investing activities was $389.9 million for the year ended December 31, 2012. The Company made payments of approximately $552.5 million for asset acquisitions, payments of yard installments and improvements. These cash outflows were partially offset by the receipt proceeds of $18.7 million in connection with the sale of Senior Unsecured Notes of Ocean Rig UDW, the net proceeds of $116.8 million from the sale of assets and $27.1 million as a result of the net decrease in minimum cash deposits required by our lenders.

Net Cash Provided By Financing Activities

Net cash provided by financing activities was $1.2 billion for the year ended December 31, 2013, consisting mainly of the borrowings of $3.0 billion under our long term credit facilities, the net proceeds of $123.0 million in connection with the sale of common shares of Ocean Rig owned by us, the net proceeds of $23.4 million in connection with the sale of our common shares and the refund of financing costs of $5.9 million, which were offset by $89.9 million in payments for financing costs and repayments of debt totaling $1.8 billion under our long-term credit facilities.

Net cash provided by financing activities was $243.2 million for the year ended December 31, 2012, consisting mainly of the borrowings of $966.1 million under our long term credit facilities and Senior Secured Notes of Ocean Rig UDW and the net proceeds of $180.5 million in connection with the sale of common shares of Ocean Rig UDW owned by us, which were offset by $35.4 million in payments for financing costs, repayments and prepayments of $867.9 million of debt under our long-term credit facilities.

C.           Research and Development, Patents and Licenses etc.

Not applicable.

D.           Trend Information

See other discussions within "Item 5. Operating and Financial Review and Prospects" and "Item 4. Information on the Company—B. Business overview."

E.           Off-balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

F.           Tabular Disclosure of Contractual Obligations

The following table sets forth our contractual obligations and their maturity dates as of December 31, 2014:

	Payments due by period
Obligations	Total			Less than 1 year			1-3 years			3-5 years			More than 5 years
(In thousands of Dollars)
Long-term debt (1)		$	5,636,323		$	1,195,323		$	864,000		$	564,000		$	3,013,000
Interest and borrowing fees (2)			1,459,941			245,902			532,403			404,837			276,799
Shipbuilding contracts – Drillships (3)			1,928,900			566,300			1,362,600			-			-
Total		$	9,025,164		$	2,007,525		$	2,759,003		$	968,837		$	3,289,799

(1) As further discussed in Note 11 to our consolidated financial statements, the outstanding balance of our long-term debt at December 31, 2014, was $5.6 billion (gross of unamortized deferred financing fees of $118.7 million), which was used to partially finance the expansion of our fleet and for the construction of our drilling rigs. The loans bear interest at LIBOR plus a margin, except for an amount of $4.5 billion from the Loan facilities which are based on a fixed rate. The amounts in the table under "Long Term Debt" do not include any projected interest payments.

As a supplement to our contractual obligations table, the following schedule sets forth our loan repayment obligations as required under our loan facilities as of December 31, 2014. Note that the amount of debt related to our shipping segments has been classified as "Less than 1 year" in the contractual obligations table to be consistent with the classification of the debt as current liability within our consolidated financial statements. The debt is classified as a current liability as the debt may be called for payment by the lenders at any time.

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Loan repayments as per original terms of loan agreements	Payments due by period
	Total			Less than 1 year			1-3 years			3-5 years			More than 5 years
(In thousands of Dollars)
Long-term debt (1)		$	5,636,323		$	475,717		$	1,227,450		$	835,856		$	3,097,300
Interest and borrowing fees (2)			1,574,719			280,236			575,930			430,110			288,443
Total		$	7,211,042		$	755,953		$	1,803,380		$	1,265,966		$	3,385,743

(2) A porion of our long-term debt outstanding as of December 31, 2014 bears variable interest at margin over LIBOR, but such variable interest is fixed by our existing interest rate swaps. The calculation of interest payments is based on the weighted average fixed interest rate ranging from 2.60% to 7.25%.

(3) The figure includes contracted purchase obligations only.

G.           Safe Harbor

See the section entitled "Forward looking statements" at the beginning of this annual report.

Item 6.   Directors and Senior Management

A.           Directors and Senior Management

Set forth below are the names, ages and positions of our directors, executive officers and key employees. Our board of directors is elected annually on a staggered basis. Each director elected holds office until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal, or the earlier termination of his term of office. Officers are appointed from time to time by vote of our board of directors and hold office until a successor is elected.

Name	Age	Position
George Economou	62	Chairman, President, Chief Executive Officer and Class A Director
Harry Kerames	60	Class A Director
Vassilis Karamitsanis	39	Class A Director
George Xiradakis	50	Class B Director
Chryssoula Kandylidis	61	Class C Director
George Demathas	62	Class C Director
Anthony Kandylidis	37	Exeuctive Vice President
Ziad Nakhleh	43	Chief Financial Officer
Niki Fotiou	45	Senior Vice President Head of Accounting and Reporting
Anastasia Pavli	33	Secretary

The business address of each person listed above is the address of our principal executive offices, which are located at 109 Kifisias Avenue and Sina Street, GR 15124, Amaroussion, Greece.

Biographical information with respect to each of our directors, executives and key personnel is set forth below:

George Economou has over 30 years of experience in the maritime industry and has served as Chairman, President and Chief Executive Officer of Dryships Inc. since its incorporation in 2004. He successfully took the Company public in February 2005, on NASDAQ under the trading symbol: DRYS. Mr. Economou has overseen the Company's growth into one of the largest US listed drybulk company in fleet size and revenue and the third largest Panamax owner in the world. The Company subsequently invested in and developed Ocean Rig UDW Inc., an owner of drilling rigs and drillships involved in ultra deepwater drilling. Mr. Economou is the Chairman, President and Chief Executive Officer of Ocean Rig UDW Inc. Mr. Economou is a member of ABS Council, Intertanko Hellenic Shipping Forum and Lloyds Register Hellenic Advisory Committees. Since 2010, he has been a member of the board of directors of Danaos Corporation. Apart from his shipping interests, Mr. Economou has also invested in real estate. Mr. Economou is a graduate of the Massachusetts Institute of Technology and holds both a Bachelor of Science and a Master of Science degree in Naval Architecture and Marine Engineering and a Master of Science in Shipping and Shipbuilding Management.

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Harry Kerames was appointed to our board of directors on July 29, 2009. Harry Kerames has over 22 years of experience in the transportation industry. Mr. Kerames is the President and founder of Blue Star LLC, a marine consultant and advisor firm. Mr. Kerames has been the Managing Director of Global Capital Finance, where he was responsible for the firm's shipping practice. Prior to joining Global Capital Finance in 2006, he was the Chief Marketing Officer at Charles R. Weber Company Inc., where he brokered the freight derivative business, and co-founded a freight derivatives hedge fund. Mr. Kerames has also held various directorships, senior level marketing positions, and consultative roles with Illinois Central Railroad, Genstar Corporation, Motive Power Industries, Hub Group Distribution Services, and Ship and Transportation Equipment Finance and OceanFreight Inc. Mr. Kerames is a member of the Baltic Exchange, the Hellenic American Chamber of Commerce, and the Connecticut Maritime Association. Mr. Kerames graduated with a Bachelor of Science from the University of Connecticut. Mr Kerames is the chairman of our Audit Committee.

Vassilis Karamitsanis was appointed to our board of directors on July 29, 2009. Vassilis Karamitsanis is an attorney and a founding partner of SigmaKappa Sigma Law Offices. From 2007 to 2009, Mr. Karamitsanis was the head of the legal department at Karouzos Construction & Development Group. Mr. Karamitsanis has also previously served as a legal advisor to Dimand Real Estate Development and LPSA Consultants S.A. and has served as a special advisor to the Hellenic Ministry of Health & Welfare. He is a member of the Athens Bar Association and practices real estate, corporate, domestic and international contracting, telecommunications, and energy law. Mr. Karamitsanis graduated from Athens College Lyceum and received his law degree from Aristotle University of Thessaloniki. He also holds a postgraduate degree in Economic Analysis of Law from Erasmus University of Rotterdam and a postgraduate degree in Economic Analysis of Institutions from University Aix-Marseille III, Aix-en-Provence.

George Demathas was appointed to our board of directors on July 18, 2006. Mr. Demathas was also a director of Ocean Rig ASA from 2008 to 2010. Since 2001, Mr. Demathas has been the Chief Executive Officer and a director of Stroigasitera Inc., a privately held company that finances and develops natural gas infrastructure projects in Central Asia, and since 1996, Mr. Demathas has invested in natural gas trunk pipelines in Central Asia. Since 1991, Mr. Demathas has been involved in Malden Investment Trust Inc. in association with Lukoil, working in the Russian petrochemical industry. Mr. Demathas was a principal in Marketing Systems Ltd., where Mr. Demathas supplied turnkey manufacturing equipment to industries in the Former Soviet Union. Mr. Demathas has a Bachelor of Arts in Mathematics and Physics from Hamilton College in New York and an Master of Science in Electrical Engineering and Computer Science from Columbia University. He is based in Moscow and travels widely in Europe and the United States.

George Xiradakis was appointed to our board of directors in May 2006. Mr. Xiradakis has been the Managing Director of XRTC Business Consultants Ltd., a consulting firm providing financial advice to the maritime industry, including financial and state institutions. XRTC acted as the commercial representative of international banks including the French banking groups Credit Lyonnais and NATIXIS in Greece. Mr. Xiradakis is also the advisor of various shipping companies, as well as international and state organizations. He also serves as the General Secretary of the Association of Banking and Shipping Executives of Hellenic Shipping. In addition, Mr. Xiradakis has served on the board of directors of Paragon Shipping Inc., a company listed on the New York Stock Exchange, since 2008, and is also a member of the audit committee of Paragon Shipping Inc.  From July 2010 to August 2010, Mr. Xiradakis served on the board of directors of Ocean Rig UDW Inc., the Company's majority-owned subsidiary, and from 2008 to 2009, Mr. Xiradakis was a member of the board of directors of Aries Maritime Transport. Mr. Xiradakis has also served as President and Chairman of the board of directors of the Hellenic Real Estate Corporation and the Hellenic National Center of Port Development. Mr. Xiradakis has a certificate as a Deck Officer from the Hellenic Merchant Marine and he is a graduate of the Nautical Marine Academy of Aspropyrgos, Greece. He also holds a postgraduate Diploma in Commercial Operation of Shipping from London Guildhall University formerly known as City of London Polytechnic in London. Mr. Xiradakis holds an MSc. in Maritime Studies from the University of Wales.

Chryssoula Kandylidis was appointed to our board of directors on March 5, 2008. Mrs. Kandylidis has also served as an advisor to the Minister of Transport and Communications in Greece for matters concerning people with special abilities for the past three years on a voluntary basis. Mrs. Kandylidis graduated from Pierce College in Athens, Greece and from the Institut Francais d' Athenes. She also holds a degree in Economics from the University of Geneva. Mrs. Kandylidis is the sister of George Economou, our Chief Executive Officer.

Anthony Kandylidis has served as our Executive Vice President since January 2015.  Mr. Kandylidis serves as Executive Vice President of Ocean Rig since June 2012. Mr. Kandylidis started his career at OMI Corporation's commercial department. During his tenure at OMI Corporation, he gained significant experience in the tanker vessel business and held various positions with responsibilities spanning Sale and Purchase, Time Charters, FFA Trading, Corporate Finance and Strategic Planning. In the spring of 2006, Mr. Kandylidis returned to Greece where he provided consultancy services to companies affiliated with Mr. George Economou. In September of 2006, Mr. Kandylidis founded OceanFreight Inc. and he took OceanFreight Inc. public in April of 2007. In 2011 OceanFreight Inc. was absorbed by DryShips through a merger. Mr. Kandylidis graduated magna cum laude from Brown University and continued his studies at the Massachusetts Institute of Technology where he graduated with a Masters degree of Science in Ocean Systems Management. Mr. Kandylidis is the son of Chryssoula Kandylidis, a director of DryShips.

Ziad Nakhleh was appointed as our Chief Financial Officer in November 2009. Mr. Nakhleh has over 13 years of finance experience. From January, 2005 to September, 2008, he served as Treasurer and Chief Financial Officer of Aegean Marine Petroleum Network Inc., or Aegean, a publicly traded marine fuels logistics company listed on the New York Stock Exchange. From September 2008 to October 2009, Mr. Nakhleh was engaged in a consulting capacity to various companies in the shipping and marine fuels industries. Prior to his time with Aegean, Mr. Nakhleh was employed at Ernst & Young and Arthur Andersen in Athens. Mr. Nakhleh is a graduate of the University of Richmond in Virginia and is a member of the American Institute of Certified Public Accountants.

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Niki Fotiou was appointed as the Company's Senior Vice President Head of Accounting and Reporting in January 2010. From July 2006 to December 2009, Ms. Fotiou served as the Group Controller of Cardiff Marine Inc. For the period from 1993 to 2006, Ms. Fotiou worked for Deloitte and for Hyatt International Trade and Tourism Hellas. Ms Fotiou is a graduate of the University of Cape Town and is a member of the Association of Chartered Certified Accountants.

Anastasia Pavli was appointed as our corporate secretary with effect from January 1, 2012. Ms Pavli is an attorney-at-law. Ms. Pavli graduated from the Athens Law Faculty with an L.L.B in 2006 and completed part of her undergraduate studies at the University of Heidelberg, Germany. Ms. Pavli received an L.L.M. from University College, London, United Kingdom in 2007 and has been a member of the Piraeus Bar Association since 2008. Ms. Pavli is also the legal counsel of a company affiliated with Mr. George Economou.

B.           Compensation of Directors and Senior Management

We paid an aggregate amount of $5.4 million, $4.3 million and $5.2 million, as cash compensation to our officers and executive directors for the fiscal years ended December 31, 2014, 2013 and 2012 respectively. Non-executive directors received annual cash compensation in the aggregate amount of $0.4 million, plus reimbursement of out-of-pocket expenses. We do not have a retirement plan for our officers or directors.

Consultancy Agreements

Agreement for the Services of our Chief Executive Officer

On October 22, 2008, we entered into a consultancy agreement with Fabiana, a Marshall Islands entity beneficially owned by our Chief Executive Officer, Mr. George Economou, with an effective date of February 3, 2008, as amended. Under the agreement, Fabiana provides the services of our Chief Executive Officer. The term of the agreement has been amended for a period of five years commencing on February 3, 2013 and  unless terminated earlier in accordance with the agreement. Pursuant to the agreement, we are obligated to pay (i) annual remuneration to Fabiana in the amount of Euro 2.7 million (or $3.6 million, based on the Euro/U.S. dollar exchange rate as of December 31, 2012); and (ii) potential bonus compensation for the services provided at the end of each year, with any such bonus to be determined by the compensation committee of our board of directors. In addition, under the terms of the agreement, Fabiana also received in 2013 1,000,000 common shares that were awarded under our 2008 Equity Incentive Plan, as discussed below under "—Equity Incentive Plan."

The agreement may be terminated (i) at the end of the term unless extended by mutual agreement in writing; (ii) at any time by mutual agreement of the parties; (iii) by the company without cause; or (iv) by either party for any material breach of their respective obligations under the agreement.

On January 12, 2011, the compensation committee of our board of directors approved a bonus award to Fabiana of $4 million in cash and 9,000,000 common shares for Fabiana's contribution of the services of our Chief Executive Officer during 2010. The shares vest over a period of eight years with 1,000,000 shares vesting on the grant date and 1,000,000 shares vesting annually on December 31, 2011 through 2018, respectively.

On August 20, 2013, the compensation committee of our board of directors approved that a bonus in the form of 1,000,000 shares of the Company's common stock, be granted to Fabiana for the contribution of our Chief Executive Officer services rendered during 2012. The shares vest over a period of two years  with 333,334 shares vesting on the grant date, 333,333 shares vesting on August 20, 2014 and 333,333 vesting on August 20, 2015 respectively.

Fabiana did not receive any bonus payments in 2012 or 2013.

On August 19, 2014, the Compensation Committee approved a bonus in the form of 1,200,000 shares of the Company's common stock be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2013. The shares vest over a period of three years with 400,000 shares vesting on December 31, 2014, 400,000 shares vesting on December 31, 2015, and 400,000 vesting on December 31, 2016.

On December 30, 2014, the Compensation Committee approved that a bonus in the form of 2,100,000 shares of the Company's common stock and a cash bonus of $1.0 million be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2014. The shares vest over a period of three years with 700,000 shares vesting on December 31, 2015, 700,000 shares vesting on December 31, 2016, and 700,000 vesting on December 31, 2017.

Agreement for the Services of our Executive Vice President

Effective from January 1, 2015, we entered into a consultancy agreement with Basset for the consultancy services of Mr. Anthony Kandylidis as Executive Vice-President of the Company. The annual remuneration to be awarded to Basset under the consultancy agreement is Euro 0.45 million ($0.55 million based on the Euro/U.S. Dollar exchange rate as of December 31, 2014) and includes a sign on bonus of $2.0 million.

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 Agreement for the Services of our Chief Financial Officer

On October 1, 2009, we entered into a consultancy agreement with an entity beneficially owned by our Chief Financial Officer, Mr. Ziad Nakhleh, as amended on February 4, 2011 and April 10, 2012 and as further amended on February 16, 2015, for the provision of the services of our Chief Financial Officer. The term of the agreement has been extended for a period of two years commencing on January 1, 2014. Under the terms of the agreement, we are obligated to pay (i) an annual base salary and (ii) additional bonus compensation as determined by the compensation committee of our board of directors.

The agreement may be terminated (i) at the end of the term unless extended by mutual agreement in writing; (ii) at any time by mutual agreement of the parties; (iii) at any time by us without cause; or (iv) at any time by either party in the event of a material breach of obligations by the other party. In addition, upon termination within three months following a change in control, as defined in the agreement, that occurs within two years of the date of the agreement, we will be obligated to pay the consultancy fee under the balance of the agreement, which shall not be less than six months' base salary or greater than twelve months' base salary.

Agreement for the Services of our Senior Vice President, Head of Accounting and Reporting

On March 5, 2010, we entered into a consultancy agreement as amended, with an entity beneficially owned by our Senior Vice President, Head of Accounting and Reporting, Ms. Niki Fotiou, for the provision of the services of our Senior Vice President, Head of Accounting and Reporting. We have extended the term of this agreement, which will be deemed to expire as of December 31, 2015. Under the terms of the agreement, we are obligated to pay (i) an annual base salary; (ii) a cash bonus; (iii) equity compensation; (iv) additional bonus compensation as determined by our Chief Financial Officer; and (v) a signing bonus.

The agreement may be terminated (i) at the end of the term, unless extended by mutual agreement in writing; (ii) at any time by mutual agreement of the parties; (iii) at any time by us without cause; or (iv) at any time by either party in the event of a material breach of obligations by the other party. In addition, upon termination within three months following a change in control, as defined in the agreement, that occurs within two years of the date of the agreement, we will be obligated to pay the consultancy fee under the balance of the agreement, which shall not be less than six months' base salary or greater than twelve months' base salary.

Equity Incentive Plan

On January 16, 2008, the Company's board of directors approved the 2008 Equity Incentive Plan, as amended, or the Plan. Under the Plan, officers, directors, and key employees of the Company and its subsidiaries and affiliates and consultants and service providers to the Company and its subsidiaries and affiliates are eligible to receive, with respect to the Company's common shares, awards of stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock units and unrestricted stock. A total of 21,834,055 common shares have been reserved for issuance under the Plan, subject to adjustment for changes in our capitalization as provided in the Plan. The Plan is administered by our board of directors. Unless terminated earlier by our board of directors, the Plan will expire after January 16, 2018, the tenth anniversary of the date the Plan was adopted. Our awards under the Plan are set forth as follows:

On March 5, 2008, we awarded 1,000,000 non-vested common shares to Fabiana. The shares vested quarterly in eight equal installments, with the first installment of 125,000 shares of common stock vesting on May 28, 2008. The fair value of the 1,000,000 common shares on the grant date amounted to $75.09 per share.

On October 2, 2008, we approved grants in the amount of 9,000 vested common shares to three of our non-executive directors. Also on October 2, 2008, we approved grants of 2,700 non-vested common shares each, or 9,000 non-vested common shares in the aggregate, to two of our non-executive directors, to be issued and to vest in the amount of 75 shares per director, or 150 shares in the aggregate, per month over a three-year period beginning on February 1, 2009 and continuing until January 1, 2012 or such other time as we may instruct. From the 9,000 non-vested common shares, 3,600 shares were forfeited during 2010. All of the non-vested common shares described above have vested. The fair value of the vested shares on the grant date was $33.59 per share.

On March 12, 2009, 70,621 non-vested common shares were granted to an executive officer of the Company. The shares vested in annual installments of 42,373 and 28,248 shares on March 1, 2010 and March 1, 2011, respectively. The fair value of each share on the grant date was $3.54.

Also on January 25, 2010, we awarded 4,500,000 non-vested common shares to Fabiana for the contribution of the services of our Chief Executive Officer during the fiscal year ended 2009 as well as for the anticipated contribution of the services of our Chief Executive Officer during the fiscal years ended 2010, 2011 and 2012. The shares vest over a period of three years, with 1,000,000 shares vesting on the award date, 1,000,000 shares vesting on each of December 31, 2010 and 2011 and 1,500,000 shares vesting on December 31, 2012. The fair value of the shares on the award date was $6.05 per share.

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On March 5, 2010, 2,000 non-vested common shares and 1,000 vested common shares were granted to an executive officer of the Company under the Plan. All of the shares awarded under this grant have vested. The shares were issued during July 2010 and the fair value of each share, on the grant date, was $5.66.

On January 12, 2011, we awarded 9,000,000 non-vested common shares to Fabiana for the contribution of the services of our Chief Executive Officer during the fiscal year ended 2010. The shares awarded to Fabiana vest over a period of eight years, with 1,000,000 shares vesting on February 10, 2011 and 1,000,000 shares vesting annually on December 31 of 2011 through 2018. The fair value of the shares on the award date was $5.50 per share.

On February 4, 2011, we awarded 15,000 non-vested common shares to one of our executive officers, which vest on a pro rata basis over the course of three years beginning in June 2012. The fair value of the shares on the award date was $5.01 per share.

On August 20, 2013, we awarded 1,000,000 non-vested common shares to Fabiana for the contribution of George Economou for Chief Executive Officer's services rendered during 2012. The shares vest over a period of two years  with 333,334 shares vesting on the grant date, 333,333 shares vesting on August 20, 2014 and 333,333 vesting on August 20, 2015 respectively. The fair value of the shares on the award date was $2.01 per share.

On August 19, 2014, the Compensation Committee approved that a bonus in the form of 1,200,000 shares of the Company's common stock, with par value $0.01, be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2013. The shares vest over a period of three years with 400,000 shares vesting on December 31, 2014, 400,000 shares vesting on December 31, 2015, and 400,000 vesting on December 31, 2016.

On December 30, 2014, the Compensation Committee approved that a bonus in the form of 2,100,000 shares of the Company's common stock, with par value $0.01,  and a cash bonus of $1.0 million be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2014. The shares vest over a period of three years with 700,000 shares vesting on December 31, 2015, 700,000 shares vesting on December 31, 2016, and 700,000 vesting on December 31, 2017.

As of March 2, 2015, we had 2,931,034 common shares remaining for issuance under the Plan.

Stock options and stock appreciation rights may be granted under the Plan with a per share exercise price equal to the per share fair market value of our common shares on the date of grant, unless otherwise determined by the Plan's administrator, but in no event will the exercise price be less than the fair market value of a common share on the date of grant. Options and stock appreciation rights may be exercisable at times and under conditions as determined by the Plan's administrator, but in no event will they be exercisable later than ten years from the date of grant. Awards of restricted stock, restricted stock units and phantom stock units may be granted under the Plan subject to vesting and forfeiture provisions and other terms and conditions as determined by the Plan's administrator. The Plan's administrator may grant dividend equivalents with respect to grants of restricted stock units and phantom stock units.

Adjustments may be made to outstanding awards in the event of a corporate transaction or change in capitalization or other extraordinary event. In the event of a "change in control" (as defined in the Plan), unless otherwise provided by the Plan's administrator in an award agreement, awards then outstanding will become fully vested and exercisable in full.

C.           Board Practices

Our board of directors is elected annually, and each director elected holds office for a three-year term or until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal or the earlier termination of his term of office. The term of our Class A directors, Messrs. George Economou, Harry Kerames and Vassilis Karamitsanis, expires at the annual general meeting of shareholders in 2017. The term of our Class B director, Mr. George Xiridakis, expires at the annual general meeting of shareholders in 2015. The term of our Class C directors, Ms. Chryssoula Kandylidis and Mr. George Demathas, expires at the annual general meeting of shareholders in 2016.

There are no service contracts between us and any of our directors providing for benefits upon termination of their employment or service.

Our board of directors has determined four of our directors to be independent under the rules of the NASDAQ Stock Market LLC: Messrs. Harry Kerames, Vassilis Karamitsanis, George Xiradakis and George Demathas. Under the NASDAQ corporate governance rules, a director is not considered independent unless our board of directors affirmatively determines that the director has no direct or indirect material relationship with us or our affiliates that could reasonably be expected to interfere with the exercise of such director's independent judgment. In making this determination, our board of directors broadly considers all facts and circumstances it deems relevant from the standpoint of the director and from that of persons or organizations with which the director has an affiliation.

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Committees of the Board of Directors

Our board of directors has established an audit committee comprised of three independent directors: Harry Kerames, Vassilis Karamitsanis and George Xiradakis. Mr. Harry Kerames has been appointed to serve as Chairman of the audit committee. The audit committee is governed by a written charter, which has been approved by the board of directors. The board of directors has determined that all of the members of the audit committee meet the applicable independence requirements under Rule 10A-3 of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act and the NASDAQ Stock Market LLC and fulfill the requirement of being financially literate and that George Xiradakis qualifies as an "audit committee financial expert" as defined under current SEC regulations. The audit committee is appointed by the board of directors and is responsible for, among other matters:

· engaging our external and internal auditors;

· approving in advance all audit and non-audit services provided by the auditors;

· approving all fees paid to the auditors;

· reviewing the qualification and independence of our external auditors;

· reviewing our relationship with external auditors, including considering audit fees which should be paid as well as any other fees which are payable to auditors in respect of non-audit activities, discussing with the external auditors such issues as compliance with accounting principles and any proposals which the external auditors have made vis-а-vis our accounting principles and standards and auditing standards;

· overseeing our financial reporting and internal control functions;

· overseeing our whistleblower's process and protection; and

· overseeing general compliance with related regulatory requirements.

Our board of directors has established a compensation committee comprised of two independent directors, Messrs. Harry Kerames and Vassilis Karamitsanis. Mr. Vassilis Karamitsanis has been appointed to serve as Chairman of the compensation committee. The compensation committee is responsible for determining the compensation of our executive officers.

Our board of directors has also established a nominating committee consisting of two independent directors, Messrs. George Demathas and George Xiradakis. Mr. George Demathas has been appointed to serve as Chairman of the nominating committee. The nominating committee is responsible for identifying, evaluating and recommending to the board of directors individuals for membership on the board of directors, as well as considering nominees proposed by shareholders in accordance with our Amended and Restated Bylaws.

D.           Employees

Drybulk and Tanker Segment

As of December 31, 2014, 2013 and 2012, DryShips Inc. employed 19, 17 and 19 persons at its offices in Athens, Greece, respectively. As of December 31, 2014, 2013 and 2012, TMS Bulkers and TMS Tankers employed approximately 281, 246 and 176 people in the aggregate, respectively.  TMS Bulkers and TMS Tankers are responsible for recruiting, either directly or through a crewing agent, the senior officers and all other crew members for our drybulk and tanker vessels. We believe the streamlining of crewing arrangements will ensure that all our vessels will be crewed with experienced seamen that have the qualifications and licenses required by international regulations and shipping conventions. We did not experience any material work stoppages with respect to our drybulk and tanker segments due to labor disagreements during 2014, 2013 or 2012.

Offshore Drilling Segment

As of December 31, 2014, 2013 and 2012, our majority-owned subsidiary, Ocean Rig UDW Inc., employed 339, 145 and 10 persons, respectively. As of December 31, 2014, 2013 and 2012, the total number of employees employed by wholly-owned management subsidiaries of Ocean Rig UDW was approximately 2,320, 1,742 and 1,374, respectively, of which approximately 493, 265 and 244 were full-time crew engaged through third party crewing agencies, respectively. Of the total number of employees as of December 31, 2014, 2013 and 2012, approximately 185, 161 and 144 were assigned to the Eirik Raude, approximately 206, 218 and 154 were assigned to the Leiv Eiriksson, approximately 186, 191 and 186 were assigned to the Ocean Rig Corcovado, and approximately 198, 212 and 205 were assigned to the Ocean Rig Olympia, respectively. In addition, of the total number of employees as of December 31, 2014, 2013 and 2012, approximately 221, 200 and 202 were assigned to the Ocean Rig Poseidon and approximately 180, 185 and 182 were assigned to the Ocean Rig Mykonos, respectively. Furthermore, of the total number of employees as of December 31, 2014, approximately 194 were assigned to the Ocean Rig Mylos, approximately 178 were assigned to the Ocean Rig Skyros, approximately 206 were assigned to the Ocean Rig Athena and approximately 100 were assigned to the Ocean Rig Apollo, respectively. As of December 31, 2014, 2013 and 2012, the newbuild drillship project team, located in South Korea and Norway, employed 45, 47 and 44 employees, respectively, while the management and staff positions at the Stavanger office consisted of 15, 47 and 139 employees, respectively. As of December 31, 2014,  there were also 121 employees based at our Aberdeen, Rio de Janeiro, Angola and Jersey offices, 199 employees based at our Athens offices and 3 employees based in other locations. As of December 31, 2013, there were also 90 employees based at our Aberdeen, Rio de Janeiro, Angola and Jersey offices and 19 employees based in other locations.  As of December 31, 2012, there were also 67 employees based at our Aberdeen, Rio de Janeiro and Jersey offices and five employees based in other locations.

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We did not experience any material work stoppages with respect to our offshore drilling segment due to labor disagreements during 2014, 2013 or 2012.

E.           Share Ownership

For the total amount of common shares owned by all of our officers and directors, individually and as a group, see "Item 7. Major Shareholders and Related Party Transactions."

Item 7.    Major Shareholders and Related Party Transactions

A.           Major Shareholders

The following table sets forth the beneficial ownership of our common shares, as of February 18, 2015, held by:

· each person or entity that we know beneficially owns 5% or more of our common shares;

· each of our executive officers, directors and key employees; and

· all our executive officers, directors and key employees as a group.

Beneficial ownership is determined in accordance with the SEC's rules. In computing percentage ownership of each person, common shares subject to options held by that person that are currently exercisable or convertible, or exercisable or convertible within 60 days of March 2, 2015, are deemed to be beneficially owned by that person. These shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person. All of our shareholders, including the shareholders listed in the table below, are entitled to one vote for each common share held.

Name and Address of Beneficial Owner(1)	Number of Shares Owned		Percent of Class(2)
George Economou (3)		118,067,177		17.6	%
Blue Mountain Capital Management, LLC(4)		71,428,000		10.7	%
Anthony Kandylidis		—		*
Harry Kerames		—		*
Evangelos Mytilinaios		—		*
George Xiradakis		—		*
George Demathas		—		*
Niki Fotiou		—		*
Executive Officers, Key Employees and Directors as a Group		118,813,577		17.7	%

_____________________

*	Less than one percent.
(1)	Unless otherwise indicated, the business address of each beneficial owner identified is c/o DryShips, 109 Kifisias Avenue and Sina Street, Amaroussion GR 151 24 Greece.
(2)	Based on 669,964,321 common shares outstanding as of March 2, 2015.
(3)	Mr. Economou may be deemed to beneficially own 10,994,910 of these shares through Elios Investments Inc., which is a wholly-owned subsidiary of the Entrepreneurial Spirit Foundation, a Lichtenstein foundation, or the Foundation, the beneficiaries of which are Mr. Economou and members of his family. Mr. Economou may be deemed to beneficially own 18,800,000 of these shares through Fabiana, a Marshall Islands corporation, of which Mr. Economou is the controlling person. Mr. Economou may be deemed to beneficially own 254,512 of these shares through Goodwill Shipping Company Limited, a Malta corporation, of which Mr. Economou is the controlling person. Mr. Economou may be deemed to beneficially own 58,105,667 of these shares, through Sphinx Investment Corp., a Marshall Islands corporation, of which Mr. Economou is the controlling person. Each warrant entitles the holder to purchase one of our common shares. Mr. Economou may be deemed to beneficially own 29,962,088 of these shares through Entrepreneurial Spirit Holdings Inc., a Liberian corporation that is wholly-owned by the Foundation.
(4)	This information is derived from Schedule 13G/A filed with the SEC on November 3, 2014.

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As of February 18, 2015, we had 49 shareholders of record, 37 of which were located in the United States and held an aggregate of 597,323,546 of our common shares, representing 84.3% of our outstanding common shares. However, one of the U.S. shareholders of record is CEDE & CO., a nominee of The Depository Trust Company, which held 597,291,458 of our common shares as of February 18, 2015. Accordingly, we believe that the shares held by CEDE & CO. include common shares beneficially owned by both holders in the United States and non-U.S. beneficial owners. We are not aware of any arrangements the operation of which may at a subsequent date result in our change of control.

B.           Related Party Transactions

Agreements with Cardiff, TMS Bulkers and TMS Tankers

Mr. George Economou, our Chairman, President and Chief Executive Officer, controls the Foundation, a Liechtenstein foundation that owns 100.0% of the issued and outstanding capital stock of Cardiff, TMS Bulkers' and TMS Tankers.

Management Agreements – Drybulk Vessels

Since January 1, 2011, we have outsourced all of our technical and commercial functions relating to the operation and employment of our drybulk carrier vessels to TMS Bulkers, a related party, pursuant to management agreements entered into for each of our operating drybulk carriers and vessels under construction. Prior to January 1, 2011, Cardiff, a company affiliated with our Chairman, President and Chief Executive Officer, Mr. George Economou, served as our technical and commercial manager pursuant to separate management agreements with each of our drybulk vessel-owning subsidiaries. Effective January 1, 2011, we entered into new management agreements with TMS Bulkers that replaced our management agreements with Cardiff, on the same terms as our management agreements with Cardiff, as a result of an internal restructuring of Cardiff for the purpose of enhancing Cardiff's efficiency and the quality of Cardiff's ship-management services.

Mr. Economou, and, under the guidance of our board of directors, manages our business, including our administrative functions, and we monitor TMS Bulkers' performance under the management agreements.

Management Agreements with TMS Bulkers

Under our management agreements with TMS Bulkers, TMS Bulkers is entitled to a fixed management fee of Euro 1,500 (or $1,823 based on the Euro/U.S. Dollar exchange rate at December 31, 2014) per vessel, per day, payable in equal monthly installments in advance and automatically adjusted each year to the Greek Consumer Price Index for the previous year by not less than 3% and not more than 5%. If we request that TMS Bulkers supervise the construction of a newbuilding vessel, we are obligated to pay TMS Bulkers an upfront fee equal to 10% of the supervision cost budget for such vessel as approved by us in lieu of the fixed management fee. For any additional attendance above the budgeted superintendent expenses, we are charged extra at a standard rate of Euro 500 (or $608 based on the Euro/U.S. Dollar exchange rate as of December 31, 2014) per day. Effective January 1, 2012, the fixed management fee was adjusted by 3% to Euro 1,545 (or $1,878based on the Euro/U.S. Dollar exchange rate as of December 31, 2014) per vessel, per day.

In addition, TMS Bulkers is entitled to a chartering commission of 1.25% of all monies earned by the vessel, which survives the termination of the management agreement until the termination of the charter agreement then in effect or the termination of any other employment arranged prior to such termination. TMS Bulkers also receives a sale and purchase commission of 1.0%. Furthermore, under the management agreements, we may award TMS Bulkers an annual performance incentive fee.

Each management agreement has an initial term of five years and will be automatically renewed for a five year period and thereafter extended in five year increments, unless we provide notice of termination in the fourth quarter of the year immediately preceding the end of the respective term. The management agreements may be terminated as follows:

(i) TMS Bulkers may terminate the agreement with immediate effect by notice in writing (a) if any amounts payable by the vessel owner are not received by TMS Bulkers within ten running days; (b) the vessel owner does not meet certain obligations related to the technical management of the vessels for any reason within its control; or (c) the vessel owner employs the vessel in a hazardous or improper manner, and the vessel owner fails to remedy such default;

(ii) the vessel owner may terminate the agreement with immediate effect by notice in writing if TMS Bulkers does not meet its obligations for any reason within its control under the agreement and fails to remedy such default within a reasonable time;

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(iii) the agreement shall be deemed terminated in the case of the sale of the vessel, if the vessel becomes a total loss or is declared as a constructive total loss or in the event of an order or resolution passed for the winding up, dissolution, liquidation or bankruptcy of either party; and

(iv) upon a change of control of us and/or the vessel owners.

In the event that the management agreement is terminated for any reason other than a default by TMS Bulkers, we will be required to pay the management fee for a further period of three calendar months as from the date of termination. In the event of a change of control of us, as defined in the agreements, we will be required to pay TMS Bulkers a termination payment, representing an amount equal to the estimated remaining fees payable to TMS Bulkers under the then current term of the agreement which such payment shall not be less than the fees for a period of 36 months and not more than a period of 48 months.

The management agreements provide that TMS Bulkers shall not be liable to us for any losses or damages arising in the course of its performance under the agreement unless such loss or damage is proved to have resulted from the negligence, gross negligence or willful default by TMS Bulkers, its employees or agents and in such case the liability of TMS Bulkers per incident or series of incidents is limited to a total of ten times the annual management fee payable under the relevant agreement. The management agreements further provide that TMS Bulkers shall not be liable for any of the actions of the crew, even if such actions are negligent, grossly negligent or willful, except to the extent that they are shown to have resulted from a failure by TMS Bulkers to perform its obligations with respect to management of the crew. Except to the extent of the liability cap described above, we have agreed to indemnify TMS Bulkers and its employees and agents against any losses incurred in the course of the performance of the agreement. Under the management agreements, TMS Bulkers has the right to sub-contract any of its obligations thereunder, including those relating to management of the crew. In the event of such a sub-contract, TMS Bulkers shall remain fully liable for the due performance of its obligations under the management agreements.

During the years ended December 31, 2014, 2013 and 2012, total charges from TMS Bulkers under the management agreements amounted to $33.5 million, $35.8 million and $33.9 million, respectively.

Management Agreements – Drilling Units

Services Agreements

On December 1, 2010, DryShips Inc. entered into the Global Services Agreement with Cardiff, effective December 21, 2010, pursuant to which we engaged Cardiff to act as consultant on matters of chartering and sale and purchase transactions for our offshore drilling units. Under the Global Services Agreement, Cardiff, or its subcontractor, (i) provided consulting services related to the identification, sourcing, negotiation and arrangement of new employment for our offshore assets, including our drilling units; and (ii) identified, sourced, negotiated and arranged the sale and purchase of our offshore assets, including our drilling units. In consideration of such services, Cardiff was entitled to a fee of 1.0% in connection with employment arrangements and 0.75% in connection with sale and purchase activities.

Except as provided below, the Global Services Agreement applied to all offshore drilling contracts we entered into after December 21, 2010, as well as the drilling contract with Cairn Energy plc, or Cairn, for the Ocean Rig Corcovado, which commenced in January 2011 and was completed in November 2011, and the drilling contracts with Vanco Cote d'Ivoire Ltd. and Vanco Ghana Ltd for the Ocean Rig Olympia, which commenced in March 2011, were novated to Tullow Ghana in December 2011 and were completed in the second quarter of 2012. The Global Services Agreement did not apply to the agreement with Petrobras Oil & Gas regarding the early termination of the drilling contract with Petrobras Oil & Gas for the Leiv Eiriksson and the replacement of the Leiv Eiriksson under the drilling contract with Petrobras Oil & Gas with the Ocean Rig Poseidon, which occurred in April 2011, the drilling contract with Cairn for the Leiv Eiriksson, which commenced in April 2011 and was completed in November 2011 and the drilling contract with Borders & Southern plc for the Leiv Eiriksson, which commenced in November 2011 and was completed in the fourth quarter of 2012.

For the years ended December 31, 2014, 2013 and 2012, total charges from Cardiff under the Global Services Agreement amounted to $0 million, $0 and $7.2 million, respectively.

Effective January 1, 2013, the Global Services Agreement was terminated by mutual agreement of the parties.  Also effective January 1, 2013, Ocean Rig Management, our majority-owned subsidiary and a wholly-owned subsidiary of Ocean Rig UDW, entered into a new services agreement, or the Ocean Rig Services Agreement, with Cardiff  Drilling , a company controlled by our Chairman, President and Chief Executive Officer, on the same terms and conditions as the Global Services Agreement, except that under the Ocean Rig Services Agreement, Ocean Rig Management is obligated to pay directly the fees of 1.0% in consideration of employment arrangements under the agreement and $0.75% in consideration of purchase and sale activities under the agreement, whereas under the Global Services Agreement, those fees were paid by DryShips Inc. For the years ended December 31, 2014 and 2013 total charges from Cardiff under the Ocean Rig Services Agreement amounted to $21.3 million and $17.7 million, respectively.

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Management Agreements – Tankers

Since January 1, 2011, TMS Tankers has provided the commercial and technical management functions of our tankers, including while our tankers were under construction, pursuant to separate management agreements entered into with TMS Tankers for each of our tankers.  Each management agreement provides for a management fee of Euro 1,700 (or $2,066 based on the Euro/U.S. Dollar exchange rate as of December 31, 2014) per vessel, per day, payable in equal monthly installments in advance and automatically adjusted each year to the Greek Consumer Price Index for the previous year by not less than 3% and not more than 5%. Effective January 1, 2012, the fixed management fee was adjusted by 3% to Euro 1,751 (or $2,128 based on the Euro/U.S. Dollar exchange rate as of December 31, 2014) per vessel, per day. In addition, TMS Tankers also received a construction supervisory fee of 10% of the budget for our tankers under construction, payable up front, in lieu of the fixed management fee while our tankers were under construction.

In addition, under the management agreements, TMS Tankers is entitled to a chartering commission of 1.25% of all monies earned by the vessel and a vessel sale and purchase commission of 1.0%. The management agreements further provide that in our discretion, we may pay TMS Tankers an annual performance incentive fee.

Each management agreement has a term of five years and is automatically renewed for successive five year periods unless we provide notice of termination in the fourth quarter of the year immediately preceding the end of the respective term.

The management agreements may be terminated as follows:

(i) TMS Tankers may terminate the agreement with immediate effect by notice in writing (a) if any amounts payable by the vessel owner are not received by TMS Tankers within ten running days; (b) the vessel owner does not meet certain obligations related to the technical management of the vessels for any reason within its control; or (c) the vessel owner employs the vessel in a hazardous or improper manner, and the vessel owner fails to remedy such default;

(ii) the vessel owner may terminate the agreement with immediate effect by notice in writing if TMS Tankers does not meet its obligations for any reason within its control under the agreement and fails to remedy such default within a reasonable time;

(iii) the agreement shall be deemed terminated in the case of the sale of the vessel, if the vessel becomes a total loss or is declared as a constructive total loss or in the event of an order or resolution passed for the winding up, dissolution, liquidation or bankruptcy of either party; and

(iv) upon a change of control of us and/or the vessel owners.

In the event that the management agreements are terminated for any reason other than a default by TMS Tankers, we will be required to pay the management fee for a further period of three calendar months as from the date of termination. In the event of a change of control of us, as defined in the agreements, we will be required to pay TMS Tankers a termination payment, representing an amount equal to the estimated remaining fees payable to TMS Tankers under the then current term of the agreement which such payment shall not be less than the fees for a period of 36 months and not more than a period of 48 months.

The management agreements provide that TMS Tankers shall not be liable to us for any losses or damages arising in the course of its performance under the agreement unless such loss or damage is proved to have resulted from the negligence, gross negligence or willful default by TMS Tankers, its employees or agents and in such case the liability of TMS Tankers per incident or series of incidents is limited to a total of ten times the annual management fee payable under the relevant agreement. The management agreements further provide that TMS Tankers shall not be liable for any of the actions of the crew, even if such actions are negligent, grossly negligent or willful, except to the extent that they are shown to have resulted from a failure by TMS Tankers to perform its obligations with respect to management of the crew. Except to the extent of the liability cap described above, we have agreed to indemnify TMS Tankers and its employees and agents against any losses incurred in the course of the performance of the agreement. Under the new management agreements, TMS Tankers has the right to sub-contract any of its obligations thereunder, including those relating to management of the crew. In the event of such a sub-contract, TMS Tankers shall remain fully liable for the due performance of its obligations under the management agreements.

For the years ended December 31, 2014, 2013 and 2012, total charges from TMS Tankers under the management agreements amounted to $10.5 million, $ 11.7 million and $9.6 million, respectively.

Cardiff Tankers Inc.

   Under charter agreements for all of our tankers, Cardiff Tankers Inc. ("Cardiff Tankers"), a related party entity incorporated in the Republic of the Marshall Islands, is entitled to a 1.25% commission on the charter hire earned by those tankers.

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Pooling Arrangements

Three of our Suezmax tankers, Vilamoura, Lipari and Petalidi, operated in the Blue Fin tanker pool since their delivery to us in March 2011, April 2012 and May 2012, respectively, until the termination of our pooling agreements with Blue Fin Tankers Inc. relating to such vessels in October 2012, March 2013 and November 2012, respectively. Our Aframax tankers Saga, Daytona, and Belmar operated in Sigma tanker pool since their delivery to us in January 2011, April 2011, and October 2011 until the termination of our pooling agreements with Sigma Tankers Inc. relating to such vessels in April 2012, October 2012 and January 2013, respectively. Our Aframax tanker Calida has operated in the Sigma tanker pool since its delivery to us in January 2012. The Sigma and Blue Fin tanker pools are managed by Heidmar, a related party. Our Chairman, President Chief Executive Officer is the Chairman of the Board of Directors of Heidmar and Heidmar is 49%-owned by a company related to Mr. Economou.

Pursuant to our pooling agreements with Blue Fin Tankers Inc. for the aforementioned Suezmax vessels, we were obligated to time charter the vessels into the pool for a period of 12 months, after which the charters would automatically renew for successive 12 month periods; provided that, after the initial period, we or Heidmar, as the pool manager, could request that the vessels be redelivered after giving 90 days' notice. The pool manager was entitled to receive an agency fee of $387 per day per vessel, subject to adjustment on January 1st of each year with the rate of increase to be a minimum equal to the U.S. Consumer Price Index for the preceding 12 months plus 3%, but in no event less than 5%, and a maximum annual increase of 8%. In addition, the pool manager was entitled to receive a commission of 1.25% of the freight or charterhire earned by the vessels on contracts or charter parties entered into by the pool during the term of the agreement. In addition, we were obligated to contribute approximately $3.8 million to the pool for the vessel's working capital. The agency fees, commissions and working capital contribution were deducted from our pool earnings.

Pursuant to our pooling agreement with Sigma Tankers Inc. for the Aframax vessel Calida, we are obligated to time charter the vessel into the pool for a period of 12 months, after which the charter would automatically renew for successive 12 month periods; provided that, after the initial period, we or Heidmar, as the pool manager, may request that the vessel be redelivered after giving 90 days' notice. The pool manager is entitled to receive an agency fee of $387 per day for the vessel, subject to adjustment on January 1st of each year with the rate of increase to be a minimum equal to the U.S. Consumer Price Index for the preceding 12 months plus 3% and a maximum annual increase of 8%. In addition, the pool manager is entitled to receive a commission of 1.25% of the freight or charterhire earned by the vessels on contracts or charter parties entered into by the pool during the term of the agreement; provided that, in the event the pool consists of less than 20 vessels, the commission is increased to 1.50% of the freight or charterhire earned. In addition, we are obligated to contribute approximately $3.8 million to the pool for the vessel's working capital. The agency fees, commissions and working capital contribution were deducted from our pool earnings. The pooling agreement relating to the Calida was terminated in October 2013. Our pooling agreements with Sigma Tankers Inc. for our Aframax vessels Saga, Daytona, and Belmar, which terminated in April 2012, October 2012 and January 2013, respectively, contained the same terms and conditions as the pooling agreement relating to the Calida.

Consultancy Agreements

Vivid Finance

Effective from September 1, 2010, we entered into a consultancy agreement, or the DryShips Consultancy Agreement, with Vivid Finance, a company controlled by our Chairman, President and Chief Executive Officer, Mr. George Economou, pursuant to which Vivid Finance provides consulting services relating to (i) the identification, sourcing, negotiation and arrangement of new loan and credit facilities, interest swap agreements, foreign currency contracts and forward exchange contracts; (ii) the raising of equity or debt in the public capital markets; and (iii) the renegotiation of existing loan facilities and other debt instruments. In consideration for these services, Vivid Finance is entitled to a fee of twenty basis points, or 0.20%, on the total transaction amount. The DryShips Consultancy Agreement has a term of five years and may be terminated (i) at the end of its term unless extended by mutual agreement of the parties; (ii) at any time by the mutual agreement of the parties; and (iii) by us after providing written notice to Vivid Finance at least 30 days prior to the actual termination date.

For the years ended December 31, 2014, 2013 and 2012, total charges from Vivid Finance under the consultancy agreement amounted to $16.2  million, $18.1 million and $14.2 million, respectively.

Effective January 1, 2013, Ocean Rig Management, a wholly-owned subsidiary of our majority-owned subsidiary Ocean Rig UDW, entered into a separate consultancy agreement, or the Ocean Rig Consultancy Agreement, with Vivid Finance, on the same terms and conditions as the DryShips Consultancy Agreement, except that under the Ocean Rig Consultancy Agreement, Ocean Rig Management is obligated to pay directly the fee of 0.20% to Vivid Finance on the total transaction amount in consideration of the services provided, whereas under the DryShips Consultancy Agreement, this fee was paid by DryShips Inc.  In connection with Ocean Rig Management's entry into the Ocean Rig Consultancy Agreement, the DryShips Consultancy Agreement was amended, effective as of January 1, 2013, to limit the scope of the services provided under the agreement to DryShips Inc. and its subsidiaries or affiliates, except for Ocean Rig UDW and its subsidiaries.  In essence, post-amendment, the DryShips Consultancy Agreement is in effect for our tanker and drybulk shipping segments only.

Consultancy Agreements Relating to the Provision of the Services of Certain of our Executive Officers

For a description of our consultancy agreements relating to the provision of the services of certain of our executive officers and key employees, please see "Item 6. Directors, Senior Management and Employees—B. Compensation—Consultancy  Agreements."

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C.           Interests of Experts and Counsel

Not applicable.

Item 8.    Financial Information

A.           Consolidated statements and other financial information.

See "Item 18. Financial Statements."

Legal Proceedings

We have not been involved in any legal proceedings which may have, or have had, a significant effect on our business, financial position, results of operations or liquidity, nor are we aware of any proceedings that are pending or threatened which may have a significant effect on our business, financial position, results of operations or liquidity. Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping and drilling businesses. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company's vessels and drilling units. Except as described below, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements.

We have obtained hull and machinery insurance for the assessed market value of our fleet and protection and indemnity insurance. However, such insurance coverage may not provide sufficient funds to protect us from all liabilities that could result from its operations in all situations. Risks against which we may not be fully insured or insurable include environmental liabilities, which may result from a blow-out or similar accident, or liabilities resulting from reservoir damage alleged to have been caused by the negligence of the Company.

Our loss of hire insurance coverage does not protect against loss of income from day one. It covers approximately one year for the loss of time but will be effective after 45 days' off-hire. During 2012, the Ocean Rig Corcovado, a drillship owned by Ocean Rig,incurred off-hire due to a failure in one of its engines which was a covered event under the loss of hire policy that resulted in $24.6 million being recognized as revenue during the year ended December 31, 2012. The amount of $24.6 million was reimbursed by the insurers to the Company in August 2012. During 2014, the Ocean Rig Corcovado incurred off-hire for the same event and, as a result,an additional amount of $20.2 million for the above covered event was recognized as revenue during the year ended December 31, 2014, and was reimbursed during the same period. During 2014, the Ocean Rig Mylos incurred off-hire due to damage to the blow-out-preventer stack during testing, which was a covered event under the loss of hire policy that resulted in $39.6 million being recognized as revenue during the year ended December 31, 2014, from which an amount of $39.1 was reimbursed during the year.

As part of the normal course of operations, our customers may disagree on amounts due to us under the provision of the contracts which are normally settled though negotiations with the customer. Disputed amounts are normally reflected in revenues at such time as we reache agreement with the customer on the amounts due.

On July 17, 2008, we entered into an agreement to sell the vessel Toro, a 1995-built 73,034 dwt Panamax drybulk carrier, to Samsun Logix Corporation ("Samsun") for the price of approximately $63.4 million. On January 29, 2009, we reached an agreement with the buyers whereby the price was reduced to $36.0 million. As part of the agreement, the buyers released the deposit of $6.3 million to us immediately and were required to make a new deposit of $1.5 million towards the revised purchase price. On February 13, 2009, we proceeded with the cancellation of the sale agreement due to the buyers' failure to pay the new deposit of $1.5 million and to perform their obligations under the agreement. In February 2009, Samsun was placed in corporate rehabilitation. In February 2010, Samsun's plan of reorganization was approved by its creditors. As part of this plan, we will recover a certain percentage of the agreed-upon purchase price.

As this is contingent on the successful implementation of the plan of reorganization, we are unable to estimate the impact on our consolidated financial statements.

Ocean Rig's drilling rig the Leiv Eiriksson operated in Angola during the period from 2002 to 2007. Ocean Rig's manager in Angola during this period made a legal claim for reimbursement of import/export duties for two export/importation events in the period 2002 to 2007 retroactively levied by the Angolan government. Agreement was reached between the parties to settle this claim for an amount of $6.1 million which was paid by Ocean Rig's relevant subsidiary on May 24, 2012, to the claimant, in full and final settlement of the London Court Proceedings. Ocean Rig recorded a charge of $6.1 million during the year ended December 31, 2012, which is included in "Legal settlements and other, net" in the consolidated statements of operations.

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On May 10, 2013, Drillship Hydra Owners Inc., being the owning company of the drillship Ocean Rig Corcovado, filed a claim against Capricorn Greenland Exploration 1 Limited and Cairn Energy Plc with the High Court in London in connection with the loss of daily earnings and cost of repair for the Blow Out Preventer of Ocean Rig Corcovado in June and July 2011. In July 2013 Ocean Rig reached an out-of-court commercial agreement with Capricorn Greenland Exploration 1 Limited and Cairn Energy Plc to receive a compensation amounting to $5.0 million and a Settlement Agreement and Release dated September 12, 2013 was entered and the relevant claim filed in the High Court in London, U.K. was dropped. In this respect, Ocean Rig, having previously recognized a receivable of $11.0 million, recorded a charge of $6.0 million during the year ended December 31, 2013, which is included under "Legal settlements and other, net" in the consolidated statement of operations.

Ocean Rig Norway Operations Inc. ("OCR"), a subsidiary of Ocean Rig, was notified by a letter dated 13 November 2013 that arbitration proceedings were commenced against it by Westcon Yard AS of Norway ("Westcon"), in connection to an alleged outstanding unpaid amount of Norwegian Krone Seventy Seven Million Three Hundred Eighty Three Thousand Eight Hundred and Three and Fifty Eight Шre (NOK 77,383,803.58), $10.4 million (based on based on the NOK/U.S. Dollar exchange rate as of December 31, 2014)  plus interest and costs related to upgrades performed in the drilling unit Leiv Eiriksson in late 2012 and early 2013. The counterparties reached an agreement during the year ended December 31, 2014.

Dividend Policy

In light of a lower freight rate environment and a highly challenged financing environment, our board of directors, beginning in the fourth quarter of 2008, suspended dividends in respect of our common shares. Our dividend policy is assessed by our board of directors from time to time. The suspension of dividends allows us to preserve capital and use the preserved capital to capitalize on market opportunities as they may arise. Until market conditions improve, it is unlikely that we will reinstate the payment of dividends. In addition, other external factors, such as our lenders imposing restrictions on our ability to pay dividends under the terms of our loan agreements, may limit our ability to pay dividends. Further, we may not be permitted to pay dividends if we are in breach of the covenants contained in our loan agreements.

Declaration and payment of any dividend is subject to the discretion of our board of directors. The timing and amount of dividend payments will be dependent upon our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in our loan agreements, the provisions of Marshall Islands law affecting the payment of distributions to shareholders and other factors.

Because we are a holding company with no material assets other than the stock of our subsidiaries, our ability to pay dividends, if any, in the future, will also depend on the earnings and cash flow of our subsidiaries and their ability to pay dividends to us. If there is a substantial decline in the drybulk, tanker or offshore drilling charter markets, our earnings would be negatively affected thus limiting our ability to pay dividends, if any, in the future. Marshall Islands law generally prohibits the payment of dividends other than from surplus or while a company is insolvent or would be rendered insolvent upon the payment of such dividend.

We believe that, under current U.S. law, any future dividend payments from our then current and accumulated earnings and profits, as determined under U.S. federal income tax principles, would constitute "qualified dividend income" and, as a consequence, non-corporate U.S. shareholders would generally be subject to the same preferential U.S. federal income tax rates applicable to long-term capital gains with respect to such dividend payments. Distributions in excess of our earnings and profits, as so calculated, will be treated first as a non-taxable return of capital to the extent of a U.S. stockholder's tax basis in its common shares on a dollar-for-dollar basis and thereafter as capital gain. Please see "Item 10. Additional Information—E. Taxation" for additional information relating to the tax treatment of our dividend payments.

On August 8, 2014, Ocean Rig paid a quarterly cash dividend with respect to the quarter ended June 30, 2014 of $0.19 per common share to shareholders of record as of August 1, 2014. On November 10, 2014, Ocean Rig paid a quarterly cash dividend with respect to the quarter ended September 30, 2014, of $0.19 per common share to shareholders of record as of October 31, 2014. On February 24, 2015, Ocean Rig declared a quarterly cash dividend with respect to the quarter ended December 31, 2014, of $0.19 per common share to shareholders of record as of March 10, 2015, and payable on or about March 23, 2015.

During the year ended December 31, 2014, Ocean Rig paid dividends amounting to $30,563, to shareholders other than the Company.

B.           Significant Changes

See note 22 of "Item 18. Financial Statements."

Item 9.   The Offer and Listing

Our common shares currently trade on the NASDAQ Global Select Market under the symbol "DRYS". The table below sets forth the high and low closing prices of our common shares for each of the periods indicated, as reported by the NASDAQ Global Select Market.

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For the Year Ended	Low		High
December 31, 2010	$	3.42	$	6.77
December 31, 2011	$	1.97	$	5.50
December 31, 2012	$	1.58	$	3.74
December 31, 2013	$	1.64	$	4.70
December 31, 2014	$	0.76	$	4.50

For the Quarter Ended
March 31, 2013	$	1.64	$	2.30
June 30, 2013	$	1.68	$	2.25
September 30, 2013	$	1.78	$	3.93
December 31, 2013	$	2.72	$	4.70
March 31, 2014	$	3.15	$	4.50
June 30, 2014	$	2.87	$	3.53
September 30, 2014	$	2.44	$	3.36
December 31, 2014	$	0.76	$	3.30

For the Month Ended
August 2014	$	2.67	$	3.36
September 2014	$	2.44	$	3.30
October 2014	$	2.51	$	1.32
November 2014	$	1.28	$	1.60
December 2014	$	0.76	$	1.36
January 2015	$	0.86	$	1.15
February 2015	$	0.92	$	1.09
March 1, 2015 through March 9, 2015	$	0.88	$	0.93

Item 10.    Additional Information

A.           Share Capital

Not applicable.

B.           Memorandum and Articles of Association

The information set forth in the sections entitled "Description of Capital Stock" and "Description of Preferred Shares" in our Registration Statement on Form F-3ASR (Registration No. 333-190951), filed with the SEC on September 3, 2013, is incorporated by reference herein, provided that as of March 2, 2015, we had 669,964,321 common shares outstanding and no shares of Series A Convertible preferred stock outstanding.

The following is a description of the material terms of our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws.

Description of Common Shares

Each of our outstanding common shares entitles the holder to one vote on all matters submitted to a vote of stockholders. Subject to preferences that may be applicable to any outstanding shares of preferred shares, holders of shares of common shares are entitled to receive ratably all dividends, if any, declared by our board of directors out of funds legally available for dividends. Holders of common shares do not have conversion, redemption or preemptive rights to subscribe to any of our securities. All outstanding common shares are fully paid and non-assessable. The rights, preferences and privileges of holders of our common shares are subject to the rights of the holders of any preferred shares that may be outstanding. Our common shares are listed on the NASDAQ Global Select Market under the symbol "DRYS."

Description of Preferred Shares

As of the date of this annual report, we are authorized to issue up to 500,000,000 shares of preferred stock, par value $0.01 per share, of which 100,000,000 have been designated as Series A Convertible Preferred Stock and 10,000,000 have been designated as Series A Participating Preferred Stock.  Currently, we have no shares of preferred stock outstanding.

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Our Series A Convertible Preferred Stock that was outstanding until October 2011 accrued cumulative dividends on a quarterly basis at an annual rate of 6.75% of the aggregate face value. Dividends were payable in preferred stock or cash, if cash dividends have been declared on our common shares. Such accrued dividends were payable in additional shares of preferred stock immediately prior to any conversion.

Each share of our Series A Convertible Preferred Stock was mandatorily convertible into our common shares proportionally, upon the contractual delivery of our drillships Ocean Rig Corcovado, Ocean Rig Olympia, Ocean Rig Poseidon and Ocean Rig Mykonos, at a premium of 127.5% of the original purchase price. Furthermore, each share of the Series A Convertible Preferred Stock could have been converted into our common shares at any time at the option of the holder at a conversion rate of 1.0:0.7.

Each share of Series A Convertible Preferred Stock entitled the holder to one vote on all matters submitted to a vote of our shareholders. Except as otherwise provided in the Certificate of Designations of Rights, Preferences and Privileges of Series A Convertible Preferred Stock, or the Certificate of Designations, or by law, the holders of shares of Series A Convertible Preferred Stock and the holders of our common shares voted together as one class on all matters submitted to a vote of the Company's shareholders. Except as required by law, holders of Series A Convertible Preferred Stock had no special voting rights and their consent was not be required (except to the extent they are entitled to vote with holders of our common shares as described above) for taking any corporate action.

The Series A Convertible Preferred Stock ranked senior to all other series of our preferred stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provided otherwise. The Series A Convertible Preferred Stock was not redeemable unless upon any liquidation, dissolution or winding up of the Company, or sale of all or substantially all of the Company's assets, in which case a one-to-one redemption takes place plus any accrued and unpaid dividends.

In connection with the delivery of our newbuilding drillships the Ocean Rig Corcovado, Ocean Rig Olympia, Ocean Rig Poseidon and Ocean Rig Mykonos all of our outstanding shares of Series A Convertible Preferred Stock were converted into common shares in accordance with the terms of the Certificate of Designations.

For a more information regarding our Series A Participating Preferred Stock, see "—Stockholders Rights Agreement."

Our Articles of Incorporation and Bylaws

Our purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the BCA. Our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws do not impose any limitations on the ownership rights of our shareholders.

Directors

Our directors are elected by a plurality of the votes cast by shareholders entitled to vote in an election. Our Amended and Restated Articles of Incorporation provide that cumulative voting shall not be used to elect directors. Our board of directors must consist of at least three members. The exact number of directors is fixed by a vote of at least 66 2/3% of the entire board. Our Amended and Restated Bylaws provide for a staggered board of directors whereby directors shall be divided into three classes: Class A, Class B and Class C which shall be as nearly equal in number as possible. Shareholders, acting as at a duly constituted meeting, or by unanimous written consent of all shareholders, initially designated directors as Class A, Class B or Class C. The term of our directors designated Class A directors expires at our 2014 annual meeting of shareholders. Class B directors serve for a term expiring at our 2015 annual meeting of shareholders. Directors designated as Class C directors serve for a term expiring at our 2013 annual meeting of shareholders. At annual meetings for each initial term, directors to replace those whose terms expire at such annual meetings will be elected to hold office until the third succeeding annual meeting. Each director serves his respective term of office until his successor has been elected and qualified, except in the event of his death, resignation, removal or the earlier termination of his term of office. Our board of directors has the authority to fix the amounts which shall be payable to the members of the board of directors for attendance at any meeting or for services rendered to us.

Under our Amended and Restated Bylaws, no contract or transaction between the Company and one or more of our directors or officers, or between the Company and any other corporation, partnership, association or other organization of which one or more of our directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of our board of directors or a committee thereof which authorizes the contract or transaction, or solely because his or her or their votes are counted for such purpose, if: (i) the material facts as to his or her or their relationship or interest as to the contract or transaction are disclosed or are known to our board or directors or the applicable committee thereof and the board or directors or such committee, as applicable, in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, or, if the votes of the disinterested directors are insufficient to constitute an act of the board of directors as defined under the BCA, then by unanimous vote of the disinterested directors; (ii) the material facts as to his or her or their relationship or interest as to the contract or transaction are disclosed or are known to the Company's shareholders, and the contract or transaction is specifically approved in good faith by vote of the shareholders; or (iii) the contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified by our board of directors, a committee thereof or our shareholders.  Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee thereof that authorizes the contract or transaction.

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Shareholder Meetings

Under our Amended and Restated Bylaws, annual shareholders meetings will be held at a time and place selected by our board of directors. The meetings may be held in or outside of the Marshall Islands. Our board of directors may set a record date between 15 and 60 days before the date of any meeting to determine the shareholders that will be eligible to receive notice and vote at the meeting.

Dissenters' Rights of Appraisal and Payment

Under the BCA, our shareholders have the right to dissent from various corporate actions, including any merger or consolidation or sale of all or substantially all of our assets not made in the usual course of our business, and receive payment of the fair value of their shares. However, the right of a dissenting shareholder to receive payment of the appraised fair value of his shares is not available under the BCA for the shares of any class or series of stock, which shares or depository receipts in respect thereof, at the record date fixed to determine the shareholders entitled to receive notice of and to vote at the meeting of the shareholders to act upon the agreement of merger or consolidation, were either (i) listed on a securities exchange or admitted for trading on an interdealer quotation system or (ii) held of record by more than 2,000 holders. In the event of any further amendment of our Amended and Restated Articles of Incorporation, a shareholder also has the right to dissent and receive payment for the shareholder's shares if the amendment alters certain rights in respect of those shares. The dissenting shareholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting shareholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in any appropriate court in any jurisdiction in which our shares are primarily traded on a local or national securities exchange.

Shareholders' Derivative Actions

Under the BCA, any of our shareholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the shareholder bringing the action is a holder of common shares both at the time the derivative action is commenced and at the time of the transaction to which the action relates.

Indemnification of Officers and Directors

Our Amended and Restated Bylaws include a provision that entitles any director or officer of the Company to be indemnified by the Company upon the same terms, under the same conditions and to the same extent as authorized by the BCA if he acted in good faith and in a manner reasonably believed to be in and not opposed to the best interests of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

We are also authorized to carry directors' and officers' insurance as a protection against any liability asserted against our directors and officers acting in their capacity as directors and officers regardless of whether the Company would have the power to indemnify such director or officer against such liability by law or under the provisions of our by laws. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors and executive officers.

The indemnification provisions in our Amended and Restated Bylaws may discourage shareholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our shareholders. There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.

Anti-Takeover Provisions of Our Charter Documents

Several provisions of our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws may have anti-takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our board of directors to maximize shareholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover provisions, which are summarized below, could also discourage, delay or prevent (1) the merger or acquisition of our company by means of a tender offer, a proxy contest or otherwise, that a shareholder may consider in its best interest and (2) the removal of incumbent officers and directors.

Blank Check Preferred Stock

Under the terms of our Amended and Restated Articles of Incorporation, our board of directors has authority, without any further vote or action by our shareholders, to issue up to 500,000,000 shares of blank check preferred stock, of which 100,000,000 of these shares have been designated as Series A Convertible Preferred Stock and 10,000,000 of these shares have been designated as Series A Participating Preferred Stock as of March 2, 2015.  As of March 2, 2015, we had no shares of preferred stock outstanding.  Our board of directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.

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Classified Board of Directors

Our Amended and Restated Articles of Incorporation provide for a board of directors serving staggered, three-year terms. Approximately one-third of our board of directors will be elected each year. The classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of our company. It could also delay shareholders who do not agree with the policies of the board of directors from removing a majority of the board of directors for two years.

Election and Removal of Directors

Our Amended and Restated Articles of Incorporation prohibit cumulative voting in the election of directors. Our Amended and Restated Bylaws require shareholders to give advance written notice of nominations for the election of directors. Our Amended and Restated Bylaws also provide that our directors may be removed only for cause and only upon affirmative vote of the holders of at least 66 2/3% of the outstanding voting shares of the Company. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.

Limited Actions by Shareholders

Under the BCA and our Amended and Restated Bylaws, any action required or permitted to be taken by our shareholders must be effected at an annual or special meeting of shareholders or by the unanimous written consent of our shareholders. Our Amended and Restated Bylaws provide that, unless otherwise prescribed by law, only a majority of our board of directors, the chairman of our board of directors or the President may call special meetings of our shareholders, and the business transacted at the special meeting is limited to the purposes stated in the notice. Accordingly, a shareholder may be prevented from calling a special meeting of shareholders for shareholder consideration of a proposal over the opposition of our board of directors and shareholder consideration of a proposal may be delayed until the next annual meeting of shareholders.

Advance Notice Requirements for Shareholder Proposals and Director Nominations

Our Amended and Restated Bylaws provide that shareholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of shareholders must provide timely notice of their proposal in writing to the corporate secretary. Generally, to be timely, a shareholder's notice must be received at our principal executive offices not less than 150 days nor more than 180 days prior to the one year anniversary of the preceding year's annual meeting of shareholders. Our Amended and Restated Bylaws also specify requirements as to the form and content of a shareholder's notice. These provisions may impede shareholders' ability to bring matters before an annual meeting of shareholders or make nominations for directors at an annual meeting of shareholders.

Stockholders Rights Agreement

We entered into a Stockholders Rights Agreement with American Stock Transfer & Trust Company, as Rights Agent, as of January 18, 2008. Under this Agreement, we declared a dividend payable of one preferred share purchase right, or Right, to purchase one one-thousandth of a share of our Series A Participating Preferred Stock for each outstanding common share. The Right will separate from the common shares and become exercisable after (1) the 10th business day after a person or group acquires ownership of 15% or more of our common shares or (2) the 10th business day (or such later date as determined by the company's board of directors) after a person or group announces a tender or exchange offer which would result in that person or group holding 15% or more of our common shares, or collectively, the Distribution Date. On the Distribution Date, each holder of a Right will be entitled to purchase for $250.00, or the Exercise Price, a fraction (1/1000th) of one share of our Series A Participating Preferred Stock, which has similar economic terms as one of our common shares. Subject to certain exceptions, if a person acquires more than 15% of our common shares, referred to as an Acquiring Person, each holder of a Right (except that Acquiring Person) will be entitled to buy at the exercise price the number of our common shares stock having a market value of twice the exercise price. In addition, any time after the date an Acquiring Person obtains more than 15% of our common shares and before that Acquiring Person acquires more than 50% of our outstanding common shares, we may exchange each right owned by all other Rights holders, in whole or in part, for one of our common shares. We may also redeem the Rights at any time prior to a public announcement that a person has acquired ownership of 15% or more of the Company's common stock.

On July 9, 2009, the Stockholders Rights Agreement was amended for the sole purpose of amending and restating the definition of Acquiring Person to exempt persons acquiring our Series A Convertible Preferred Stock and any of our common shares resulting from the conversion of any such preferred stock from the definition of Acquiring Person, subject to certain exceptions. On April 21, 2010, the Stockholders Rights Agreement was further amended for the sole purpose of further amending and restating the definition of Acquiring Person to exempt from the definition of Acquiring Persons any persons acting (i) as a broker, dealer, distributor or initial purchaser or underwriter of our securities or as a market-maker with respect to such securities or (ii) in connection with share lending agreements or similar agreements between us or any of our affiliates and such person or any of such person's affiliates or associates, subject to certain exceptions.

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The Rights expire on the earliest of (1) February 4, 2018 or (2) the exchange or redemption of the Rights as described above. The terms of the rights and the Stockholders Rights Agreement may be amended without the consent of the Rights holders at any time on or prior to the Distribution Date. After the Distribution Date, the terms of the Rights and the Stockholders Rights Agreement may be amended to make changes, which do not adversely affect the rights of the Rights holders (other than the Acquiring Person). The Rights do not have any voting rights. The Rights have the benefit of certain customary anti-dilution protections. As of March 2, 2015, no exercise of any Right had occurred.

C.           Material Contracts

We refer you to "Item 5. Operating and Financial Review and Prospects—B. Liquidity and capital resources," "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions," and "—B. Memorandum and Articles of Association—Stockholders Rights Agreement" for a discussion of our material agreements that we have been a party to outside the ordinary course of our business during the two-year period immediately preceding the date of this annual report.

Other than the agreements discussed in the aforementioned sections of this annual report, we have no material contracts, other than contracts entered into in the ordinary course of business, to which we or any member of the group is a party.

D.           Exchange Controls

Under Marshall Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of our common shares.

 E.           Taxation

The following discussion is based upon the provisions of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed U.S. Treasury Department regulations, or Treasury Regulations, administrative rulings, pronouncements and judicial decisions, all as of the date of this annual report. Unless otherwise noted, references to the "Company" include the Company's subsidiaries. Except as otherwise discussed herein, this discussion assumes that the Company does not have an office or other fixed place of business in the United States.

Taxation of the Company's Shipping Income: In General

The Company anticipates that it will derive gross income from the use and operation of vessels in international commerce and that this income will principally consist of freights from the transportation of cargoes, hire or lease from time or voyage charters and the performance of services directly related thereto, which the Company refers to as "shipping income."

Shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States will be considered to be 50% derived from sources within the United States. Shipping income attributable to transportation that both begins and ends in the United States will be considered to be 100% derived from sources within the United States. The Company is not permitted by law to engage in transportation that gives rise to 100% U.S. source income. Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources outside the United States.

Shipping Income derived from sources outside the United States will not be subject to U.S. federal income tax.

Based upon the Company's anticipated shipping operations, the Company's vessels will operate in various parts of the world, including to or from U.S. ports. Unless exempt from U.S. taxation under Section 883 of the Code, the Company will be subject to U.S. federal income taxation, in the manner discussed below, to the extent its shipping income is considered derived from sources within the United States.

Application of Code Section 883

Under the relevant provisions of Section 883 of the Code and the Treasury Regulations promulgated thereunder, the Company will be exempt from U.S. taxation on its U.S. source shipping income if:

(i) It is organized in a "qualified foreign country" which is one that grants an equivalent exemption from tax to corporations organized in the United States in respect of each category of shipping income for which exemption is being claimed under Section 883 of the Code, which the Company refers to as the "Country of Organization Requirement"; and

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(ii) It can satisfy any one of the following two (2) stock ownership requirements:

· more than 50% of the Company's stock, in terms of value, is beneficially owned by individuals who are residents of a qualified foreign country, which the Company refers to as the "50% Ownership Test"; or

· the Company's stock is "primarily and regularly" traded on an established securities market located in the United States or in a qualified foreign country, which the Company refers to as the "Publicly Traded Test".

The U.S. Treasury Department has recognized (i) the Marshall Islands, the country of incorporation of the Company and of a number of its ship-owning subsidiaries and (ii) Malta, the country of incorporation of the remaining ship-owning subsidiaries of the Company, as qualified foreign countries. Accordingly, the Company and its subsidiaries satisfy the Country of Organization Requirement.

Therefore, the Company's eligibility to qualify for exemption under Section 883 is wholly dependent upon being able to satisfy one of the stock ownership requirements. For the 2014 taxable year, the Company believes that it satisfied the Publicly-Traded Test since, for more than half the days of the Company's 2014 taxable year, the Company's stock was "primarily and regularly traded" on the NASDAQ Global Select Market, which is an "established securities market" in the United States within the meaning of the Treasury Regulation under Section 883 of the Code, and intends to take this position on its 2014 United States income tax returns.

Taxation in Absence of Exemption under Section 883 of the Code

To the extent the benefits of Section 883 of the Code are unavailable with respect to any item of U.S. source income, the Company's U.S. source shipping income would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, or the 4% gross basis tax regime. Since under the sourcing rules described above, no more than 50% of the Company's shipping income would be treated as being derived from U.S. sources, the maximum effective rate of U.S. federal income tax on the Company's shipping income would never exceed 2% under the 4% gross basis tax regime.

Gain on Sale of Vessels

Regardless of whether we qualify for exemption under Section 883 of the Code, we will not be subject to U.S. federal income taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under U.S. federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel by us will be considered to occur outside of the United States.

U.S. Federal Taxation of Our Other Income

In addition to our shipping operations, we provide drilling services to third parties on the United States Outer Continental Shelf through our indirect majority-owned subsidiary, Ocean Rig USA LLC. Ocean Rig USA LLC is engaged in a trade or business in the United States. Therefore, Ocean Rig USA LLC is subject to U.S. federal income tax on a net basis on its taxable income. The amount of such taxable income and such U.S. federal income tax liability will vary depending upon the level of Ocean Rig USA LLC's operations in the United States in any given taxable year. Distributions from Ocean Rig USA LLC to our subsidiary that owns the interests in Ocean Rig USA LLC may be subject to U.S. federal withholding tax at a 30% rate.

U.S. Federal Income Taxation of Holders

U.S. Federal Income Taxation of U.S. Holders

As used herein, the term "U.S. Holder" means a beneficial owner of common shares that is a U.S. citizen or resident, U.S. corporation or other U.S. entity taxable as a corporation, an estate the income of which is subject to U.S. federal income taxation regardless of its source, or a trust if a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.

If a partnership holds our common shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding our common shares, you are encouraged to consult your tax advisor regarding the U.S. federal income tax consequences of owning an interest in a partnership that holds our common shares.

Distributions

Subject to the discussion of passive foreign investment companies below, any distributions made by us with respect to our common shares to a U.S. Holder will generally constitute dividends, which may be taxable as ordinary income or "qualified dividend income" as described in more detail below, to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of our current or accumulated earnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder's tax basis in its common shares on a dollar-for-dollar basis and thereafter as capital gain. Because we are not a U.S. corporation, the Holders of commons shares that are corporations will not be entitled to claim a dividends received deduction with respect to any distributions they receive from the Company. Dividends paid with respect to our common shares will generally be treated as "passive category income" or, in the case of certain types of U.S. Holders, "general category income" for purposes of computing allowable foreign tax credits for U.S. foreign tax credit purposes.

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Dividends paid on our common shares to a U.S. Holder who is an individual, trust or estate, or a U.S. Individual Holder, will generally be treated as "qualified dividend income" that is taxable to such U.S. Individual Holders at preferential tax rates provided that (1) the Company's common shares are readily tradable on an established securities market in the United States (such as the Nasdaq Global Select Market, on which our common shares are listed); (2) we are not a passive foreign investment company for the taxable year during which the dividend is paid or the immediately preceding taxable year (which we do not believe we are, have been or will be); and (3) the U.S. Individual Holder has owned the common shares for more than 60 days in the 121-day period beginning 60 days before the date on which the common shares become ex-dividend. There is no assurance that any dividends paid on our common shares will be eligible for these preferential rates in the hands of a U.S. Individual Holder.  Any dividends paid by the Company which are not eligible for these preferential rates will be taxed as ordinary income to a U.S. Holder.

Special rules may apply to any "extraordinary dividend", which is generally a dividend in an amount which is equal to or in excess of ten percent of a stockholder's adjusted basis (or fair market value in certain circumstances) in one of our common shares. If we pay an "extraordinary dividend" on our common shares that is treated as "qualified dividend income," then any loss derived by a U.S. Individual Holder from the sale or exchange of such common shares will be treated as long-term capital loss to the extent of such dividend.

Sale, Exchange or other Disposition of Common Shares

Assuming we do not constitute a passive foreign investment company for any taxable year, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder's tax basis in such shares. Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder's holding period is greater than one year at the time of the sale, exchange or other disposition. Otherwise, such gain or loss will be treated as long-term capital gain on loss. Such capital gain or loss will generally be treated as U.S.-source income or loss, as applicable, for U.S. foreign tax credit purposes. A U.S. Holder's ability to deduct capital losses is subject to certain limitations.

Passive Foreign Investment Company Status and Significant Tax Consequences

Special U.S. federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a passive foreign investment company, or a PFIC, for U.S. federal income tax purposes. In general, we will be treated as a PFIC with respect to a U.S. Holder if, for any taxable year in which such holder held our common shares, either:

· at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or

· at least 50% of the average value of the assets held by the Company during such taxable year produce, or are held for the production of, passive income.

For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share of the income and assets, respectively, of any of our subsidiary corporations in which we own at least 25% of the value of the subsidiary's stock. Income earned, or deemed earned, by us in connection with the performance of services would not constitute passive income. By contrast, rental income would generally constitute passive income unless we were treated under specific rules as deriving our rental income in the active conduct of a trade or business.

Based on our current operations and future projections, we do not believe that we are, nor do we expect to become, a PFIC with respect to any taxable year. Although there is no legal authority directly on point, and we are not relying upon an opinion of counsel on this issue, our belief is based principally on the position that, for purposes of determining whether we are a PFIC, the gross income we derive or are deemed to derive from the time chartering and voyage chartering activities of our wholly-owned subsidiaries should constitute services income, rather than rental income. Correspondingly, such income should not constitute passive income, and the assets that we or our wholly-owned subsidiaries own and operate in connection with the production of such income, in particular, the tankers, should not constitute assets that produce, or are held for the production of, passive income for purposes of determining whether we are a PFIC. We believe there is substantial legal authority supporting our position consisting of case law and Internal Revenue Service, IRS, pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, it should be noted that there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, in the absence of any legal authority specifically relating to the Code provisions governing PFICs, the IRS or a court could disagree with our position. In addition, although we intend to conduct our affairs in a manner so as to avoid being classified

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as a PFIC with respect to any taxable year, we cannot assure you that the nature of our operations will not change in the future.

As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a U.S. Holder would be subject to different taxation rules depending on whether the U.S. Holder makes an election to treat us as a "Qualified Electing Fund," which election we refer to as a "QEF election." As an alternative to making a QEF election, a U.S. Holder should be able to elect to mark-to-market our common shares, which election we refer to as a "Mark-to-Market Election."

Taxation of U.S. Holders Making a Timely QEF Election

If a U.S. Holder makes a timely QEF election, which U.S. Holder we refer to as a "U.S. Electing Holder," the U.S. Electing Holder must report each year for U.S. federal income tax purposes his pro rata share of our ordinary earnings and our net capital gain, if any, for our taxable year that ends with or within the taxable year of the U.S. Electing Holder, regardless of whether or not distributions were received from us by the U.S. Electing Holder. The U.S. Electing Holder's adjusted tax basis in the common shares will be increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits that had been previously taxed will result in a corresponding reduction in the adjusted tax basis in the common shares and will not be taxed again once distributed. A U.S. Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of our common shares. A U.S. Holder would make a QEF election with respect to any taxable year that our company is a PFIC by filing IRS Form 8621 with his U.S. federal income tax return. If we were aware that we were to be treated as a PFIC for any taxable year, we would provide each U.S. Holder with all necessary information in order to make the QEF election described above.

Taxation of U.S. Holders Making a Mark-to-Market Election

Alternatively, if we were to be treated as a PFIC for any taxable year and, as we anticipate, our stock is treated as "marketable stock," a U.S. Holder would be allowed to make a Mark-to-Market Election with respect to our common shares, provided the U.S. Holder completes and files IRS Form 8621 in accordance with the relevant instructions and related Treasury Regulations. If that election is made, the U.S. Holder generally would include as ordinary income in each taxable year the excess, if any, of the fair market value of the common shares at the end of the taxable year over such holder's adjusted tax basis in the common shares. The U.S. Holder would also be permitted an ordinary loss in respect of the excess, if any, of the U.S. Holder's adjusted tax basis in the common shares over its fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the Mark-to-Market Election. A U.S. Holder's tax basis in its common shares would be adjusted to reflect any such income or loss amount. Gain realized on the sale, exchange or other disposition of our common shares would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the common shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included by the U.S. Holder.

Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election

Finally, if we were to be treated as a PFIC for any taxable year, a U.S. Holder who does not make either a QEF election or a Mark-to-Market Election for that year, whom we refer to as a "Non-Electing U.S. Holder," would be subject to special rules with respect to (1) any excess distribution (e.g., the portion of any distributions received by the Non-Electing U.S. Holder on our common shares in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing U.S. Holder in the three preceding taxable years, or, if shorter, the Non-Electing U.S. Holder's holding period for the common shares), and (2) any gain realized on the sale, exchange or other disposition of our common shares. Under these special rules:

· the excess distribution or gain would be allocated ratably over the Non-Electing U.S. Holders' aggregate holding period for the common shares;

· the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income; and

· the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.

These penalties would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilize leverage in connection with its acquisition of our common shares. If a Non-Electing U.S. Holder who is an individual dies while owning our common shares, such holder's successor generally would not receive a step-up in tax basis with respect to such shares.

If we were to be treated as a PFIC for any taxable year ending on or after December 31, 2014, U.S. Holders would be required to report their ownership of our common shares to the IRS by filing an IRS Form 8621 with their U.S. federal income tax return for each such taxable year.

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U.S. Federal Income Taxation of "Non-U.S. Holders"

A beneficial owner of common shares, other than an entity treated as a partnership for U.S. federal income tax purposes, that is not a U.S. Holder is referred to herein as a "Non-U.S. Holder."

Dividends on Common Shares

Non-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on dividends received from us with respect to our common shares, unless that income is effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty with respect to those dividends, that income is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States.

Sale, Exchange or Other Disposition of Common Shares

Non-U.S. Holders generally will not be subject to U.S. federal income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of our common shares, unless:

· the gain is effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States. If the Non-U.S. Holder is entitled to the benefits of an income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or

· the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.

If the Non-U.S. Holder is engaged in a U.S. trade or business for U.S. federal income tax purposes, the income from the common shares, including dividends and the gain from the sale, exchange or other disposition of the common shares that is effectively connected with the conduct of that trade or business will generally be subject to regular U.S. federal income tax in the same manner as discussed in the previous section relating to the taxation of U.S. Holders. In addition, if you are a corporate Non-U.S. Holder, your earnings and profits that are attributable to the effectively connected income, which are subject to certain adjustments, may be subject to an additional branch profits tax at a rate of 30%, or at a lower rate as may be specified by an applicable income tax treaty.

Backup Withholding and Information Reporting

In general, dividend payments, or other taxable distributions, made within the United States to a holder of common shares will be subject to information reporting requirements. Such payments will also be subject to backup withholding tax if paid to a non-corporate U.S. Holder who:

· ails to provide an accurate taxpayer identification number;

· is notified by the IRS that he has failed to report all interest or dividends required to be shown on his U.S. federal income tax returns; or

· in certain circumstances, fails to comply with applicable certification requirements.

Non-U.S. Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on an appropriate IRS Form W-8.

If a Non-U.S. Holder sells the our common shares to or through a U.S. office or broker, the payment of the proceeds is subject to both U.S. backup withholding and information reporting unless the Non-U.S. Holder certifies that it is a non-U.S. person, under penalties of perjury, or it otherwise establishes an exemption. If a Non-U.S. Holder sells common shares through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to the Non-U.S. Holder outside the United States, then information reporting and backup withholding generally will not apply to that payment. However, U.S. information reporting requirements, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made to the Non-U.S. Holder outside the United States, if the Non-U.S. Holder sells common shares through a non-U.S. office of a broker that is a U.S. person or has some other contacts with the United States.

Backup withholding tax is not an additional tax. Rather, a taxpayer generally may obtain a refund of any amounts withheld under backup withholding rules that exceed the taxpayer's income tax liability by filing a refund claim with the IRS.

Pursuant to recently enacted legislation, individuals who are U.S. Holders (and to the extent specified in applicable Treasury regulations, certain individuals who are Non-U.S. Holders and certain U.S. entities) who hold "specified foreign financial assets" (as defined in Section 6038D of the Code) are required to file IRS Form 8938 with information relating to the asset for each taxable year in which the aggregate value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollar amount as prescribed by applicable Treasury regulations). Specified foreign financial assets would include, among other assets, the common shares, unless the shares held through an account maintained with a U.S. financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect. Additionally, in the event an individual U.S. Holder (and to the extent specified in applicable Treasury regulations, an individual Non-U.S. Holder or a U.S. entity) that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of U.S. federal income taxes of such holder for the related tax year may not close until three years after the date that the required information is filed. U.S. Holders (including U.S. entities) and Non-U.S. Holders are encouraged consult their own tax advisors regarding their reporting obligations under this legislation.

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Marshall Islands Tax Considerations

We are incorporated in the Marshall Islands. Under current Marshall Islands law, we are not subject to tax on income or capital gains, and no Marshall Islands withholding tax will be imposed upon payments of dividends by us to our stockholders.

Other Tax Considerations

In addition to the tax consequences discussed above, we may be subject to tax in one or more other jurisdictions where we conduct activities. The amount of any such tax imposed upon our operations may be material.

We provide offshore drilling services to third parties through our wholly-owned subsidiaries. Such services may be provided in countries where the tax legislation subjects drilling revenue to withholding tax or other corporate taxes, and where the operating cost may also be increased due to tax requirements. The amount of such taxable income and liability will vary depending upon the level of our operations in such jurisdiction in any given taxable year. Distributions from our subsidiaries may be subject to withholding tax.

We do not benefit from income tax positions that we believe are more likely than not to be disallowed upon challenge by a tax authority. If any tax authority successfully challenges our operational structure, inter-company pricing policies or the taxable presence of our key subsidiaries in certain countries; or if the terms of certain income tax treaties are interpreted in a manner that is adverse to our structure; or if we lose a material tax dispute in any country, particularly in the United States, Canada, the U.K., Brazil, Angola, Cyprus, Ghana, Netherlands, Ivory Coast, Tanzania, Falkland Islands, Ireland, Sierra Leone, Gabon, West Africa,  Equatorial Guinea or Norway, our effective tax rate on our world-wide earnings could increase substantially and our earnings and cash flows from operations could be materially adversely affected.

F.           Dividends and Paying Agents

Not applicable.

G.           Statement by Experts

Not applicable.

H.           Documents on Display

We file reports and other information with the SEC. These materials, including this annual report and the accompanying exhibits, may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549, or from the SEC's website: http://www.sec.gov. You may obtain information on the operation of the public reference room by calling 1 (800) SEC-0330 and you may obtain copies at prescribed rates.

I.            Subsidiary Information

Not applicable.

Item 11.   Quantitative and Qualitative Disclosures about Market Risk

Our Risk Management Policy

Our primary market risks relate to adverse movements in the charterhire rates for our drybulk and tanker fleet and dayrates for our offshore drilling fleet and any declines that may occur in the value of our assets, which consist primarily of our drybulk and tanker vessels and drilling units. Our policy is to continuously monitor our exposure to other business risks, including the impact of changes in interest rates, currency rates, charter rates and dayrates and bunker prices on earnings and cash flows. We intend to assess these risks and, when appropriate, enter into derivative contracts with credit-worthy counterparties to minimize our exposure to these risks. In regard to charter rates, dayrates and bunker prices, as our employment policy for our vessels and drilling units has been, and is expected to continue to be, with a high percentage of our fleet on periodic employment, we are not directly exposed to increases in bunker fuel prices as these are the responsibility of the charterer under period charter arrangements.

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We regularly review the strategic decision with respect to the appropriate ratio of spot charter revenues to fixed-rate charter revenues taking into account its expectations about spot and time charter forward rates. Decisions to modify fixed-rate coverage are implemented in either the physical markets through changes in time charters or in the FFA markets, thus managing the desired strategic position while maintaining flexibility of ship availability to customers. We enter into FFAs with an objective of economically hedging risk seeking to reduce its exposure to changes in the spot market rates earned by some of its vessels in the normal course of our shipping business. None of these FFAs qualify as cash flow hedges for accounting purposes. FFAs are executed mainly through the London Clearing House, or LCH. LCH requires the posting of collateral by all participants. The use of a clearing house reduces the Company's exposure to counterparty credit risk.

Under the terms of our loan agreements, we are required to maintain compliance with minimum valuation covenants in regard to the vessels and drillships that are mortgaged to those banks. As such, in order to monitor on a regular basis the current market value of our fleet and thus to highlight any downturn in its value, we obtain on a semi-annual basis two independent valuations of all of our vessels and drilling units from two international sale and purchase brokers to determine the ongoing market value of our fleet. These valuations are used in the assessment regarding the necessary ongoing level of depreciation that we are recording in our books.

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates primarily to our long-term and short-term debt. The international shipping and offshore drilling industries are capital intensive, requiring significant amounts of investment. Much of this investment is provided in the form of long-term debt. Our debt usually contains interest rates that fluctuate with LIBOR. Increasing interest rates could adversely impact future earnings.

Historically, we have been subject to market risks relating to changes in interest rates, because we have had significant amounts of floating rate debt outstanding. We manage this risk by entering into interest rate swap agreements in which we exchange fixed and variable interest rates based on agreed upon notional amounts. We use such derivative financial instruments as risk management tools and not for speculative or trading purposes. In addition, the counterparties to our derivative financial instruments are major financial institutions, which helps us to manage our exposure to nonperformance of our counterparties under our debt agreements.

As of December 31, 2014, we had a total of 24 interest rate swap, cap and floor agreements, maturing from January 2015 through November 2017. These agreements are entered into in order to hedge our exposure to interest rate fluctuations with respect to our borrowings.

Our interest expense is affected by changes in the general level of interest rates. As an indication of the extent of our sensitivity to interest rate changes, an increase in LIBOR of 1.0%, with all other variables held constant, would have increased our interest and finance costs, net loss and cash outflows in the current year by approximately $56.4 million based upon our debt level at December 31, 2014. A 1.0% increase in LIBOR, with all other variables held constant, would have increased our interest and finance costs for the year ended December 31, 2014 from $411.0 million to $467.4 million based upon our debt level at December 31, 2014.

Foreign Currency Exchange Risk

We generate a substantial portion of our revenues in U.S. dollars; however, a portion of our revenue under our contracts with Petroleo Brasileiro S.A., or Petrobras Brazil, for the Ocean Rig Corcovado and the Ocean Rig Mykonos is, and with Repsol Sinopec Brasil S.A., or Repsol, for the Ocean Rig Mylos is receivable in Brazilian Real.  In addition, for the year ended December 31, 2014, we incurred approximately 51% of our operating expenses and the majority of our management expenses in currencies other than the U.S. dollar. For accounting purposes, expenses incurred in currencies other than the U.S. dollar are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction. Because a significant portion of our expenses are incurred in currencies other than the U.S. dollar, our expenses may from time to time increase relative to our revenues as a result of fluctuations in exchange rates, which could affect the amount of net income that we report in future periods. As of December 31, 2014, the net effect of a 1% adverse movement in U.S. dollar/Euro exchange rates would not have a material effect on our net income, while the net effect of a 1% adverse movement in U.S. dollar/currencies other than the U.S. dollar exchange rates would have resulted in a decrease of $4.4 million in our profits before taxes for the year ended December 31, 2014.

Our international operations expose us to foreign exchange risk. We use a variety of techniques to minimize exposure to foreign exchange risk, such as the use of foreign exchange derivative instruments. Fluctuations in foreign currencies typically have not had a material impact on our overall results. In situations where payments of local currency do not equal local currency requirements, foreign exchange derivative instruments, specifically foreign exchange forward contracts, or spot purchases, may be used to mitigate foreign currency risk. A foreign exchange forward contract obligates us to exchange predetermined amounts of specified foreign currencies at specified exchange rates on specified dates or to make an equivalent U.S. dollar payment equal to

the value of such exchange. We do not enter into derivative transactions for speculative purposes. On December 31, 2014, we did not have any open foreign currency forward exchange contracts.

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Item 12.    Description of Securities Other than Equity Securities

A.           Debt Securities

Not applicable.

B.           Warrants and Rights

Not applicable.

C.           Other Securities

Not applicable.

D.           American Depository shares

Not applicable.

PART II

Item 13.     Defaults, Dividend Arrearages and Delinquencies

See "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Breach of Financial Covenants under Secured Credit Facilities."

Item 14.     Material Modifications to the Rights of Security Holders and Use of Proceeds

We have adopted a Stockholders Rights Agreement, pursuant to which each of our common shares includes one preferred stock purchase right that entitles the holder to purchase from us 1/1,000 of a share of our Series A Participating Preferred Stock or additional amounts of our common shares if any third party seeks to acquire control of a substantial block of our common shares without the approval of our board of directors.  See "Item 10. Additional Information—B. Memorandum and Articles of Association—Stockholders Rights Agreement."

Item 15.     Controls and Procedures

(a) Disclosure Controls and Procedures

Management, including our Company's Chief Executive Officer and Chief Financial Officer has conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2014. The Company's disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports the Company files under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, to allow for timely decisions regarding required disclosures.

Based on this evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2014, the Company's disclosure controls and procedures are effective to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

(b) Management's Annual Report on Internal Control Over Financial Reporting

Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:

1. Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

2. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are

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being made only in accordance with authorizations of management and directors of the Company; and

3. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in "Internal Control—Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO (2013 Framework), as of December 31, 2014.

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process, and it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Management has assessed the effectiveness of the Company's internal control over financial reporting at December 31, 2014, based on the framework established in Internal Control—Integrated Framework issued by COSO (2013 Framework). Based on the aforementioned assessment, management concluded that Company's internal control over financial reporting is effective as of December 31, 2014.

The independent registered public accounting firm, Ernst Young (Hellas) Certified Auditors Accountants S.A., that audited the consolidated financial statements of the Company for the year ended December 31, 2014, included in this annual report, has issued an attestation report on the Company's internal control over financial reporting.

(c) Report of Independent Registered Public Accounting Firm

The report of Ernst Young (Hellas) Certified Auditors Accountants S.A. included in "Item 18. Financial Statements" of this annual report is incorporated herein by reference.

(d) Changes in Internal Control over Financial Reporting

There have been no significant changes in our internal control over financial  reporting that have accrued during the year ended December 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 16A.      Audit Committee Financial Expert

Our board of directors has determined that Mr. George Xiradakis, whose biographical details are included in "Item 6. Directors, Senior Management and Employees," a member of our audit committee, qualifies as an "audit committee financial expert" as that term is defined under SEC regulations. Our board of directors has also determined that Mr. Xiradakis is independent under SEC Rule 10A-3 of the Exchange Act and the independence rules of the NASDAQ Stock Market LLC.

Item 16B.      Code of Ethics

We have adopted a code of ethics that applies to our directors, officers and employees. In March 2008, our board of directors adopted an amendment to our code of ethics that would permit our officers, directors and employees who own common shares to transact in our securities pursuant to trading plans adopted in reliance upon Rule 10b5-1 under the Exchange Act. A copy of our code of ethics is posted in the "Investor Relations" section of the DryShips Inc. website, and may be viewed at http://www.dryships.com. We will also provide a hard copy of our code of ethics free of charge upon written request of a shareholder. Shareholders may direct their requests to the attention of Investor Relations, DryShips Inc., 109 Kifisias Avenue and Sina Street, 151 24 Amaroussion, Greece. No substantive amendments to our code of ethics were made during the fiscal year ended December 31, 2014, and no waivers of our code of ethics were granted to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions during the fiscal year ended December 2014.

Item 16C.      Principal Accountant Fees and Services

Audit Fees

The table below sets forth the total fees for the services performed by our Independent Auditors. The table below also identifies these amounts by category of services.

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(U.S. Dollars in Thousands)	2013		2014
Audit and audit related fees	$	1,997	$	2,122
Tax fees		160		46
Total fees	$	2,157	$	2,168

Taxation fees represent fees for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning. There were no audit-related or other fees billed in 2014 and 2013.

All audit and non-audit services provided by the Independent Auditors were pre-approved by our audit committee. Our audit committee is responsible for the appointment, replacement, compensation, evaluation and oversight of the work of the independent auditors. As part of this responsibility, our audit committee pre-approves the audit and non-audit services performed by the independent auditors in order to assure that they do not impair the auditor's independence from the Company. The audit committee has adopted a policy which sets forth the procedures and the conditions pursuant to which services proposed to be performed by the independent auditors may be pre-approved.

Item 16D.      Exemptions from the Listing Standards for Audit Committees

Not applicable.

Item 16E.       Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Not applicable.

Item 16F.       Changes in Registrant's Certifying Accountant

None.

Item 16G.       Corporate Governance

Exemptions from NASDAQ corporate governance rules

As a foreign private issuer, we are subject to less stringent corporate governance requirements than U.S.-domiciled companies. Subject to certain exceptions, NASDAQ permits foreign private issuers to follow home country practice in lieu of the NASDAQ corporate governance requirements. The practices we intend to follow in lieu of NASDAQ's corporate governance rules are:

· In lieu of obtaining shareholder approval prior to the issuance of designated securities or the adoption of equity compensation plans or material amendments to such equity compensation plans, we will comply with provisions of the BCA, providing that the board of directors approve share issuances and adoptions of and material amendments to equity compensation plans.

· Our board of directors will not hold regularly scheduled meetings at which only independent directors are present.

· As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to NASDAQ pursuant to NASDAQ corporate governance rules or Marshall Islands law. Consistent with Marshall Islands law and as provided in our Amended and Restated Bylaws, we will notify our shareholders of meetings between 15 and 60 days before the meeting. This notification will contain, among other things, information regarding business to be transacted at the meeting. In addition, our Amended and Restated Bylaws provide that shareholders must give us between 150 and 180 days advance notice to properly introduce any business at a meeting of shareholders.

Other than as noted above, we are in full compliance with all other applicable NASDAQ corporate governance standards.

Item 16H.       Mine Safety Disclosure

Not applicable.

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PART III.

Item 17.          Financial Statements

See "Item 18. Financial Statements."

Item 18.          Financial Statements

The financial statements beginning on page F-1 together with the respective reports of the Independent Registered Public Accounting Firm therefore, are filed as a part of this annual report.

Item 18.1.       Schedule I – Condensed Financial Information of DryShips Inc. (Parent Company only)

The Schedule I, beginning after page F-55, is filed as part of this report.

Item 19.         Exhibits

1.1	Articles of Amendment to Articles of Incorporation of DryShips Inc., incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 8-A of DryShips Inc., filed with the SEC on January 18, 2008.
1.2	Amended and Restated Bylaws of DryShips Inc., incorporated by reference to Exhibit 3.1 to the Registration Statement on Form F-3 of DryShips Inc. (File No. 333-169235), filed with the SEC on September 7, 2010.
1.3	Certificate of Designations of Rights, Preferences and Privileges of Series A Convertible Preferred Stock of DryShips Inc., incorporated by reference to Exhibit 2.5 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
2.1	Form of Common Share Certificate, incorporated by reference to Exhibit 2.1 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2008, filed with the SEC on March 30, 2009.
2.2	Form of Global Note, incorporated by reference to Exhibit 2.2 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
2.3	Indenture dated November 17, 2009, incorporated by reference to Exhibit 4.7 to the Post-effective Amendment to the Registration Statement on Form F-3 of DryShips Inc. (File No. 333-146540), filed with the SEC on November 17, 2009.
2.4	First Supplemental Indenture, dated November 25, 2009, to the Indenture dated November 17, 2009, incorporated by reference to Exhibit 3 to the Report on Form 6-K of DryShips Inc., filed with the SEC on November 25, 2009.
2.5	Bond Agreement between Ocean Rig UDW Inc. and Norsk Tillitsmann ASA, dated April 14, 2011, incorporated by reference to Exhibit 10.40 of the Registration Statement on Form F-4 of Ocean Rig UDW Inc. (Registration No. 333-175940), filed with the SEC on August 1, 2011.
2.6	Indenture, dated as of September 20, 2012, by and among Drill Rigs Holdings Inc., Ocean Rig UDW Inc., and each of the Guarantors party thereto, U.S. Bank National Association, as Trustee, and Deutsche Bank Trust Company Americas, as Noteholder Collateral Agent, Registrar and Paying Agent, relating to 6.50% Senior Secured Notes Due 2017, incorporated by reference to exhibit 2.4 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.
2.7	Supplemental Indenture, dated as of January 23, 2013, amending and supplementing the Indenture, dated as of September 20, 2012, by and among Drill Rigs Holdings Inc., Ocean Rig UDW Inc., and each of the Guarantors party thereto, U.S. Bank National Association, as Trustee, and Deutsche Bank Trust Company Americas, as Noteholder Collateral Agent, Registrar and Paying Agent, relating to 6.50% Senior Secured Notes Due 2017, incorporated by reference to exhibit 2.5 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.
2.8	Second Supplemental Indenture, dated as of January 30, 2013, amending and supplementing the Indenture, dated as of September 20, 2012, as supplemented by a supplemental indenture, dated as of January 23, 2013, by and among Drill Rigs Holdings Inc., Ocean Rig UDW Inc., and each of the Guarantors party thereto, U.S. Bank National Association, as Trustee, and Deutsche Bank Trust Company Americas, as Noteholder Collateral Agent, Registrar and Paying Agent, relating to 6.50% Senior Secured Notes Due 2017, incorporated by reference to exhibit 2.6 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.

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2.9	Third Supplemental Indenture, dated as of March 15, 2013, amending and supplementing the Indenture, dated as of September 20, 2012, as supplemented by a supplemental indenture, dated as of January 23, 2013, and a second supplemental indenture dated as of January 30, 2013, by and among Drill Rigs Holdings Inc., Ocean Rig UDW Inc., and each of the Guarantors party thereto, U.S. Bank National Association, as Trustee, and Deutsche Bank Trust Company Americas, as Noteholder Collateral Agent, Registrar and Paying Agent, relating to 6.50% Senior Secured Notes Due 2017, incorporated by reference to exhibit 2.7 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.
4.1	Stockholders Rights Agreement, dated January 18, 2008, by and between DryShips Inc. and American Stock Transfer & Trust Company, as Rights Agent, incorporated by reference to Exhibit 4.2 to the Registration Statement on Form 8-A of DryShips Inc., filed with the SEC on January 18, 2008.
4.2	Amendment No. 1, dated as July 9, 2009, to Stockholders Rights Agreement, incorporated by reference to Exhibit 99.1 to the Registration Statement on Form 8-A of DryShips Inc., filed with the SEC on July 15, 2009.
4.3	Amendment No. 2, dated as of April 21, 2010, to Stockholders Rights Agreement, incorporated by reference to Exhibit 99.1 to the Registration Statement on Form 8-A of DryShips Inc., filed with the SEC on April 27, 2010.
4.4	Amended and Restated 2008 Equity Incentive Plan of DryShips Inc., incorporated by reference to Exhibit 4.1 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.5	Loan Agreement, dated March 31, 2006, by and between DryShips Inc., as Borrower, the banks and financial institutions listed therein, as Lenders and Swap Banks, HSH Nordbank AG, as Agent, Security Trustee, Lead Arranger, Lead Bookrunner and Joint Underwriter, and The Governor and Company of the Bank of Scotland, as Joint Bookrunner and Joint Underwriter, relating to a term loan and short-term credit facilities of up to $518,750,000, or the HSH Nordbank Senior Loan Agreement, incorporated by reference to Exhibit 4.4 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2005, filed with the SEC on April 21, 2006.
4.6	Loan Agreement, dated March 31, 2006, by and between DryShips Inc., as Borrower, the banks and financial institutions listed therein, as Lenders and Swap Banks, HSH Nordbank AG, as Agent, Security Trustee, Lead Arranger and Lead Bookrunner, and The Governor and Company of the Bank of Scotland, as Joint Bookrunner, relating to a term loan and short-term credit facilities of up to$110,000,000, or the HSH Nordbank Junior Loan Agreement, incorporated by reference to Exhibit 4.5 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2005, filed with the SEC on April 21, 2006.
4.7	Supplemental Letter, dated May 15, 2006, to the HSH Nordbank Senior Loan Agreement and the HSH Nordbank Junior Loan Agreement, incorporated by reference to Exhibit 4.5 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.8	Supplemental Agreement, dated November 29, 2006, to the HSH Nordbank Senior Loan Agreement, incorporated by reference to Exhibit 4.5 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2007, filed with the SEC on March 31, 2008.
4.9	Supplemental Agreement, dated November 29, 2006, to the HSH Nordbank Junior Loan Agreement, incorporated by reference to Exhibit 4.6 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2007, filed with the SEC on March 31, 2008.
4.10	Amending and Restating Agreement, dated May 23, 2007, relating to the HSH Nordbank Senior Loan Agreement, as supplemented and amended by a supplemental letter dated May 15, 2006 and as further amended and supplemented by a supplemental agreement dated November 29, 2006, incorporated by reference to Exhibit 4.8 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2007, filed with the SEC on March 31, 2008.

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4.11	Amending and Restating Agreement, dated May 23, 2007, relating to the HSH Nordbank Junior Loan Agreement, as supplemented and amended by a supplemental letter dated May 15, 2006 and as further amended and supplemented by a supplemental agreement dated November 29, 2006, incorporated by reference to Exhibit 4.9 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2007, filed with the SEC on March 31, 2008
4.12	Supplemental Agreement, dated February 27, 2008, to the HSH Nordbank Senior Loan Agreement, as supplemented and amended by a supplemental letter dated May 15, 2006 and as further amended and supplemented by a supplemental agreement dated November 29, 2006 and as further amended and restated by an amending and restating agreement dated May 23, 2007, incorporated by reference to Exhibit 4.10 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2008, filed with the SEC on March 30, 2009.
4.13	Supplemental Agreement, dated February 27, 2008, to the HSH Nordbank Junior Loan Agreement, as supplemented and amended by a supplemental letter dated May 15, 2006 and as further amended and supplemented by a supplemental agreement dated November 29, 2006 and as further amended and restated by an amending and restating agreement dated May 23, 2007, incorporated by reference to Exhibit 4.11 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2008, filed with the SEC on March 30, 2009.
4.14	Supplemental Letter, dated April 23, 2008, to the HSH Nordbank Senior Loan Agreement, as supplemented and amended by a supplemental letter dated May 15, 2006, a supplemental agreement dated November 29, 2006 and a supplemental agreement dated February 27, 2008 and as amended and restated by an amending and restating agreement dated May 23, 2007, incorporated by reference to Exhibit 4.12 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2008, filed with the SEC on March 30, 2009.
4.15	Supplemental Letter, dated April 23, 2008, to the HSH Nordbank Junior Loan Agreement, as supplemented and amended by a supplemental letter dated May 15, 2006, a supplemental agreement dated November 29, 2006 and a supplemental agreement dated February 27, 2008 and as amended and restated by an amending and restating agreement dated May 23, 2007, incorporated by reference to Exhibit 4.13 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2008, filed with the SEC on March 30, 2009.
4.16	Supplemental Agreement, dated November 17, 2009, to the HSH Nordbank Senior Loan Agreement, as supplemented, amended and restated from time to time, incorporated by reference to Exhibit 4.15 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.17	Supplemental Agreement, dated November 17, 2009, to the HSH Nordbank Junior Loan Agreement, as supplemented, amended and restated from time to time, incorporated by reference to Exhibit 4.14 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.18	Supplemental Letter, dated September 29, 2010, to the HSH Nordbank Senior Loan Agreement, as supplemented, amended and restated from time to time, incorporated by reference to Exhibit 1 to the Report on Form 6-K of DryShips Inc., filed with the SEC on September 30, 2010.
4.19	Supplemental Letter, dated September 29, 2010, to the HSH Nordbank Junior Loan Agreement, as supplemented, amended and restated from time to time, incorporated by reference to Exhibit 2 to the Report on Form 6-K of DryShips Inc., filed with the SEC on September 30, 2010.
4.20	Supplemental Letter, dated February 9, 2012, to the HSH Nordbank Senior Loan Agreement, as supplemented, amended and restated from time to time, incorporated by reference to Exhibit 4.20 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.21	Supplemental Letter, dated February 9, 2012, to the HSH Nordbank Junior Loan Agreement, as supplemented, amended and restated from time to time, incorporated by reference to Exhibit 4.21 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.22	Pledge and Security Agreement, dated as of February 9, 2012, made by DryShips Inc. to HSH Nordbank AG, incorporated by reference to Exhibit 4.22 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.23	Uncertificated Securities Control Agreement, dated as of February 9, 2012, among DryShips Inc., HSH Nordbank AG and Ocean Rig UDW Inc., incorporated by reference to Exhibit 4.23 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.24	Supplemental Letter, dated September 27, 2012, to the HSH Nordbank Senior Loan Agreement, as supplemented, amended and restated from time to time, incorporated by reference to Exhibit 4.24 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2012 filed with the SEC on March 22, 2013.

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4.25	Supplemental Letter, dated September 27, 2012, to the HSH Nordbank Junior Loan Agreement, as supplemented, amended and restated from time to time, incorporated by reference to Exhibit 4.25 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2012 filed with the SEC on March 22, 2013.
4.26	Pledge and Security Agreement, dated as of September 27, 2012, made by DryShips Inc. to HSH Nordbank AG incorporated by reference to Exhibit 4.26 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2012 filed with the SEC on March 22, 2013.
4.27	Uncertificated Securities Control Agreement, dated as of September 27, 2012, among DryShips Inc., HSH Nordbank AG and Ocean Rig UDW Inc. incorporated by reference to Exhibit 4.27 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2012 filed with the SEC on March 22, 2013.
4.28	Loan Agreement, dated October 2, 2007, by and between Ioli Owning Company Limited and Deutsche Schiffsbank Aktiengesellschaft relating to a secured loan of up to $35,000,000, incorporated by reference to Exhibit 4.10 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2007, filed with the SEC on March 31, 2008.
4.29	Waiver Letter, dated December 11, 2009, to a Loan Agreement, dated October 2, 2007, by and between Ioli Owning Company Limited and Deutsche Schiffsbank Aktiengesellschaft relating to a secured loan of up to $35,000,000, incorporated by reference to Exhibit 4.21 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.30	First Supplemental Agreement, dated February 25, 2010, to a Loan Agreement, dated October 2, 2007, by and between Ioli Owning Company Limited and Deutsche Schiffsbank Aktiengesellschaft relating to a secured loan of up to $35,000,000, incorporated by reference to Exhibit 2 to the Report on Form 6-K of DryShips Inc., filed with the SEC on September 30, 2010.
4.31	Waiver Letter, dated May 19, 2010, to a Loan Agreement, dated October 2, 2007, by and between Ioli Owning Company Limited and Deutsche Schiffsbank Aktiengesellschaft relating to a secured loan of up to $35,000,000, as amended, incorporated by reference to Exhibit 4.23 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.32	Waiver Letter, dated September 22, 2010, to a Loan Agreement, dated October 2, 2007, by and between Ioli Owning Company Limited and Deutsche Schiffsbank Aktiengesellschaft relating to a secured loan of up to $35,000,000, as amended, incorporated by reference to Exhibit 1 to the Report on Form 6-K of DryShips Inc., filed with the SEC on September 30, 2010.
4.33	Waiver Letter, dated September 6, 2011, to a Loan Agreement, dated October 2, 2007, by and between Ioli Owning Company Limited and Deutsche Schiffsbank Aktiengesellschaft relating to a secured loan of up to $35,000,000, as amended, incorporated by reference to Exhibit 4.29 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.34	Second Supplemental Agreement, dated November 10, 2011, to a Loan Agreement, dated October 2, 2007, by and between Ioli Owning Company Limited and Deutsche Schiffsbank Aktiengesellschaft relating to a secured loan of up to $35,000,000, as amended and supplemented by a First Supplemental Agreement dated February 25, 2010, incorporated by reference to Exhibit 4.30 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.35	Loan Agreement, dated October 5, 2007, by and between Boone Star Owners Inc. and Iokasti Owning Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $90,000,000, incorporated by reference to Exhibit 4.22 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2008, filed with the SEC on March 30, 2009.
4.36	Waiver Letter, dated April 15, 2009, to a Loan Agreement, dated October 5, 2007, by and between Boone Star Owners Inc. and Iokasti Owning Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $90,000,000, incorporated by reference to Exhibit 4.26 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.37	First Supplemental Agreement, dated July 30, 2009, to a Loan Agreement, dated October 5, 2007, by and between Boone Star Owners Inc. and Iokasti Owning Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $90,000,000, incorporated by reference to Exhibit 4.21 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.38	Second Supplemental Agreement, dated August 25, 2010, to a Loan Agreement, dated October 5, 2007, by and between Boone Star Owners Inc. and Iokasti Owning Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $90,000,000, as amended and supplemented by a supplemental agreement dated July 30, 2009, incorporated by reference to Exhibit 4.28 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.

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4.39	Supplemental Letter, dated September 16, 2011, to a Loan Agreement, dated October 5, 2007, by and between Boone Star Owners Inc. and Iokasti Owning Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $90,000,000, as amended and supplemented, incorporated by reference to Exhibit 4.35 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.40	Loan Agreement, dated November 16, 2007, by and between Iason Owning Company Limited, as Borrower, and EFG Eurobank Ergasias S.A., as Bank, relating to a loan of up to $47,000,000, incorporated by reference to Exhibit 4.11 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2007, filed with the SEC on March 31, 2008.
4.41	Waiver Letter, dated February 25, 2009, to a Loan Agreement, dated November 16, 2007, by and between Iason Owning Company Limited, as Borrower, and EFG Eurobank Ergasias S.A., as Bank, relating to a loan of up to $47,000,000, incorporated by reference to Exhibit 4.30 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.42	Waiver Letter, dated November, 11, 2009, to a Loan Agreement, dated November 16, 2007, by and between Iason Owning Company Limited, as Borrower, and EFG Eurobank Ergasias S.A., as Bank, relating to a loan of up to $47,000,000, incorporated by reference to Exhibit 4.31 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.43	Waiver Letter, dated February 24, 2010, to a Loan Agreement, dated November 16, 2007, by and between Iason Owning Company Limited, as Borrower, and EFG Eurobank Ergasias S.A., as Bank, relating to a loan of up to $47,000,000, incorporated by reference to Exhibit 4.23 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.44	Supplemental Agreement, dated April 15, 2010, to a Loan Agreement, dated November 16, 2007, by and between Iason Owning Company Limited, as Borrower, and EFG Eurobank Ergasias S.A., as Bank, relating to a loan of up to $47,000,000, incorporated by reference to Exhibit 4.33 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.45	Second Supplemental Agreement, dated January 27, 2011, relating to a Loan Agreement, dated November 16, 2007, by and between Iason Owning Company Limited, as Borrower, and EFG Eurobank Ergasias S.A., as Bank, relating to a loan of up to $47,000,000, as amended and supplemented by a first supplemental agreement dated April 15, 2010, incorporated by reference to Exhibit 4.42 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.46	Supplemental Letter, dated June 29, 2011, to a Loan Agreement, dated November 16, 2007, by and between Iason Owning Company Limited, as Borrower, and EFG Eurobank Ergasias S.A., as Bank, relating to a loan of up to $47,000,000, as amended and supplemented by a first supplemental agreement dated April 15, 2010 and as further amended and supplemented by a second supplemental agreement dated January 27, 2011, incorporated by reference to Exhibit 4.41 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.47	Loan Agreement, dated December 4, 2007, by and among Team-Up Owning Company Limited and Orpheus Owning Company Limited, as Borrowers, the banks and financial institutions listed therein, as Banks, and DnB NOR Bank ASA, as Arranger, Agent, Security Agent and Account Bank, relating to a loan of up to $101,150,000, incorporated by reference to Exhibit 4.12 to the Annual Report on from 20-F of DryShips Inc. for the fiscal year ended December 31, 2007, filed with the SEC on March 31, 2008.
4.48	Waiver Letter, dated May 19, 2010, to a Loan Agreement, dated December 4, 2007, by and among Team-Up Owning Company Limited and Orpheus Owning Company Limited, as Borrowers, the banks and financial institutions listed therein, as Banks, and DnB NOR Bank ASA, as Arranger, Agent, Security Agent and Account Bank, relating to a loan of up to $101,150,000, incorporated by reference to Exhibit 4.35 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.

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4.49	Supplemental Agreement, dated June 11, 2009, to a Loan Agreement, dated December 4, 2007, by and among Team-Up Owning Company Limited and Orpheus Owning Company Limited, as Borrowers, the banks and financial institutions listed therein, as Banks, and DnB NOR Bank ASA, as Arranger, Agent, Security Agent and Account Bank, relating to a loan of up to $101,150,000, incorporated by reference to Exhibit 4.25 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.50	Second Supplemental Agreement, dated January 26, 2011, to a Loan Agreement, dated December 4, 2007, by and among Team-Up Owning Company Limited and Orpheus Owning Company Limited, as Borrowers, the banks and financial institutions listed therein, as Banks, and DnB NOR Bank ASA, as Arranger, Agent, Security Agent and Account Bank, relating to a loan of up to $101,150,000, as amended and supplemented by a first supplemental agreement dated 11 June 2009, incorporated by reference to Exhibit 4.47 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.51	Supplemental Letter, dated September 23, 2011, to a Loan Agreement, dated December 4, 2007, by and among Team-Up Owning Company Limited and Orpheus Owning Company Limited, as Borrowers, the banks and financial institutions listed therein, as Banks, and DnB NOR Bank ASA, as Arranger, Agent, Security Agent and Account Bank, relating to a loan of up to $101,150,000, as amended and supplemented by a first supplemental agreement dated 11 June 2009 and as further amended and supplemented by a second supplemental agreement dated 26 January 2011, incorporated by reference to Exhibit 4.46 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.52	Loan Agreement, dated March 13, 2008, by and among Annapolis Shipping Company Limited, Atlas Owing Company Limited, Farat Shipping Company Limited and Lansat Shipping Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $130,000,000, incorporated by reference to Exhibit 4.33 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2008, filed with the SEC on March 30, 2009.
4.53	First Supplemental Agreement, dated December 12, 2008, to a Loan Agreement, dated March 13, 2008, by and among Annapolis Shipping Company Limited, Atlas Owing Company Limited, Farat Shipping Company Limited and Lansat Shipping Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $130,000,000, incorporated by reference to Exhibit 4.35 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.54	Waiver Letter, dated April 15, 2009, to a Loan Agreement, dated March 13, 2008, by and among Annapolis Shipping Company Limited, Atlas Owing Company Limited, Farat Shipping Company Limited and Lansat Shipping Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $130,000,000, as amended and supplemented by a first supplemental agreement dated December 12, 2008, incorporated by reference to Exhibit 4.47 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.55	Second Supplemental Agreement, dated July 30, 2009, to a Loan Agreement, dated March 13, 2008, by and among Annapolis Shipping Company Limited, Atlas Owing Company Limited, Farat Shipping Company Limited and Lansat Shipping Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $130,000,000, as amended and supplemented by a first supplemental agreement dated December 12, 2008, incorporated by reference to Exhibit 4.36 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.56	Waiver Letter, dated November 27, 2009, to a Loan Agreement, dated March 13, 2008, by and among Annapolis Shipping Company Limited, Atlas Owing Company Limited, Farat Shipping Company Limited and Lansat Shipping Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $130,000,000, as amended and supplemented by a first supplemental agreement dated December 12, 2008 and a second supplemental agreement dated July 30, 2009, incorporated by reference to Exhibit 4.49 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.57	Amending and Restating Loan Agreement, dated January 25, 2010, to a Loan Agreement, dated March 13, 2008, by and among Annapolis Shipping Company Limited, Atlas Owing Company Limited, Farat Shipping Company Limited and Lansat Shipping Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $130,000,000, as amended and supplemented by a first supplemental agreement dated December 12, 2008 and a second supplemental agreement dated July 30, 2009, incorporated by reference to Exhibit 4.50 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.

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4.58	Amended and Restated Loan Agreement, dated August 25, 2010, relating to a Loan Agreement, dated March 13, 2008, by and among Annapolis Shipping Company Limited, Atlas Owing Company Limited, Farat Shipping Company Limited and Lansat Shipping Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $130,000,000, as amended and restated on January 25, 2010 and as further amended and restated on August 25, 2010, incorporated by reference to Exhibit 4.51 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.59	Amended and Restated Loan Agreement, dated November 29, 2010, relating to a Loan Agreement, dated March 13, 2008, by and among Annapolis Shipping Company Limited, Atlas Owing Company Limited, Farat Shipping Company Limited and Lansat Shipping Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $130,000,000, as amended and restated on January 25, 2010, August 25, 2010 and November 29, 2010, incorporated by reference to Exhibit 4.52 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.60	Supplemental Letter, dated September 16, 2011, to a Loan Agreement, dated March 13, 2008, by and among Annapolis Shipping Company Limited, Atlas Owing Company Limited, Farat Shipping Company Limited and Lansat Shipping Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $130,000,000, as novated, amended and restated, incorporated by reference to Exhibit 4.56 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.61	Loan Agreement, dated May 5, 2008, by and among Dalian Star Owners Inc., as Borrower, the banks and financial institutions listed therein, as Lenders, Dresdner Bank AG in Hamburg, as Agent and Security Trustee, and Dresdner Bank AG in Hamburg and West LB AG, as Swap Banks and Joint Arrangers, relating to a term loan facility of up to $90,000,000, incorporated by reference to Exhibit 4.34 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2008, filed with the SEC on March 30, 2009.
4.62	Waiver Letter, dated October 22, 2009, to a Loan Agreement, dated May 5, 2008, by and between Dalian Star Owners Inc., as Borrower, the banks and financial institutions listed therein, as Lenders, Dresdner Bank AG in Hamburg, as Agent and Security Trustee, and Dresdner Bank AG in Hamburg and West LB AG, as Swap Banks and Joint Arrangers, relating to a term loan facility of up to $90,000,000, incorporated by reference to Exhibit 4.38 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.63	Supplemental Agreement, dated May 10, 2010, to a Loan Agreement, dated May 5, 2008, by and among Dalian Star Owners Inc., as Borrower, the banks and financial institutions listed therein, as Lenders, Dresdner Bank AG in Hamburg, as Agent and Security Trustee, and Dresdner Bank AG in Hamburg and West LB AG, as Swap Banks and Joint Arrangers, relating to a term loan facility of up to $90,000,000, incorporated by reference to Exhibit 4.55 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.64	Loan Agreement, dated May 13, 2008, by and among Ionian Traders Inc. and Norwalk Star Owners Inc., as Borrowers, Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG and others, as Lenders, Deutsche Schiffsbank Aktiengesellschaft, as Agent and Security Agent, and Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG, as Swap Providers, relating to a secured loan of $125,000,000, incorporated by reference to Exhibit 4.38 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2008, filed with the SEC on March 30, 2009.
4.65	Waiver Letter, dated December 11, 2009, to a Loan Agreement, dated May 13, 2008, by and among Ionian Traders Inc. and Norwalk Star Owners Inc., as Borrowers, Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG and others, as Lenders, Deutsche Schiffsbank Aktiengesellschaft, as Agent and Security Agent, and Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG, as Swap Providers, relating to a secured loan of $125,000,000, incorporated by reference to Exhibit 4.58 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.66	First Supplemental Agreement, dated February 25, 2010, to a Loan Agreement, dated May 13, 2008, by and among Ionian Traders Inc. and Norwalk Star Owners Inc., as Borrowers, Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG and others, as Lenders, Deutsche Schiffsbank Aktiengesellschaft, as Agent and Security Agent, and Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG, as Swap Providers, relating to a secured loan of $125,000,000, incorporated by reference to Exhibit 4.44 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.67	Waiver Letter, dated May 19, 2010, to a Loan Agreement, dated May 13, 2008, by and among Ionian Traders Inc. and Norwalk Star Owners Inc., as Borrowers, Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG and others, as Lenders, Deutsche Schiffsbank Aktiengesellschaft, as Agent and Security Agent, and Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG, as Swap Providers, relating to a secured loan of $125,000,000, as amended, incorporated by reference to Exhibit 4.60 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.

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4.68	Waiver Letter, dated September 22, 2010, to a Loan Agreement, dated May 13, 2008, by and among Ionian Traders Inc. and Norwalk Star Owners Inc., as Borrowers, Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG and others, as Lenders, Deutsche Schiffsbank Aktiengesellschaft, as Agent and Security Agent, and Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG, as Swap Providers, relating to a secured loan of $125,000,000, as amended, incorporated by reference to Exhibit 1 to the Report on Form 6-K of DryShips Inc., filed with the SEC on September 30, 2010.
4.69	Waiver Letter, dated September 6, 2011, to a Loan Agreement, dated May 13, 2008, by and among Ionian Traders Inc. and Norwalk Star Owners Inc., as Borrowers, Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG and others, as Lenders, Deutsche Schiffsbank Aktiengesellschaft, as Agent and Security Agent, and Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG, as Swap Providers, relating to a secured loan of $125,000,000, as amended, incorporated by reference to Exhibit 4.66 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.70	Second Supplemental Agreement, dated November 10, 2011, to a Loan Agreement, dated May 13, 2008, by and among Ionian Traders Inc. and Norwalk Star Owners Inc., as Borrowers, Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG and others, as Lenders, Deutsche Schiffsbank Aktiengesellschaft, as Agent and Security Agent, and Deutsche Schiffsbank Aktiengesellschaft and Bayerische Hypo-Und Vereinsbank AG, as Swap Providers, relating to a secured loan of $125,000,000, as amended and supplemented by a First Supplemental Agreement dated February 25, 2010, incorporated by reference to Exhibit 4.67 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.71	Loan Agreement, dated June 20, 2008, by and among Aegean Traders Inc. and Iguana Shipping Company Limited, as Borrowers, and WestLB AG, as Lender, relating to a loan facility of up to $103,200,000, incorporated by reference to Exhibit 4.40 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2008, filed with the SEC on March 30, 2009.
4.72	Waiver Letter, dated July 22, 2009, to a Loan Agreement, dated June 20, 2008, by and among Aegean Traders Inc. and Iguana Shipping Company Limited, as Borrowers, and WestLB AG, as Lender, relating to a loan facility of up to $103,200,000, incorporated by reference to Exhibit 4.63 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.73	First Supplemental Agreement, dated October 8, 2009, to a Loan Agreement, dated June 20, 2008, by and among Aegean Traders Inc. and Iguana Shipping Company Limited, as Borrowers, and WestLB AG, as Lender, relating to a loan facility of up to $103,200,000, incorporated by reference to Exhibit 4.46 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.74	Waiver Letter, dated November 23, 2009, to a Loan Agreement, dated June 20, 2008, by and among Aegean Traders Inc. and Iguana Shipping Company Limited, as Borrowers, and WestLB AG, as Lender, relating to a loan facility of up to $103,200,000, as amended, incorporated by reference to Exhibit 4.65 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.75	Amending and Restating Loan Agreement, dated January 18, 2010, to a Loan Agreement, dated June 20, 2008, by and among Aegean Traders Inc. and Iguana Shipping Company Limited, as Borrowers, and WestLB AG, as Lender, relating to a loan facility of up to $103,200,000, as supplemented and amended by a first supplemental agreement dated October 8, 2009, incorporated by reference to Exhibit 4.66 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.76	Supplemental Letter, dated June 10, 2010, to a Loan Agreement, dated June 20, 2008, by and among Aegean Traders Inc. and Iguana Shipping Company Limited, as Borrowers, and WestLB AG, as Lender, relating to a loan facility of up to $103,200,000, as amended and supplemented by a supplemental agreement dated October 8, 2009 and as amended and restated by an amending and restating agreement dated January 18, 2010, incorporated by reference to Exhibit 4.67 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.

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4.77	Loan Agreement, dated July 23, 2008, by and among Cretan Traders Inc., as Borrower, the banks and financial institutions listed therein, as Lenders, and Norddeutsche Landesbank Girozentrale, as Swap Bank, Underwriter, Mandated Lead Arranger, Bookrunner, Agent and Security Trustee, relating to a term loan facility of up to $126,400,000, incorporated by reference to Exhibit 4.41 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2008, filed with the SEC on March 30, 2009.
4.78	Waiver Letter, dated July 24, 2009, to a Loan Agreement, dated July 23, 2008, by and among Cretan Traders Inc., as Borrower, the banks and financial institutions listed therein, as Lenders, and Norddeutsche Landesbank Girozentrale, as Swap Bank, Underwriter, Mandated Lead Arranger, Bookrunner, Agent and Security Trustee, relating to a term loan facility of up to $126,400,000, incorporated by reference to Exhibit 4.69 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.79	Supplemental Agreement, dated October 12, 2009, to a Loan Agreement, dated July 23, 2008, by and among Cretan Traders Inc., as Borrower, the banks and financial institutions listed therein, as Lenders, and Norddeutsche Landesbank Girozentrale, as Swap Bank, Underwriter, Mandated Lead Arranger, Bookrunner, Agent and Security Trustee, relating to a term loan facility of up to $126,400,000, incorporated by reference to Exhibit 4.48 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.80	Supplemental Letter, dated February 8, 2010, to a Loan Agreement, dated July 23, 2008, by and among Cretan Traders Inc., as Borrower, the banks and financial institutions listed therein, as Lenders, and Norddeutsche Landesbank Girozentrale, as Swap Bank, Underwriter, Mandated Lead Arranger, Bookrunner, Agent and Security Trustee, relating to a term loan facility of up to $126,400,000, as amended and supplemented by a supplemental agreement dated October 12, 2009, incorporated by reference to Exhibit 4.71 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.81	Supplemental Agreement, dated September 9, 2011, in relation to a Loan Agreement, dated July 23, 2008, by and among Cretan Traders Inc., as Borrower, the banks and financial institutions listed therein, as Lenders, and Norddeutsche Landesbank Girozentrale, as Swap Bank, Underwriter, Mandated Lead Arranger, Bookrunner, Agent and Security Trustee, relating to a term loan facility of up to $126,400,000, as amended and supplemented by a supplemental agreement dated October 12, 2009 and two supplemental letters dated July 24, 2009 and February 8, 2010, incorporated by reference to Exhibit 4.78 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.82	Supplemental Agreement, dated January 4, 2012, in relation to a Loan Agreement, dated July 23, 2008, by and among Cretan Traders Inc., as Borrower, the banks and financial institutions listed therein, as Lenders, and Norddeutsche Landesbank Girozentrale, as Swap Bank, Underwriter, Mandated Lead Arranger, Bookrunner, Agent and Security Trustee, relating to a term loan facility of up to $126,400,000, as amended and supplemented by two supplemental agreements dated October 12, 2009 and September 9, 2011 and two supplemental letters dated July 24, 2009 and February 8, 2010, incorporated by reference to Exhibit 4.79 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.83	Fourth Supplemental Agreement, dated August 31, 2012, in relation to a Loan Agreement, dated July 23, 2008, by and among Cretan Traders Inc., as Borrower, the banks and financial institutions listed therein, as Lenders, and Norddeutsche Landesbank Girozentrale, as Swap Bank, Underwriter, Mandated Lead Arranger, Bookrunner, Agent and Security Trustee, relating to a term loan facility of up to $126,400,000, as amended and supplemented by three supplemental agreements dated October 12, 2009, September 9, 2011 and January 4, 2012 and two supplemental letters dated July 24, 2009 and February 8, 2010 incorporated by reference to Exhibit 4.83 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2012 filed with the SEC on March 22, 2013.
4.84	Credit Facility Agreement, dated July 18, 2008, by and between Drillship Skopelos Owners Inc., as Owner, Deutsche Bank A.G., London Branch, as Bookrunner and Joint Mandated Lead Arranger, Dexia Credit Local, New York Branch, as Joint Mandated Lead Arranger, the various financial institutions listed therein, as Lenders, Deutsche Bank AG, London Branch and Dexia Credit Local, New York Branch, as Swap Banks, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to Exhibit 10.6 to the Post-Effective Amendment to the Registration Statement on Form F-3ASR of DryShips Inc. (File No. 333-146540), filed with the SEC on October 20, 2008.
4.85	Credit Facility Agreement, dated July 18, 2008, by and between Drillship Kithira Owners Inc., as Owner, Deutsche Bank A.G., London Branch, as Bookrunner and Joint Mandated Lead Arranger, Dexia Credit Local, New York Branch, as Joint Mandated Lead Arranger, the various financial institutions listed therein, as Lenders, Deutsche Bank AG, London Branch and Dexia Credit Local, New York Branch, as Swap Banks, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to Exhibit 10.7 to the Post-Effective Amendment to the Registration Statement on Form F-3ASR of DryShips Inc. (File No. 333-146540), filed with the SEC on October 20, 2008.

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4.86	Supplemental Agreement, dated September 17, 2008, by and between Drillship Skopelos Owners Inc., as Owner, Deutsche Bank A.G., London Branch, as Bookrunner and Joint Mandated Lead Arranger, Dexia Credit Local, New York Branch, as Joint Mandated Lead Arranger, Deutsche Bank AG, London Branch and Dexia Credit Local, New York Branch, as Swap Banks, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, relating to a $562,500,000 Credit Facility Agreement, dated July 18, 2008, incorporated by reference to Exhibit 4.51 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.87	Supplemental Agreement, dated September 17, 2008, relating to a Credit Facility Agreement, dated July 18, 2008, by and between Drillship Kithira Owners Inc., as Owner, Deutsche Bank A.G., London Branch, as Bookrunner and Joint Mandated Lead Arranger, Dexia Credit Local, New York Branch, as Joint Mandated Lead Arranger, Deutsche Bank AG, London Branch and Dexia Credit Local, New York Branch, as Swap Banks, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, relating to a $562,500,000 Credit Facility Agreement, dated July 18, 2008, incorporated by reference to Exhibit 4.52 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.88	Supplemental Agreement No. 2, dated December 18, 2008, by and between Drillship Skopelos Owners Inc., as Owner, Deutsche Bank A.G., London Branch, as Bookrunner and Joint Mandated Lead Arranger, Dexia Credit Local, New York Branch, as Joint Mandated Lead Arranger, Deutsche Bank AG, London Branch and Dexia Credit Local, New York Branch, as Swap Banks, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, relating to a $562,500,000 Credit Facility Agreement, dated July 18, 2008, as amended and supplemented by a Supplemental Agreement dated September 17, 2008, incorporated by reference to Exhibit 4.53 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.89	Supplemental Agreement No. 2, dated December 18, 2008, relating to a Credit Facility Agreement, dated July 18, 2008, by and between Drillship Kithira Owners Inc., as Owner, Deutsche Bank A.G., London Branch, as Bookrunner and Joint Mandated Lead Arranger, Dexia Credit Local, New York Branch, as Joint Mandated Lead Arranger, Deutsche Bank AG, London Branch and Dexia Credit Local, New York Branch, as Swap Banks, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, relating to a $562,500,000 Credit Facility Agreement, dated July 18, 2008, as amended and supplemented by a Supplemental Agreement dated September 17, 2008, incorporated by reference to Exhibit 4.54 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.90	Waiver Letter, dated May 21, 2009, relating to a $562,500,000 Credit Facility Agreement, dated July 18, 2008, as amended and supplemented by the supplemental agreement dated September 17, 2008 and the supplemental agreement No. 2 dated December 18, 2008, by and among (among others) Drillship Skopelos Owners Inc., as Owner, the Lenders under the Credit Agreement, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to Exhibit 4.78 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.91	Waiver Letter, dated May 21, 2009, relating to a $562,500,000 Credit Facility Agreement, dated July 18, 2008, as amended and supplemented by the supplemental agreement dated September 17, 2008 and the supplemental agreement No. 2 dated December 18, 2008, by and among (among others) Drillship Kithira Owners Inc., as Owner, the Lenders under the Credit Agreement, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to Exhibit 4.79 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.92	Facility Agent's and Security Trustee's Consent Letter, dated June 5, 2009, relating to a $562,500,000 Credit Facility Agreement, dated July 18, 2008, as amended and supplemented by the supplemental agreement dated September 17, 2008 and the supplemental agreement No. 2 dated December 18, 2008, by and among (among others) Drillship Skopelos Owners Inc., as Owner, the Lenders under the Credit Agreement, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to Exhibit 4.80 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 310, 2010, filed with the SEC on April 15, 2011.

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4.93	Facility Agent's and Security Trustee's Consent Letter, dated June 5, 2009, relating to a $562,500,000 Credit Facility Agreement, dated July 18, 2008, as amended and supplemented by the supplemental agreement dated September 17, 2008 and the supplemental agreement No. 2 dated December 18, 2008, by and among (among others) Drillship Kithira Owners Inc., as Owner, the Lenders under the Credit Agreement, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to Exhibit 4.81 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.94	Supplemental Agreement No. 3, dated January 29, 2010, by and among Drillship Skopelos Owners Inc., as Owner, Deutsche Bank A.G., London Branch, as Bookrunner and Joint Mandated Lead Arranger, Dexia Credit Local, New York Branch, as Joint Mandated Lead Arranger, Deutsche Bank AG, London Branch and Dexia Credit Local, New York Branch, as Swap Banks, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, relating to $562,500,000 Credit Facility Agreement as amended and supplemented by a Supplemental Agreement dated September 17, 2008 and a Supplemental Agreement No. 2 dated December 18, 2008, incorporated by reference to Exhibit 4.55 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.95	Supplemental Agreement No. 3, dated January 29, 2010, by and among Drillship Kithira Owners Inc., as Owner, Deutsche Bank A.G., London Branch, as Bookrunner and Joint Mandated Lead Arranger, Dexia Credit Local, New York Branch, as Joint Mandated Lead Arranger, Deutsche Bank AG, London Branch and Dexia Credit Local, New York Branch, as Swap Banks, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, relating to $562,500,000 Credit Facility Agreement as amended and supplemented by a Supplemental Agreement dated September 17, 2008 and a Supplemental Agreement No. 2 dated December 18, 2008, incorporated by reference to Exhibit 4.56 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2009, filed with the SEC on April 9, 2010.
4.96	Facility Agent's Consent Letter, dated June 23, 2010 relating to a $562,500,000 Credit Facility Agreement, dated July 18, 2008, as amended and supplemented by the supplemental agreement dated September 17, 2008, the supplemental agreement no. 2 dated December 18, 2008 and the supplemental agreement no. 3 dated January 29, 2010, by and between (among others) Drillship Skopelos Owners Inc., as Owner, certain Lenders referred to therein, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to Exhibit 4.84 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.97	Facility Agent's Consent Letter, dated June 23, 2010, relating to a $562,500,000 Credit Facility Agreement, dated July 18, 2008, as amended and supplemented by the supplemental agreement dated September 17, 2008, the supplemental agreement no. 2 dated December 18, 2008 and the supplemental agreement no. 3 dated January 29, 2010, by and between (among others) Drillship Kithira Owners Inc., as Owner, certain Lenders referred to therein, Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to Exhibit 4.85 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.98	Amendment and Restatement Agreement to the Credit Agreement, dated April 27, 2011, by and among Drillship Skopelos Owners Inc., as Owner, Deutsche Bank A.G., London Branch, as Bookrunner and Joint Mandated Lead Arranger, Deutsche Bank AG, London Branch, as Swap Bank, Deutsche Bank Luxembourg S.A., as Facility Agent for itself and on behalf of the various financial institutions as Lenders, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to exhibit 10.32 to the Registration Statement on Form F-4 of Ocean Rig UDW Inc. (Registration No. 333-175940), filed with the SEC on August 1, 2011.
4.99	Amendment and Restatement Agreement to the Credit Agreement, dated April 27, 2011, by and among Drillship Kithira Owners Inc., as Owner, Deutsche Bank A.G., London Branch, as Bookrunner and Joint Mandated Lead Arranger, Deutsche Bank AG, London Branch, as Swap Bank, Deutsche Bank Luxembourg S.A., as Facility Agent for itself and on behalf of the various financial institutions as Lenders, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to exhibit 10.33 to the Registration Statement on Form F-4 of Ocean Rig UDW Inc. (Registration No. 333-175940), filed with the SEC on August 1, 2011.

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4.100	Amendment Agreement to the Credit Agreement, dated August 10, 2011, by and among Drillship Skopelos Owners Inc., as Owner, DryShips Inc., as Sponsor and Ocean Rig UDW Inc., as Ocean Rig guarantor, Deutshce Bank AG, London Branch, as Bookrunner and Mandated Lead Arranger, Deutsche Bank AG, London Branch, as Swap Bank, Deutsche Bank Luxembourg S.A., as Facility Agent for itself and on behalf of various financial institutions as Lenders, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to exhibit 10.34 to the Registration Statement on Form F-4/A of Ocean Rig UDW Inc. (Registration No. 333-175940), filed with the SEC on August 17, 2011.
4.101	Sponsor Construction and Post-Delivery Guarantee, dated July 18, 2008, between DryShips Inc., as Guarantor, Deutsche Bank Luxembourg S.A., as Facility Agent, various financial institutions, as Lenders, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to exhibit 10.34 to the Registration Statement on Form F-4 of Ocean Rig UDW Inc. (Registration No. 333-175940), filed with the SEC on August 1, 2011.
4.102	Sponsor Construction and Post-Delivery Guarantee, dated July 18, 2008, between DryShips Inc., as Guarantor, Deutsche Bank Luxembourg S.A., as Facility Agent, various financial institutions, as Lenders, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to exhibit 10.35 to the Registration Statement on Form F-4 of Ocean Rig UDW Inc. (Registration No. 333-175940) filed with the SEC on August 1, 2011.
4.103	Ocean Rig Guarantee, dated April 27, 2011, between Ocean Rig UDW Inc., as Guarantor, Deutsche Bank Luxembourg S.A., as Facility Agent for itself and on behalf of various financial institutions as Lenders, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to exhibit 10.36 to the Registration Statement on Form F-4 of Ocean Rig UDW Inc. (Registration No. 333-175940) filed with the SEC on August 1, 2011.
4.104	Ocean Rig Guarantee, dated April 27, 2011, between Ocean Rig UDW Inc., as Guarantor, Deutsche Bank Luxembourg S.A., as Facility Agent for itself and on behalf of various financial institutions as Lenders, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to exhibit 10.37 to the Registration Statement on Form F-4 of Ocean Rig UDW Inc. (Registration No. 333-175940) filed with the SEC on August 1, 2011.
4.105	Credit Facility Agreement, dated July 18, 2008, by and among Drillship Skopelos Owners Inc., as Owner, Deutsche Bank AG, London Branch, as Bookrunner and Mandated Lead Arranger, various financial institutions, as Lenders, Deutsche Bank AG, London Branch, as Swap Bank, and Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, as amended and supplemented from time to time and most recently amended and restated on May 14, 2012, incorporated by reference to exhibit 4.31 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.
4.106	Credit Facility Agreement, dated July 18, 2008, by and among Drillship Kithira Owners Inc., as Owner, Deutsche Bank AG, London Branch, as Bookrunner and Mandated Lead Arranger, various financial institutions, as Lenders, Deutsche Bank AG, London Branch, as Swap Bank, and Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, as amended and supplemented from time to time and most recently amended and restated on May 14, 2012, incorporated by reference to exhibit 4.32 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.
4.107	Sponsor Guarantee, dated May 14, 2012, between DryShips Inc., as Guarantor, Deutsche Bank Luxembourg S.A., as Facility Agent for itself and on behalf of various financial institutions, as Lenders, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to exhibit 4.33 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.
4.108	Sponsor Guarantee, dated May 14, 2012, between DryShips Inc., as Guarantor, Deutsche Bank Luxembourg S.A., as Facility Agent for itself and on behalf of various financial institutions, as Lenders, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, incorporated by reference to exhibit 4.34 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.
4.109	Deed of Release and Amendment, dated May 14, 2012, by and among Drillship Skopelos Owners Inc., as Owner, Ocean Rig Drilling Operations B.V., as Bareboat Charterer, DryShips Inc., as Sponsor, Ocean Rig UDW Inc., Drillships Investment Inc., Skopelos Shareholders Inc., Deutsche Bank AG, London Branch, as Swap Bank, Deutsche Bank Luxembourg S.A., as Facility Agent on behalf of various financial institutions as Lenders, Deutsche Bank AG Filiale Deutschlandgescharft, as Security Trustee, Deutshce Bank AG, London Branch, as Bookrunner and Mandated Lead Arranger, and Deutsche Bank AG, London Branch, as Account Bank, incorporated by reference to exhibit 4.35 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.

    4.110 Deed of Release and Amendment, dated May 14, 2012, by and among Drillship Kithira Owners Inc., as Owner, Ocean Rig Poseidon Operations Inc., as Bareboat Charterer, DryShips Inc., as Sponsor, Ocean Rig UDW Inc., Drillships Investment Inc., Kithira Shareholders Inc., Deutsche Bank AG, London Branch, as Swap Bank, Deutsche Bank Luxembourg S.A., as Facility Agent on behalf of various financial institutions as Lenders, Deutsche Bank AG Filiale Deutschlandgescharft, as Security Trustee, Deutshce Bank AG, London Branch, as Bookrunner and Mandated Lead Arranger, and Deutsche Bank AG, London Branch, as Account Bank, incorporated by reference to exhibit 4.36 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.

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4.111	Addendum No. 2, dated May 18, 2012, to an Amended and Restated Guarantee, Revolving Credit and Term Loan Facility Agreement, dated November 19, 2009, by and among Ocean Rig ASA, Ocean Rig Norway AS and Drill Rigs Holdings Inc., as borrowers, the guarantors listed therein, as original guarantors, the financial institutions listed therein, as banks, DNB Bank ASA, as guarantee bank, DNB Bank ASA, as mandated lead arranger and bookrunner, HSH Nordbank AG, Nordea Bank Norge ASA and Skandinaviska Enskilda Banken AB (Publ), as mandated lead arrangers, and DNB Bank ASA, as agent, for $1,040,000,000, incorporated by reference to exhibit 4.9 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.
4.112	Loan Agreement, dated February 7, 2011, by and among Olympian Zeus Owners Inc. and Olympian Apollo Owners Inc., as joint and several Borrowers, the banks and financial institutions set forth therein, Nordea Bank Finland, plc, London Branch, as Arranger, Agent, Security Agent and Account Bank, and Nordea Bank Finland plc, as Swap Provider, relating to a term loan of up to $70,000,000, incorporated by reference to Exhibit 4.119 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.113	Senior Secured Credit Facility Agreement, dated April 15, 2011, by and among Drillships Holdings Inc., as Borrower, the banks and financial institutions named therein, as Mandated Lead Arrangers and Lenders, and Nordea Bank Finland plc, London Branch, as Agent, relating to a credit facility of $800,000,000, incorporated by reference to exhibit 10.4 to the Registration Statement on Form F-4 of Ocean Rig UDW Inc.  (Registration No. 333-175940), filed with the SEC on August 1, 2011.
4.114	Amendment Agreement, dated May 9, 2012, to the Senior Secured Credit Facility Agreement, dated April 15, 2011, by and among Drillships Holdings Inc., as Borrower, the banks and financial institutions named therein, as Mandated Lead Arrangers and Lenders, and Nordea Bank Finland plc, London Branch, as Agent, relating to a credit facility of $800,000,000, incorporated by reference to exhibit 4.8 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.
4.115	Loan Agreement, dated October 26, 2011, by and among Olympian Ares Owners Inc., Olympian Artemis Owners Inc., Olympian Demeter Owners Inc. and Olympian Poseidon Owners Inc., as joint and several Borrowers, ABN AMRO Bank N.V. and The Export-Import Bank of Korea, as joint Arrangers, ABN AMRO Bank N.V., as Facility Agent, Security Trustee, Account Bank and Swap Provider, The Export-Import Bank of Korea, as loan provider, and the banks and financial institutions listed therein, as Commercial Lenders, relating to a loan of $141,350,000, incorporated by reference to Exhibit 4.105 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.116	Loan Agreement, dated February 14, 2012, for a loan of up to $122,580,000, by and among Oceanview Owners Limited, Oceansurf Owners Limited and Oceancentury Owners Limited, as joint and several Borrowers, arranged by China Development Bank Corporation, as Mandated Lead Arranger and Bank of China, as Coordinating Mandated Lead Arranger, with China Development Bank Corporation and Bank of China Limited, as Original Lenders, with China Development Bank Corporation, as Facility Agent, and China Development Bank Corporation, as Security Agent, incorporated by reference to Exhibit 4.106 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.117	Commitment Letter, dated February 13, 2012, by and between the Company and HSH Nordbank AG relating to a term loan facility of up to $87,653,740, incorporated by reference to Exhibit 4.107 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.118	Loan Agreement, dated March 19, 2012, by and among Amathus Owning Company Limited, Symi Owners Inc. and Kalymnos Owners Inc., as joint and several Borrowers, and the banks and financial institutions listed therein, as Lenders, and HSH Nordbank AG, as Agent, Mandated Lead Arranger, Swap Bank and Security Trustee, relating to a loan facility of up to $87,653,740, incorporated by reference to Exhibit 4.118 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2012 filed with the SEC on March 22, 2013.

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4.119	Amended and Restated Loan Agreement, dated February 12, 2008, by and among OceanFreight Inc., as Borrower, the subsidiaries of OceanFreight Inc. listed therein, as Joint and Several Guarantors, the banks and financial institutions listed therein, as Lenders, Nordea Bank Norge ASA, acting through its Grand Cayman branch, as Lead Arranger and Bookrunner, Nordea Bank Finland plc, acting through its New York branch, as Administrative Agent and Security Trustee, Bank of Scotland plc, Piraeus Bank A.E. and Skandinaviska Enskilda Banken AB, as Co-Arrangers, and Nordea Bank Finland plc, acting through its New York branch, as Swap Bank, relating to a $325,000,000 senior secured credit facility and a $125,000,000 secured term loan facility, incorporated by reference to Exhibit 4.5 to the Annual Report on Form 20-F of OceanFreight Inc. for the fiscal year ended December 31, 2007, filed with the SEC on March 7, 2008.
4.120	First Amendatory Agreement to an Amended and Restated Loan Agreement, dated February 12, 2008, by and among OceanFreight Inc., as Borrower, the subsidiaries of OceanFreight Inc. listed therein, as Joint and Several Guarantors, the banks and financial institutions listed therein, as Lenders, Nordea Bank Norge ASA, acting through its Grand Cayman branch, as Lead Arranger and Bookrunner, Nordea Bank Finland plc, acting through its New York branch, as Administrative Agent and Security Trustee, Bank of Scotland plc, Piraeus Bank A.E. and Skandinaviska Enskilda Banken AB, as Co-Arrangers, and Nordea Bank Finland plc, acting through its New York branch, as Swap Bank, relating to a $325,000,000 senior secured credit facility and a $125,000,000 secured term loan facility, incorporated by reference to Exhibit 4.9 of the Report on Form 6-K of OceanFreight Inc., filed with the SEC on February 2, 2009.
4.121	Second Amendatory Agreement, dated August 8, 2011, amending and supplementing the Amended and Restated Loan Agreement, dated February 12, 2008, by and among OceanFreight Inc., as Borrower, the subsidiaries of OceanFreight Inc. listed therein, as Joint and Several Guarantors, the banks and financial institutions listed therein, as Lenders, Nordea Bank Norge ASA, acting through its Grand Cayman branch, as Lead Arranger and Bookrunner, Nordea Bank Finland plc, acting through its New York branch, as Administrative Agent and Security Trustee, Bank of Scotland plc, Piraeus Bank A.E. and Skandinaviska Enskilda Banken AB, as Co-Arrangers, and Nordea Bank Finland plc, acting through its New York branch, as Swap Bank, as amended by a First Amendatory Agreement dated January 9, 2009, incorporated by reference to Exhibit 4.110 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.122	Guarantee, dated August 23, 2011, by DryShips Inc., as Guarantor, in favor of Nordea Bank Finland PLC, New York Branch, as Security Trustee, incorporated by reference to Exhibit 4.111 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.123	Loan Agreement, dated April 20, 2011, by and between Olympian Hera Owners Inc., as Borrower, the banks and financial institutions set out therein, as Banks, and DVB Bank SE, as Arranger, Agent and Security Agent, relating to a term loan of up to $32,312,500, incorporated by reference to Exhibit 4.112 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 16, 2012.
4.124	Supplemental Agreement, dated July 31, 2012, to a Loan Agreement, dated April 20, 2011, by and between Olympian Hera Owners Inc., as Borrower, the banks and financial institutions set out therein, as Banks, and DVB Bank SE, as Arranger, Agent and Security Agent, relating to a term loan of up to $32,312,500, incorporated by reference to Exhibit 4.124 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2012 filed with the SEC on March 22, 2013.
4.125	Loan Agreement, dated October 24, 2012, by and among Olympian Athena Owners Inc., Olympian Aphrodite Owners Inc. and Olympian Dionysus Owners Inc., as joint and several borrowers, ABN AMRO Bank N.V. and The Korea Development Bank, as joint mandated Arrangers, ABN AMRO Bank N.V., as Facility Agent, Security Trustee, Account Bank, Swap Provider and K-sure Agent, and the banks and financial institutions listed therein, as Lenders, relating to a $107,668,750 loan, incorporated by reference to Exhibit 4.125 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2012 filed with the SEC on March 22, 2013.
4.126	Share Lending Agreement, dated November 19, 2009, between DryShips Inc. and Deutsche Bank AG, London Branch, incorporated by reference to Exhibit 4 to the Report on Form 6-K of DryShips Inc., filed with the SEC on November 25, 2009.
4.127	Share Lending Agreement, dated April 21, 2010, by and between DryShips Inc. and Deutsche Bank AG, London Branch, incorporated by reference to Exhibit 3 to the Report on Form 6-K of DryShips Inc., filed with the SEC on April 27, 2010.
4.128	Form of Vessel Management Agreement, dated January 1, 2011 with TMS Bulkers Ltd., incorporated by reference to Exhibit 4.112 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.

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4.129	Form of Vessel Management Agreement, dated December 28, 2010 with TMS Tankers Ltd., incorporated by reference to Exhibit 4.113 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.130	Consultancy Agreement, dated September 1, 2010, by and between DryShips Inc. and Vivid Finance Inc., incorporated by reference Exhibit 2 to the Report on Form 6-K of DryShips Inc., filed with the SEC on September 7, 2010, incorporated by reference to Exhibit 4.114 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011
4.131	Addendum No. 1, dated January 1, 2013, to the Consultancy Agreement, dated September 1, 2010, by and between the Company and Vivid Finance Inc., incorporated by reference to exhibit 4.41 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.
4.132	Global Services Agreement, dated December 1, 2010, by and between DryShips Inc. and Cardiff Marine Inc., incorporated by reference to Exhibit, incorporated by reference to Exhibit 4.115 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011.
4.133	Termination Agreement, dated January 1, 2013, by and between DryShips Inc. and Cardiff Marine Inc., relating to the Global Services Agreement, dated December 1, 2010, by and between DryShips Inc. and Cardiff Marine Inc., incorporated by reference to exhibit 4.38 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.
4.134	Drillship Master Agreement, dated November 22, 2010, by and between DryShips Inc. and Samsung Heavy Industries Co., Ltd., incorporated by reference to Exhibit 4.116 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011
4.135	Novation Agreement, dated December 30, 2010, by and between DryShips Inc., Ocean Rig UDW Inc. and Samsung Heavy Industries Co., Ltd., incorporated by reference to Exhibit 4.117 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2010, filed with the SEC on April 15, 2011
4.136	Addendum No. 1, dated May 16, 2011, to a Drillship Master Agreement, dated November 22, 2010, between DryShips Inc. and Samsung Heavy Industries Co., Ltd., as novated by a Novation Agreement, dated December 30, 2010, between Samsung Heavy Industries Co., Ltd., DryShips Inc. and Ocean Rig UDW Inc., incorporated by reference to Exhibit 10.3 of the Registration Statement on Form F-4 of Ocean Rig UDW Inc. (Registration No. 333-175940), filed with the SEC on August 1, 2011
4.137	Addendum No. 2, dated January 27, 2012, to a Drillship Master Agreement, dated November 22, 2010, between DryShips Inc. and Samsung Heavy Industries Co., Ltd., as novated by a Novation Agreement, dated December 30, 2010 and as amended by Addendum No. 1 dated May 16, 2011, incorporated by reference to Exhibit 4.3 of the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2011, filed with the SEC on March 13, 2012
4.138	Addendum No. 3 dated April 2, 2012, to a Drillship Master Agreement, dated November 22, 2010, between DryShips Inc. and Samsung Heavy Industries Co., Ltd., as novated by a Novation Agreement, dated December 30, 2010 and as amended, incorporated by reference to exhibit 4.5 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.
4.139	Addendum No. 4, dated September 3, 2012, to a Drillship Master Agreement, dated November 22, 2010, between DryShips Inc. and Samsung Heavy Industries Co., Ltd., as novated by a Novation Agreement, dated December 30, 2010 and as amended, incorporated by reference to exhibit 4.6 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.
4.140	Agreement and Plan of Merger, dated July 26, 2011, by and among DryShips Inc., Pelican Stockholdings Inc. and OceanFreight Inc., incorporated by reference to Exhibit 99.1 to the Registration Statement on Form F-4 of Ocean Rig UDW Inc. (File No. 333-176641), filed with the SEC on September 1, 2011.

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4.141	Purchase and Sale Agreement, dated July 26, 2011, by and among DryShips Inc., OceanFreight Inc., Basset Holdings Inc., Steel Wheel Investments Limited and Haywood Finance Limited, incorporated by reference to Exhibit 99.2 to the Registration Statement on Form F-4 of Ocean Rig UDW Inc. (File No. 333-176641), filed with the SEC on September 1, 2011.
4.142	Form of Vessel Management Agreement, dated June 15, 2010 with TMS Dry Ltd., incorporated by reference to Exhibit 4.6 to the Annual Report on Form 20-F of OceanFreight Inc., filed with the SEC on April 14, 2011
4.143	Form of Novation Agreement, dated December 30, 2011, between DryShips Inc., TMS Dry Ltd. and TMS Bulkers Ltd., incorporated by reference to exhibit 4.130 to the Annual Report on Form 20-F of DryShips Inc. filed with the SEC on March 16, 2012.
4.144	Registration Rights Agreement, dated as of March 20, 2012, by and between DryShips Inc. and Ocean Rig UDW Inc., incorporated by reference to exhibit 4.4 to the Registration Statement on Form F-1 of Ocean Rig UDW Inc. (Registration No. 333-180241), filed with the SEC on March 20, 2012.
4.145	Facilities Agreement, dated February 28, 2013, by and among Drillships Ocean Ventures Inc., as Borrower, and Ocean Rig UDW Inc., as Parent and Guarantor, and the companies listed therein, as Guarantors, and the banks and financial institutions named therein, as Mandated Lead Arrangers, with the banks and financial institutions named therein, as Lenders under the Commercial Facilities, Eksportkreditt Norge AS, as Lender under the Eksportkreditt/GEIK Facilities, The Export-Import Bank of Korea, as Lender under the Kexim Facilities, and DNB Bank ASA, as Facility Agent and Security Agent, relating to $1,350,000,000 of Term Loan Facilities, incorporated by reference to exhibit 4.44 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2012, filed with the SEC on March 22, 2013.

4.146	Novation Agreement and accompanying agreement dated April 17, 2013, by and among Amazon Owning Company Limited, Rightmove Owners Inc., Shanghai Jiangnan-Chiangxing Shipbuilding Co., Ltd., and China Shipbuilding Trading Company, Limited relating to Hull 1239, incorporated by reference to exhibit 4.146 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.147	Novation Agreement and accompanying agreement dated April 17, 2013, by and among Pasifai Owning Company Limited, Gratis Owners Inc., Shanghai Jiangnan-Chiangxing Shipbuilding Co., Ltd., and China Shipbuilding Trading Company, Limited relating to Hull 1240, incorporated by reference to exhibit 4.147 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.148	Waiver Letter dated May 27, 2013 to the Credit Facility Agreement, dated July 18, 2008, by and among Drillship Kithira Owners Inc., as Owner, Deutsche Bank AG, London Branch, as Bookrunner and Mandated Lead Arranger, various financial institutions, as Lenders, Deutsche Bank AG, London Branch, as Swap Bank, and Deutsche Bank Luxembourg S.A., as Facility Agent, and Deutsche Bank AG Filiale Deutschlandgeschaft, as Security Trustee, as amended and supplemented from time to time and most recently amended and restated on May 14, 2012, incorporated by reference to exhibit 4.45 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.149	Amendment No. 1 to Pledge and Security Agreement, dated as of September 27, 2012, made by DryShips Inc. to HSH Nordbank AG., dated June 21, 2013, incorporated by reference to exhibit 4.149 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.150	Waiver Letter, dated June 25, 2013, relating to a Senior Secured Credit Facility Agreement, dated April 15, 2011, by and among Drillships Holdings Inc., as Borrower, the banks and financial institutions named therein, as Mandated Lead Arrangers and Lenders, and Nordea Bank Finland plc, London Branch, as Agent, relating to a credit facility of $800,000,000, incorporated by reference to exhibit 4.46 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.151	Credit Agreement, dated July 12, 2013, by and among Drillships Finance Holding Inc., as Borrower, Ocean Rig UDW Inc., as Parent, Deutsche Bank AG New York Branch, as Administrative Agent and the companies listed therein, and the banks and financial institutions named therein, as Joint Global Coordinators, Joint Lead Arrangers and Joint Bookrunners and the banks and financial institutions named therein, as Joint Lead Arrangers and Joint Bookrunners, relating to a combined $1.8 billion of Tranche B-1 and Tranche B-2 Term Loans incorporated by reference to exhibit 4.47 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.152	Incremental Amendment, dated July 26, 2013, by and among Drillships Finance Holding Inc., as Borrower, Ocean Rig UDW Inc., as Parent, Deutsche Bank AG New York Branch, as Administrative Agent under the Credit Agreement, dated July 12, 2013 (the "July 12, 2013, Credit Agreement"), and the Incremental Lenders, as defined therein, relating to an increase of $100,000,000 under the July 12, 2013 Credit Agreement, incorporated by reference to exhibit 4.48 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.

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4.153	Amended and Restated Loan Agreement, dated August 1, 2013, relating to a Loan Agreement, dated March 13, 2008, by and among Annapolis Shipping Company Limited, Atlas Owing Company Limited, Farat Shipping Company Limited and Lansat Shipping Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $130,000,000, as amended and restated on January 25, 2010 and as further amended and restated on August 25, 2010, incorporated by reference to Exhibit 4.153 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.154	Third Supplement Agreement dated August 1, 2013, relating to Loan Agreement, dated October 5, 2007, by and between Boone Star Owners Inc. and Iokasti Owning Company Limited, as Borrowers, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $90,000,000, as amended, incorporated by reference to Exhibit 4.154 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.155	Amending and Restating Agreement dated August 30, 2013 relating to the Facilities Agreementby and among Drillships Ocean Ventures Inc., as Borrower, and Ocean Rig UDW Inc., as Parent and Guarantor, and the companies listed therein, as Guarantors, and the banks and financial institutions named therein, as Mandated Lead Arrangers, with the banks and financial institutions named therein, as Lenders under the Commercial Facilities, Eksportkreditt Norge AS, as Lender under the Eksportkreditt/GEIK Facilities, The Export-Import Bank of Korea, as Lender under the Kexim Facilities, and DNB Bank ASA, as Facility Agent and Security Agent, relating to $1,350,000,000 of Term Loan Facilities originally dated February 28, 2013 incorporated by reference to exhibit 4.49 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.156	Consultancy Agreement, dated September 9, 2013, by and Eastern Med Consultants Inc., an indirect wholly owned subsidiary of Ocean Rig UDW Inc., and Azara Services S.A. incorporated by reference to exhibit 4.52 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.157	Amendment Number 2 to Uncertificated Securities Control Agreement, dated as of September 27, 2012, as amended among DryShips Inc., HSH Nordbank AG and Ocean Rig UDW Inc., dated September 9, 2013, incorporated by reference to exhibit 4.50 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.158	Amendment Number 3 to Pledge and Security Agreement, dated as of September 27, 2012, as amended, among DryShips Inc., HSH Nordbank AG and Ocean Rig UDW Inc., dated November 14, 2013.
4.159	Amendment Number 3 to Uncertificated Securities Control Agreement, dated as of September 27, 2012, as amended, among DryShips Inc., HSH Nordbank AG and Ocean Rig UDW Inc., dated November 14, 2013, incorporated by reference to exhibit 4.51 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.160	Supplement to Loan Agreement dated November 18, 2013, to the original Loan Agreement dated March 31, 2006, by and between DryShips Inc., as Borrower, the banks and financial institutions listed therein, as Lenders and Swap Banks, HSH Nordbank AG, as Agent, Security Trustee, Lead Arranger and Lead Bookrunner, and The Governor and Company of the Bank of Scotland, as Joint Bookrunner, as amended, relating to a term loan and short-term credit facilities of up to $110,000,000, or the HSH Nordbank Junior Loan Agreement, incorporated by reference to Exhibit 4.160 to the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.161	Supplement to Loan Agreement dated November 18, 2013, to the original Loan Agreement dated March 31, 2006, by and between DryShips Inc., as Borrower, the banks and financial institutions listed therein, as Lenders and Swap Banks, HSH Nordbank AG, as Agent, Security Trustee, Lead Arranger, Lead Bookrunner and Joint Underwriter, and The Governor and Company of the Bank of Scotland, as Joint Bookrunner and Joint Underwriter, relating to a term loan and short-term credit facilities of up to $518,750,000, or the HSH Nordbank Senior Loan Agreement, incorporated by reference to Exhibit 4.161 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.162	Supplemental Letter dated December 10, 2013, relating to the Facilities Agreement by and among Drillships Ocean Ventures Inc., as Borrower, and Ocean Rig UDW Inc., as Parent and Guarantor, and the companies listed therein, as Guarantors, and the banks and financial institutions named therein, as Mandated Lead Arrangers, with the banks and financial institutions named therein, as Lenders under the Commercial Facilities, Eksportkreditt Norge AS, as Lender under the Eksportkreditt/GEIK Facilities, The Export-Import Bank of Korea, as Lender under the Kexim Facilities, and DNB Bank ASA, as Facility Agent and Security Agent, relating to $1,350,000,000 of Term Loan Facilities originally dated February 28, 2013, incorporated by reference to exhibit 4.53 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.

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4.163	Amendment and Restatement Agreement dated as of February 7, 2014 relating to the Credit Agreement, dated July 12, 2013, as amended by the Incremental Agreement on July 26, 2013, by and among Drillships Finance Holding Inc., as Borrower, Ocean Rig UDW Inc., as Parent, Deutsche Bank AG New York Branch, as Administrative Agent and the companies listed therein, and the banks and financial institutions named therein, relating to a re-financing of the combined $1.9 billion of Tranche B-1 and Tranche B-2 Term Loans, incorporated by reference to exhibit 4.54 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.
4.164	Management Agreement, dated December 13, 2013, by and between Drillship Skyros Owners Inc., as the Owner, and Ocean Rig Management Inc., as the Manager, incorporated by reference to exhibit 4.59 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.165	Management Agreement, dated February 25, 2014, by and between Drillship Kythnos Owners Inc., as the Owner, and Ocean Rig Management Inc., as the Manager, incorporated by reference to exhibit 4.60 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.166	Indenture, dated as of March 26, 2014, by and between Ocean Rig UDW Inc., as the Issuer, and Deutsche Bank Trust Company Americas, as Trustee, relating to 7.25% Senior Notes Due 2019, incorporated by reference to exhibit 4.55 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.167	Management Agreement, dated April 17, 2014, by and between Drillship Hydra Owners Inc., as the Owner, and Ocean Rig Management Inc., as the Manager, incorporated by reference to exhibit 4.61 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.168	Management Agreement, dated April 17, 2014, by and between Drillship Kithira Owners Inc., as the Owner, and Ocean Rig Management Inc., as the Manager, incorporated by reference to exhibit 4.62 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.169	Management Agreement, dated April 17, 2014, by and between Drillship Paros Owners Inc., as the Owner, and Ocean Rig Management Inc., as the Manager, incorporated by reference to exhibit 4.63 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.170	Management Agreement, dated April 17, 2014, by and between Ocean Rig 1 Inc., as the Owner, and Ocean Rig Management Inc., as the Manager, incorporated by reference to exhibit 4.64 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.171	Management Agreement, dated April 17, 2014, by and between Ocean Rig 2 Inc., as the Owner, and Ocean Rig Management Inc., as the Manager, incorporated by reference to exhibit 4.65 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.172	Management Agreement, dated April 17, 2014, by and between Drillship Skiathos Owners Inc., as the Owner, and Ocean Rig Management Inc., as the Manager, incorporated by reference to exhibit 4.66 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.173	Management Agreement, dated April 17, 2014, by and between Drillship Skopelos Owners Inc., as the Owner, and Ocean Rig Management Inc., as the Manager, incorporated by reference to exhibit 4.67 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.174	Credit Agreement, dated July 25, 2014, by and among Drillships Ventures Projects Inc., as Finco, Drillships Ocean Ventures Inc., as Borrower, Ocean Rig UDW, as Parent, various lenders and Deutsche Bank AG New York Branch, as Administrative Agent and Pari Passu Collateral Agent and the other entities listed therein, relating to a Term Loan in an aggregate principal amount equal to $1.3 billion, incorporated by reference to exhibit 4.56 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.175	Pledge and Security Agreement, dated July 25, 2014, relating to the Credit Agreement dated July 25, 2014, by and among Ocean Rig UDW Inc., Drillships Ocean Ventures, Inc., Drillships Ventures Projects Inc., the subsidiaries identified therein, and Deutsche Bank AG New York Branch, as Pari Passu Collateral Agent, incorporated by reference to exhibit 4.57 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.176	Facilities Agreement, dated February 13, 2015, by and among Drillship Alonissos Shareholders Inc., as Borrower, Ocean Rig UDW Inc., as Parent and Guarantor, Drillship Alonissos Owners Inc., as Drillship Owner and Guarantor, and the other entities named therein, relating to $475 million Term Loan Facilities, incorporated by reference to exhibit 4.58 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.177	First Supplemental Agreement, dated March 28, 2014, to a Loan Agreement, dated March 19, 2012, by and among Amathus Owning Company Limited, Symi Owners Inc. and Kalymnos Owners Inc., as joint and several Borrowers, DryShips Inc., as Guarantor, and HSH Nordbank AG, as Agent, Mandated Lead Arranger, Swap Bank and Security Trustee, relating to a loan facility of up to $87,653,740.

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4.178	Form of Vessel Management Agreement, dated May 7, 2014, by and between Chloe Owning Company Limited and TMS Bulkers Ltd.
4.179	Fifth Supplemental Agreement, dated July 11, 2014, to a Loan Agreement dated July 23, 2008, by and among Cretan Traders Inc., as Borrower, Monteagle Shipping SA, as Existing Guarantor, the banks and financial institutions listed therein, as Lenders, and Norddeutsche Landesbank Girozentrale, as Swap Bank, Underwriter, Mandated Lead Arranger, Bookrunner, Agent and Security Trustee, relating to a term loan facility of up to $126,400,000.
4.180	Supplemental Agreement, dated July 17, 2014, to a Loan Agreement, dated October 26, 2011, by and among Olympian Ares Owners Inc., Olympian Artemis Owners Inc., Olympian Demeter Owners Inc. and Olympian Poseidon Owners Inc., as joint and several Borrowers, DryShips Inc., as Guarantor, and ABN AMRO Bank N.V. , as Facility Agent and Security Trustee, relating to a loan of $141,350,000.
4.181	Supplemental Agreement, dated July 31, 2014, to a Loan Agreement dated October 24, 2012, by and among Olympian Athena Owners Inc., Olympian Aphrodite Owners Inc. and Olympian Dionysus Owners Inc., as joint and several borrowers, DryShips Inc., as Guarantor, and ABN AMRO Bank N.V., as Facility Agent and Security Trustee relating to a $107,668,750 loan.
4.182	Loan Agreement, dated October 29, 2014, by and among the subsidiaries of DryShips Inc. listed therein as Borrowers, DryShips Inc., as Parent, DryShips Inc. and the subsidiaries of DryShips Inc. listed therein as Guarantors,  the financial institutions listed therein as Lenders, the financial institutions listed therein as Hedging Providers, Nordea Bank Finland plc, London Branch, as Arranger, Bookrunner and Agent, and Nordea Bank AB, London Branch as Security Agent, relating to a loan facility of up to $170,000,000.
4.183	Second Supplemental Agreement, dated November 12, 2014, to a Loan Agreement dated June 20, 2008, by and among Aegean Traders Inc., as Borrower, DryShips Inc., as Corporate Guarantor and Portigon AG, London Branch, as Lender, relating to a loan facility of up to $103,200,000.
4.184	Loan Agreement, dated November 14, 2014, by and among DryShips, Inc., as Borrower, the financial institutions listed therein as Original Lenders, and ABN AMRO Bank N.V., as Arranger, Facility Agent and Security Agent, relating to a senior secured bridge loan facility of up to $200,000,000.
4.185	Exchangeable Promissory Note, dated November 18, 2014, by and between DryShips, Inc., as Borrower, and Alley Finance Co., or its permitted assigns, as Noteholder, relating to a $120,000,000 loan, incorporated by reference to Exhibit 4.69 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
4.186	Fifth Amending and Restating Agreement, dated December 23, 2014, to a Loan Agreement dated March 13, 2008, by and among Ialysos Owning Company Limited, as Borrower, DryShips Inc., as Corporate Guarantor, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $130,000,000.
4.187	Fourth Supplemental Agreement, dated December 23, 2014, to a Loan Agreement dated October 5, 2007, by and between Boone Star Owners Inc. and Iokasti Owning Company Limited, as Borrowers, DryShips Inc., as Corporate Guarantor, and Piraeus Bank A.E., as Lender, relating to a loan facility of up to $90,000,000.
4.188	Management Agreement, dated February 17, 2015, by and between Drillship Alonissos Owners Inc., as the Owner, and Ocean Rig Management Inc., as the Manager, incorporated by reference to exhibit 4.68 to the Annual Report on Form 20-F of Ocean Rig UDW Inc. for the fiscal year ended December 31, 2014, filed with the SEC on March 9, 2015.
8.1	Subsidiaries of DryShips Inc.
12.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
12.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
13.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1	Consent of Independent Registered Public Accounting Firm (Ernst & Young (Hellas) Certified Auditors Accountants S.A.)
101	The following materials from the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2013, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 2013 and 2014; (ii) Consolidated Statements of Operations for the years ended December 31, 2012, 2013 and 2014; (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2012, 2013 and 2014; (iv) Consolidated Statements of Stockholders' Equity for the years ended December 31, 2012, 2013 and 2014; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2013 and 2014; and (v) the Notes to Consolidated Financial Statements

148

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

		DRYSHIPS INC.
		(Registrant)
Date:  March 10, 2015	By:	/s/ Ziad Nakhleh
		Ziad Nakhleh
		Chief Financial Officer

149

DRYSHIPS INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F-2
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Balance Sheets as of December 31, 2013 and  2014	F-4
Consolidated Statements of Operations for the years ended December 31, 2012, 2013  and  2014	F-6
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2012, 2013 and 2014	F-7
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2012, 2013 and 2014	F-8
Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2013 and 2014	F-10
Notes to Consolidated Financial Statements	F-12

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of DryShips Inc.

We have audited the accompanying consolidated balance sheets of DryShips Inc. (the "Company") as of December 31, 2013 and 2014, and the related consolidated statements of operations and comprehensive income/(loss), stockholders' equity and cash flows for each of the three years in the period ended December 31, 2014. Our audits also included the financial statement schedule listed in Item 18.1. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of DryShips Inc. at December 31, 2013 and 2014, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

The accompanying consolidated financial statements and schedule have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company reports a working capital deficit of $394 million at December 31, 2014. In addition, the shipping segment has not complied with certain covenants of its bank agreements. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The consolidated financial statements and schedule do not include any adjustments relating to the recoverability and classification of recorded asset amounts, the amounts and classification of liabilities, or any other adjustments that might result in the event the Company is unable to continue as a going concern.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), DryShips Inc.'s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 10, 2015 expressed an unqualified opinion thereon.

/s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.

Athens, Greece

March 10, 2015

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of DryShips Inc.

We have audited DryShips Inc.'s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). DryShips Inc.'s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, DryShips Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of DryShips Inc. as of December 31, 2013 and 2014, and the related consolidated statements of operations, comprehensive income/(loss), stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2014 of DryShips Inc. and our report dated March 10, 2015 expressed an unqualified opinion thereon that included an explanatory paragraph regarding DryShips Inc.'s ability to continue as a going concern.

/s/ Ernst & Young (Hellas) Certified Auditors-Accountants S.A.

Athens, Greece

March 10, 2015

F-3

DRYSHIPS INC.

Consolidated Balance Sheets

As of December 31, 2013 and 2014

(Expressed in thousands of U.S. Dollars – except for share and per share data)

	December 31,
	2013			2014
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	595,142		$	566,242
Restricted cash (Note 2)		94,170			92,694
Trade accounts receivable, net of allowance for doubtful receivables of $2,948 and $2,825 at December 31, 2013 and 2014, respectively		321,989			404,656
Due from related parties (Note 4)		39,023			38,221
Other current assets (Note 5)		133,875			125,464
Total current assets		1,184,199			1,227,277
FIXED ASSETS, NET:
Advances for vessels and drillships under construction and related costs (Note 6)		679,008			623,984
Vessels, net (Note 7)		2,249,087			2,141,617
Drilling rigs, drillships, machinery and equipment, net (Note 7)		5,828,231			6,259,747
Total fixed assets, net		8,756,326			9,025,348
OTHER NON-CURRENT ASSETS:
Financial instruments (Note 10)		14,741			11,086
Restricted cash (Note 2)		50,000			-
Other non-current assets (Note 8)		118,426			107,892
Total other non-current assets		183,167			118,978
Total assets	$	10,123,692		$	10,371,603
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt, net of deferred finance costs (Note 9)	$	1,660,168		$	1,165,021
Accounts payable and other current liabilities		102,528			97,608
Accrued liabilities		232,623			192,239
Due to related parties (Note 4)		611			12,717
Deferred revenue		128,044			123,728
Financial instruments (Note 10)		47,740			30,447
Total current liabilities		2,171,714			1,621,760
NON-CURRENT LIABILITIES
Long-term debt, net of current portion and deferred finance costs (Note 9)		3,907,835			4,352,592
Financial instruments (Note 10)		26,086			10,420
Deferred revenue		152,226			81,359
Other non-current liabilities		34,133			15,084
Total non-current liabilities		4,120,280			4,459,455
COMMITMENTS AND CONTINGENCIES (Note 13)		-			-
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 500,000,000 shares authorized at December 31, 2013 and 2014; 100,000,000 shares designated as Series A Convertible preferred stock;  0 shares of Series A Convertible Preferred stock issued and outstanding at December 31, 2013 and 2014, respectively (Note 11)		-			-
Common stock, $0.01 par value; 1,000,000,000 shares authorized at December 31, 2013 and 2014; 432,654,477 and 706,064,321 shares issued and outstanding at December 31, 2013 and 2014, respectively (Note 11)		4,326			7,060
Treasury stock; $0.01 par value; 21,000,000 and 36,100,000 shares at December 31, 2013 and 2014, respectively (Note 11)		(210	)		(361	)
Additional paid-in capital (Note 11)		2,824,702			3,249,376
Accumulated other comprehensive loss (Note 14)		(6,062	)		(6,622	)
Accumulated deficit		(209,120	)		(256,632	)
Total DryShips Inc. stockholders' equity		2,613,636			2,992,821
Non-controlling interests		1,218,062			1,297,567
Total equity		3,831,698			4,290,388
Total liabilities and stockholders' equity	$	10,123,692		$	10,371,603

   The accompanying notes are an integral part of these consolidated financial statements.

F-4

DRYSHIPS INC.

Consolidated Statements of Operations

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of U.S. Dollars – except for share and per share data)

	Year ended December 31,
	2012			2013			2014
REVENUES:
Voyage revenues (including amortization of above market acquired time charters)	$	268,236		$	311,764		$	368,447
Service revenues, net		941,903			1,180,250			1,817,077
Total Revenues (Notes 2 and 16)	$	1,210,139		$	1,492,014		$	2,185,524
OPERATING EXPENSES/(INCOME):
Voyage expenses (Note 2)		30,012			103,211			117,165
Vessels, drilling rigs and drillships operating expenses		649,722			609,765			844,260
Depreciation and amortization (Notes 7)		335,458			357,372			449,792
Loss on sale of assets, net (Note 7)		1,179			-			-
Loss on contract cancellation (Note 6)		-			-			1,307
Contract termination fees and other (Note 6)		41,339			33,293			-
Vessel impairment charge (Notes 7 and 10)		-			43,490			38,148
General and administrative expenses		145,935			184,722			193,686
Legal settlements and other, net (Note 13.1)		(9,360	)		4,585			(2,013	)
Operating income		15,854			155,576			543,179
OTHER INCOME / (EXPENSES):
Interest and finance costs (includes $22,195 accumulated other comprehensive classifications in 2012 for losses on previously designated cash flow hedges and gains on Senior Notes) (Note 15)		(210,128	)		(332,129	)		(411,021	)
Interest income		4,203			12,498			12,146
Gain/(Loss) on interest rate swaps (Note 10)		(54,073	)		8,373			(15,528	)
Other, net (Note 10)		(492	)		2,245			7,067
Total other expenses, net		(260,490	)		(309,013	)		(407,336	)
INCOME/(LOSS) BEFORE INCOME TAXES		(244,636	)		(153,437	)		135,843
Less: Income taxes (Note 18)		(43,957	)		(44,591	)		(77,823	)
NET INCOME/(LOSS)		(288,593	)		(198,028	)		58,020
Less: Net (income)/loss attributable to non-controlling interests		41,815			(25,065	)		(105,532	)
NET LOSS ATTRIBUTABLE TO DRYSHIPS INC.	$	(246,778	)	$	(223,093	)	$	(47,512	)
NET LOSS ATTRIBUTABLE TO DRYSHIPS INC COMMON STOCKHOLDERS (Note 17)	$	(246,778	)	$	(223,149	)	$	(48,209	)
LOSS PER COMMON SHARE ATTRIBUTABLE TO DRYSHIPS INC. COMMON STOCKHOLDERS, BASIC AND DILUTED (Note 17)	$	(0.65	)	$	(0.58	)	$	(0.11	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES, BASIC AND DILUTED (Note 17)		380,159,088			384,063,306			456,031,628

The accompanying notes are an integral part of these consolidated financial statements.

F-5

DRYSHIPS INC.

Consolidated Statements of Comprehensive Income Loss

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of U.S. Dollars)

	Year ended December 31,
	2012			2013			2014
- Net income/(loss)	$	(288,593	)	$	(198,028	)	$	58,020
Other comprehensive income/ (loss):
- Unrealized gain/(loss) on senior unsecured notes		2,059			-			-
- Reclassification of gain associated with senior unsecured notes to Consolidated Statement of Operations, net		(709	)		-			-
- Reclassification of losses on previously designated cash flow hedges to Consolidated Statement of Operations, net		22,904			-
- Reclassification of realized losses associated with capitalized interest to Consolidated Statement of Operations, net		549			550			550
- Actuarial gains/(losses)		(637	)		3,335			(1,518	)
Other comprehensive income/(loss)	$	24,166		$	3,885		$	(968	)
Comprehensive income/(loss)		(264,427	)		(194,143	)		57,052
- Less: comprehensive (income)/loss attributable to non-controlling interests		34,215			(26,532	)		(105,137	)
Comprehensive loss attributable to DryShips Inc.	$	(230,212	)	$	(220,675	)	$	(48,085	)

The accompanying notes are an integral part of these consolidated financial statements.

F-6

DRYSHIPS INC.

Consolidated Statements of Stockholders' Equity

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of U.S. Dollars – except for share data)

	Common Stock				Treasury Stock
	Shares		Par Value		Shares			Par Value			Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings/(Accumulated Deficit)			Total DryShips Stockholders Equity			Non- controlling interests			Total Equity
BALANCE, January 1, 2012		424,762,094	$	4,247		(1,000,000	)	$	(10	)	$	2,908,950		$	(28,610	)	$	260,751		$	3,145,328		$	793,334		$	3,938,662
- Net loss		—		—		—			—			—			—			(246,778	)		(246,778	)		(41,815	)		(288,593	)
- Issuance of non-vested shares		150		—		—			—			—			—			—			—			—			—
- Issuance of treasury stock		—		—		(10,000,000	)		(100	)		100			—			—			—			—			—
- Issuance of subsidiary shares to non-controlling interest		—		—		—			—			(84,629	)		2,869			—			(81,760	)		262,245			180,485
- Other comprehensive income		—		—		—			—			—			16,566			—			16,566			7,600			24,166
- Amortization of stock based compensation		—		—		—			—			13,104			—			—			13,104			195			13,299
BALANCE December 31, 2012		424,762,244	$	4,247		(11,000,000	)	$	(110	)	$	2,837,525		$	(9,175	)	$	13,973		$	2,846,460		$	1,021,559		$	3,868,019
- Net income/(loss)		—		—		—			—			—			—			(223,093	)		(223,093	)		25,065			(198,028	)
- Issuance of common stock		6,892,233		69		—			—			23,369			—			—			23,438			—			23,438
- Issuance of non vested shares		1,000,000		10		—			—			(10	)		—			—			—			—			—
- Issuance of treasury stock		—		—		(10,000,000	)		(100	)		100			—			—			—			—			—
- Issuance of subsidiary shares to non-controlling interest		—		—		—			—			(46,237	)		695			—			(45,542	)		168,502			122,960
- Other comprehensive income		—		—		—			—			—			2,418			—			2,418			1,467			3,885
- Amortization of stock based compensation		—		—		—			—			9,955			—			—			9,955			1,469			11,424

F-7

DRYSHIPS INC.

Consolidated Statements of Stockholders' Equity

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of U.S. Dollars – except for share data)

	Common Stock				Treasury Stock
	Shares		Par Value		Shares			Par Value			Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings/ (Accumulated Deficit			Total DryShips Stockholders Equity			Non controlling interests			Total equity
BALANCE December 31, 2013		432,654,477	$	4,326		(21,000,000	)	$	(210	)	$	2,824,702		$	(6,062	)	$	(209,120	)	$	2,613,636		$	1,218,062		$	3,831,698
- Net income/(loss)		—		—		—			—			—			—			(47,512	)		(47,512	)		105,532			58,020
- Issuance of common stock		272,209,844		2,722		—			—			419,653			—			—			422,375			—			422,375
- Issuance of non vested shares		1,200,000		12		—			—			(12	)		—			—			—			—			—
- Issuance of treasury stock		—		—		(15,100,000	)		(151	)		151			—			—			—			—			—
- Issuance of subsidiary shares to non-controlling interest		—		—		—			—			(4,758	)		13			—			(4,745	)		3,478			(1,267	)
- Other comprehensive income		—		—		—			—			—			(573	)		—			(573	)		(395	)		(968	)
- Amortization of stock based compensation		—		—		—			—			9,640			—			—			9,640			1,453			11,093
-Dividends paid		—		—		—			—			—			—			—			—			(30,563	)		(30,563	)
Balance December 31, 2014		706,064,321	$	7,060		(36,100,000	)	$	(361	)	$	3,249,376		$	(6,622	)	$	(256,632	)	$	2,992,821		$	1,297,567		$	4,290,388

The accompanying notes are an integral part of these consolidated financial statements.

F-8

DRYSHIPS INC.

Consolidated Statements of Cash Flows

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of U.S. Dollars)

	Year ended December 31,
	2012			2013			2014
Cash Flows from Operating Activities:
Net income/(loss)	$	(288,593	)	$	(198,028	)	$	58,020
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		335,458			357,372			449,792
Amortization, write off of deferred financing fees		20,548			48,980			53,063
Amortization of convertible senior notes debt discount		38,855			43,769			45,261
Amortization of fair value of acquired time charters and drilling contracts		20,527			10,759			7,443
Amortization of cash flow hedge reserve		22,904			-			-
Vessel impairment charge		-			43,490			38,148
Loss on sale of assets, net		1,179			-			-
Loss on contract cancellation		-			-			1,307
Gain on sale of notes		(709	)		-			-
Forfeiture of advances for vessel acquisitions		19,939			-			13,933
Amortization of stock based compensation		13,299			11,424			11,093
Change in fair value of derivatives		(54,506	)		(88,859	)		(29,304	)
Security deposits for derivatives		24,550			-			-
Amortization of free lubricants benefit		(14	)		(12	)		-
Changes in operating assets and liabilities:
Trade accounts receivable		(33,469	)		(147,936	)		(82,667	)
Due from related parties		(14,540	)		1,663			12,089
Other current and non-current assets		(58,277	)		(33,164	)		38,219
Accounts payable and other current and non-current liabilities		41,098			9,705			(25,489	)
Accrued liabilities		57,277			55,509			(41,436	)
Due to related parties		(2,768	)		(4,139	)		819
Deferred revenue		94,771			135,447			(75,183	)
Net Cash Provided by Operating Activities		237,529			245,980			475,108
Cash Flows from Investing Activities:
Short term investment		-			(442	)		368
Sale of notes		18,709			-			-
Advances for vessel acquisitions and drillships under construction		(276,956	)		(235,346	)		(296,306	)
Vessel acquisitions and improvements		(177,724	)		(181,176	)		(54,660	)
Drilling rigs, drillships equipment and other improvements		(97,868	)		(1,051,704	)		(455,595	)
Proceeds from sale of vessels and contract cancellation		116,834			-			-
Decrease in restricted cash		27,058			234,338			51,476
Net Cash Used in Investing Activities		(389,947	)		(1,234,330	)		(754,717	)

F-9

DRYSHIPS INC.

Consolidated Statements of Cash Flows

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of U.S. Dollars)

	Year ended December 31,
	2012			2013			2014
Cash Flows from Financing Activities:
Proceeds from  long-term credit facilities, term loans and senior notes	$	966,103		$	2,982,576		$	2,617,100
Principal payments and repayments of long-term debt and senior notes		(867,932	)		(1,803,366	)		(2,008,826	)
Payments of convertible notes		-			-			(700,000	)
Net proceeds from common stock issuance		-			23,438			421,911
Net proceeds from sale in ownerships of subsidiary		180,485			122,960			-
Dividends paid		-			-			(30,563	)
Payment of financing costs, net		(35,431	)		(84,066	)		(48,913	)
Net Cash Provided by Financing Activities		243,225			1,241,542			250,709
Net increase/ (decrease) in cash and cash equivalents		90,807			253,192			(28,900	)
Cash and cash equivalents at beginning of year		251,143			341,950			595,142
Cash and cash equivalents at end of year	$	341,950		$	595,142		$	566,242
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for:
Interest, net of amount capitalized	$	118,606		$	171,649		$	267,554
Income taxes		45,450			50,392			60,374
Non cash financing and investing activities:
Issuance of non-vested shares		-			10			12

The accompanying notes are an integral part of these consolidated financial statements.

F-10

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

1. Basis of Presentation and General Information:

The accompanying consolidated financial statements include the accounts of DryShips Inc., its subsidiaries and consolidated Variable Interest Entities ("VIEs") (collectively, the "Company" or "DryShips"). DryShips was formed on September 9, 2004, under the laws of the Republic of the Marshall Islands. The Company is a provider of international seaborne drycargo and oil transportation services and deepwater drilling rig services.

Customers individually accounting for more than 10% of the Company's voyage revenues and drilling revenues during the years ended December 31, 2012, 2013 and 2014, were as follows:

	Year ended December 31,
	2012			2013			2014
Customer A - Drilling segment		-			-			12	%
Customer B - Drilling segment		38	%		26	%		15	%
Customer C - Drilling segment		14	%		-			-
Customer D - Drilling segment		-			-			12	%
Customer E - Drilling segment		-			11	%		10	%
Customer F - Drilling segment		-			14	%		25	%

The loss of any of these significant customers could have a material adverse effect on the Company's results of operations if they were not replaced by other customers.

2. Significant Accounting policies:

(a)Principles of consolidation: The accompanying consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("US GAAP") and applicable rules and regulations of the U.S. Securities and Exchange Committee (the "SEC") and include the accounts and operating results of DryShips, its wholly-owned subsidiaries and its VIEs. As of December 31, 2014, the Company consolidated 100% one VIE for which it is deemed to be the primary beneficiary, i.e. it has a controlling financial interest in this entity. The VIE's total assets and liabilities, as of December 31, 2013, were $35,782 and $56,556, respectively, total liabilities exceeding total assets by $20,774. The VIE's total assets and liabilities, as of December 31, 2014, were $64,314 and $65,358 respectively, with total liabilities exceeding total assets by $1,044. A VIE is an entity that in general does not have equity investors with voting rights or that has equity that do not provide sufficient financial resources for the entity to support its activities. A controlling financial interest in a VIE is present when a company has the power to direct the activities of a VIE that most significantly impact the entity's economic performance and absorbs a majority of an entity's expected losses, receives a majority of an entity's expected residual returns, or both.

All intercompany balances and transactions have been eliminated on consolidation.

(b) Business combinations: The Company uses the acquisition method of accounting under the authoritative guidance on business combinations, which requires an acquirer in a business combination to recognize the assets acquired, the liabilities assumed and any non-controlling interest in the acquiree at their fair values at the acquisition date. The costs of the acquisition and any related restructuring costs are to be recognized separately in the Consolidated Statements of Operations. The acquired company's operating results are included in the Company's consolidated financial statements starting on the date of acquisition.

The purchase price is equivalent to the fair value of the consideration transferred and liabilities incurred, including liabilities related to contingent consideration. Tangible and identifiable intangible assets acquired and liabilities assumed as of the date of acquisition are recorded at the acquisition date fair value. Goodwill is recognized for the excess of the purchase price over the net fair value of assets acquired and liabilities assumed. When the fair value of net assets acquired exceeds the fair value of consideration transferred plus any non-controlling interest in the acquiree, the excess is recognized as a gain.

F-11

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2. Significant Accounting policies - continued:

(c) Use of estimates: The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(d) Comprehensive income/(loss): The Company's comprehensive income/(loss) is comprised of net income/(loss), actuarial gains/losses related to the adoption and implementation of ASC 715, "Compensation-Retirement Benefits", as well as losses in the fair value of the derivatives that qualify for hedge accounting in accordance with ASC 815 "Derivatives and Hedging" and realized gains/losses on cash flow hedges associated with capitalized interest in accordance with ASC 815-30-35-38 "Derivatives and Hedging".

During 2013, the Company adopted the requirements of Accounting Standard Update ("ASU")  2013-02, "Comprehensive Income (Topic 220) - Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income". The objective of this Update is to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments do not change the current requirements for reporting net income or other comprehensive income in the financial statements. However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under US GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under US GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under US GAAP that provide additional detail about those amounts.

(e) Cash and cash equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents.

(f) Restricted cash: Restricted cash may include: (i) cash collateral required under the Company's financing and swap arrangements, (ii) retention accounts which can only be used to fund the loan installments coming due, (iii) minimum liquidity collateral requirements or minimum required cash deposits, as defined in the Company's loan agreements, (iv) taxes withheld from employees and deposited in designated bank accounts and, (v) amounts pledged as collateral for bank guarantees to suppliers.

F-12

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 2. Significant Accounting policies - continued:

(g) Trade accounts receivable net: The amount shown as trade accounts receivable, at each balance sheet date, includes receivables from customers, net of allowance for doubtful receivables. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate allowance for doubtful receivables.

(h) Short-term investments: Short-term investments generally represent investments in time deposits, which have maturities in excess of three months but less than twelve months. These investments are accounted for at cost.

(i) Concentration of credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents; trade accounts receivable and derivative contracts (interest rate swaps, foreign currency contracts and forward freight agreements). The maximum exposure to loss due to credit risk is the book value at the balance sheet date. The Company places its cash and cash equivalents, consisting mostly of bank deposits, with qualified financial institutions.

The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company is exposed to credit risk in the event of non-performance by counter parties to derivative instruments; however, the Company limits its exposure by diversifying among counter parties. The Company's major customers are oil companies, which reduces its credit risk. When considered necessary, additional arrangements are put in place to minimize credit risk, such as letters of credit or other forms of payment guarantees. The Company limits its credit risk with trade accounts receivable by performing ongoing credit evaluations of its customers' financial condition and generally does not require collateral for its trade accounts receivable. The Company has made advances for the construction of vessels and drillships to the yards. The ownership of the vessels and drillships is transferred from the yard to the Company at delivery. The credit risk of the advances is, to a large extent, reduced through refund guarantees issued by financial institutions.

As of December 31, 2014, cumulative installment payments made to the yards amounted to approximately $515,856for thedrillships under construction.These installment payments are, to a large extent, secured with irrevocable letters of guarantee, issued by financial institutions, or "refund guarantees".

(j) Advances for vessels and drillships under construction: This represents amounts expended by the Company in accordance with the terms of the construction contracts for vessels and drillships as well as other expenses incurred directly or under a management agreement with a related party in connection with on site supervision. In addition, interest costs incurred during the construction (until the asset is substantially complete and ready for its intended use) are capitalized. The carrying value of vessels and drillships under construction ("Newbuildings") represents the accumulated costs at the balance sheet date. Cost components include payments for yard installments and variation orders, commissions to related party, construction supervision, equipment, spare parts and capitalized interest.

(k) Capitalized interest: Interest expense is capitalized during the construction period of drilling rigs, drillships and vessels based on accumulated expenditures for the applicable project at the Company's current rate of borrowing. The amount of interest expense capitalized in an accounting period is determined by applying an interest rate ("the capitalization rate") to the average amount of accumulated expenditures for the asset during the period. The capitalization rates used in an accounting period are based on the rates applicable to borrowings outstanding during the period. The Company does not capitalize amounts in excess of actual interest expense incurred in the period. If the Company's financing plans associate a specific new borrowing with a qualifying asset, the Company uses the rate on that borrowing as the capitalization rate to be applied to that portion of the average accumulated expenditures for the asset that does not exceed the amount of that borrowing. If average accumulated expenditures for the asset exceed the amounts of specific new borrowings associated with the asset, the capitalization rate applied to such excess is a weighted average of the rates applicable to other borrowings of the Company. Capitalized interest expense for the years ended December 31, 2012, 2013 and 2014, amounted to $58,967, $69,714 and $39,225, respectively (Note 15).

(l) Insurance claims: The Company records insurance claim recoveries for insured losses incurred on damages to fixed assets, loss of hire and for insured crew medical expenses under "Other current assets". Insurance claims are recorded, net of any deductible amounts, at the time the Company's fixed assets suffer insured damages, loss due to the vessel/ drilling unit being wholly or partially deprived of income as a consequence of damage to the unit or when crew medical expenses are incurred, recovery is probable under the related insurance policies and the Company can make an estimate of the amount to be reimbursed following the insurance claim.

F-13

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 2. Significant Accounting policies - continued:

(m) Inventories: Inventories consist of consumable bunkers (if any), lubricants and victualing stores, which are stated at the lower of cost or market value and are recorded under "Other current assets". Cost is determined by the first in, first out method.

(n) Foreign currency translation: The functional currency of the Company is the U.S. Dollar since the Company operates in international shipping and drilling markets and, therefore, primarily transacts business in U.S. Dollars. The Company's accounting records are maintained in U.S. Dollars. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated into U.S. Dollars at the year-end exchange rates. Resulting gains or losses are included in "Other, net" in the accompanying consolidated statements of operations.

(o) Fixed assets, net:

(i) Drybulk and tanker carrier vessels are stated at cost, which consists of the contract price and any material expenses incurred upon acquisition (initial repairs, improvements, delivery expenses and other expenditures to prepare the vessel for its initial voyage). Subsequent expenditures for major improvements are also capitalized when they appreciably extend the useful life, increase the earning capacity or improve the efficiency or safety of the vessels. The cost of each of the Company's vessels is depreciated beginning when the vessel is ready for its intended use, on a straight-line basis over the vessel's remaining economic useful life, after considering the estimated residual value. Vessel's residual value is equal to the product of its lightweight tonnage and estimated scrap rate per ton. In general, management estimates the useful life of the Company's vessels to be 25 years from the date of initial delivery from the shipyard. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the date such regulations are adopted.

(ii) Drilling rigs and drillships are stated at cost less accumulated depreciation. Such costs include the cost of adding or replacing parts of drilling rig or drillship machinery and equipment when the cost is incurred, if the recognition criteria are met. The recognition criteria require that the cost incurred extends the useful life of a drilling rig or drillship. The carrying amounts of those parts that are replaced are written off and the cost of the new parts is capitalized. Depreciation is calculated on a straight-line basis over the useful life of the assets after considering the estimated residual value as follows: bare deck 30 years and other asset parts 5 to 15 years. The residual values of the drilling rigs and drillships are estimated at $35,000 and $50,000, respectively, for the years ended December 31, 2012, 2013 and 2014.

(p) Long lived assets held for sale: The Company classifies long lived assets and disposal groups as being held for sale in accordance with ASC 360, "Property, Plant and Equipment", when: (i) management has committed to a plan to sell the long lived assets; (ii) the long lived assets are available for immediate sale in their present condition; (iii) an active program to locate a buyer and other actions required to complete the plan to sell the long lived assets have been initiated; (iv) the sale of the long lived assets is probable and transfer of the asset is expected to qualify for recognition as a completed sale within one year; and (v) the long lived assets are being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Long lived assets classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These long lived assets are not depreciated once they meet the criteria to be classified as held for sale.

When the Company concludes a Memorandum of Agreement for the disposal of a vessel/drilling unit which has yet to complete a time charter or drilling contract, it is considered that the held for sale criteria discussed in guidance are not met until the time charter or drilling contract has been completed as the vessel/drilling unit is not available for immediate sale. As a result, such vessels/drilling units are not classified as held for sale.

When the Company concludes a Memorandum of Agreement for the disposal of a vessel/drilling unit which has no time charter or drilling contract to complete or a contract that is transferable to a buyer, it is considered that the held for sale criteria discussed in the guidance are met. As a result such vessels/drilling unit are classified as held for sale. Furthermore, in the period a long-lived asset meets the held for sale criteria, a loss is recognized for any reduction of the long-lived asset's carrying amount to its fair value less cost to sell. No such adjustments were identified for the years ended December 31, 2012, 2013 or 2014.

F-14

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 2. Significant Accounting policies - continued:

(q) Impairment of long-lived assets: The Company reviews for impairment long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In this respect, the Company reviews its assets for impairment on an asset by asset basis. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, the Company evaluates the asset for impairment loss. The impairment loss is determined by the difference between the carrying amount of the asset and the fair value of the asset. The Company evaluates the carrying amounts of its vessels, drilling rigs and drillships by obtaining vessel, drilling rigs and drillships appraisals to determine if events have occurred that would require modification to their carrying values or useful lives. In evaluating useful lives and carrying values of long-lived assets, the Company reviews certain indicators of potential impairment, such as undiscounted projected operating cash flows, vessel, drilling rigs and drillships sales and purchases, business plans and overall market conditions. In developing estimates of future undiscounted cash flows, the Company makes assumptions and estimates about the vessels', drilling rigs and drillships, future performance, with the significant assumptions being related to charter and drilling rates, fleet utilization, operating expenses, capital expenditures, residual value and the estimated remaining useful life of each vessel, drilling rig and drillship. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends as well as future expectations. To the extent impairment indicators are present, the Company determines undiscounted projected net operating cash flows for each vessel, drilling rig and drillship and compares them to their carrying value. The projected net operating cash flows are determined by considering the charter revenues and drilling revenues from existing time charters and drilling contracts for the fixed fleet days and an estimated daily time charter equivalent for the unfixed days. The Company estimates the daily time charter equivalent for the unfixed days based on the most recent ten year historical average for similar vessels and utilizing available market data for time charter and spot market rates and forward freight agreements over the remaining estimated life of the vessel, drilling rig and drillship, net of brokerage commissions, expected outflows for vessels', drilling rigs' and drillships' maintenance and operating expenses (including planned drydocking and special survey expenditures), assuming an average annual inflation rate of 2% and fleet utilization of 98%. The salvage value used in the impairment test is estimated to be $250 per light weight ton (LWT) for vessels, while $35,000 and $50,000 for drilling rigs and drillships, respectively in accordance with the Company's vessels', drilling rigs', drillships' depreciation policy. If the Company's estimate of undiscounted future cash flows for any vessel, drilling rig and drillship is lower than its respective carrying value, the carrying value is written down, by recording a charge to operations, to its' respective fair market value if the fair market value is lower than the vessel's, drilling rig or drillship's carrying value.

F-15

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 2. Significant Accounting policies - continued:

The Company's analysis for the year ended December 31, 2014, which also involved sensitivity tests on the time charter rates, drilling rates and fleet utilization (being the most sensitive inputs to variances), allowing for variances ranging from 97.5% to 92.5% depending on vessel type on time charter rates, indicated a potential impairment loss for one of its vessels, and no impairment on any of its drilling rigs and drillships. Although the Company believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective. There can be no assurance as to how long charter rates and vessel values will remain at their currently low levels or whether they will improve by any significant degree. Charter rates may remain at depressed levels for some time which could adversely affect the Company's revenue and profitability, and future assessments of vessel impairment. While for the drilling segment there can be no assurance as to how long drilling rates and drilling rigs/drillships values will remain at their currently high levels or whether they will improve or the opposite by any significant degree. As a result of the impairment review, the Company determined that the carrying amounts of its assets were recoverable and, therefore, concluded that no impairment loss was necessary for 2012 and 2013. However, due to Company's decision to sell certain vessels during the years and/or subsequent to the balance sheet dates and based on the agreed-upon sales price, an impairment charge relating to assets held for use of $0 and $43,490 for each of the years ended December 31, 2012 and 2013, respectively, was recognized.  As a result of the impairment review for the year ended December 31, 2014, the Company determined that the carrying amount of one of its drybulk vessels was not recoverable and, therefore, an impairment loss of $38,148 was recognized (Notes 7 and 10).

(r) Dry-docking costs: The Company follows the direct expense method of accounting for dry-docking costs whereby costs are expensed in the period incurred for the vessels, drilling rigs and drillships.

(s) Class costs: The Company follows the direct expense method of accounting for periodic class costs incurred during special surveys of drilling rigs and drillships, normally every five years. Class costs and other maintenance costs are expensed in the period incurred and included in "Vessels, drilling rigs and drillships operating expenses".

(t) Deferred financing costs: Deferred financing costs include fees, commissions and legal expenses associated with the Company's long- term debt. These costs are amortized over the life of the related debt using the effective interest method and are included in interest expense. Unamortized fees relating to loans repaid or refinanced as debt extinguishments are expensed as interest and finance costs in the period the repayment or extinguishment is made. Arrangement fees paid to lenders for loans which the Company has not drawn down are capitalized and included in other current and non-current assets. Amortization and write offs for each of the years ended December 31, 2012, 2013 and 2014, amounted to $17,565, $46,006 and $50,551 respectively (Note 15).

(u) Convertible senior notes: In accordance with ASC Topic 470-20, "Debt with Conversion and Other Options," for convertible debt instruments that contain cash settlement options upon conversion at the option of the issuer, the Company determines the carrying amounts of the liability and equity components of its convertible notes by first determining the carrying amount of the liability component of the convertible notes by measuring the fair value of a similar liability that does not have an associated equity component. The carrying amount of the equity component representing the embedded conversion option is then determined by deducting the fair value of the liability component from the total proceeds. The resulting debt discount is amortized to interest cost using the effective interest method over the period the debt is expected to be outstanding as an additional non-cash interest expense. Transaction costs associated with the instrument are allocated pro-rata between the debt and equity components (Note 9).

(v) Revenue and related expenses:

(i) Drybulk carrier and tanker vessels:

Time and bareboat charters: The Company generates its revenues from charterers for the charter hire of its vessels, which are considered to be operating lease arrangements. Vessels are chartered using time and bareboat charters and where a contract exists, the price is fixed, service is provided and collection of the related revenue is reasonably assured, revenue is recognized as it is earned ratably on a straight-line basis over the duration of the period of each time charter as adjusted for the off-hire days that the vessel spends undergoing repairs, maintenance and upgrade work depending on the condition and specification of the vessel.

F-16

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 2.  Significant Accounting policies - continued:

 (v) Revenue and related expenses - (continued):

Voyage charters: Voyage charter is a charter where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified freight rate per ton. If a charter agreement exists and collection of the related revenue is reasonably assured, revenue is recognized as it is earned ratably during the duration of the period of each voyage. When a voyage charter agreement is in place, a voyage is deemed to commence upon the completion of discharge of the vessel's previous cargo and is deemed to end upon the completion of discharge of the current cargo. Demurrage income represents payments by a charterer to a vessel owner when loading or discharging time exceeds the stipulated time in the voyage charter and is recognized ratably as earned during the related voyage charter's duration period.

Pooling arrangements: For vessels operating in pooling arrangements, the Company earns a portion of the total revenues generated by the pool, net of expenses incurred by the pool. The amount allocated to each pool participant vessel, including the Company's vessels, is determined in accordance with an agreed-upon formula, which is determined by points awarded to each vessel in the pool based on the vessel's age, design and other performance characteristics. Revenue under pooling arrangements is accounted for on the accrual basis and is recognized when an agreement with the pool exists, price is fixed, service is provided and the collectability is reasonably assured.

The allocation of such net revenue may be subject to future adjustments by the pool however, historically, such changes have not been material.

Voyage related and vessel operating costs: Under a time charter, specified voyage costs, such as fuel and port charges are paid by the charterer and other non-specified voyage expenses, such as commissions, are paid by the Company. Vessel operating costs including crew, maintenance and insurance are paid by the Company. Under voyage charter arrangements, voyage expenses, primarily consisting of commissions, port, canal and bunker expenses that are unique to a particular charter, are paid for by the Company, except for commissions, which are either paid for by the Company or are deducted from the freight revenue. All voyage and vessel operating expenses are expensed as incurred, except for commissions. Commissions are deferred and amortized over the related voyage charter period to the extent revenue has been deferred since commissions are earned as the Company's revenues are earned. Under a bareboat charter, the charterer assumes responsibility for all voyage and vessel operating expenses and risk of operation.

Deferred voyage revenue: Deferred voyage revenue primarily relates to cash advances received from charterers. These amounts are recognized as revenue over the voyage or charter period.

 (ii) Drilling rigs and drillships:

Revenues: The Company's services and deliverables are generally sold based upon contracts with its customers that include fixed or determinable prices. The Company recognizes revenue when delivery occurs, as directed by its customer, and collectability is reasonably assured. The Company evaluates if there are multiple deliverables within its contracts and whether the agreement conveys the right to use the drilling rigs and drillships for a stated period of time and meets the criteria for lease accounting, in addition to providing a drilling services element, which is generally compensated for by day rates. In connection with drilling contracts, the Company may also receive revenues for preparation and mobilization of equipment and personnel or for capital improvements to the drilling rigs or drillships and day rate or fixed price mobilization and demobilization fees. Revenues are recorded net of agents' commissions. There are two types of drilling contracts: well contracts and term contracts.

F-17

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 2. Significant Accounting policies - continued:

 (v) Revenue and related expenses - (continued):

(a) Well contracts: Well contracts are contracts under which the assignment is to drill a certain number of wells. Revenue from day-rate based compensation for drilling operations is recognized in the period during which the services are rendered at the rates established in the contracts. All mobilization revenues, direct incremental expenses of mobilization and contributions from customers for capital improvements are initially deferred and recognized as revenues and expenses, as applicable, over the estimated duration of the drilling period. To the extent that mobilization expenses exceed revenue to be recognized, they are expensed as incurred. Demobilization revenues and expenses are recognized over the demobilization period. All revenues for well contracts are recognized as "Service revenues" in the consolidated statement of operations.

(b) Term contracts: Term contracts are contracts under which the assignment is to operate the unit for a specified period of time. For these types of contracts the Company determines whether the arrangement is a multiple element arrangement containing both a lease element and drilling services element. For revenues derived from contracts that contain a lease, the lease elements are recognized as "Leasing revenues" in the consolidated statement of operations on a basis approximating straight line over the lease period. The drilling services element is recognized as "Service revenues" in the period in which the services are rendered at estimated fair value. Revenues related to the drilling element of mobilization and direct incremental expenses of drilling services are deferred and recognized over the estimated duration of the drilling period. To the extent that expenses exceed revenue to be recognized, they are expensed as incurred. Demobilization fees and expenses are recognized over the demobilization period. Contributions from customers for capital improvements are initially deferred and recognized as revenues over the estimated duration of the drilling contract.

(w) Earnings/(loss) per common share: Basic earnings/(loss) per common share are computed by dividing net income/(loss) available to common stockholders by the weighted average number of common shares outstanding during the year. Diluted earnings per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised. Dilution is computed by the treasury stock method whereby all of the Company's dilutive securities are assumed to be exercised and the proceeds used to repurchase common shares at the weighted average market price of the Company's common stock during the relevant periods. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) are included in the denominator of the diluted earnings per share computation.

(x) Segment reporting: The Company determined that it operates under three reportable segments, as a provider of drybulk commodities transportation services for the steel, electric utility, construction and agri-food industries (drybulk segment), as a provider of ultra deep water drilling services (drilling segment) and as a provider of transportation services of crude and refined petroleum cargoes (tanker segment). The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company's consolidated financial statements.

F-18

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 2. Significant Accounting policies - continued:

(y) Financial instruments: The Company designates its derivatives based upon guidance on ASC 815, "Derivatives and Hedging" which establishes accounting and reporting requirements for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. The guidance on accounting for certain derivative instruments and certain hedging activities requires all derivative instruments to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings unless specific hedge accounting criteria are met.

(i) Hedge accounting: At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy undertaken for the hedge. The documentation includes identification of the hedging instrument, hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's effectiveness in offsetting exposure to changes in the hedged item's cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in cash flows and are assessed on an ongoing basis to determine whether they actually have been highly effective throughout the financial reporting periods for which they were designated.

The Company is party to interest swap agreements where it receives a floating interest rate and pays a fixed interest rate for a certain period. Contracts which meet the strict criteria for hedge accounting are accounted for as cash flow hedges. A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognized asset or liability, or a highly probable forecasted transaction that could affect profit or loss.

The effective portion of the gain or loss on the hedging instrument is recognized directly as a component of "Accumulated other comprehensive income/(loss)" in equity, while any ineffective portion, if any, is recognized immediately in current period earnings.

The Company discontinues cash flow hedge accounting if the hedging instrument expires and it no longer meets the criteria for hedge accounting or designation is revoked by the Company. At that time, any cumulative gain or loss on the hedging instrument recognized in equity is kept in equity until the forecasted transaction occurs. When the forecasted transaction occurs, any cumulative gain or loss on the hedging instrument is recognized in the consolidated statement of operations. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in equity is transferred to net profit or loss for the year as financial income or expense.

(ii) Other derivatives: Changes in the fair value of derivative instruments that have not been designated as hedging instruments are reported in current period earnings.

(z) Fair value measurements: The Company follows the provisions of ASC 820, "Fair Value Measurements and Disclosures" which defines, and provides guidance as to the measurement of, fair value. ASC 820 creates a hierarchy of measurement and indicates that, when possible, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets and the lowest priority (Level 3) to unobservable data, for example, the reporting entity's own data. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy (Note 10).

(aa) Stock-based compensation: Stock-based compensation represents vested and non-vested common stock granted to employees and directors, for their services. The Company calculates total compensation expense for the award based on its fair value on the grant date and amortizes the total compensation on an accelerated basis over the vesting period of the award or service period (Note 12).

F-19

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 2. Significant Accounting policies - continued:

 (ab) Income taxes: Income taxes have been provided for based upon the tax laws and rates in effect in the countries in which the Company's operations are conducted and income is earned. There is no expected relationship between the provision for/or benefit from income taxes and income or loss before income taxes because the countries in which the Company operates have taxation regimes that vary not only with respect to the nominal rate, but also in terms of the availability of deductions, credits and other benefits. Variations also arise because income earned and taxed in any particular country or countries may fluctuate from year to year. Deferred tax assets and liabilities are recognized for the anticipated future tax effects of temporary differences between the financial statement basis and the tax basis of the Company's assets and liabilities using the applicable jurisdictional tax in effect at the year end. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. The Company accrues interest and penalties related to its liabilities for unrecognized tax benefits as a component of income tax expense.

(ac) Commitments and contingencies: Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate of the amount of the obligation can be made. Provisions are reviewed at each balance sheet date.

(ad) Recent accounting pronouncements:

Revenue from Contracts with Customers: The Financial Accounting Standards Board ("FASB") and the International Accounting Standards Board ("IASB") (collectively, the "Boards") jointly issued a standard in May 2014 that will supersede virtually all of the existing revenue recognition guidance in U.S. GAAP and International Financial Reporting Standards ("IFRS") and is effective for annual periods beginning on or after January 1, 2017. The standard establishes a five-step model that will apply to revenue earned from a contract with a customer (with limited exceptions), regardless of the type of revenue transaction or the industry. The standard's requirements will also apply to the recognition and measurement of gains and losses on the sale of some non-financial assets that are not an output of the entity's ordinary activities (e.g., sales of property, plant and equipment or intangibles). Extensive disclosures will be required, including disaggregation of total revenue, information about performance obligations, changes in contract asset and liability account balances between periods, and key judgments and estimates. The guidance in Accounting Standard Update ("ASU") 2014-09 Revenue from Contracts with Customers (Topic 606) supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, this ASU supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. Management is in the process of accessing the impact of the new standard on Company's financial position and performance.

F-20

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 2. Significant Accounting policies - continued:

(ae) Recent accounting pronouncements - continued:

Going Concern: In August 2014, the FASB issued ASU No. 2014-15–Presentation of Financial Statements - Going Concern. ASU 2014-15 provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 requires an entity's management to evaluate at each reporting period based on the relevant conditions and events that are known at the date of financial statements are issued, whether there are conditions or events, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued and to disclose the necessary information. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.

 3. Going Concern

As of December 31, 2014, the drilling segment was in compliance with its financial covenants while the shipping segment was in breach of certain financial covenants, contained in the Company's loan agreements relating to  $259,537 , of the Company's debt. Even though as of the date of approval of the consolidated financial statements none of the lenders have declared an Event of Default under the loan agreements, these breaches constitute events of default and may result in the lenders requiring immediate repayment of the loans. As a result of this non-compliance and of the cross default provisions contained in all bank loan agreements of the shipping segment, the Company has classified the respective bank loans amounting to $1,163,321 at December 31, 2014, as current liabilities (Note 9). As a result, the Company reports a working capital deficit of $394,483 at December 31, 2014.

In addition, and as further discussed in Note 13, the Company's expected short term capital commitments to fund the construction installments under the drillships newbuilding contracts in the year ending December 31, 2015, amount to $566,300,which will be partially financed by the $475,000 million secured credit facility signed on February 13, 2015. Furthermore, the Company's current maturities of long-term debt (excluding the balance classified as current due to the breach in convenants) at December 31, 2014, amounted to $475,717.The Company expects to finance its current maturities of long-term debt and unfinanced capital commitments with cash on hand, operational cash flow and debt or equity issuances, or a combination thereof.

The Company is currently in negotiations with its lenders to obtain waivers or waiver extensions. Management expects that the lenders will not demand payment of the loans before their maturity, provided that the Company pays scheduled loan installments and accumulated or accrued interest as they fall due under the existing credit facilities. Management plans to settle the loan interest and scheduled loan repayments with cash expected to be generated from operations and from financing activities.

The consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Accordingly, the consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, the amounts and classification of liabilities, or any other adjustments that might result in the event the Company is unable to continue as a going concern.

F-21

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 4. Transactions with Related Parties:

The amounts included in the accompanying consolidated balance sheets and consolidated statements of operations are as follows:

	December 31,
	2013			2014
Balance Sheet
Due to related party - Cardiff Marine Inc.	$	(3	)	$	-
Due to related party - Tri-Ocean Heidmar		(43	)		-
Due to related party - Cardiff Tankers		(181	)		(266	)
Due to related party - Sigma and Blue Fin pool		(336	)		-
Due to related party - Fabiana Services S.A.		-			(1,000	)
Due to related party - Vivid Finance Limited		(48	)		(164	)
Due to related party – Cardiff Drilling		-			(4,287	)
Due to related party – Azara Services S.A.		-			(4,000	)
Due to related party – Basset Holding Inc.		-			(3,000	)
Due to related party - Total		(611	)		(12,717	)
Due from related party - TMS Bulkers		29,059			28,318
Due from related party - TMS Tankers		9,964			9,903
Due from related party - Total	$	39,023		$	38,221
Advances for vessels and drillships under construction – Cardiff Drilling/TMS Bulkers/ TMS Tankers, for the year	$	4,778		$	1,546
Vessels, net –TMS Bulkers/TMS Tankers, for the year		6,815			530
Drilling rigs, drillships, machinery and equipment, net – Cardiff/Cardiff Drilling, for the year		5,692			2,885
Trade Accounts Receivable – Accrued Receivables – Sigma and Blue Fin pools	$	386		$	-

	Year ended December 31,
Statement of Operations	2012			2013			2014
Voyage Revenues - Sigma and Blue Fin pool.	$	27,306		$	5,306		$	44
Service Revenues, net – Cardiff/Cardiff Drilling		6,193			10,786			16,826
Voyage expenses - TMS Tankers		(507	)		(1,483	)		(2,002	)
Voyage expenses - TMS Bulkers		(3,166	)		(2,619	)		(2,754	)
Voyage expenses -  Cardiff Tankers		(166	)		(1,423	)		(2,002	)
Gain on sale of assets - commissions - TMS Bulkers		(1,180	)		(710	)		-
Contract termination fees and other		(300	)		(23,048	)		-
General and administrative expenses:
- Consultancy fees - Fabiana Services S.A.		(4,397	)		(3,593	)		(4,595	)

F-22

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 4. Transactions with Related Parties - continued:

	Year ended December 31,
Statement of Operations	2012			2013			2014
- Management fees - TMS Tankers	$	(5,151	)	$	(8,362	)	$	(8,548	)
- Management fees - TMS Bulkers		(26,518	)		(27,803	)		(29,176	)
- Consultancy fees – Vivid Finance Limited		(14,201	)		(18,056	)		(16,242	)
- Consultancy fees – Azara Services S.A.		-			(5,000	)		(9,000	)
- Consultancy fees -  Basset Holding Inc.		(2,676	)		(4,200	)		(8,191	)
- Rent		(41	)		-			-
- Amortization of DryShips CEO stock based compensation	$	(12,663	)	$	(7,780	)	$	(7,516	)
- Amortization of Ocean Rig's CEO stock based compensation		-			(1,358	)		(2,316	)

          (Per day and per quarter information in the note below is expressed in United States Dollars/Euros)

TMS Bulkers Ltd. - TMS Tankers Ltd.:

Effective January 1, 2011, each of the Company's drybulk vessel-owning subsidiaries entered into new management agreements with TMS Bulkers Ltd. ("TMS Bulkers"), which replaced the Company's management agreements with Cardiff Marine Inc. ("Cardiff" or the "Manager"), a related technical and commercial management company incorporated in Liberia, that were effective as of September 1, 2010 through December 31, 2010 and each of the Company's tanker ship-owning subsidiaries entered into new management agreements with TMS Tankers Ltd. ("TMS Tankers") (together, TMS Bulkers and TMS Tankers are hereinafter referred to as the "Managers"). The Managers are beneficially owned by Mr. George Economou, the Company's Chairman, President and Chief Executive Officer.

TMS Bulkers provides comprehensive drybulk ship management services, including technical supervision, such as repairs, maintenance and inspections, safety and quality, crewing and training as well as supply provisioning. TMS Bulkers' commercial management services include operations, chartering, sale and purchase, post-fixture administration, accounting, freight invoicing and insurance. Each new vessel management agreement provides for a fixed management fee, the same fee as was charged by Cardiff under the Company's previous management agreements effective from September 1, 2010, of Euro 1,500 ($1,823 based on the Euro/U.S. Dollar exchange rate at December 31, 2014) per vessel per day, which is payable in equal monthly installments in advance and can be adjusted each year to the Greek Consumer Price Index for the previous year by not less than 3% and not more than 5%. Effective January 1, 2012, the fixed management fee was adjusted by 3% to Euro 1,545 ($1,878 based on the Euro/U.S. Dollar exchange rate at December 31, 2014).

If TMS Bulkers is requested to supervise the construction of a newbuilding vessel, in lieu of the management fee, the Company will pay TMS Bulkers an upfront fee equal to 10% of the budgeted supervision cost. For any additional attendance above the budgeted superintendent expenses, the Company will be charged extra at a standard rate of Euro 500 (or $608 based on the Euro/U.S. Dollar exchange rate as of December 31, 2014) per day.

TMS Tankers provides comprehensive tanker ship management services, including technical supervision, such as repairs, maintenance and inspections, safety and quality, crewing and training as well as supply provisioning. TMS Tankers' commercial management services include operations, sale and purchase, post-fixture administration, accounting, freight invoicing and insurance. Under the management agreements, TMS Tankers is entitled to a daily management fee per vessel of Euro 1,700 ($2,066 based on the Euro/U.S. Dollar exchange rate at December 31, 2014), payable in equalmonthly installments in advance and may automatically be adjusted each year to the Greek Consumer Price Index for the previous year by not less than 3% and not more than 5%. Effective January 1, 2012, the fixed management fee was adjusted by 3% to Euro 1,751 ($2,128 based on the Euro/U.S. Dollar exchange rate at December 31, 2014). TMS Tankers is entitled to a construction supervisory fee of 10% of the budgeted supervision cost for the vessels under construction, payable up front in lieu of the fixed management fee.

Under their respective agreements, the Managers are also entitled to (i) a discretionary incentive fee, (ii) a commission of 1.25% on charter hire agreements that are arranged by the Managers; and (iii) a commission of 1% of the purchase price on sales or purchases of vessels in the Company's fleet that are arranged by the Managers.

F-23

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 4. Transactions with Related Parties - continued:

TMS Bulkers Ltd. - TMS Tankers Ltd. - continued:

In the event that the management agreements are terminated for any reason other than a default by the Managers or change of control of the Company's ownership, the Company will be required to pay the management fee for a further period of three calendar months as from the date of termination.

In the event of a change of control of the Company's ownership the Company will be required to pay the Managers a termination payment, representing an amount equal to the estimated remaining fees payable to the Managers under the then current term of the agreement which such payment shall not be less than the fees for a period of 36 months and not more than a period of 48 months.

Each management agreement has an initial term of five years and will be automatically renewed for a five year period and thereafter extended in five year increments, unless the Company provides notice of termination in the fourth quarter of the year immediately preceding the end of the respective term.

Transactions with TMS Bulkers and TMS Tankers in Euros were settled on the basis of the average U.S. Dollar rate on the invoice date.

Global Services Agreement: On December 1, 2010, the Company entered into a Global Services Agreement with Cardiff, effective December 21, 2010, pursuant to which the Company engaged Cardiff to act as consultant on matters of chartering and sale and purchase transactions for the offshore drilling units operated by the Company's majority-owned subsidiary, Ocean Rig. Under the Global Services Agreement, Cardiff, or its subcontractor, (i) provided consulting services related to the identification, sourcing, negotiation and arrangement of new employment for offshore assets of the Company and its subsidiaries, including the Company's drilling units; and (ii) identified, sourced, negotiated and arranged the sale or purchase of the offshore assets of the Company and its subsidiaries, including the Company's drilling units. In consideration of such services, the Company paid Cardiff a fee of 1.0% in connection with employment arrangements and 0.75% in connection with sale and purchase activities.

Effective January 1, 2013,Ocean Rig Management Inc. ("Ocean Rig Management"), a wholly-owned subsidiary of Ocean Rig, the Company's majority owned subsidiary, entered into a Global Services Agreement with Cardiff Drilling Inc. ("Cardiff Drilling") a company controlled by Mr. George Economou, the Company's Chairman, President and Chief Executive Officer, pursuant to which Ocean Rig Management engaged Cardiff Drilling to act as consultant on matters of chartering and sale and purchase transactions for the offshore drilling units operated by Ocean Rig. Under the Global Services Agreement, CardiffDrilling, or its subcontractor, (i) provides consulting services related to the identification, sourcing, negotiation and arrangement of new employment for offshore assets of Ocean Rig and its subsidiaries; and (ii) identifies, sources, negotiates and arranges the sale or purchase of the offshore assets of Ocean Rig and its subsidiaries. In consideration of such services, Ocean Rig will pay CardiffDrilling a fee of 1.0% in connection with employment arrangements and 0.75% in connection with sale and purchase activities. Costs from the Global Services Agreement are expensed in the consolidated statements of operations or capitalized as a component of "Advances for drillships under construction and related costs" being a directly attributable cost to the construction, as applicable.

Transactions with Cardiff in Euros were settled on the basis of the average USD rate on the invoice date.

Cardiff Marine Inc: On January 2, 2014, the Company entered into an agreement with certain clients of Cardiff, a company controlled by Mr. George Economou, the Company's Chairman, President and Chief Executive Officer, for the grant of seven rights of first refusal to acquire seven Newcastlemax newbuildings, should they wish to sell these vessels at some point in the future. The Company may exercise any one, several or all of the rights. Each right is valid until one day before the contractual date of delivery of each vessel. These newbuildings are scheduled for delivery between the fourth quarter of 2015 and the fourth quarter of 2016.

Mr. George Economou: As the Company's Chairman, President, Chief Executive Officer ("CEO") and principal shareholder, with a 17.3% shareholding as of December 31, 2014, Mr. George Economou has the ability to exert influence over the operations of the Company. In April 2012, companies affiliated with the Company's Chairman, President and Chief Executive Officer purchased a total of 2,185,000 common shares of Ocean Rig in the public offering by Ocean Rig of common shares of Ocean Rig owned by DryShips, that was completed on April 17, 2012 (Note 11). During March 2013, the Company accepted an offer from a company affiliated with Mr. George Economou for the sale of two Very Large Ore Carriers (VLOC) newbuildings (Note 6).

F-24

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

4. Transactions with Related Parties - continued:

Fabiana Services S.A.: Under the consultancy agreements effective from February 3, 2008, between the Company and Fabiana Services S.A. ("Fabiana"), a related party entity incorporated in the Marshall Islands, Fabiana provides consultancy services relating to the services of Mr. George Economou in his capacity as Chief Executive Officer of the Company (Note 12).

On January 25, 2010, the Compensation Committee approved that a bonus in the form of 4,500,000 shares of the Company's common stock, with par value $0.01, be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2009 as well as for anticipated services during the years 2010, 2011 and 2012. The shares vest over a period of three years, with 1,000,000 shares vesting on the grant date; 1,000,000 shares vesting on December 31, 2010 and 2011 respectively; and 1,500,000 shares vesting on December 31, 2012. In addition, the annual remuneration to be awarded to Fabiana under the consultancy agreement was increased to Euro 2.7 million ($3.7 million based on the exchange rate as of December 31, 2013).

On January 12, 2011, the Compensation Committee approved a $4 million bonus and 9,000,000 shares of the Company's common stock payable to Fabiana for the provision of the services of the Company's Chief Executive Officer during 2010. The shares were granted to Fabiana and vest over a period of eight years, with 1,000,000 shares to vest on the grant date and 1,000,000 shares to vest annually on December 31, 2011 through 2018, respectively.

On August 20, 2013, the Compensation Committee approved that a bonus in the form of 1,000,000 shares of the Company's common stock, with par value $0.01, be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2012. The shares vest over a period of two years  with 333,334 shares vesting on the grant date, 333,333 shares vesting on August 20, 2014 and, 333,333 shares vesting on August 20, 2015, respectively.

On August 19, 2014, the Compensation Committee approved that a bonus in the form of 1,200,000 shares of the Company's common stock, with par value $0.01, be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2013. The shares vest over a period of three years with 400,000 shares vesting on December 31, 2014, 400,000 shares vesting on December 31, 2015, and 400,000 vesting on December 31, 2016.

On December 30, 2014, the Compensation Committee approved that a bonus in the form of 2,100,000 shares of the Company's common stock, with par value $0.01, and a cash bonus of $1,000 be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2014. The shares vest over a period of three years with 700,000 shares vesting on December 31, 2015, 700,000 shares vesting on December 31, 2016, and 700,000 shares vesting on December 31, 2017.

Azara Services S.A.: Under the consultancy agreement entered on September 9, 2013 and effective from January 1, 2013, between one of the wholly owned subsidiaries of Ocean Rig and Azara Services S.A. ("Azara"), a related party entity incorporated in the Republic of Marshall Islands, Azara provides consultancy services relating to the services of Mr. George Economou in his capacity as Chief Executive Officer of Ocean Rig. The annual remuneration to be awarded to Azara under the consultancy agreement is $2,500 in cash.

On August 20, 2013, Ocean Rig's Compensation Committee approved a sign-on bonus of $2,500 cash and 150,000 shares of Ocean Rig's common stock to Azara, relating to the services of Mr. George Economou as Chief Executive Officer of Ocean Rig. The shares vest over a period of two years  with 50,000 shares vesting on the grant date, 50,000 shares vesting on August 20, 2014 and, 50,000 vesting on August 20, 2015, respectively. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $17.56 per share.

On August 19, 2014, Ocean Rig's CompensationCommittee approved a bonus in the form of $2,500 cash and 150,000 shares of Ocean Rig's common stock to Azara, relating to the services of Mr. George Economou as Chief Executive Officer of Ocean Rig, rendered during 2013. The shares vest over a period of three years with 50,000 shares vesting on December 31, 2014, 50,000 shares vesting on December 31, 2015 and, 50,000 vesting on December 31, 2016. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $18.37 per share.

On December 30, 2014, Ocean Rig's Compensation Committee approved a bonus in the form of $4,000 cash and 300,000 shares of Ocean Rig's common stock to Azara, relating to the services of Mr. George Economou as Chief Executive Officer, during 2014. The shares vest over a period of three years with 100,000 shares vesting on December 31, 2015, 100,000 shares

F-25

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

4. Transactions with Related Parties - continued:

vesting on December 31, 2016, and 100,000 vesting on December 31, 2017. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of Ocean Rig shares on the grant date of $9.46 per share.

Basset Holdings Inc.:Under the consultancy agreement effective from January 1, 2015, between the Company and Basset Holdings Inc. ("Basset"), a related party entity incorporated in the Republic of Marshall Islands, Basset provides consultancy services relating to the services of Mr. Anthony Kandylidis in his capacity as Executive Vice-President of the Company. The annual remuneration to be awarded to Basset under the consultancy agreement is Euro 0.45 million ($0.55 million based on the Euro/U.S. Dollar exchange rate as of December 31, 2014).

Under the consultancy agreement effective from June 1, 2012, between a wholly owned subsidiary of Ocean Rig and Basset, a related party entity incorporated in the Republic of Marshall Islands, Basset provides consultancy services relating to the services of Mr. Anthony Kandylidis in his capacity as Executive Vice-President of Ocean Rig. The annual remuneration to be awarded to Basset under the consultancy agreement was Euro 0.9 million ($1.1 million based on the Euro/U.S. Dollar exchange rate as of December 31, 2014). Effective January 1, 2015, the annual remuneration was reduced to Euro 0.45 million ($0.55 million based on the Euro/U.S. Dollar exchange rate as of December 31, 2014).

On August 20, 2013, the Compensation Committee of Ocean Rig approved that a cash bonus of $3,000 be paid to Basset for the contribution of Mr. Antony Kandylidis for Executive Vice President's services.

On August 19, 2014, the Compensation Committee of Ocean Rig approved that a cash bonus of $4,000 be paid to Basset for the contribution of Mr. Anthony Kandylidis for Executive Vice President's services, during 2013.

On December 30, 2014, the Compensation Committee of Ocean Rig approved that a cash bonus of $3,000 be paid to Basset for the contribution of Mr. Anthony Kandylidis for Executive Vice President's services, during 2014.

Basset is also the owner of 114,286 shares of Ocean Rig's common stock, as of December 31, 2014.

Steel Wheel Investments Limited: Steel Wheel Investments Limited ("Steel Wheel"), a company controlled by the Company's Executive Vice President, Mr. Antony Kandylidis, is the owner of 1,570,226 shares of Ocean Rig's common stock, as of December 31, 2014.

Cardiff Tankers Inc.:Under charter agreements for all the Company's tankers, Cardiff Tankers Inc. ("Cardiff Tankers"), a related party entity incorporated in the Republic of the Marshall Islands, provides services related to the sourcing, negotiation and execution of charters, for which it is entitled to a 1.25% commission on charter hire earned by those tankers.

Vivid Finance Limited: Under the consultancy agreement effective from September 1, 2010 between the Company and Vivid Finance Limited ("Vivid"), a company controlled by the Chairman, President and Chief Executive Officer of the Company, Mr. George Economou, Vivid provides the Company with financing-related services such as (i) negotiating and arranging new loan and credit facilities, interest rate swap agreements, foreign currency contracts and forward exchange contracts, (ii) renegotiating existing loan facilities and other debt instruments, and (iii) the raising of equity or debt in the capital markets. In exchange for its services, Vivid is entitled to a fee equal to 0.20% on the total transaction amount. The consultancy agreement has a term of five years and may be terminated (i) at the end of its term unless extended by mutual agreement of the parties; (ii) at any time by the mutual agreement of the parties.

Effective January 1, 2013, the Company, amended the agreement with Vivid to limit the scope of the services provided under the agreement to DryShips Inc. and its subsidiaries or affiliates, except for Ocean Rig and its subsidiaries.  In essence, post-amendment, the consultancy agreement between the DryShips Inc. and Vivid is in effect for the Company's tanker and drybulk shipping segments only.

Effective January 1, 2013, Ocean Rig Management Inc., a wholly-owned subsidiary of Ocean Rig, entered into a new consultancy agreement with Vivid, on the same terms and conditions as in the consultancy agreement, dated as of September 1, 2010, between DryShips Inc. and Vivid, except that under the new agreement, Ocean Rig is obligated to pay directly the fee of 0.20%  to Vivid on the total transaction amount in consideration of the services provided by Vivid in respect of Ocean Rig's offshore drilling business, whereas under the consultancy agreement between DryShips Inc. and Vivid, this fee was paid by DryShips Inc.

F-26

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

4. Transactions with Related Parties - continued:

Lease Agreement: The Company leased office space in Athens, Greece from a son of Mr. George Economou until December 31, 2012.

Sigma Tankers Inc. pool and Blue Fin Tankers Inc. pool: Three of the Suezmax tankers, Vilamoura, Lipari and Petalidi, operated in the Blue Fin Tankers pool ("Blue Fin") until the termination of the pooling agreements with Blue Fin relating to such vessels in October 2012, March 2013 and November 2012, respectively. The Aframax tankers Saga, Daytona, and Belmar and Calida operated in the Sigma Tanker Pool ("Sigma") until the termination of the pooling agreements with Sigma relating to such vessels in April 2012, October 2012, January 2013 and October 2013, respectively. Sigma and Blue Fin are spot market pools managed by Heidmar Inc. Mr. George Economou is a member of the Board of Directors of Heidmar Inc.

 5. Other Current assets

The amount of other current assets shown in the accompanying consolidated balance sheets is analyzed as follows:

	December 31,
	2013		2014
Inventories	$	25,640	$	20,304
Deferred mobilization expenses		75,804		66,169
Prepayments and advances		14,425		28,071
Insurance claims (Note 13)		2,012		7,201
Other		15,994		3,719
	$	133,875	$	125,464

 6. Advances for Vessels and Drillships under Construction and Acquisitions:

The amounts shown in the accompanying consolidated balance sheets include milestone payments relating to the drillships building contracts with the shipyards, supervision costs and any material related expenses incurred during the construction periods, all of which are capitalized in accordance with the accounting policy discussed in Note 2.

As of December 31, 2013 and 2014, the movement of the advances for vessels and drillships under construction and acquisitions are set forth below:

	December 31,
	2013			2014
Balance at beginning of year	$	1,201,807		$	679,008
Advances for drillships under construction and related costs		1,279,281			691,755
Cancellation of vessel acquisitions		-			(15,240	)
Vessels' impairment charge		(43,490	)		-
Vessels/drillships delivered		(1,758,590	)		(731,539	)
Balance at end of year	$	679,008		$	623,984

On April 12, 2011, the Company concluded an order with an established Chinese shipyard for two 176,000 dwt drybulk vessels, namely hull number H1241 and H1242, for an aggregated price of $54,164 per vessel. On March 26, 2013, the Company concluded two Memoranda of Agreements with an unrelated party for the sale of the Capesize newbuildings, Hull 1241 and Hull 1242, for a sale price of $71,000 in the aggregate. An impairment loss of $31,617 in the aggregate, was recognized in 2013 as a result of the reduction of the vessels' carrying amount to their fair value. In addition, an amount of $10,245 related to this agreement was paid in 2013 and included in "Contract termination fees and other" in the consolidated financial statements. On May 23, 2013 and June 17, 2013, Hull 1241 and Hull 1242, were delivered to their new owners, respectively.

F-27

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

6. Advances for Vessels and Drillships under Construction and Acquisitions – continued:

On December 16, 2011, the Company placed an order for four 75,900 dwt Panamax ice class bulk vessels, namely hull number H1259, H1260, H1261 and H1262, with Jiangsu Rongsheng Heavy Industries, for a price of $34,000 each. On August 24, 2014, the Company agreed with Jiangsu Rongsheng Heavy Industries to cancel the construction of the four newbuilding Ice class Panamax vessels. On September 2, 2014, the Company received in connection with the cancellation of these newbuilding contracts all installments previously paid to the shipyard of $11,560, plus interest, which resulted to a loss of $1,307 recognized in the consolidated statement of operations for the year ended December 31, 2014.

In connection with OceanFreight's acquisition, the Company acquired the orders for five Very Large Ore Carriers, or VLOCs with an established Chinese shipyard. On September 10, 2012, the vessel Fakarava was delivered to the Company while on May 23, 2013 and June 18, 2013, the Company took delivery of its newbuilding VLOC's Negonego (ex. H1229) and Rangiroa (ex. H1228), respectively. During March 2013, the Company accepted an offer from an entity affiliated with Mr. George Economou, the Company's Chairman, President and Chief Executive Officer (Note 4), for the novation of the shipbuilding contracts of two VLOC under construction, Hull 1239 and Hull 1240, scheduled for delivery during the fourth quarter 2013 and the first quarter 2014, respectively. An impairment loss of $11,873 in the aggregate, was recognized in 2013, as a result of the reduction of the vessels carrying amount to their fair value. In addition, due to the novation agreements, which were signed on April 17, 2013, an amount of $18,305 was paid in 2013 and included in "Contract termination fees and other" in the consolidated financial statements.

On November 22, 2010, the Company placed an order for twelve tanker vessels (six Aframax and six Suezmax), with an established Korean shipyard, for a total consideration of $771,000. On January 18, 2011, March 23, 2011, April 29, 2011 and October 7, 2011, the Company took delivery of its newbuilding tankers Saga, Vilamoura, Daytona and Belmar, respectively. On January 3, 2012, April 25, 2012 and May 31, 2012, the Company took delivery of its newbuilding tankers Calida, Lipari and Petalidi, respectively, while on January 8, 2013, January 15, 2013 and January 31, 2013, the Company took delivery of its newbuilding tankers Alicante, Mareta and Bordeira. On December 27, 2012, the Company entered into two novation agreements with an unrelated party for the sale of the remaining two newbuilding tankers Esperona and Blanca. The total cost of $41,339, including capitalized expenses, included in "Contract termination fees and other " in the accompanying 2012 consolidated statement of operations consists mainly of the forfeiture of $19,939 in deposits (including capitalized expenses) for the acquisition of the tanker vessels already made by the Company and $10,700 in cash consideration for each newbuilding tanker.

On April 18, 2011, April, 27, 2011, June 23, 2011 and September 20, 2012, pursuant to the option contract with Samsung Heavy Industries Co Ltd. ("Samsung"), the Company's majority owned subsidiary, Ocean Rig exercised four of its six newbuilding drillship options, and entered into building contracts for four seventh generation ultra-deepwater drillships, namely the Ocean Rig Mylos, the Ocean Rig Skyros, the Ocean Rig Athena, and the Ocean Rig Apollo for a total contractual cost of approximately $608,000 per drillship for the initial three and $683,000 for the fourth. The Ocean Rig Mylos, the Ocean Rig Skyros, the Ocean Rig Athena and the Ocean Rig Apollo were delivered on August 19, 2013, December 20, 2013, March 24, 2014 and March 5, 2015, respectively.

On August 30, 2013, Drillship Santorini Owners Inc., a wholly owned subsidiary of Ocean Rig, the Company's majority owned subsidiary, signed a contract to construct the Ocean RigSantorini, a 7th generation ultra deepwater drillship at Samsung Heavy Industries. This 7th generation drillship is a sister ship to the Ocean Rig Skyros, the Ocean Rig Athena and the Ocean Rig Apollo. The Ocean Rig Santorini, which is equipped with two blow-out preventers and the Company has advanced $127,000 to the yard, is scheduled to be delivered in June 2016. The total project cost is estimated to be approximately $644,000.

On April 8, 2014, two contracts between Drillship Crete Owners Inc. and Drillship Amorgos Owners Inc., two wholly owned subsidiaries of Ocean Rig, the Company`s majority owned subsidiary and Samsung Heavy Industries Co., Ltd ("Samsung") became effective for the construction of two seventh generation new integrated design drillships at Samsung and paid $76,600 as first installment to the yard for each of the new drillships, which are equipped with two blow-outpreventers. The drillships are scheduled to be delivered to the Company in February 2017 and June 2017, respectively. The total project cost is approximately $728,000, per drillship.

F-28

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

7. Vessels, Drilling Rigs, Drillships, Machinery and Equipment:

Vessels:

The amounts in the accompanying consolidated balance sheets are analyzed as follows:

	Cost			Accumulated Depreciation			Net Book Value
Balance, December 31, 2012	$	2,562,411		$	(502,841	)	$	2,059,570
Additions/transfers from vessels under construction		310,047			-			310,047
Depreciation		-			(120,530	)		(120,530	)
Balance, December 31, 2013		2,872,458			(623,371	)		2,249,087
Additions		54,660			-			54,660
Depreciation		-			(123,982	)		(123,982	)
Vessel impairment charge		(53,167	)		15,019			(38,148	)
Balance, December 31, 2014	$	2,873,951		$	(732,334	)	$	2,141,617

On February 10, 2012, the Company concluded two Memoranda of Agreement for the sale of vessels Avoca and Padre and on March 16, 2012, for the sale of vessel Positano, for a sale price of $118,000 in the aggregate. The Company did not classify the above vessels as "held for sale" in the accompanying consolidated balance sheet as of December 31, 2011, as all criteria required for their classification as "Vessels held for sale" were not met. An impairment loss of $32,584 in the aggregate, was recognized, as a result of the reduction of the vessels' carrying amount to their fair value in 2011. The vessels Avoca and Padre were delivered to their new owners on February 22, 2012 and February 24, 2012, respectively, realizing a loss of $1,511 in 2012. The vessel Positano was delivered to her new owners on May 4, 2012, realizing a gain of $492 in 2012.

On March 18, 2014, the Company concluded a Memorandum of Agreement with an unaffiliated third party for the acquisition of one second hand Capesize vessel with an attached time charter, Raiatea (ex. Conches), for a purchase price of $53,000. The vessel was delivered on April 24, 2014.

As a result of the impairment review for the year ended December 31, 2014, the Company determined that the carrying amount of one of its assets was not recoverable and, therefore, an impairment loss of $38,148 was recognized, as a result of the reduction of the vessel's carrying amount to its fair value.

Drilling rigs, drillships, machinery and equipment:

The amounts in the accompanying consolidated balance sheets are analysed as follows:

	Cost		Accumulated Depreciation			Net Book Value
Balance, December 31, 2012	$	5,021,508	$	(574,778	)	$	4,446,730
Additions		1,616,335		-			1,616,335
Depreciation		-		(234,834	)		(234,834	)
Balance, December 31, 2013	$	6,637,843	$	(809,612	)	$	5,828,231
Additions		755,330		-			755,330
Depreciation		-		(323,814	)		(323,814	)
Balance December 31, 2014	$	7,393,173	$	(1,133,426	)	$	6,259,747

As of December 31, 2014, all of the Company's operating vessels, drilling rigs and drillships, have been pledged as collateral to secure the bank loans, Ocean Rig's 6.5% senior secured notes due 2017 and the term loan B facilities (Note 9).

F-29

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 8. Other non-current assets:

The amounts included in the accompanying consolidated balance sheets are as follows:

	December 31,
	2013		2014
Security deposits for derivatives	$	550	$	550
Deferred mobilization expenses		73,806		43,327
Prepaid investments		21,554		57,910
Intangible assets, net		6,175		4,732
Above-market acquired time charter contracts		8,816		1,373
Other		7,525		-
	$	118,426	$	107,892

As of December 31, 2013 and 2014, security deposits of $550 for the tankers Saga and Vilamoura, were recorded as "Other non-current assets" in the accompanying consolidated balance sheets due to the market loss in the swap agreements as of the related dates.

F-30

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

9. Long-term Debt:

The amount of long-term debt shown in the accompanying consolidated balance sheets is analyzed as follows:

	December 31,
	2013			2014
5% Convertible Senior Unsecured Notes	$	700,000		$	-
6.5% Drill Rigs Senior Secured Notes		800,000			800,000
7.25% Ocean Rig Senior Unsecured Notes		-			500,000
9.5% Ocean Rig Senior Unsecured Notes		500,000			-
Secured Credit Facilities- Drybulk Segment		638,820			685,410
Secured Credit Facilities- Tanker Segment		303,979			277,913
Secured Bridge Credit Facility		-			200,000
$1.35 billion Secured Credit Facilities - Drilling Segment		890,000			-
$1.9 billion Term Loan B Facility - Drilling Segment		1,895,250			1,876,250
$1.3 billion Term Loan B Facility – Drilling Segment		-			1,296,750
Less: Deferred financing costs and equity component of notes		(160,046	)		(118,710	)
Total debt		5,568,003			5,517,613
Less: Current portion		(1,660,168	)		(1,165,021	)
Long-term portion	$	3,907,835		$	4,352,592

Convertible Senior Notes and Related Borrow Facility

In November 2009, the Company issued $400,000 aggregate principal amount of 5% Convertible unsecured Senior Notes (the "Notes"), which were due December 1, 2014. The full over allotment option granted was exercised and an additional $60,000 Notes were purchased. Accordingly, $460,000 in aggregate principal amount of Notes were sold, resulting in aggregate net proceeds of approximately $447,810 after the underwriters commissions.

As the Notes contained a cash settlement option upon conversion at the option of the issuer, the Company applied the guidance for "Accounting for Convertible Debt Instruments That May be Settled in Cash Upon Conversion (Including Partial Cash Settlement)" and therefore, on the day of the Note issuance, bifurcated the $460,000 principal amount of the Notes into liability and equity components of $341,156 and $118,844, respectively, by first determining the carrying amount of the liability component of the Notes by measuring the fair value of a similar liability that did not have an associated equity component. The equity component was calculated by deducting the fair value of the liability component from the total proceeds received at issuance. Additionally, the guidance required the Company to accrete the discount of $118,844 to the principal amount of the Notes over the term of the Notes. The Company's interest expense associated with this Note accretion was based on an effective interest rate of 12%.

In April 2010, the Company issued $220,000 aggregate principal amount of Notes, which were due December 1, 2014. These Notes were offered as additional Notes under the indenture, as supplemented by a supplemental indenture, pursuant to which the Company previously issued $460,000 aggregate principal amount of Notes due December 1, 2014 in November 2009. The terms of the Notes offered in April 2010 other than their issue date and public offering price, were identical to the Notes issued in November 2009.

The full over allotment option granted was exercised and an additional $20,000 aggregate principal amount of Notes were purchased. Accordingly, $240,000 in aggregate principal amount of Notes were sold, resulting in aggregate net proceeds of approximately $237,202 after the underwriters commissions. On the day of the Note issuance, the Company bifurcated the $240,000 principal amount of the Notes into the liability and equity components of $168,483 and $71,517, respectively, by first determining the carrying amount of the liability component of the Notes by measuring the fair value of a similar liability that did not have an associated equity component. The equity component was calculated by deducting the fair value of the liability component from the total proceeds received at issuance. Additionally, the Company was required to accrete the discount of $71,517 to the principal amount of the Notes over the term of the Notes. The Company's interest expense associated with this Note accretion was based on an effective interest rate of 14%.

F-31

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

9. Long-term Debt – continued:

In conjunction with the public offering of 5% Notes described above, the Company also entered into share lending agreements with an affiliate of the underwriter of the offering, or the share borrower, pursuant to which the Company loaned the share borrower approximately 36,100,000 shares of the Company's common stock. Under the share lending agreements, the share borrower was required to return the borrowed shares when the Notes were no longer outstanding. The Company did not receive any proceeds from the sale of the borrowed shares by the share borrower, but the Company did receive a nominal lending fee of $0.01 per share from the share borrower for the use of the borrowed shares.  As of December 31, 2013, the share borrower had returned an aggregate 21,000,000 of the above-referenced loaned shares to the Company. As of December 31, 2014, the share borrower returned the remaining 15,100,000 of the above mentioned loaned shares to the Company. The returned loaned shares were not retired and are included as treasury stock in theaccompanying balance sheets as of December 31, 2013 and 2014.

The fair value of the outstanding loaned shares as of December 31, 2013 and 2014, was $70,970 and $0, respectively. On the day of the Notes issuance the fair value of the share lending agreements was determined to be $14,476, based on a 5.5% interest rate of the Notes without the share lending agreement and was recorded as debt issuance cost. Amortization of the issuance costs associated with the share lending agreement included in "Interest and finance costs" during the years ended December 31, 2012, 2013 and 2014, was $2,983, $2,974 and $2,733, respectively. The unamortized balance as ofDecember 31, 2013 and 2014, was $2,733 and $0, respectively.

Effective September 19, 2011, the applicable conversion price was changed to $6.9 per share. The previous conversion price of $7.19 per share was adjusted downward in connection with the Company's partial spin off of Ocean Rig.

The total interest expense related to the Notes in the Company's consolidated statements of operations for the years ended December 31, 2012, 2013 and 2014, was $73,855, $78,769 and $76,680 of which $38,855, $43,769 and $45,261, respectively are non-cash amortization of the discount on the liability component and $35,000, $35,000 and $31,419, respectively are the contractual interest payable semi-annually at a coupon rate of 5% per year. At December 31, 2013 and 2014, the net carrying amount of the liability component and unamortized discount were $654,738 and $0, respectively and $45,261 and $0, respectively.

The Company's interest expense associated with the $460,000 aggregate principal amount and $240,000 aggregate principal amount of Notes was accretive based on an effective interest rate of 12% and 14%, respectively.

During November 2014, the Company repurchased on the open market and cancelled $191,090 principal amount of its 5% convertible notes. On November 24, 2014, the Company repaid the remaining amount of its 5% convertible notes, amounting to $508,910.

Ocean Rig's 6.5% senior secured notes due 2017

On September 20, 2012,  Ocean Rig's wholly owned subsidiary Drill Rigs Holdings Inc. ("the Issuer"), issued $800,000 aggregate principal amount of 6.50% Senior Secured Notes due 2017 (the "Drill Rigs Notes") offered in a private offering, resulting in net proceeds of approximately $781,965. Ocean Rig used a portion of the net proceeds of the notes to repay the full amount outstanding under its $1,040,000 senior secured credit facility as at September 20, 2012. The Drill Rigs Notes are secured obligations and rank senior in right of payment to any future subordinated indebtedness and equally in right of payment to all of its existing and future unsecured senior indebtedness.

The Drill Rigs Notes are fully and unconditionally guaranteed by Ocean Rig and certain of its existing and future subsidiaries (collectively, the "Issuer Subsidiary Guarantors" and, together with Ocean Rig, the "Guarantors").

Upon a change of control, which occurs if 50% or more of Ocean Rig's shares are acquired by any person or group other than DryShips or its affiliates, the Issuer will be required to make an offer to repurchase the notes at a price equal to 101% of the principal amount thereof, plus any accrued and unpaid interest thereon to the date of repurchase. On or after October 1, 2015, the Issuer may, at its option, redeem all or a portion of the notes, at one time or from time to time at 103.25% (from October 1, 2015 to September 30, 2016) or 100% (October 1, 2016 and thereafter) of the principal amount thereof, plus any accrued and unpaid interest thereon to the date of redemption.

The Drill Rigs Notes and the Drill Rigs Notes guarantees are secured, on a first priority basis, by a security interest in the Issuer's two semi-submersible offshore drilling rigs, the Leiv Eiriksson and the Eirik Raude, and certain other assets of the Issuer and the Issuer Subsidiary Guarantors and by a pledge of the stock of the Issuer and the Issuer Subsidiary Guarantors, subject to certain exceptions. The contractual semi-annual coupon interest rate is 6.5% on the Drill Rigs Notes.

F-32

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

9. Long-term Debt - continued:

Ocean Rig's 7.25% senior unsecured notes due 2019

On March 26, 2014, Ocean Rig issued $500,000 aggregate principal amount of 7.25% senior unsecured notes due 2019 (the "7.25% Senior Unsecured Notes"), offered in a private placement, resulting in net proceeds of approximately $493,625. The 7.25% Senior Unsecured Notes are unsecured obligations and rank senior in right of payment to any future subordinated indebtedness and equally in right of payment to all of its existing and future unsecured senior indebtedness. Ocean Rig used the net proceeds from the offering ofthe 7.25% Senior Unsecured Notes, together with cash on hand and repurchased $462,300 of its 9.5% Senior Unsecured Notes, of which $500,000 in aggregate principal amount was outstanding prior to closing of the 7.25% Senior Unsecured Notes Offering, at atender premium of 105.375%, while the remaining $37,700, was redeemed at a redemption price of 104.5% on May 13, 2014.

The 7.25% Senior Unsecured Notes are not guaranteed by any of the Company's subsidiaries. Upon a change of control, which occurs if 50% or more of the Company's shares are acquired by any person or group other than DryShips or its affiliates, the noteholders will have an option to require the Company to purchase all outstanding notes at a redemption price of 101% of the principal amount thereof plus accrued and unpaid interest to the date of purchase. The contractual semi-annual coupon interest rate is 7.25% per year.

Ocean Rig's 9.5% senior unsecured notes due 2016

On April 27, 2011, Ocean Rig issued $500,000 aggregate principal amount of its 9.5% senior unsecured notes due 2016 (the "9.5% Senior Unsecured Notes ") offered in a private placement, resulting in net proceeds of approximately $487.5 million. The 9.5% Senior Unsecured Notes were unsecured obligations and ranked senior in right of payment to any future subordinated indebtedness and equally in right of payment to all of its existing and future unsecured senior indebtedness.

On April 26, 2011, DryShips agreed to purchase from three unaffiliated companies 9.5% Senior Unsecured Notes in the total aggregate principal amount of $75,000. During the period from May 19, 2011 to July 27, 2011, the Company sold to third parties these senior unsecured notes with notional amount of $57,000 resulting in a gain of $1,406. The remaining $18,000 senior unsecured notes were measured at fair value as of December 31, 2011 and a loss of $1,350 was recorded in "Other comprehensive income". During the period from March 15, 2012 to March 30, 2012, the remaining $18,000 of senior unsecured notes were also sold to third parties with a notional amount of $18,000 resulting in a gain of $709.

The 9.5% Senior Unsecured Notes were repurchased or redeemed by proceeds from from the 7.25% Senior Unsecured Notes offering discussed above, together with cash on hand.

Term bank loans and credit facilities

The bank loans are payable in U.S. Dollars in quarterly and semi-annual installments with balloon payments due atmaturity between January 2015 and June 2025. Interest rates on the outstanding loans as at December 31, 2014, are basedon LIBOR plus a margin, except for an amount of $3,173,000 from the Loan facilities which are based on a fixed rate.

On March 28, 2014, the Company entered into a supplemental agreement relating to the loan agreement dated March 19, 2012, to amend certain financial covenants.

On May 29, 2014 the Company entered into a supplemental agreement to the loan agreement dated February 14, 2012 to amend certain definitions.

On July 7, 2014 the Company entered into an agreement with Commerzbank under the $35.0 million Senior Secured Credit Facility dated October 2, 2007, under which the Company agreed to make a cash prepayment of $2,700 to avoid a loan-to-value covenant breach.

On July 11, 2014, the Company entered into a supplemental agreement under the secured term loan facility dated July 23, 2008, to among other things, release the vessel Woolloomoloo from the collateral package under this loan.

On July 17, 2014, the Company signed a supplemental agreement under the secured term loan facility dated October 26, 2011 for a waiver of a certain financial covenant until December 31, 2014.

F-33

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

9. Long-term Debt - continued:

Term bank loans and credit facilities – continued:

On July 31, 2014, the Company signed a supplemental agreement under the secured term loan facility dated October 24, 2012, for the relaxation of a certain financial covenant until December 31, 2014.

On October 29, 2014, the Company entered into a senior secured credit facility with Nordea Bank for up to $170,000 to refinance the existing indebtedness under the Company's $325,000 Senior Credit Facility, which had a balance of $50,010 as of October 31, 2014. This facility has a five-year term, bears interest at LIBOR plus a margin, is repayable in quarterly installments and is secured by the six vessels that secured the $325,000 Senior Credit Facility, as well as three other vessels.

On November 12, 2014, the Company signed a supplemental agreement under the secured loan facility dated June 20, 2008, for relaxation of certain financial covenants.

On November 14, 2014, the Company entered into a facility agreement with ABN AMRO, for a secured bridge loan facility in an amount of $200,000. The loan is repayable through a single repayment installment. In connection with the ABN AMRO facility, on November 18, 2014, as required by that facility, Ocean Rig filed a prospectus supplement covering up to 78,301,755 of its common shares held by DryShips or its pledgees. Of the shares registered, 45,129,069 Ocean Rig shares were initially pledged by the Company to ABN AMRO under the terms of the ABN AMRO facility which requires collateral coverage based on the prevailing 30-day Volume Weighted Average Price ("VWAP") at draw down. On January 9, 2015, the Company provided additional security in relation to the ABN AMRO facility in the form of 8,000,000 Ocean Rig shares owned by the Company. On January 20 and February 2, 2015, the Company made two prepayments of $10,000 and $5,000 plus accrued interest, respectively under this loan agreement.

On December 23, 2014, the Company entered into an agreement with the lender under its two Senior Secured Credit Facilities, dated October 5, 2007 and March 13, 2008. Under the terms of these agreements, among other things, the lender has agreed to waive certain financial covenants until December 31, 2014 and relax other financial covenants until maturity, and theCompany has agreed to provide a pledge over 8,775,055 Ocean Rig shares owned by DryShips until December 31, 2014.

$1.35 billion Senior Secured Credit Facility

 On February 28, 2013, Drillships Ocean Ventures Inc., a majority owned subsidiary and Ocean Rig's wholly-owned subsidiary, entered into a secured term loan facilities agreement with a syndicate of lenders and DNB Bank ASA, as facility agent and security agent, in the amount of $1,350,000 to partially finance the construction costs of the Ocean Rig Mylos, the Ocean Rig Skyros and the Ocean Rig Athena. The facilities agreement was comprised of three term loan facilities of up to $150,000 each (one relating to each of the aforementioned seventh generation drillships) made available by the commercial lenders, or the Commercial Facilities, three term loan facilities of up to $150,000 each (one relating to each of the aforementioned seventh generation drillships) made available by Eksportkreditt Norge AS, or the Eksportkreditt GIEK Facilities, and three term loan facilities of up to $150,000 each (one relating to each of the aforementioned seventh generation drillships) made available by the Export-Import Bank of Korea, or the Kexim Facilities.  All term loan facilities bore interest at LIBOR plus a margin and were repayable in quarterly installments, beginning three months after the delivery of the first drillship. The Commercial Facilities matured five years after the first drawdown date while the Eksportkreditt GIEK Facilities and Kexim Facilities matured five or eleven years after the first drawdown date at the lenders option. In connection with this loan, Ocean Rig paid $22.4 million as loan origination fees. On August 20, 2013 and December 20, 2013, the Company drew down an amount of $900,000 in aggregate under the above facility in connection with the deliveries of Ocean Rig Mylos and the Ocean Rig Skyros. On March 24, 2014, Ocean Rig drew down the remaining undrawn amount of $450,000, in connection with the delivery of Ocean Rig Athena.

Under the agreement, Ocean Rig would only pay dividends or make other distributions in respect of its capital stock under the $1,350,000 secured term loan facility in an amount of up to 50% of net income of each previous financial year, provided in each case that Ocean Rig maintained minimum liquidity in an aggregate amount of not less than $200,000 in cash and cash equivalents and restricted cash and maintain such level for the next 12 months following the date of the dividend payment.

F-34

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

9. Long-term Debt - continued:

On August 30, 2013, Ocean Rig signed a supplemental agreement to amend certain provisions in its $1,350,000 Senior Secured Facility dated February 28, 2013. Under the terms of the agreement, the existing dividend restriction of up to 50% of preceding fiscal year net income amended to apply on a cumulative basis from July 1, 2013 onwards (50% of cumulative net income) and include a carve-out to pay additional dividends up to the higher of (i) $150,000 and (ii) 5% of Ocean Rig's net tangible assets. Furthermore, the minimum interest coverage ratio requirement would be 2.0 times until June 30, 2015 and the maximum leverage ratio will be 6.5 times until June 30, 2014, 6.0 times until December 31, 2014 and 5.5 times until June 30, 2015.

On July 25, 2014, this facility was repaid in full and replaced by the $1,300,000 Senior Secured Term Loan B Facility (see below).

$1.3 billion Senior Secured Term Loan B Facility

On July 25, 2014, Ocean Rig's wholly owned subsidiary, Drillships Ocean Ventures Inc., entered into a $1,300,000 Senior Secured Term Loan B ("New Term Loan B") facility to repay the $1,350,000 Senior Secured Credit Facility, which had an outstanding loan balance of approximately $1,300,000 on that date. The unamortized balance of the deferred finance fees associated with the loan repaid, amounting to approximately $19,797, was written off in the consolidated statement of operations upon the extinguishment of the related debt in July 2014. In addition, restricted cash of $75,000 associated with the respective debt was released upon the repayment.  The New Term Loan B facility which is secured primarily by first priority mortgages on the vessels, the Ocean Rig Mylos, the Ocean Rig Skyros and the Ocean Rig Athena, bears interest at a fixed rate and matures on July 25, 2021.

$1.9 billion term loan B facilitiy

On July 12, 2013,  Ocean Rig, through its wholly-owned subsidiaries, Drillships Financing Holding Inc. ("DFHI") and Drillships Projects Inc., entered into a $1,800,000 senior secured term loan facility, comprised of tranche B-1 term loans in an aggregate principal amount equal to $975,000 ("Tranche B-1 Term Loans") and tranche B-2 term loans in an aggregate principal amount equal to $825,000 ("Tranche B-2 Term Loans" and, together with the Tranche B-1 Term Loans, the "Term Loans"), with respective maturity dates in the first quarter of 2021, subject to adjustment to the third quarter of 2020 in certain circumstances and the third quarter of 2016. The Term Loans are initially guaranteed by Ocean Rig and certain existing and future subsidiaries of DFHI and are secured by certain assets of, and by a pledge of the stock of, DFHI and the subsidiary guarantors. The net proceeds of the Term Loans were used by Ocean Rig to repay in full amounts outstanding under Ocean Rig's $800,000 secured term loan agreement and the two $495,000 senior secured credit facilities, amounting to $1,519,168 in aggregate. The unamortized balance of the deferred finance fees associated with the repaid loans, amounting to approximately $23.3 million was written off upon the extinguishment of the related debt in July 2013. In addition, restricted cash of $131.6 million associated with the respective loans were released upon the repayment. On July 26, 2013, Ocean Rig through its wholly-owned subsidiaries DFHI and Drillships Projects Inc., entered into an incremental amendment to the $1,800,000 senior term loan for additional tranche B-1 term loans in a principal amount of $100,000.

On February 7, 2014, Ocean Rig refinanced its then existing short-term Tranche B-2 Term Loans with a fungible add-on to its existing long-term Tranche B-1 Term Loans.  As a result of this refinancing, the total $1.9 billion of Tranche B-1 Term Loans will mature noearlier than the third quarter of 2020.

$12.5 million Sellers credit

On March 15, 2013, the Company reached an agreement with a far eastern shipyard for a $12,500 sellers credit to the Company.  This credit was repayable to the yard in one bullet repayment two years after date of drawdown and it bore interest at 3% per annum. The Company agreed to provide a pledge of 1,602,500 shares in Ocean Rig that the Company owns, which pledge would be automatically released upon repayment of the credit. During March 2013, the Company drew the total amount of $12,500. On January 8, 2015, this credit was repaid in full by the Company. On the date of repayment and termination of the loan agreement, the Company was released from its obligations and 1,602,500 shares of Ocean Rig UDW Inc. pledged by the Company to the shipyard were released and returned to the Company.

The aggregate available undrawn amounts under the Company's facilities at December 31, 2013 and 2014, were $450,000 and $0, respectively.

The weighted-average interest rates on the above outstanding debt were: 6.35%, 6.63% and 6.60% for the years ended December 31, 2012, 2013 and 2014, respectively.

F-35

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 9. Long-term Debt - continued:

The table below presents the movement for bank loans and notes throughout 2014:

Loan	Loan agreement date	Original Amount		December 31, 2013		New Loans		Repayments			December 31, 2014
Secured Credit Facility	October 2, 2007	$	35,000	$	17,000		-		(4,200	)	$	12,800
Secured Credit Facility	October 5, 2007		90,000		57,000		-		(4,000	)		53,000
Secured Credit Facility	June 20, 2008		103,200		24,250		-		(3,000	)		21,250
Secured Credit Facility	May 13, 2008		125,000		21,595		-		(5,889	)		15,706
Secured Credit Facility	May 5, 2008		90,000		36,000		-		(6,000	)		30,000
Secured Credit Facility	November 16, 2007		47,000		16,000		-		(2,000	)		14,000
Secured Credit Facility	July 23, 2008		126,400		53,225		-		(10,600	)		42,625
Secured Credit Facility	March 13, 2008		130,000		30,241		-		(1,336	)		28,905
Secured Credit Facility	February 7, 2011		70,000		57,167		-		(4,667	)		52,500
Secured Credit Facility	April 20, 2011		32,313		26,927		-		(2,154	)		24,773
Secured Credit Facility	October 26, 2011		141,350		123,230		-		(10,840	)		112,390
Secured Credit Facility	October 24, 2012		107,669		96,654				(8,405	)		88,249
Senior Secured Credit Facility	February 28, 2013		1,350,000		890,000		450,000		(1,340,000	)		-
Term Loan B Facility	July 12, 2013		1,900,000		1,895,250		-		(19,000	)		1,876,250
Term Loan B Facility	July 25, 2014		1,300,000		-		1,300,000		(3,250	)		1,296,750
Secured Credit Facility	March 31, 2006		753,637		174,406		-		-			174,406
Secured Credit Facility	March 19, 2012		87,654		16,980		-		(1,191	)		15,789
Secured Credit Facility	February 14, 2012		122,580		115,590		-		(5,760	)		109,830
Secured Bridge Credit Facility	November 14, 2014		200,000		-		200,000		-			200,000
Senior Secured Credit Facility	October 29, 2014		167,100		-		167,100		-			167,100
Secured Credit Facility	September 18, 2007		325,000		76,534		-		(76,534	)		-
5% Convertible Senior Unsecured Notes	November 21, 2009		460,000		700,000		-		(700,000	)		-
6.5% Drill Rigs Senior Secured Notes	September 20, 2012		800,000		800,000		-		-			800,000
7.25% Ocean Rig's Senior Unsecured Notes	March 26, 2014		500,000		-		500,000		-			500,000
9.5% Ocean Rig's Senior Unsecured Notes	April 14, 2011	$	500,000	$	500,000		-		(500,000	)	$	-
				$	5,728,049		2,617,100		(2,708,826	)	$	5,636,323

The above loans and secured notes are secured by a first priority mortgage over the Company's vessels, drilling rigs and drillships, corporate guarantees, first priority assignments of all freights, earnings, insurances and requisition compensation and pledges of the shares of capital stock of certain of the Company's subsidiaries. The loans contain covenants that restrict, without the bank's prior consent, changes in management and ownership of the vessels, the incurrence of additional indebtedness and mortgaging of vessels and changes in the general nature of the Company's business. In addition, some of the vessels owning companies are not permitted to pay any dividends to DryShips nor DryShips to its shareholders without the lender's prior consent. The loans also contain certain financial covenants relating to the Company's financial position, operating performance and liquidity, including maintaining working capital above a certain level. The Company's secured credit facilities impose operating and negative covenants on the Company and its subsidiaries. These covenants may limit the Dryships' subsidiaries' ability to, among other things, without the relevant lenders' prior consent (i) incur additional indebtedness, (ii) change the flag, class or management of the vessel mortgaged under such facility, (iii) create or permit to exist liens on their assets, (iv) make loans, (v) make investments or capital expenditures, and (vi) undergo a change in ownership or control.

F-36

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

9. Long-term Debt - continued:

As of December 31, 2014, the shipping segment was not in compliance with certain loan-to-value ratios contained in certain of its loan agreements. These loan-to-value ratio shortfalls do not constitute events of default that would automatically trigger the full repayment of the loan. Based on the loan agreements, loan-to-value shortfalls may be remedied by the Company by providing additional collateral or repaying the amount of the shortfall. In addition, as ofDecember 31, 2014, the shipping segment was in breach of certain financial covenants, contained in the Company's loan agreements relating to $259,537 of the Company's debt (Note 3). As a result of this non-compliance and of the cross default provisions contained in all bank loan agreements of the shipping segment and in accordance with guidance related to the classification of obligations that are callable by the creditor, the Company has classified all of its shipping segment's bank loans in breach amounting to $1,163,321 as current at December 31, 2014.

As of December 31, 2014, the Company was in compliance with all the financial covenants contained in its debt agreements relating to its drilling segment.

Total interest incurred on long-term debt and amortization of debt issuance costs, including capitalized interest, for the years ended December 31 2012, 2013 and 2014, amounted to $222,635, $297,602 and $367,996, respectively. These amounts net of capitalized interest are included in "Interest and finance costs" in the accompanying consolidated statement of operations.

The annual principal payments required to be made after December 31, 2014, including balloon payments, totaling $5,636,323 due through June 2025 are as follows:

2015	$	1,195,323
2016		32,000
2017		832,000
2018		32,000
2019		532,000
2020 and thereafter		3,013,000
Total principal payments		5,636,323
Less: Financing fees and equity component of notes		(118,710	)
Total debt	$	5,517,613

10. Financial Instruments and Fair Value Measurements:

ASC 815, "Derivatives and Hedging" requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the statement of financial position. Effective January 1, 2011, the Company removed the designation of the cash flow hedges and discontinued hedge accounting for the associated interest rate swaps.

The Company recognizes all derivative instruments as either assets or liabilities at fair value on its consolidated balance sheets.

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income/ (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in the accompanying consolidated statement of operations. Changes in the fair value of derivative instruments that have not been designated as hedging instruments are reported in the accompanying consolidated statement of operations.

The Company enters into interest rate swap transactions to manage interest costs and risk associated with changing interest rates with respect to its variable interest rate loans and credit facilities. The Company entered into forward freight agreements ("FFA") and foreign currency forward contracts in order to manage risks associated with fluctuations in charter rates and foreign currencies, respectively. All of the Company's derivative transactions are entered into for risk management purposes.

F-37

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 10. Financial Instruments and Fair Value Measurements - continued:

10.1 Interest rate swaps, cap and floor agreements: As of December 31, 2012,  2013 and 2014 the Company had outstanding 43, 27 and 24 interest rate swaps of $4.6 billion, $2.9 billion and $2.4 billion notional amount, respectively,maturing from January 2015 through November 2017.

Effective January 1, 2011, the Company removed the designation of the cash flow hedges and discontinued hedge accounting for the associated interest rate swaps. As a result, as of December 31, 2012, 2013 and 2014, these agreements do not qualify for hedge accounting and, as such, changes in their fair values are included in the accompanying consolidated statement of operations. In accordance with ASC 815-30-40 the unrealized loss accumulated in "Accumulated other comprehensive income/(loss)" for previously designated cash flow hedges, which as of December 31, 2010, amounted to $35,992, is being reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings. As a result, during the year ended December 31, 2012, an amount of $22,904 was reclassified into the consolidated statement of operations. Included in the $22,904 is an amount of $13,088 that was transferred to the consolidated statements of operations immediately as a result of the early loan repayment, which ended the forecasted transaction.

Accumulated other comprehensive income/(loss) also included realized losses on cash flow hedges associated with interest capitalized during prior years under "Advances for vessels and drillships under construction and acquisitions" amounting to $16,463, which according to ASC 815-30-35 is being reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings. As a result, during the years ended December 31, 2013 and 2014,the amounts of $550 and $550, respectively were reclassified into the consolidated statement of operations.

The fair value of the above mentioned agreements equates to the amount that would be paid by the Company if the agreements were transferred to a third party at the reporting date, taking into account current interest rates and creditworthiness of both the financial instrument counterparty and the Company.

The change in the fair value of such agreements which do not qualify for hedge accounting for the years ended December 31, 2012, 2013 and 2014, amounted to gains of $54,506, $88,859 and $29,304, respectively and is included in "Gain/ (Loss) on interest rate swaps" in the accompanying consolidated statement of operations.

As of December 31, 2012, security deposits of $8,000 were provided as security by the Company. The Company has deposited also a cash collateral of $6,000 that was classified as current restricted cash. These amounts were released upon the delivery of the Ocean Rig Mylos and the Ocean Rig Skyros (Note 6).

As of December 31, 2013 and 2014, security deposits of $550 for the tankers Saga and Vilamoura, were recorded as "Other non-current assets" in the accompanying consolidated balance sheet due to the market loss in the respective swap agreements as of the related dates.

10.2 Forward freight agreements: FFA trading generally has not qualified as hedge accounting and as such the trading of FFAs could lead to material fluctuations in the Company's reported results from operations on a period to period basis.

F-38

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

10. Financial Instruments and Fair Value Measurements - continued:

As of December 31, 2013 and 2014, the Company had no open FFAs.

10.3 Foreign currency forward contracts: As of December 31, 2012, 2013 and 2014, the Company had no outstanding forward contracts.

Tabular disclosure of financial instruments is as follows:

Fair Values of Derivative Instruments in the Consolidated Balance Sheets:

		Asset Derivatives					Liability Derivatives
Derivatives not designated as hedging instruments	Balance Sheet  Location	December 31, 2013 Fair value		December 31, 2014 Fair value		Balance Sheet Location	December 31, 2013 Fair value		December 31, 2014 Fair value
Interest rate swaps	Financial instruments-current assets	$	-	$	-	Financial instruments- current liabilities	$	47,740	$	30,447
Interest rate swaps	Financial instruments- non-current assets		14,741		11,086	Financial instruments- non-current liabilities		26,086		10,420
Total derivatives not designated as hedging instruments		$	14,741	$	11,086		$	73,826	$	40,867
Total derivatives		$	14,741	$	11,086	Total derivatives	$	73,826	$	40,867

During the years ended December 31, 2012, 2013 and 2014, the losses transferred from other comprehensive income/ (loss) to the statement of operations were $23,453, $550 and $550, respectively. The estimated net amount of existing losses at December 31, 2014, that will be reclassified into earnings within the next twelve months related with cash flow hedges is $550.

		Amount of Gain/(Loss)
Derivatives not designated as hedging instruments	Location of Gain or (Loss) Recognized	Year Ended December 31, 2012				Year Ended December 31, 2013			Year Ended December 31, 2014
Interest rate swaps	Gain/(Loss) on interest rate swaps		$	(54,073	)		$	8,373		$	(15,528	)
Total			$	(54,073	)		$	8,373		$	(15,528	)

The carrying amounts of cash and cash equivalents, restricted cash, trade accounts receivable and accounts payable and other current liabilities reported in the consolidated balance sheets approximate their respective fair values because of the short term nature of these accounts. The fair value of credit facilities is estimated based on current rates offered to the Company for similar debt of the same remaining maturities. Additionally, the Company considers its creditworthiness in determining the fair value of the credit facilities. The carrying value approximates the fair market value for the floating rate loans. The fair value of the interest rate swaps was determined using a discounted cash flow method based on market-based LIBOR swap yield curves, taking into account current interest rates and the creditworthiness of both the financial instrument counterparty and the Company.

F-39

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

10. Financial Instruments and Fair Value Measurements - continued:

The Convertible Senior Notes, the OCR UDW Notes and the Drill Rigs Notes, have a fixed rate and their estimated fair values were determined through Level 2 inputs of the fair value hierarchy (quoted price in the over-the counter-market). The fair value of the outstanding balance of the $1,900,000 and $1,300,000 Term Loan B Facilities that have a fixed rate is estimated through Level 2 of the fair value hierarchy by discounting future cash flows using rates currently available for debt with similar terms, credit risk and remaining maturities. The estimated fair value of the above Convertible Senior Notes, 9.5% Senior Unsecured Notes, Drill Rigs Notes and loans at December 31, 2013, is approximately, $700,000,  $531,250, $863,504 and $1,951,790, respectively compared to a carrying value net of finance fees of $649,966, $493,915, $784,485 and $1,839,170, respectively. The estimated fair value of the above 7.25% Senior Unsecured Notes and Drill Rigs Notes at December 31, 2014, is approximately $380,000 and $666,000, respectively, while the loan balances are approximately the same as their fair market values, compared to a carrying amount net of financing fees of $492,214, $788,224, $1,825,671 and $1,266,341, respectively.

The guidance for fair value measurements applies to all assets and liabilities that are being measured and reported on a fair value basis. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The statement requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The following table summarizes the valuation of assets and liabilities measured at fair value on a recurring basis as of the valuation date.

	December 31, 2013				Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)			Significant Other Observable Inputs (Level 2)				Unobservable Inputs (Level 3)
Recurring measurements:
Interest rate swaps - asset position		$	14,741			$	-		$	14,741			$	-
Interest rate swaps - liability position		$	(73,826	)		$	-		$	(73,826	)		$	-
Total		$	(59,085	)		$	-		$	(59,085	)		$	-

	December 31, 2014			Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)
Recurring measurements:
Interest rate swaps - asset position	$	11,086		$	-	$	11,086		$	-
Interest rate swaps - liability position	$	(40,867	)	$	-	$	(40,867	)	$	-
Total	$	(29,781	)	$	-	$	(29,781	)	$	-

F-40

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

10. Financial Instruments and Fair Value Measurements - continued:

The following table summarizes the valuation of assets measured at fair value on a non-recurring basis as of the valuation date.

	Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Impairment loss
Non-Recurring measurements:
Long-lived assets held and used	$	-	$	71,000	$	-	$	(43,490	)
Total	$	-	$	71,000	$	-	$	(43,490	)

In accordance with the provisions of relevant guidance, four newbuildings with a carrying amount of $43,490 were written down to their fair values as determined based on the agreed sale price, resulting in an impairment charge of $43,490, which was included in the accompanying consolidated statement of operations for the year ended December 31, 2013 (Note 6).

	Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Impairment loss
Non-Recurring measurements:
Long-lived assets held and used	$	-	$	10,500	$	-	$	(38,148	)
Total	$	-	$	10,500	$	-	$	(38,148	)

As a result of the impairment analysis performed for the year ended December 31, 2014, one of the Company's vessels, with a carrying amount of $48,648 was written down to its fair value as determined based on the valuations of the independent valuators, resulting in an impairment charge of $38,148, which was included in the accompanying consolidated statement of operations for the year ended December 31, 2014 (Note 7).

F-41

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

11. Common Stock and Additional Paid-in Capital:

Net Loss Attributable to Dryships Inc. and Transfers from the Non-controlling Interest:

The following table represents the effects of any changes in Dryships Inc. ownership interest in a subsidiary on the equity attributable to the shareholders of Dryships Inc.

	Year Ended December 31,
	2012			2013			2014
Net loss attributable to Dryships Inc.	$	(246,778	)	$	(223,093	)	$	(47,512	)
Transfers to the non-controlling interest:
Decrease in Dryships Inc. equity for reduction in subsidiary ownership		(81,760	)		(45,542	)		(4,758	)
Net transfers to the non-controlling interest		(81,760	)		(45,542	)		(4,758	)
Net loss attributable to Dryships Inc. and transfers to/from the non-controlling interest	$	(328,538	)	$	(268,635	)	$	(52,270	)

F-42

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

11. Common Stock and Additional Paid-in Capital - continued:

Issuance of common shares

On October 4, 2013, the Company filed a prospectus supplement to the universal shelf registration statement on Form F-3 filed on August 30, 2013, pursuant to an at-the-market offering for up to $200,000 of the Company's common shares. In connection with the offering, the Company entered into a Sales Agreement with Evercore Group L.L.C., ("Evercore"), the sales agent, dated October 4, 2013. During 2013, 6,892,233 common shares were issued and sold pursuant to the at-the-market offering, resulting in net proceeds of $23,655, after deducting commissions, while in 2014, 22,209,844 common shares were issued and sold pursuant to the at-the-market offering, resulting in net proceeds of $90,016, after deducting commissions.

On October 29, 2014, the Company successfully completed the offering of 250,000,000 shares of its common stock, par value $0.01 per share, at a price of $1.40 per share. As part of the offering, George Economou, the Company's Chairman, President and Chief Executive Officer, has purchased $80,000, or 57,142,000 shares, of common stock in the offering at the public offering price. The Company used the net proceeds of approximately $332,852 from the offering to repurchase a portion of its $700,000 principal amount of indebtedness under the 5.0% Convertible Senior Notes matured on December 1, 2014.

Sale of Ocean Rig shares

On April 17, 2012, the Company completed a public offering of an aggregate of 11,500,000 common shares of Ocean Rig owned by DryShips. The Company received approximately $180,485 of net proceeds from the public offering. The net assets of Ocean Rig as of April 17, 2012, amounted to $3,003,954. At the date of the transaction, the carrying amounts of Ocean Rig's assets and liabilities did not require fair value adjustments. The difference between the net consideration received and the amount attributed to the non-controlling interests which amounted to $81,760 was recognized in equity attributable to the controlling interest.

On February 14, 2013, the Company completed a public offering of an aggregate of 7,500,000 common shares of Ocean Rig owned by DryShips. The Company received approximately $122,960 of net proceeds from the public offering. The net assets of Ocean Rig as of February 14, 2013, amounted to $2,950,992. At the date of the transaction, the carrying amounts of Ocean Rig's assets and liabilities did not require fair value adjustments. The difference between the net consideration received and the amount attributed to the non-controlling interests, which amounted to $45,542, was recognized in equity attributable to the controlling interest.

Treasury stock

During September 2011, April 2012 and January 2013 the share borrower described in Note 9 returned to the Company an aggregate of 21,000,000 loaned shares of the Company's common stock, which were not retired and are held as treasury stock. During December, 2014 the share borrower described in Note 9 returned to the Company the remaining 15,100,000 loaned shares of the Company's common stock, which were not retired and are held as treasury stock.

Stockholders Rights Agreement

As of January 18, 2008, the Company entered into a Stockholders Rights Agreement (the "Agreement"). Under the Agreement, the Company's Board of Directors declared a dividend payable of one preferred share purchase right, ("Right"), to purchase one one-thousandth of a share of the Company's Series A Participating Preferred Stock for each outstanding common share. Each Right entitles the registered holder, upon the occurrence of certain events, to purchase from the Company one one-thousandth of a share of Series A Participating Preferred Stock or additional shares of common stock. As of December 31, 2014, no exercise of any Rights had occurred. As of July 9, 2009, an amendment was effected to the Agreement to reflect the issuance of Series A Convertible Preferred Stock.

F-43

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

11. Common Stock and Additional Paid-in Capital - continued:

Dividends

On May 8, 2014, Ocean Rig's Board of Directors declared a quarterly cash dividend with respect to the quarter ended March 31, 2014 of $0.19 per common share, to shareholders on record as of May 20, 2014. The dividend was paid in May, 2014.

On July 21, 2014, Ocean Rig's Board of Directors declared a quarterly cash dividend with respect to the quarter ended June 30, 2014 of $0.19 per common share, to shareholders on record as of August 1, 2014. The dividend was paid in August, 2014.

On October15, 2014, Ocean Rig's Board of Directors declared a quarterly cash dividend with respect to the quarter ended September 30, 2014, of $0.19 per common share, to shareholders on record as of October 31, 2014. The dividend was paid in November, 2014.

Ocean Rig paid dividends amounting to $30,563, to shareholders other than the Company, during the year ended December 31, 2014.

12. Equity incentive plan

On January 16, 2008, the Company's Board of Directors approved the 2008 Equity Incentive Plan (the "Plan"). Under the Plan, officers, key employees and directors are eligible to receive awards of stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock units and unrestricted stock. On January 25, 2010, the Company's Board of Directors amended the 2008 Equity Incentive Plan to provide that a total of 21,834,055 common shares be reserved for issuance.

On March 5, 2008, 1,000,000 shares of non-vested common stock out of the 1,834,055 shares then reserved under the Plan were granted to Fabiana, an entity that offers consultancy services to the Chief Executive Officer, Mr. George Economou. The shares vested quarterly in eight equal installments with the first installment of 125,000 common shares vesting on May 28, 2008. The stock-based compensation was recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $75.09 per share. As of December 31, 2014, the shares have vested in full.

On October 2, 2008, the Company's Board of Directors and Compensation Committee approved grants for the non-executive directors of the Company. On October 2, 2008, 9,000 shares of non-vested common stock and 9,000 shares of vested common stock were granted to the non-executive directors. The non-vested common stock vested evenly over a three-year period with the first vesting date commencing on January 1, 2009. For the director vested and non-vested stock, the fair value of each share on the grant date was $33.59. As of December 31, 2014, these shares have vested in full.

On March 12, 2009, 70,621 shares of non-vested common stock out of the 1,834,055 shares then reserved under the Plan were granted to an executive of the Company. The shares vested in annual installments of 42,373 and 28,248 shares on March 1, 2010 and 2011, respectively. The fair value of each share on the grant date was $3.54. As of December 31, 2014, the shares have vested in full.

On January 25, 2010, 4,500,000 shares of non-vested common stock out of 21,834,055 shares reserved under the Plan were granted to Fabiana as a bonus for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2009 as well as for anticipated services during the years 2010, 2011 and 2012. The shares vested over a period of three years, with 1,000,000 shares vesting on the grant date; 1,000,000 shares vesting on December 31, 2010 and 2011, respectively; and 1,500,000 shares vesting on December 31, 2012. The stock-based compensation was recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $6.05 per share. As of December 31, 2014, the shares have vested in full.

On March 5, 2010, 2,000 shares of non-vested common stock and 1,000 shares of vested common stock out of the 21,834,055 shares reserved under Plan were granted to an executive of the Company. The shares vested in annual installments of 1,000 shares on March 5, 2010, December 31, 2010 and 2011, respectively. The shares were issued during July 2010 and the fair value of each share, on the grant date, was $5.66. As of December 31, 2014, the shares have vested in full.

F-44

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

12. Equity incentive plan - continued:

On January 12, 2011, 9,000,000 shares of the non-vested common stock out of 21,834,055 shares reserved under the Plan were granted to Fabiana as a bonus for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2010. The shares were granted to Fabiana and vest over a period of eight years, with 1,000,000 shares vesting on the grant date and 1,000,000 shares vesting annually on December 31, 2011, through 2018, respectively. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $5.50 per share. As of December 31, 2014, 5,000,000 of these shares have vested.

On February 4, 2011, 15,000 shares of non-vested common stock out of the 21,834,055 shares reserved under Plan were granted to an executive of the Company. The shares vest on a pro-rata basis over a period of three years from the date of the non-vested stock award agreement. The fair value of each share, on the grant date, was $5.01. As of December 31, 2014, the shares have vested in full.

On August 20, 2013, the Compensation Committee approved that a bonus in the form of 1,000,000 shares of the Company's common stock, with par value $0.01, be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2012. The shares vest over a period of two years with 333,334 shares vesting on the grant date, 333,333 shares vesting on August 20, 2014 and 333,333 vesting on August 20, 2015, respectively. The stock based compensation is being recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $2.01 per share. As of December 31, 2014, 666,667 of these shares have vested.

On August 19, 2014, the Compensation Committee approved that a bonus in the form of 1,200,000 shares of the Company's common stock, with par value $0.01, be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2013. The shares vest over a period of three years, with 400,000 shares vesting on December 31, 2014, 400,000 shares vesting on December 31, 2015, and 400,000 vesting on December 31, 2016. The stock based compensation is being recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $3.26 per share. As of December 31, 2014, 400,000 of these shares have vested.

On December 30, 2014, the Compensation Committee approved that a bonus in the form of 2,100,000 shares of the Company's common stock, with par value $0.01, be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2014. The shares vest over a period of three years, with 700,000 shares vesting on December 31, 2015, 700,000 shares vesting on December 31, 2016, and 700,000 vesting on December 31, 2017. The stock based compensation is being recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $1.07 per share. As of December 31, 2014, none of these shares have vested.

A summary of the status of the Company's non vested shares as of December 31, 2012, 2013 and 2014 and movement for the years ended December 31, 2012, 2013 and 2014, is presented below. There were no shares forfeited in 2012, 2013 and 2014.

	Number of non vested shares			Weighted average grant date fair value per non vested shares
Balance December 31, 2011		8,510,150		$	5.60
Vested		(2,505,150	)		5.83
Balance December 31, 2012		6,005,000		$	5.50
Granted		1,000,000			2.01
Vested		(1,338,334	)		4.63
Balance December 31, 2013		5,666,666		$	5.09
Granted		3,300,000			1.87
Vested		(1,733,333	)		4.31
Balance December 31, 2014		7,233,333		$	3.81

F-45

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

12. Equity incentive plan - continued:

	Number of vested shares		Weighted average grant date fair value per vested shares
As at December 31, 2011		6,092,871	$	17.23
Non vested shares granted in prior years and vested 2012		2,505,150		5.83
As at December 31, 2012		8,598,021	$	13.91
Granted and vested		333,334		2.01
Non vested shares granted in prior years and vested 2013		1,005,000		5.50
As at December 31, 2013		9,936,355	$	12.66
Granted and vested		400,000		3.26
Non vested shares granted in prior years and vested 2014		1,333,333		4.63
As at December 31, 2014		11,669,688	$	11.42

As of December 31, 2012, 2013 and 2014, there was $19,725, $13,947 and $12,589 respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of four years. The stock-based compensation recognized to expenses amounted to $12,686, $7,790 and $7,516 and is recorded in "General and administrative expenses", in the accompanying consolidated statements of operations for the years ended December 31, 2012, 2013 and 2014, respectively. The total fair value of shares vested during the years ended December 31, 2012, 2013 and 2014, were $4,008, $5,394 and $2,561, respectively.

Ocean Rig UDW Inc.

On February 14, 2012, Ocean Rig's Compensation Committee approved the grant of 112,950 shares of non-vested common stock to officers and key employees of Ocean Rig`s subsidiary, Ocean Rig AS, as a bonus for their services rendered during 2011. The shares vest over a period of three years, one third on each December 31, 2012, 2013 and 2014.The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $16.50 per share.

On March 21, 2012, Ocean Rig's Board of Directors approved the 2012 Equity Incentive Plan (the "Plan") and reserved a total of 2,000,000 common shares. Under the Plan, officers, key employees, and directors are eligible to receive awards of stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock units and unrestricted stock.

On May 15, 2012, Ocean Rig's Compensation Committee approved the grant of: a) 4,500 shares of non-vested common stock to an officer as an additional bonus for his services rendered during 2011 and b) 28,200 shares to new recruited employees as a sign-up stock bonus. The shares vest over a period of three years, one third on each of December 31, 2012, 2013 and 2014. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $15.92 per share.

On December 5, 2012, 7,500 shares awarded to an officer of Ocean Rig. The fair value of the shares on the grant date was $15.75 and the shares vested in March 2013.

On May 16, 2013, Ocean Rig's Compensation Committee approved the grant of 192,400 shares of non-vested common stock to Ocean Rig's employees. The shares vest over a period of three years. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $16.90 per share.

F-46

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

12. Equity incentive plan - continued:

Ocean Rig UDW Inc. – continued:

On August 20, 2013, Ocean Rig's Compensation Committee approved a sign-on bonus of 150,000 shares of Ocean Rig's common stock to Azara, pursuant to a consultancy agreement with Azara effective January 1, 2013, relating to the services of Mr. George Economou as Chief Executive Officer. The shares vest over a period of two years with 50,000 shares vesting on the grant date, 50,000 shares vesting on August 20, 2014 and 50,000 vesting on August 20, 2015 respectively. The stock based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $17.56 per share.

On March 31, 2014, Ocean Rig's Compensation Committee approved the grant of 161,200 shares of non-vested common stock to employees of Ocean Rig. The shares vest over a period of three years. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $17.79 per share.

On August 19, 2014, Ocean Rig's Compensation Committee approved a bonus of 150,000 shares of Ocean Rig's common stock to Azara, pursuant to a consultancy agreement with Azara effective January 1, 2013, relating to the services of Mr. George Economou as Chief Executive Officer of Ocean Rig, rendered during 2013. The shares vest over a period of three years with 50,000 shares vesting on December 31, 2014, 50,000 shares vesting on December 31, 2015, and 50,000 vesting on December 31, 2016, respectively. The stock based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $18.37 per share.

On November 4, 2014, Ocean Rig's Compensation Committee approved the grant of 45,450 shares of non-vested common stock to employees of Ocean Rig. The shares vest over a period of three years. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $12.60 per share.

On December 30, 2014, Ocean Rig's Compensation Committee approved a bonus in the form of 300,000 of Ocean Rig's common stock to be granted to Azara for the contribution of Mr. George Economou for Chief Executive Officer's services rendered to Ocean Rig during 2014. The shares vest over a period of three years with 100,000 shares vesting on December 31, 2015, 100,000 shares vesting on December 31, 2016, and 100,000 vesting on December 31, 2017. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $9.46 per share.

As of December 31, 2014, 309,452 shares have vested, while 171,626 shares were forfeited due to employees' resignations.

A summary of the status of Ocean Rig's non vested shares as of December 31, 2014 and movement during the year then ended, is presented below.

	Number of non vested shares			Weighted average grant date fair value per non vested shares
Balance December 31, 2012		73,500		$	16.40
Granted		342,400			17.19
Forfeited		(15,900	)		16.90
Vested		(160,133	)		16.92
Balance December 31, 2013		239,867		$	17.15
Granted		656,650			13.76
Forfeited		(78,576	)		16.93
Vested		(205,143	)		17.31
Balance December 31, 2014		612,798		$	13.49

F-47

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

12. Equity incentive plan - continued:

Ocean Rig UDW Inc. – continued:

	Number of vested shares			Weighted average grant date fair value per vested shares
As at December 31, 2012		2,500		$	16.50
Granted and vested		117,133			17.18
Non vested shares granted in prior years and vested 2013		43,000			16.16
As at December 31, 2013		162,633		$	16.90
Granted and vested		111,585			17.39
Non vested shares granted in prior years and vested 2014		93,558			17.20
Granted and vested shares in prior years, but cancelled during 2014		(58,324	)		16.63
As at December 31, 2014		309,452		$	17.22

As of December 31, 2013 and 2014, there was $2,724 and $6,235 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted by Ocean Rig, respectively. That cost is expected to be recognized over a period of two years. The amounts of $613, $3,634 and $3,576 represents the stock based compensation expense for each year accordingly and are recorded in "General and administrative expenses", in the accompanying consolidated statements of operations for the years ended December 31, 2012, 2013 and 2014.  The total fair value of shares vested during the years ended December 31, 2012, 2013 and 2014, was $37, $2,959 and $2,383, respectively. As of December 31, 2014, there were 139,202 shares of common stock which had been granted to employees and vested but which had not yet been issued by the Company.

13. Commitment and contingencies:

13.1 Legal proceedings

Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping and drilling business.

The Company has obtained hull and machinery insurance for the assessed market value of the Company's fleet and protection and indemnity insurance. However, such insurance coverage may not provide sufficient funds to protect the Company from all liabilities that could result from its operations in all situations. Risks against which the Company may not be fully insured or insurable include environmental liabilities, which may result from a blow-out or similar accident, or liabilities resulting from reservoir damage alleged to have been caused by the negligence of the Company.

The Company's loss of hire insurance coverage does not protect against loss of income from day one. It covers approximately one year for the loss of time but will be effective after 45 days' off-hire. During 2012, the Ocean Rig Corcovado, a drillship owned by Ocean Rig,incurred off-hire due to a failure in one of its engines which was a covered event under the loss of hire policy that resulted in $24.6 million being recognized as revenue during the year ended December 31, 2012. The amount of $24.6 million was reimbursed by the insurers to the Company in August 2012. During 2014, the Ocean Rig Corcovado incurred off-hire for the same event and, as a result,an additional amount of $20.2 million for the above covered event was recognized as revenue during the year ended December 31, 2014, and was reimbursed during the same period. During 2014, the Ocean Rig Mylos incurred off-hire due to damage to the blow-out-preventer stack during testing, which was a covered event under the loss of hire policy that resulted in $39.6 million being recognized as revenue during the year ended December 31, 2014, from which an amount of $39.1 was reimbursed during the year.

As part of the normal course of operations, the Company's customers may disagree on amounts due to the Company under the provision of the contracts which are normally settled though negotiations with the customer. Disputed amounts are normally reflected in revenues at such time as the Company reaches agreement with the customer on the amounts due.

F-48

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

13. Commitment and contingencies - continued:

Ocean Rig's drilling rig, the Leiv Eiriksson operated in Angola during the period from 2002 to 2007. Ocean Rig's manager in Angola during this period made a legal claim for reimbursement of import/export duties for two export/importation events in the period 2002 to 2007 retroactively levied by the Angolan government. Agreement was reached between the parties to settle this claim for an amount of $6.1 million which was paid by Ocean Rig's relevant subsidiary on May 24, 2012, to the claimant, in full and final settlement of the London Court Proceedings. Ocean Rig recorded a charge of $6.1 million during the year ended December 31, 2012, which is included in "Legal settlements and other, net" in the consolidated statements of operations.

On May 10, 2013, Drillship Hydra Owners Inc., being the owning company of the drillship, the Ocean Rig Corcovado, filed a claim against Capricorn Greenland Exploration 1 Limited and Cairn Energy Plc with the High Court in London in connection with the loss of daily earnings and cost of repair for the Blow Out Preventer of the Ocean Rig Corcovado in June and July 2011. In July 2013, Ocean Rig reached an out-of-court commercial agreement with Capricorn Greenland Exploration 1 Limited and Cairn Energy Plc to receive a compensation amounting to $5.0 million and a Settlement Agreement and Release dated September 12, 2013, was entered and the relevant claim filed in the High Court in London, U.K. was dropped. In this respect, Ocean Rig, having previously recognized a receivable of $11.0 million, recorded a charge of $6.0 million during the year ended December 31, 2013, which is included under "Legal settlements and other, net" in the consolidated statement of operations.

Ocean Rig Norway Operations Inc. ("OCR"), a subsidiary of Ocean Rig, was notified by a letter dated November 13, 2013, that arbitration proceedings were commenced against it by Westcon Yard AS of Norway ("Westcon"), in connection to an alleged outstanding unpaid amount of Norwegian Krone Seventy Seven Million Three Hundred Eighty Three Thousand Eight Hundred and Three and Fifty Eight Шre (NOK 77,383,803.58), $10.4 million (based on based on the NOK/U.S. Dollar exchange rate as of December 31, 2014)  plus interest and costs related to upgrades performed in the drilling unit the Leiv Eiriksson in late 2012 and early 2013. The counterparties reached an agreement during the year ended December 31, 2014.

13.2 Purchase obligations:

The following table sets forth the Company's contractual obligations and their maturity dates as of December 31, 2014, for a period of three fiscal years:

Obligations:	Total			2015			2016			2017
Drillship building contracts			1,928,900			566,300			498,200		864,400
Total obligations		$	1,928,900		$	566,300		$	498,200	$	864,400

13.3 Contractual charter revenue

Future minimum contractual charter revenue, based on vessels committed to non-cancelable, long-term time contracts as of December 31, 2014, will be $132,470 during 2015, $104,130 during 2016, $103,296 during 2017, $72,735 during 2018, $32,682 during 2019 and $1,695 during 2020 and thereafter. These amounts do not include any assumed off-hire.

Under seven of the Company's charter agreements, the charterer has the option to (i) acquire the vessels at fair market value as determined by two independent brokers, at the date that the options are exercised, less $5,000 per vessel or, (ii) to require a cash payout of $5,000 per charter agreement in which case the charter agreement will automatically be terminated on the date of completion of the current voyage. These options are exercisable beginning late March 2015 and throughout the term of the charter agreements which expire through 2020. The options will be amortized over the term of the charter agreements or when exercised, if earlier.

F-49

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

 14. Accumulated other comprehensive loss:

The amounts in the accompanying consolidated balance sheets are analyzed as follows:

	Year ended December 31,
	2013												2014
	Attributable to Dryships Inc				Attributable to non controlling interest				Total				Attributable to Dryships Inc				Attributable to non controlling interest				Total
Cash flows hedges realized loss		$	(8,915	)		$	(6,083	)		$	(14,998	)		$	(8,570	)		$	(5,878	)		$	(14,448	)
Actuarial pension gain			2,853				1,949				4,802				1,948				1,336				3,284
Total		$	(6,062	)		$	(4,134	)		$	(10,196	)		$	(6,622	)		$	(4,542	)		$	(11,164	)

15. Interest and Finance Costs:

The amounts in the accompanying consolidated statements of operations are analyzed as follows:

	Year ended December 31,
	2012			2013			2014
Interest incurred on long-term debt	$	205,070		$	251,596		$	317,445
Amortization and write-off of financing fees		17,565			46,006			50,551
Amortization of convertible notes discount		38,855			43,769			45,261
Amortization of share lending agreement-note issuance costs		2,983			2,974			2,733
Commissions, commitment fees and other financial expenses		4,622			57,498			34,256
Capitalized interest		(58,967	)		(69,714	)		(39,225	)
Total	$	210,128		$	332,129		$	411,021

F-50

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

16. Segment information:

The Company has three reportable segments from which it derives its revenues: Drybulk, Tanker and Drilling segments. The reportable segments reflect the internal organization of the Company and are a strategic business that offers different products and services. The Drybulk business segment consists of transportation and handling of Drybulk cargoes through ownership and trading of vessels. The Drilling business segment consists of the deepwater drilling rig services of the drilling rigs and drillships through ownership of drilling rigs and drillships. The Tanker business segment consists of vessels for the transportation of crude and refined petroleum cargoes.

The tables below present information about the Company's reportable segments as of and for the years ended December 31, 2012, 2013 and 2014. The accounting policies followed in the preparation of the reportable segments are the same as those followed in the preparation of the Company's consolidated financial statements.

The Company measures segment performance based on net income. Summarized financial information concerning each of the Company's reportable segments is as follows:

	Drybulk Segment									Drilling Segment									Tanker Segment												TOTAL
	2012			2013			2014			2012			2013			2014			2012			2013			2014			2012			2013			2014
Revenues	$	227,141		$	191,024		$	205,630		$	941,903		$	1,180,250		$	1,817,077		$	41,095		$	120,740		$	162,817		$	1,210,139		$	1,492,014		$	2,185,524
Vessels and rigs/drillships operating expenses		69,640			78,594			90,376			563,583			504,957			727,832			16,499			26,214			26,052			649,722			609,765			844,260
Depreciation and amortization		94,716			96,624			99,631			225,650			236,689			325,744			15,092			24,059			24,417			335,458			357,372			449,792
Loss on sale of assets		1,046			-			-			133			-			-			-			-			-			1,179			-			-
Contract termination fees and other		-			32,283			-			-			-			-			41,339			1,010			-			41,339			33,293			-
Impairment charge		-			43,490			38,148			-			-			-			-			-			-			-			43,490			38,148
General and administrative expenses		52,576			44,819			48,441			83,647			126,868			131,745			9,712			13,035			13,500			145,935			184,722			193,686
Gain/(loss) on interest rate swaps		(13,229	)		(1,226	)		(1,142	)		(36,974	)		8,616			(12,671	)		(3,870	)		983			(1,715	)		(54,073	)		8,373			(15,528	)
Gain/(loss) on FFA's		(13,934	)		(31,362	)		-			-			-			-			13,934			31,362			-			-			-			-
Income taxes		-			-			-			(43,957	)		(44,591	)		(77,823	)		-			-			-			(43,957	)		(44,591	)		(77,823	)
Net income/(loss)		(115,423	)		(265,399	)		(206,303	)		(129,396	)		64,287			259,654			(43,774	)		3,084			4,669			(288,593	)		(198,028	)		58,020
Net income/(loss) attributable to Dryships Inc.		(115,423	)		(265,399	)		(206,303	)		(87,581	)		39,222			154,122			(43,774	)		3,084			4,669			(246,778	)		(223,093	)		(47,512	)
Interest and finance cost		(95,545	)		(102,656	)		(102,806	)		(112,316	)		(218,384	)		(298,839	)		(2,267	)		(11,089	)		(10,540	)		(210,128	)		(332,129	)		(412,185	)
Interest income		3,645			2,900			1,074			553			9,595			12,227			5			3			9			4,203			12,498			13,310
Change in fair value of derivatives (gain)/loss		(41,801	)		(42,125	)		(21,069	)		(16,063	)		(44,383	)		(15,909	)		3,358			(2,351	)		7,674			(54,506	)		(88,859	)		(29,304	)
Total assets	$	2,020,180		$	1,777,176		$	1,741,235		$	6,278,860		$	7,674,674		$	8,095,212		$	579,451		$	671,842		$	652,375		$	8,878,491		$	10,123,692		$	10,488,822

A reconciliation of interest and finance costs and total segment assets with the consolidated amounts is as follows:

Interest and finance costs
Interest for reportable segments	412,185
Elimination of intersegment interest	(1,164	)
Total consolidated Interest and finance costs	411,021
Interest income
Interest for reportable segments	13,310
Elimination of intersegment interest	(1,164	)
Total consolidated Interest income	12,146
Total Assets
Total Assets for reportable segments	10,488,822
Elimination of intersegment receivables	(117,219	)
Total consolidated Assets	10,371,603

F-51

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

16. Segment information - continued:

The drilling revenue shown in the table below is analyzed by country based upon the location where the drilling takes place:

	For the years ended December 31,
Country	2012			2013		2014
Ghana	$	175,595		$	-	$	-
Norway		-			157,740		220,044
Brazil		233,569	)		353,397		581,635
Greenland		136			-		-
Ivory Coast		-			86,486		97,232
Tanzania		196,415			72,083		-
Angola		79,884			227,603		807,742
Namibia		33,212			-		-
Falkland		166,795			-		-
Equatorial Guinea		56,297			-		-
Gabon/ West Africa		-			81,104		110,424
Liberia		-			55,601		-
Ireland		-			104,014		-
Sierra Leone		-			37,272		-
Other		-			4,950		-
Total leasing and service revenues	$	941,903		$	1,180,250	$	1,817,077

The Company's vessels operate on many trade routes throughout the world, and, therefore, the provision of geographic information is considered impractical by management.

17. Earnings per share:

The Company calculates basic and diluted earnings per share as follows:

	For the years ended December 31,
	2012								2013											2014
	Income (numerator)			Weighted- average number of outstanding shares (denominator)		Amount per share			Income (numerator)			Weighted- average number of outstanding share (denominator)		Amount per share			Income (numerator)			Weighted- average number of outstanding shares (denominator)		Amount per share
Net income/(loss) attributable to DryShips Inc.	$	(246,778	)		-	$	-		$	(223,093	)		-	$	-		$	(47,512	)		-	$	-
-Less: Non-vested common stock dividends declared and undistributed earnings		-			-		-			(56	)		-		-			(697	)		-		-
Basic EPS
Income/(loss) available to common stockholders	$	(246,778	)		380,159,088	$	(0.65	)	$	(223,149	)		384,063,306	$	(0.58	)	$	(48,209	)		456,031,628	$	(0.11	)
Dilutive effect of securities
Diluted EPS
Income/(loss) available to common stockholders	$	(246,778	)		380,159,088	$	(0.65	)	$	(223,149	)		384,063,306	$	(0.58	)	$	(48,209	)		456,031,628	$	(0.11	)

F-52

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

  17. Earnings per share - continued:

Non-vested share-based payment awards that contain rights to receive non forfeitable dividends or dividend equivalents (whether paid or unpaid) and participate equally in undistributed earnings are participating securities and, thus, are included in the two-class method of computing earnings per share. Non-vested, participating restricted common stock does not have a contractual obligation to share in the losses and was therefore, excluded from the basic loss per share calculation for the years ended December 31, 2012, 2013 and 2014, due to the losses in 2012, 2013 and 2014, respectively.

The warrants were not included in the computation of diluted earnings per share because the effect is anti-dilutive for the years ended December 31, 2012, 2013 and 2014, since they are out-of-the-money.

18. Income Taxes:

18.1 Drybulk and Tanker Segments

Neither the Republic of the Marshall Islands nor Malta imposes a tax on international shipping income earned by a "non-resident" corporation thereof. Under the laws of the Republic of the Marshall Islands and Malta, the countries in which Dryships and the vessels owned by subsidiaries of the Company are registered, the Company's subsidiaries (and their vessels) are subject to registration fees and tonnage taxes, as applicable, which have been included in Vessels' operating expenses in the accompanying consolidated statements of operations.

Pursuant to Section 883 of the United States Internal Revenue Code (the "Code") and the regulations there under, a foreign corporation engaged in the international operation of ships is generally exempt from U.S. federal income tax on its U.S.-source shipping income if the foreign corporation meets both of the following requirements: (a) the foreign corporation is organized in a foreign country that grants an "equivalent exemption" to corporations organized in the United States for the types of shipping income (e.g., voyage, time, bareboat charter) earned by the foreign corporation and (b) more than 50% of the value of the foreign corporation's stock is owned, directly or indirectly, by individuals who are "residents" of the foreign corporation's country of organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States (the "50% Ownership Test"). For purposes of the 50% Ownership Test, stock owned in a foreign corporation by a foreign corporation whose stock is "primarily and regularly traded on an established securities market" in the United States (the "Publicly-Traded Test") will be treated as owned by individuals who are "residents" in the country of organization of the foreign corporation that satisfies the Publicly-Traded Test.

The Republic of the Marshall Islands and Malta, the jurisdictions where the Company and its ship-owning subsidiaries are incorporated, each grants an "equivalent exemption" to United States corporations with respect to each type of shipping income earned by the Company's ship-owning subsidiaries. Therefore, the ship-owning subsidiaries will be exempt from United States federal income taxation with respect to U.S.-source shipping income if they satisfy the 50% Ownership Test. The Company believes that each of the Company's Republic of the Marshall Islands and Malta ship-owning subsidiaries will be entitled to exemption from U.S. federal income tax in respect of their U.S. source shipping income.

The Company believes that it satisfied the Publicly-Traded Test for its 2012, 2013 and 2014 Taxable Years and, therefore, 100% of the stock of its Republic of the Marshall Islands and Malta ship-owning subsidiaries will be treated as owned by individuals "resident" in the Republic of the Marshall Islands. As such, each of the Company's Republic of the Marshall Islands and Malta ship-owning subsidiaries will be entitled to exemption from U.S. federal income tax in respect of their U.S. source shipping income. The Company's ship-owning subsidiaries intend to take such position on their U.S. federal income tax returns for the 2014 taxable year.

F-53

18. Income Taxes - continued:

18.2 Drilling Segment:

Ocean Rig UDW operates through its various subsidiaries in a number of countries throughout the world. Income taxes have been provided based upon the tax laws and rates in the countries in which operations are conducted and income is earned. The countries in which the Company operates have taxation regimes with varying nominal rates, deductions, credits and other tax attributes. Consequently, there is not an expected relationship between the provision for/or benefit from income taxes and income or loss before income taxes.

The components of the Company's income/ (losses) before taxes are as follows:

	Year ended December 31,
	2012				2013				2014
Domestic loss (Republic of the Marshall Islands)		$	(2,536	)		$	(66,604	)		$	(161,913	)
Foreign income/(loss)			(85,843	)			174,518				499,539
Total income/(loss) before taxes		$	(88,379	)		$	107,914			$	337,626

The components of the Company's tax expense were as follows:

	Year ended December 31,
	2012			2013			2014
Current Tax expense	$	43,957		$	44,591		$	77,823
Income taxes	$	43,957		$	44,591		$	77,823
Effective tax rate		(49.7	)%		41.3	%		23.1	%

The current tax expense is mainly related to withholding tax based on total contract revenue or bareboat fees. In 2014, approximately 64% of the current tax expense was related to withholding taxes in Angola. In 2013, approximately 72% of the current tax expense was related to withholding taxes in Angola, Tanzania, Sierra Leone, Liberia and Gabon, while in 2012 approximately 81% of the current tax expense was related to withholding taxes in Angola, Equatorial Guinea, Ivory Coast and Ghana.

Taxes have not been reflected in other comprehensive income/(loss) since the valuation allowances would result in no recognition of deferred tax.

	Year Ended December 31,
Reconciliation of total tax expense:	2012			2013		2014
Change in valuation allowance	$	6,311		$	-	$	-
Differences in tax rates		(3,896	)		89		-
Effect of permanent differences		120			-		-
Adjustments in respect to current income tax of previous years		184			683		-
Tax rate on interest		-			742		-
Effect of exchange rate differences		(1,599	)		7		-
Income tax		42,837			43,070		70,441
Taxes on litigation matters subject to statutory rates, including interest and penalties		-			-		7,382
Total	$	43,957		$	44,591	$	77,823

Ocean Rig UDW has from 2011 elected to use the statutory tax rate for each year based upon the location where the largest parts of its operations were domiciled. During 2012, 2013 and 2014, most of its activities were in the Republic of the Marshall Islands with tax rate of zero.

Ocean Rig UDW is subject to changes in tax laws, treaties, regulations and interpretations in and between the countries in which its subsidiaries operate. A material change in these tax laws, treaties, regulations and interpretations could result in a higher or lower effective tax rate on worldwide earnings.

F-54

DRYSHIPS

Notes to Consolidated Financial Statements

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

18. Income Taxes - continued:

18.2 Drilling Segment - (continued):

Deferred tax assets and liabilities are recognized for the anticipated future tax effects of temporary differences between the financial statement basis and the tax basis of the Company's assets and liabilities at the applicable tax rates in effect. The Company has not recognized any deferred tax liability, while the significant components of deferred tax assets are as follows:

	Year ended December 31,
	2013			2014
Deferred tax assets
Net operations loss carry forward	$	1,723		$	-
Accelerated depreciation of assets		65			101
Pension		608			1,184
Total deferred tax assets	$	2,396		$	1,285
Less: valuation allowance		(2,396	)		(1,285	)
Total deferred tax assets, net	$	-		$	-

A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. The Company provides a valuation allowance to offset deferred tax assets for net operating losses ("NOL") incurred during the year in certain jurisdictions and for other deferred tax assets where, in the Company's opinion, it is more likely than not that the financial statement benefit of these losses will not be realized. The Company provides a valuation allowance for foreign tax loss carry forward to reflect the possible expiration of these benefits prior to their utilization. As of December 31, 2014, the valuation allowance for deferred tax assets is decreased from $2,396 in 2013 to $1,285 in 2014 reflecting a decrease in net deferred tax assets during the year.

We are under tax audits in several jurisdictions for the years 2008 - 2012 and have not received any assessments or proposed assessment that we would expect to result in a material assessment of taxes.

The Company repatriates earnings from subsidiaries that are not subject to taxes and it has the intention to indefinitely reinvest the undistributed earnings of its subsidiaries that are subject to tax, thus no deferred tax liability would be recognized.

19. Subsequent Events:

20.1 On February 13, 2015 Ocean Rig executed definitive loan documentationfor an up to a $475,000 syndicated secured term loan to partially finance the construction costs of the Ocean Rig Apollo. The facility has a 5 year term and approximate 12 year repayment profile and bears interest at LIBOR plus a margin.

20.2 On February 20, 2015, Tankships Investment Holdings Inc., a subsidiary of the Company, filed a registration statement on Form F-1 with the SEC relating to a possible initial public offering.

20.3 On February 24, 2015, Ocean Rigs' Board of Directors declared a quarterly cash dividend with respect to the quarter ended December 31, 2014, of $0.19 per common share, to Ocean Rig shareholders of record as of March 10, 2015 and payable on or about March 23, 2015.

20.4 On March 5, 2015, Ocean Rig took delivery of the Ocean Rig Apollo and drew down an amount of $462,000 under the $475 million syndicated secured term loan in connection with thedelivery.

F-55

Schedule I- Condensed Financial Information of Dryships Inc. (Parent Company Only)

Balance Sheets

December 31, 2013 and 2014

(Expressed in thousands of U.S. Dollars – except for share and per share data)

	December 31,
	2013			2014
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	81		$	119
Restricted cash		232			4,043
Due from related parties		21,223			23,223
Other current assets		664			116
Total current assets		22,200			27,501
NON-CURRENT ASSETS:
Investments in subsidiaries*		4,842,130			4,900,142
Total non-current assets		4,842,130			4,900,142
Total assets	$	4,864,330		$	4,927,643
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	820,820		$	487,445
Due to subsidiaries*		1,405,024			1,428,489
Financial instruments		10,289			8,725
Due to related parties		51			2,194
Other current liabilities		6,596			6,175
Total current liabilities		2,242,780			1,933,028
NON-CURRENT LIABILITIES
Financial instruments		8,417			1,794
Total non-current liabilities		8,417			1,794
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 500,000,000 shares authorized at December 31, 2013 and 2014; 100,000,000 shares designated as Series A Convertible preferred stock; 0 shares of Series A Convertible Preferred Stock issued and outstanding at December 31, 2013 and 2014, respectively		-			-
Common stock, $0.01 par value; 1,000,000,000 shares authorized at December 31, 2013 and 2014; 432,654,477 and 706,064,321 shares issued and outstanding at December 31, 2013 and 2014, respectively		4,326			7,060
Treasury stock; $0.01 par value; 21,000,000 and 36,100,000 shares at December 31, 2013 and 2014, respectively		(210	)		(361	)
Additional paid-in capital		2,824,702			3,249,376
Accumulated other comprehensive loss		(6,062	)		(6,622	)
Accumulated deficit		(209,623	)		(256,632	)
Total stockholders' equity		2,613,133			2,992,821
Total liabilities and stockholders' equity	$	4,864,330		$	4,927,643

*Eliminated in consolidation

F-56

Schedule I- Condensed Financial Information of Dryships Inc. (Parent Company Only)

Statements of Operations

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of U.S. Dollars – except for share and per share data)

	for the year ended December 31,
	2012			2013			2014
EXPENSES:
General and administrative expenses	$	(29,408	)	$	(21,090	)	$	(23,893	)
Operating loss		(29,408	)		(21,090	)		(23,893	)
OTHER INCOME / (EXPENSES):
Interest and finance costs		(85,692	)		(89,124	)		(88,753	)
Interest income		3,065			226			989
Loss on interest rate swaps		(9,513	)		(774	)		(739	)
Other, net		672			(430	)		(220	)
Total other (expenses), net		(91,468	)		(90,102	)		(88,723	)
Equity in earnings/(loss) of subsidiaries*		(125,902	)		(112,404	)		65,104
Net loss	$	(246,778	)	$	(223,596	)	$	(47,512	)
Loss per share, basic		(0.65	)		(0.58	)		(0.10	)
Weighted average number of shares, basic		380,159,088			384,063,306			456,031,628
Loss per share, diluted		(0.65	)		(0.58	)		(0.10	)
Weighted average number of shares, diluted		380,159,088			384,063,306			456,031,628

*Eliminated in consolidation

F-57

Schedule I- Condensed Financial Information of Dryships Inc. (Parent Company Only)

Statements of Comprehensive Income/(loss)

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of U.S. Dollars – except for share and per share data)

	for the year ended December 31,
	2012			2013			2014
- Net loss	$	(246,778	)	$	(223,596	)	$	(47,512	)
Other comprehensive income/ (loss):
- Unrealized gain/(loss) on senior notes		2,059			-			-
- Reclassification of gain associated with Senior Notes to Consolidated Statement of Operations, net		(709	)		-			-
- Reclassification of losses on previously designated cash flow hedges to Consolidated Statement of Operations, net		15,261			-			-
- Reclassification of realized losses associated with capitalized interest to Consolidated Statement of Operations, net		371			331			327
- Actuarial gains/(losses)		(416	)		2,087			(900	)
Other comprehensive income/(loss)	$	16,566		$	2,418		$	(573	)
Comprehensive loss	$	(230,212	)	$	(221,178	)	$	(48,085	)

F-58

Schedule I- Condensed Financial Information of Dryships Inc. (Parent Company Only)

Statements of Cash Flows

For the years ended December 31, 2012, 2013 and 2014

(Expressed in thousands of U.S. Dollars)

	for the year ended December 31,
	2012			2013			2014
Net Cash Used in Operating Activities	$	(86,475	)	$	(85,042	)	$	(68,370	)
Cash Flows from Investing Activities:
Investments in subsidiaries		(107,463	)		8,515			(32,250	)
Dividends received		-			-			44,631
Restricted cash		408			52,033			(3,811	)
Net Cash (Used in) Provided by Investing Activities		(107,055	)		60,548			8,570
Cash Flows from Financing Activities:
Due to subsidiaries		131,516			(67,735	)		23,465
Payments of convertible notes		(72,804	)		(97,164	)		(700,000	)
Net proceeds from common stock issuance		-			23,438			421,911
Net proceeds from sale of shares in subsidiary		180,485			122,960			-
Proceeds from long-term term loans and notes		-			-			320,000
Payment of financing costs		(439	)		(2,543	)		(5,538	)
Net Cash Provided by/ (Used in) Financing Activities		238,758			(21,044	)		59,838
Net (decrease) / increase in cash and cash equivalents		45,228			(45,538	)		38
Cash and cash equivalents at beginning of year		391			45,619			81
Cash and cash equivalents at end of year	$	45,619		$	81		$	119

F-59

Schedule I- Condensed Financial Information of Dryships Inc. (Parent Company Only)

In the condensed financial information of the Parent Company, the Parent Company's investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries. The Parent Company, during the years ended December 31, 2012 and 2013, did not receive cash dividends from its subsidiaries, while during the year ended December 31, 2014 the Company received cash dividend from its subsidiary amounting of $44,631.

There are no legal or regulatory restrictions on the Parent Company's ability to obtain funds from its subsidiaries through dividends, loans or advances sufficient to satisfy the obligations discussed below that are due on or before December 31, 2015.

The Parent Company is the borrower under the credit facilities dated March 31, 2006 and November 14, 2014,amounting to $374,406 at December 31, 2014 and guarantor under the remaining shipping segment's loans outstanding at December 31, 2014.

On November 14, 2014, the Company entered into a facility agreement, as mentioned above, for a secured bridge loan facility in an amount of $200,000. The loan is repayable through a single repayment installment.

On November 18, 2014, the Company entered into a $120,000 unsecured facility with its subsidiary company, Ocean Rig UDW.

In November 2009 and April 2010, the Parent Company issued $400,000 and $220,000, respectively, aggregate principal amount of 5% Convertible unsecured Senior Notes (the "Notes"), which were due December 1, 2014. The full over allotment option granted was exercised and an additional $60,000 and $20,000, respectively, Notes were purchased. Accordingly, $460,000 and $240,000, respectively, in aggregate principal amount of Notes were sold, resulting in aggregate net proceeds of approximately $447,810 and $237,202, respectively, after underwriter commissions. During November 2014, the Company repurchased on the open market and cancelled $191,090 principal amount of its 5% convertible notes. On November 24, 2014, the Company repaid the remaining amount of its 5% convertible notes, amounting to $508,910.

The principal payments required to be made after December 31, 2014, for the loans discussed above are as follows:

Year ending December 31,	Amount
2015	$	494,406
Total principal payments		494,406
Less-Financing fees		(6,961	)
Total debt	$	487,445

As of December 31, 2014, the Company was in breach of certain financial covenants, contained in its bank loan agreement. As a result of this non-compliance and in accordance with guidance related to the classification of obligations that are callable by the creditor, the Company has classified its bank loan amounting to $374,406 as current at December 31, 2014.

See Note 3 "Going concern" and Note 9 "Long-term Debt" to the consolidated financial statements for further information.

The condensed financial information of the Parent Company should be read in conjunction with the Company's consolidated financial statements.

F-60

EX-4.177

Exhibit 4.177

Dated 28 March 2014

AMATHUS OWNING COMPANY LIMITEDSYMI OWNERS ING andKALYMNOS OWNERS INC. as joint and several Borrowers

and

DRYSHIPS INC. as Guarantor

and

HSH NORDBANKAGas Agent, Mandated Lead Arranger, Swap Bank and Security Trustee

FIRST SUPPLEMENTAL AGREEMENT
relating to a loan facility of (originally) up to US$87,653,740

Watson, Farley & Williams

Index

Clause Page

1	Interpretation	2
2	Agreement of the Lender	3
3	Conditions Precedent	3
4	Representations and Warranties	4
5	Amendments to Loan Agreement and other Finance Documents	4
6	Further Assurances	7
7	Fees and Expenses	7
8	Communications	8
9	Supplemental	8
10	Law and Jurisdiction	9

  Execution Page     9  

THIS FIRST SUPPLEMENTAL AGREEMENT is made 28 March 2014

BETWEEN

(1) AMATHUS OWNING COMPANY LIMITED ("Amathus"), SYMI OWNERS INC. ("Symi") and KALYMNOS OWNERS INC. ("Kalymnos") each incorporated in the Marshall (stands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake islands, Majuro, The Marshal Islands, MH96960 asjoint and several Borrowers;

(2) DRYSHIPS INC. as Guarantor;

(3) HSH NORDBANK AG acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as Agent;

(4) HSH NORDBANK AG acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as Mandated Lead Arranger;

(5) HSH NORDBANK AG acting through Its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as Security Trustee; and

(6) HSH NORDBANK AG acting through its office at Martensdamm 6, D-24103 Kiel, Germany, as Swap Bank.

BACKGROUND

(A) By a loan agreement dated 19 March 2012 and made between (i) the Borrowers as joint and several borrowers, (ii) the banks and financial institutions listed as lenders therein (the "Lenders") and (iii) HSH Nordbank AG as Agent, Mandated Lead Arranger, Security Trustee and Swap Bank, (the "Loan Agreement"), the Lenders have made available to the Borrowers a loan facility in an amount of (originally) up to US$87,653,740, of which an amount of US$26,979,745.29 is outstanding by way of principal on the date hereof.

(B) By a master agreement (on the 1992 ISDA Master Agreement (Multicurrency-Crossborder) form and including the Schedule thereto) (the "Master Agreement") dated 19 March 2012 and made between (i) the Borrowers and (ii) the Swap Bank, the Swap Bank agreed to enter into Designated Transactions (as defined in the Loan Agreement) with the Borrowers from time to time to (inter alia) hedge the Borrowers' exposure under the Loan Agreement to interest rate fluctuations.

(C) By a guarantee dated 19 March 2012 and made between the Guarantor and the Security Trustee, the Guarantor guaranteed the obligations of the Borrowers under the Loan Agreement and the Master Agreement (the "Guarantee").

(D) The Borrowers and the Guarantor have made a request to the Agent that the Creditor Parties give their consent to:

(i) the release of Symi and Kalymnos from all their obligations and liabilities under the Loan Agreement and the other Finance Documents to which they are a party (the "Release");

(ii) relax the financial covenants set out in paragraphs (a), (b) and (d) of clause 123 of the Guarantee (the "Guarantee Amendments") during the period commencing of the date of this Agreement and ending on 31 December 2014; and

(iii) the consequential amendments and/or variations of certain other provisions of the Loan Agreement, the Guarantee and the other Finance .Documents in connection with those matters (the "Consequential Amendment").

(E) The Creditor Parties' consent to the Borrowers' requests referred to in Recital (D) above is subject to, inter alia:

(i) the payment of the amendment fee set out in Clause 7 of this Agreement;

(ii) the consequential amendments of the Loan Agreement, the Guarantee and the other Finance Documents pursuant to the terms of this Agreement; and

(iii) all other terms and conditions contained therein.

(F) This Supplemental Agreement sets out the terms and conditions on which the Creditor Parties agree, with effect on and from the Effective Date, to amend the Loan Agreement and the Guarantee.

IT IS AGREED as follows:

1 INTERPRETATION

1.1 Defined expressions

Words and expressions defined in the Loan Agreement and the other Finance Documents shall have the same meanings when used in this Supplemental Agreement unless the context otherwise requires.

1.2 Definitions

In this Supplemental Agreement, unless the contrary intention appears:

"Continuing Finance Documents" means each document defined in the Loan Agreement as a Finance Document other than the Kalymnos Finance Documents and the Symi Finance Documents;

"Effective Date" means the date on which the conditions precedent in Clause 3 are satisfied;

"Guarantee" means the guarantee dated 19. March 2012 (as amended and supplemented from time to time) referred to In Recital (C);

"Loan Agreement" means the loan agreement dated 19 March 2012 (as amended and supplemented from time to time) referred to in Recital (A);

"Kalymnos Finance Documents" means each document defined in the Loan Agreement as a Finance Document creating a Security Interest by Kalymnos in favour of the Security Trustee, or as the case may be, the Lenders; and "Symi Finance Documents" means each document defined in the Loan Agreement as a Finance Document creating a Security Interest by Symi in favour of the Security Trustee, or as the case may be, the Lenders.

1.3 Application of construction and interpretation provisions of Loan Agreement

Clauses 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Supplemental Agreement.

2 AGREEMENT OF THE CREDITOR PARTIES

2.1 Agreement of the Creditor Parties

Each Creditor Party agrees, subject to and upon the terms and conditions of this Supplemental Agreement, to:

(a) the Release;

(b) the Guarantee Amendments;

(c) the Consequential Amendments; and

(d) the other amendments to the Loan Agreement, the Guarantee and the other Finance Documents which have been set out in Clause 5,

2.2 Release and reassignment.  With effect on and from (and subject to the occurrence of) the Effective Date, the Creditor Parties release:

(a) all Security Interests created in their favour by Symi and Kalymnos under the Symi Finance Documents and the Kalymnos Finance Documents, respectively;

(b) all the obligations of Symi and Kalymnos under the Loan Agreement, the Master Agreement and the Agency and Trust Agreement including but not limited to any covenants and undertakings relating to any asset subject to any Security Interest which is being released pursuant to this Supplemental Agreement; and

(c) re-assign to and release each of Symi and Kalymnos all its rights, title and Interest in and to all the property assigned to the Security Trustee under the Finance Documents to which each is a party.

2.3 Confirmation, Undertaking and Agreement.  Without prejudice to the generality of Clause 2.2, Amathus confirms that:

(a) all of its respective obligations under or pursuant to each of the Finance Documents to which it Is a party remain in full force and effect, despite the release of Symi, Kalymnos, the Symi Finance Documents and the Kalymnos Finance Documents, as If all references in the Loan Agreement and in any of the Finance Documents to the Borrowers were references to Amathus only; and

(b) It shall assume allobligations and liabilities of Symi and Kalymnos under the Loan Agreement and the other Finance Documents.

2.4 Effective Date

The agreement of the Creditor Parties contained In Clauses 2.1 and 2.2 shall have effect on and from the Effective Date.

3 CONDITIONS PRECEDENT

3.1 General

The agreement of the Creditor Parties contained inClause 2.1 and 2.2 is subject to the fulfilment of the conditions precedent in Clause 3.2.

3.2 Conditions precedent

The conditions referred to in Clause 3.1 are that the Agent shall have received the following documents and evidence in all respects in form and substance satisfactory to the Agent and its lawyers on or before the Effective Date:

(a) documents of the kind specified in paragraphs 2, 3 and 4 of Schedule 3,Part A to the Loan Agreement in relation to each Borrower and the Guarantor in connection with its respective execution of this Supplemental Agreement, updated with appropriate modifications to refer to this Supplemental Agreement;

(b) an original of this Supplemental Agreement duly executed by the parties to it and duly acknowledged by the Approved Manager and any other Security Party confirming their agreement to the terms and conditions of the same;

(c) such legal opinions as the Agent may require in respect of the matters contained in this Supplemental Agreement;

(d) evidence that the agent referred to in clause 31.4 of the Loan Agreement has accepted its appointment as agent for service of process under this Supplemental Agreement; and

(e) receipt of the non-refundable amendment fee referred to in Clause 7.1 of this Agreement.

4 REPRESENTATIONS AND WARRANTIES

4.1 Repetition of Loan Agreement representations and warranties

Each Borrower represents and warrants to the Creditor Parties that the representations and warranties in clause 10 of the Loan Agreement remain true and not misleading if repeated on the date of this Supplemental Agreement.

4.2 Repetition of Guarantee representations and warranties

The Guarantor represents and warrants to the Creditor Parties that the representations and warranties in clause 10 of the Guarantee remain true and not misleading if repeated on the date of this Supplemental Agreement (other than the representation set out In clause 10.3 of the Guarantee).

5 AMENDMENTS TO LOAN AGREEMENT, THE GUARANTEE AND OTHER FINANCE DOCUMENTS

5.1 Specific amendments to Loan Agreement

With effect on and from the Effective Date the Loan Agreement shall be amended as follows:

(a) by adding the following new definition in clause 1.1. thereof:

"Effective Date" means the effective date of the First Supplemental Agreement;

"First Supplemental Agreement" means the first supplemental agreement to this Agreement, dated February 2014 and entered into between (I) the Borrowers, (ií) the Guarantor, (iii) the Lenders, (iv) the Agent, (v) the Mandated Lead Arranger, (vi) the Security Trustee and (vii) the Swap Bank setting out the terms and conditions pursuant to which this Agreement is amended and/or supplemented;

"Ship"means the 2012-built Panamax bulk carrier of 76,000 metric tons deadweight constructed by Hudong and currently registered in the name of the Borrower under the Maltese Flag with the name "RARAKA"; and

"Waiver Period" means the period commencing on the Effective Date (inclusive) and ending on 31 December 2014 (Inclusive);

(b) by deleting the definitions in clause 1.1 thereof of "Borrower B", "Borrower C", "Ship A", "Ship B" and "Ship C" in their entirety and all relevant references throughout the Loan Agreement;

(c) by replacing the definition of "Tranche" in clause 1.1 thereof with the following new definition:

""Tranche" means an amount of up to the lesser of (i) $20,941,000 and (ii) 62 per cent, of the Initial Market Value of the Ship";

(d) by construing all references throughout the Loan Agreement to the "Borrowers" as if the same referred to the "Borrower";

(e) by construing all references throughout the Loan Agreement to the "Ships" as if the same referred to the "Ship";

(f) by -construing all references throughout the Loan Agreement to "Ship A" as if the same referred to the "Ship"; and

(g) by deleting clause 29 thereof in its entirety and replacing it with the following new clause:

"CLAUSE 29

INTENTIONALLY OMMITTED";

(h) by construing an references therein to "this Agreement" where the context admits as being references to "this Agreement as the same is amended and supplemented by this Supplemental Agreement and as the same may from time to time be further supplemented and/or amended"; and

(i) by construing references to each of the Finance Documents as being references to each such document as it Is from time to time supplemented and/or amended.

5.2 Specific Amendments to the Guarantee

With effect on and from the Effective Date the Guarantee shall be amended as follows:

(a) by adding the following definition in clause 1.1 of the Guarantee:

"Waiver Period" means the period commencing on the Effective Date (inclusive) and ending on 31 December 2014 (inclusive);

(b) by deleting clause 103 of the Guarantee-in its entirety and replacing it with the following new clause:

"10.3 Share capital The Guarantor has an authorised share capital divided into 1,000,000,000 registered shares and 500,000,000 preferred registered shares with par value of $0.01 each, 450,781,713 registered shares and 3,500,000 warrants have been issued and are outstanding.";

(c) by deleting paragraphs (a) (b) and (d) of clause 12.3 of the Guarantee in their entirety and replacing them with the following new clauses;

"(a) the Market Adjusted Equity Ratio shall not be less than:

(i) during the Waiver Period, 0.25:1; and

(ii) at all other times, 0.4:1;

(b) the Interest Coverage Ratio shall not be less than:

(i) during the Waiver Period, 1.50:1; and

(ii) at all other times, 3:1; and

(d) there is available to the Guarantor and all other members of the Group an aggregate amount of not less than:

(i) during the Waiver Period, $60,000,000; and

(ii) at all other times, $100,000,000,

in immediately freely available and unencumbered bank or cash balances;"; and

(d) by construing references throughout to "this Guarantee", "hereunder" and other like expressions as if the same referred to the Loan Agreement is amended and supplemented by this First Supplemental Agreement.

5.3 Amendments to the Continuing Finance Documents.

(a) With effect on and from the Effective Date each of the Continuing Finance Documents (other than the Loan Agreement and the Guarantee) shall be, and shall be deemed by this Agreement to have been, amended as follows:

(b) the definition of, and references throughout each of the Continuing Finance Documents to, the Loan Agreement and any of the other Continuing Finance Documents shall be construed as if the same referred to the Loan Agreement and the Continuing Finance Documents as amended and supplemented by this Supplemental Agreement;

(c) the definition of, and references throughout each of the Continuing Finance Document to "the Borrower" as If the same referred to Amathus only;

(d) by constructing references throughout each of the Continuing Finance Documents to the "Guarantee" as references to the Guarantee as if the same has been amended and supplemented pursuant to this Supplemental Agreement"; and

(e) by construing references throughout each of the Continuing Finance Documents to "this Agreement", "this Deed", "hereunder" and other like expressions as if the same referred to such Continuing Finance Documents as amended and supplemented by this Supplemental Agreement.

5.4 Continuing Finance Documents to remain in full force and effect

The Continuing Finance Documents shall remain in full force and effect as amended and supplemented by:

(a) the amendments to the Continuing Finance Documents contained or referred to in Clauses 5.1, 5.2 and 5.3; and

(b) such further or consequential modifications as may be necessary to give full effect to the terms of this Supplemental Agreement.

6 FURTHER ASSURANCES

6.1 Borrowers' and each Security Party's obligation to execute further documents etc.

Each Borrower and each other Security Party shah:

(a) execute and deliver to the Agent (or as it may direct) any assignment, mortgage, power of attorney; proxy or other document, governed by the law of England or such other country as the Agent may, In any particular case, specify;

(b) effect any registration or notarisation, give any notice or take any other step,

which the Agent may, by notice to the Borrowers, specify for any of the purposes described in Clause 6.2 or for any similar or related purpose.

6.2 Purposes of further assurances

Those purposes are:

(a) validly and effectively to create any Security Interest or right of any kind which the Agent intended should be created by or pursuant to the ban Agreement or any other Finance Document, each as amended and supplemented by this Supplemental Agreement, and

(b) implementing the terms and provisions of this Supplemental Agreement,

6.3 Terms of further assurances

The Agent may specify the terms of any document to be executed by the Borrowers or any other Security Party under Clause 5.1, and those terms may include any covenants, powers and provisions which the Agent considers appropriate to protect its Interests.

6.4 Obligation to comply with notice

The Borrowers or any other Security Party shall comply with a notice under Clause 6.1 by the date specified in the notice.

7 FEES AND EXPENSES

7.1 Fees

On the date of this Supplemental Agreement, the Borrowers shall pay to the Agent a non­refundable amendment fee of $4,000.

7.2 Expenses

The provisions of clause 20 (fees and expenses) of the Wan Agreement shall apply to this Supplemental Agreement as if they were expressly incorporated in this Supplemental Agreement with any necessary modifications.

8 COMMUNICATIONS

8.1 General

The provisions of clause 28 (notices) of the Loan Agreement, as amended and supplemented by this Supplemental Agreement, shall apply to this Supplemental Agreement as if they were expressly incorporated in this Supplemental Agreement with any necessary modifications.

9 SUPPLEMENTAL

9.1 Counterparts

This Supplemental Agreement may be executed in any number of counterparts.

9.2 Third Party rights

A person who is not a party to this Supplemental Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Supplemental Agreement.

10 LAW AND JURISDICTION

10.1 Governing law

This Supplemental Agreement shall be governed by and construed in accordance with English law.

10.2 Incorporation of the loan Agreement provisions

The provisions of clause 31 (law and Jurisdiction) of the Loan Agreement, as amended and supplemented by this Supplemental Agreement, shall apply to this Supplemental Agreement as if they were expressly Incorporated in this Supplemental Agreement with any necessary modifications.

THIS SUPPLEMENTAL AGREEMENT has been duly executed as a Deed on the date stated at the beginning of this Supplemental Agreement.

EXECUTION PAGE

THE BORROWERS
SIGNED by DIMITRIOS GLYNOS	)
for and on behalf of	)	/s/ Dimitrios Glynos
AMATHUS OWNING COMPANY LIMITED	)
such execution being witnessed by	)
Signature of witness		/s/ Daphne K. Plassmann
		DAPHNE K. PLASSMANN
		Attorney-at-law52 Ag. Konstantinou Street - 15124 Marousi Athens, Greece Tel.:  +30210 6140810  Fax: +30210 6140267

SIGNED by DIMITRIOS GLYNOS	)
for and on behalf of	)	/s/ Dimitrios Glynos
SYMI OWNERS INC.	)
such execution being witnessed by	)
Signature of witness		/s/ Daphne K. Plassmann
		DAPHNE K. PLASSMANN
		Attorney-at-law52 Ag. Konstantinou Street - 15124 Marousi Athens, Greece Tel.:  +30210 6140810  Fax: +30210 6140267

SIGNED by DIMITRIOS GLYNOS	)
for and on behalf of	)	/s/ Dimitrios Glynos
KALYMNOS OWNERS INC.	)
such execution being witnessed by	)
Signature of witness		/s/ Daphne K. Plassmann
		DAPHNE K. PLASSMANN
		Attorney-at-law52 Ag. Konstantinou Street - 15124 Marousi Athens, Greece Tel.:  +30210 6140810  Fax: +30210 6140267

THE GUARANTOR
SIGNED by DIMITRIOS GLYNOS	)
for and on behalf of	)	/s/ Dimitrios Glynos
DRYSHIPS INC.	)
such execution being witnessed by	)
Signature of witness		/s/ Daphne K. Plassmann
		DAPHNE K. PLASSMANN
		Attorney-at-law52 Ag. Konstantinou Street - 15124 Marousi Athens, Greece Tel.:  +30210 6140810  Fax: +30210 6140267

THE LENDER
SIGNED by Vassiliki Georgopoulos	)
for and on behalf of	)	/s/ Vassiliki Georgopoulos
HSH NORDBANK AG	)
such execution being witnessed by	)
Signature of witness		/s/ Pat Skala
		PAT SKALA
		WATSON, FARLEY & WILLIAMS348 SYNGROU AVENUE176 74 KALLITHEA ATHENS, GREECE

THE SWAP BANK
SIGNED by Vassiliki Georgopoulos	)
for and on behalf of	)	/s/ Vassiliki Georgopoulos
HSH NORDBANK AG	)
such execution being witnessed by	)
Signature of witness		/s/ Pat Skala
		PAT SKALA
		WATSON, FARLEY & WILLIAMS348 SYNGROU AVENUE176 74 KALLITHEA ATHENS, GREECE

THE AGENT
SIGNED by Vassiliki Georgopoulos	)
for and on behalf of	)	/s/ Vassiliki Georgopoulos
HSH NORDBANK AG	)
such execution being witnessed by	)
Signature of witness		/s/ Pat Skala
		PAT SKALA
		WATSON, FARLEY & WILLIAMS348 SYNGROU AVENUE176 74 KALLITHEA ATHENS, GREECE

THE SECURITY TRUSTEE
SIGNED by Vassiliki Georgopoulos	)
for and on behalf of	)	/s/ Vassiliki Georgopoulos
HSH NORDBANK AG	)
such execution being witnessed by	)
Signature of witness		/s/ Pat Skala
		PAT SKALA
		WATSON, FARLEY & WILLIAMS348 SYNGROU AVENUE176 74 KALLITHEA ATHENS, GREECE

THE MANDATED LEAD ARRANGER
SIGNED by Vassiliki Georgopoulos	)
for and on behalf of	)	/s/ Vassiliki Georgopoulos
HSH NORDBANK AG	)
such execution being witnessed by	)
Signature of witness		/s/ Pat Skala
		PAT SKALA
		WATSON, FARLEY & WILLIAMS348 SYNGROU AVENUE176 74 KALLITHEA ATHENS, GREECE

COUNTERSIGNED this 28^th day of February 2014 by the Approved Manager which, by its execution hereof confirms and acknowledges that it has read and understood the terms and conditions of the above First Supplemental Agreement, that It agrees in all respects to the same and that the Finance Documents to which It is a party shall remain in full force and effect and shall continue to stand as security for the obligations of the Borrowers under the Loan Agreement and the Master Agreement.

/s/ Dr. Adriano Cefai

DR. ADRIANO CEFAI5/1 MERCHANTS STREETVALETTA VLT 1171 MALTA.

Presidentfor and on behalf ofTMS BULKERS LTD.

EX-4.178

Exhibit 4.178

EX-4.179

Exhibit 4.179

Dated 11 July 2014

CRETAN TRADERS INC. as Borrower

and

MONTEAGLE SHIIPPING SA as Existing Guarantor

and

THE BANKS AND FINANCIAL INSTITUTIONSlisted in Schedule 1 as Lenders

and

NORDDEUTSCHE LANDESBANK GIROZENTRALE as Swap Bank

and

NORDDEUTSCHE LANDESBANK GIROZENTRALEas Underwriter, Mandated Lead Arranger, Bookrunner, Agent and Security Trustee

--------------------------------------------------------
FIFTH SUPPLEMENTAL AGREEMENT

--------------------------------------------------------

in relation to a Loan Agreement dated 23 July 2008(as amended and supplemented by four supplementalagreements dated respectively 12 October 2009, 9 September 2011,4 January 2012 and 31 August 2012 and two supplemental lettersdated respectively 24 July 2009 and 8 February 2010) in respect of a loan facility of (originally) up to US$126,400,000

WATSON. FARLEY & WILLIAMS Piraeus

INDEX

Clause		Page
1	DEFINITIONS	2
2	REPRESENTATIONS AND WARRANTIES	3
3	AGREEMENT OF THE CREDITOR PARTIES	3
4	CONDITIONS	4
5	VARIATIONS TO LOAN AGREEMENT AND CONTINUING FINANCE DOCUMENTS	5
6	CONTINUANCE OF LOAN AGREEMENT AND CONTINUING FINANCE DOCUMENTS	7
7	FEES AND EXPENSES	7
8	COMMUNICATIONS	7
9	SUPPLEMENTAL	8
10	LAW AND JURISDICTION	8

THIS FIFTH SUPPLEMENTAL AGREEMENT is dated 11 July 2014 and made

BETWEEN:

(1) CRETAN TRADERS INC., a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (including its successors) as Borrower;

(2) MONTEAGLE SHIPPING SA a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as Existing Guarantor;

(3) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Lenders;

(4) NORDDEUTSCHE LANDESBANK GIROZENTRALE acting through its office at Friedrichswall 10, D-30159, Hannover, Germany as Swap Bank; and

(5) NORDDEUTSCHE LANDESBANK GIROZENTRALE acting through its office at Friedrichswall 10, D-30159, Hannover, Germany as Underwriter, Mandated Lead Arranger, Bookrunner, Agent and Security Trustee.

BACKGROUND

(A) By a loan agreement dated 23 July 2008 (as amended and supplemented by four supplemental agreements dated respectively 12 October 2009, 9 September 2011, 4 January 2012 and 31 August 2012 and two supplemental letters dated respectively 24 July 2009 and 8 February 2010, the "Loan Agreement") made between (i) the Borrower, (ii) the Lenders, (iii) the Swap Bank, (iv) the Underwriter, (v) the Mandated Lead Arranger, (vi) the Bookrunner, (vii) the Agent and (viii) the Security Trustee, the Lenders made available to the Borrower a loan facility of (originally) up to US$126,400,000 (the "Loan").

(B) By the Agency and Trust Agreement entered into pursuant to the Loan Agreement, it was agreed that the Security Trustee would hold the Trust Property on trust for the Lenders.

(C) As at the date of this Agreement the amount outstanding by way of principal under the Loan Agreement is US$47,925,000.

(D) The Borrower has requested that the Creditor Parties agree to (inter alia):

(i) release the Collateral Owner and the Approved Manager from all their respective obligations and liabilities under the Collateral Finance Documents to which each is a party; and

(ii) discharge the Collateral Mortgage.

(E) The Creditor Parties consent to the Borrower's request referred to in Recital (D) subject to the following conditions:

(i) the amendment to the minimum security cover requirement specified in Clause 15.1 of the Loan Agreement;

(ii) the amendment to the provisions relating to the duration of normal Interest Periods specified in Clause 6.2 of the Loan Agreement; and

(iii) the consequential amendments to the Loan Agreement and the other Finance Documents in connection with those matters.

(F) This Agreement sets out the terms and conditions on which the Creditor Parties agree, with effect on and from the Effective Date, to the requests referred to in recital (D) and to the consequential amendments to the Loan Agreement and the other Finance Documents in connection with those matters.

NOW THEREFORE IT IS HEREBY AGREED

1. DEFINITIONS

1.1 Words and expressions defined in the Loan Agreement (as hereby amended) and the recitals hereto and not otherwise defined herein shall have the same meanings when used in this Supplemental Agreement.

1.2 In this Supplemental Agreement the words and expressions specified below shall have the meanings attributed to them below:

"Approved Manager" means TMS Bulkers Ltd, a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Collateral Finance Documents" means the Collateral Charterparty Assignment, the Collateral Deed of Covenant, the Collateral Earnings Account Pledge, the Collateral General Assignment, the Collateral Manager's Undertaking, the Collateral Mortgage and the Collateral Guarantee;

"Collateral Manager's Undertaking" means a letter of undertaking dated 6 February 2012 and executed by the Approved Manager in favour of the Security Trustee in relation to the management of the Collateral Ship;

"Collateral Mortgage" means the first priority Maltese statutory mortgage over the Collateral Ship dated 6 February 2012 executed by the Collateral Owner in favour of the Security Trustee;

"Collateral Owner" means Pergamos Owning Company Limited, a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Collateral Ship" means the Panamax-size bulk carrier of approximately 76,000 metric tons deadweight with IMO No. 9584499 and with the name "WOOLLOOMOOLOO" registered in the ownership of the Collateral Owner under the Maltese flag;

"Continuing Finance Documents" means each document defined in the Loan Agreement as a "Finance Document" other than the Collateral Finance Documents and, in the singular, means any of them;

"Effective Date" means a Business Day on which the Agent confirms in writing to the Borrower and the Existing Guarantor that all conditions set out in Clause 4.1 have been satisfied or waived, as specified in the Effective Date letter in accordance with Clause 4.3; and

"Existing Guarantor" means Monteagle Shipping SA, a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.

1.3 Where the context so admits words importing the singular number only shall include the plural and vice versa and words importing persons shall include firms and corporations. Clause headings are inserted for convenience of reference only and shall be ignored in construing this Supplemental Agreement.  References to Clauses are to clauses of this

Supplemental Agreement save as may be otherwise expressly provided in this Supplemental Agreement.

2. REPRESENTATIONS AND WARRANTIES

2.1 The Borrower hereby represents and warrants to the Agent, as at the date of this Supplemental Agreement, that the representations and warranties set forth in Clause 10 of the Loan Agreement (updated mutatis mutandis to the date of this Supplemental Agreement) are true and correct as if all references therein to "this Agreement" were references to the Loan Agreement as further amended by this Supplemental Agreement.

2.2 The Borrower hereby further represents and warrants to the Agent that as at the date of this Supplemental Agreement:

(a) it is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands and has full power to enter into and perform its obligations under this Supplemental Agreement and has complied with all statutory and other requirements relative to its business, and does not have an established place of business in any part of the United Kingdom or the United States of America;

(b) all necessary governmental or other official consents, authorisations, approvals, licences, consents or waivers for the execution, delivery, performance, validity and/or enforceability of this Supplemental Agreement and all other documents to be executed in connection with the amendments to the Loan Agreement and the other Finance Documents as contemplated hereby have been obtained and will be maintained in full force and effect, from the date of this Supplemental Agreement and so long as any moneys are owing under any of the Finance Documents and while all or any part of the Loan remains outstanding;

(c) it has taken all necessary corporate and other action to authorise the execution, delivery and performance of its obligations under this Supplemental Agreement and such other documents to which it is a party and such documents do or will upon execution thereof constitute its valid and binding obligations enforceable in accordance with their respective terms;

(d) the execution, delivery and performance of this Supplemental Agreement and all such other documents as contemplated hereby does not and will not, from the date of this Supplemental Agreement and so long as any moneys are owing under any of the Finance Documents and while all or any part of the Commitment remains outstanding, constitute a breach of any contractual restriction or any existing applicable law, regulation, consent or authorisation binding on the Borrower or on any of its property or assets and will not result in the creation or imposition of any security interest, lien, charge or encumbrance (other than under the Finance Documents on any of such property or assets; and

(e) it has fully disclosed in writing to the Agent all facts which it knows or which it should reasonably know and which are material for disclosure to the Agent in the context of this Supplemental Agreement and all information furnished by the Borrower or on its behalf relating to its business and affairs in connection with this Supplemental Agreement was and remains true, correct and complete in all material respects and there are no other material facts or considerations the omission of which would render any such information misleading.

3. AGREEMENT OF THE CREDITOR PARTIES

3.1 The Creditor Parties, relying upon each of the representations and warranties set out in Clauses 2.1 and 2.2 of this Supplemental Agreement, hereby agree with the Borrower, subject to and upon the terms and conditions of this Supplemental Agreement and in

particular, but without limitation, subject to the fulfilment of the conditions precedent set out in Clause 4:

(a) an amendment in the minimum security cover requirement specified in Clause 15.1 of the Loan Agreement in the manner outlined in Clauses 5.1(e);

(b) an amendment to the provisions relating to the duration of normal Interest Periods specified in Clause 6.2 of the Loan Agreement in the manner outlined in Clause 5.1(c);

(c) the release of the Collateral Owner and the Approved Manager from the Collateral Finance Documents to which each is a party and the discharge of the Collateral Mortgage; and

(d) the consequential amendments to the Loan Agreement and the other Continuing Finance Documents in connection with the matters referred to in paragraphs (a) to (c) above.

3.2 With effect on and from (subject to the occurrence of) the Effective Date, the Creditor Parties hereby irrevocably:

(a) release all Security Interests created in their favour by the Collateral Owner or, as the case may be, the Approved Manager under the Collateral Finance Documents to which each is a party;

(b) release the Collateral Owner and the Approved Manager from all their respective obligations and liabilities under the Collateral Finance Documents to which each is a party; and

(c) re-assign and release to the Collateral Owner and the Approved Manager all their rights, benefits, title and interest in and to all the property assigned to the Security Trustee under the Collateral Finance Documents to which each is a party.

3.3 The Borrower and the Security Parties agree and confirm that the Loan Agreement and the Continuing Finance Documents to which each is a party shall remain in full force and effect and the Borrower and each Security Party shall remain liable under the Loan Agreement and the Continuing Finance Documents to which each is a party for all obligations and liabilities assumed by it thereunder.

3.4 The agreement of the Creditor Parties contained in this Clause 3 shall have effect on and from the Effective Date.

4. CONDITIONS

4.1 The agreements of the Creditor Parties contained in Clause 3 of this Supplemental Agreement shall all be expressly subject to the condition that the Agent shall have received in form and substance satisfactory to it and its legal advisers on or before the Effective Date:

(a) evidence that the persons executing this Supplemental Agreement on behalf of each Security Party are duly authorised to execute the same;

(b) an original of this Agreement duly executed by the parties to it and counter-signed and acknowledged by the Security Parties;

(c) certificates from an officer of each Security Party (other than the Approved Manager) confirming the names of all the directors and shareholders of each such Security Party (other than the shareholders of the Guarantor) and having attached thereto true and complete copies of their incorporation and constitutional documents;

(d) true and complete copy of the resolutions passed at separate meetings of the sole director or directors, as the case may be, and shareholders of each such Security Party (other than the shareholders of the Guarantor) authorising and approving the execution, or acknowledgement in the case of the Guarantor, Roscoe and the Collateral Owner, of this Supplemental Agreement and any other document or action to which each is or is to be a party and authorising its directors or other representatives to execute, or acknowledge, as the case may be, the same on its behalf;

(e) the original of any power of attorney issued by each such Security Party pursuant to such resolutions aforesaid;

(f) evidence that the Borrower has satisfied the minimum security cover test outlined in clause 15.1 of the Loan Agreement (as those provisions have been amended and supplemented by this Supplemental Agreement);

(g) evidence that the handling fee of $30,000 referred to in Clause 7.1 has been paid in full;

(h) favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Marshall Islands and such other relevant jurisdictions as the Agent may require;

(i) certified copies of all documents (with a certified translation if an original is not in English) evidencing any other necessary action, approvals or consents with respect to this Supplemental Agreement (including without limitation) all necessary governmental and other official approvals and consents in such pertinent jurisdictions as the Agent deems appropriate;

(j) evidence that the process agent referred to in clause 30.4 of the Loan Agreement has accepted its appointment as agent for service of process under this Supplemental Agreement; and

(k) evidence that the provisions of clause 9.1(d) of the Loan Agreement, as amended and supplemented by this Agreement and updated with appropriate modifications to refer to this Agreement, are complied with both as at the date of this Agreement and the Effective Date.

4.2 The conditions set out in Clause 4.1 are for the sole benefit of the Creditor Parties. The Agent shall be entitled to waive the fulfilment of any of those conditions on such terms as it deems fit.

4.3 Upon fulfilment or waiver of the conditions in Clause 4.1, the Agent, the Borrower and the Existing Guarantor shall sign a letter confirming that the Effective Date has occurred and such certificate shall be binding on all parties to this Agreement.

5. VARIATIONS TO LOAN AGREEMENT AND CONTINUING FINANCE DOCUMENTS

5.1 In consideration of the agreement of the Creditor Parties contained in Clause 3 of this Supplemental Agreement, the Borrower hereby agrees with the Creditor Parties that upon satisfaction of the conditions referred to in Clause 4.1, the provisions of the Loan Agreement shall be varied and/or amended and/or supplemented with effect on and from the Effective Date as follows:

(a) by deleting the existing definition of "Effective Date" and substituting the same with the following new definition of "Effective Date" in clause 1.1 thereof:

"Effective Date" means a Business Day on which the Agent confirms in writing to the Borrower and the Existing Guarantor that all conditions set out in clause 4.1 of the Fifth

Supplemental Agreement have been satisfied or waived, as specified in the Effective Date letter in accordance with clause 4.3 of the Fifth Supplemental Agreement;";

(b) by adding the following new definition in clause 1.1 thereof:

"Fifth Supplemental Agreement"means a fifth supplemental agreement to this Agreement dated __ July 2014 and entered into between (i) the Borrower, (ii) Monteagle Shipping SA as Existing Guarantor, (iii) the Lenders, (iv) the Swap Bank, (v) the Underwriter, (vi) the Mandated Lead Arranger, (vii) the Bookrunner, (viii) the Agent and (ix) the Security Trustee;";

(c) by deleting clause 6.2 thereof in its entirety and substituting the same with the following new clause:

"6.2Duration of normal Interest Periods. Subject to clauses 6.3 and 6.4, each Interest Period shall be 3 months or such other period as the Agent may, with the authorisation of all the Lenders, agree with the Borrower.";

(d) by deleting clause 8.12 thereof in its entirety and substituting the same with the following new clause:

"8.12 Excess Earnings".If in respect of any 3-month period (with the first such period commencing on 1 September 2012) during the Security Period, the Agent determines (on the basis of evidence satisfactory to the Agent provided by the Borrower to the Agent in respect of such 3-month period by not later than the date following 30 days after the last day of such 3-month period) that the daily Earnings of RAPALLO for such period exceed the aggregate of:

(a) the expenditure necessarily incurred during such period by Roscoe in operating, insuring, dry-docking, maintaining, repairing and generally trading RAPALLO (including, without limitation, the general and administrative expenses and the maintenance costs); and

(b) any sums paid by the Borrower in respect of principal on, and interest in respect of, the Loan pursuant to this Agreement which are attributable to that 3-month period,

the Agent shall advise the Borrower of the amount of such excess (the "Excess Earnings") and the Borrower shall ensure that an amount equal to 50 per cent. of the Excess Earnings (the "Excess Amount") is transferred into the Retention Account which Excess Amount shall remain blocked until the last day of the then current Interest Period when the Excess Amount may be applied, at the discretion of the Borrower, in prepayment of the Loan in accordance with Clause 8.10(a) of this Agreement (and the Borrower hereby unconditionally and irrevocably authorises the Agent to make such application).";

(e) by deleting clause 15.1 thereof in its entirety and substituting the same with the following new clause:

"15.1 Minimum required security cover.  Clause 15.2 applies if the Agent notifies the Borrower at any time following the Effective Date that:

(a) the aggregate of (i) the aggregate Market Value of the Ship and RAPALLO and (ii) any amounts standing to the credit of the Retention Account; plus

(b) the net realisable value of any additional security previously provided under this Clause 15,

is below 125 per cent. of the Loan."; and

(f) by deleting all definitions of, and references to, the Builder, the Collateral Finance Documents, the Collateral Charter, the Collateral Charterparty Assignment, the Collateral Deed of Covenant, the Collateral Earnings Account, the Collateral Earnings Account Pledge, the Collateral General Assignment, the Collateral Guarantee, the Collateral Manager's Undertaking, the Collateral Mortgage, the Collateral Ship, the Collateral Owner and the Shipbuilding Contract throughout the Loan Agreement.

5.2 With effect on and from the Effective Date each of the Continuing Finance Documents (other than the Loan Agreement) shall be, and shall be deemed by this Supplemental Agreement to have been, amended as follows:

(a) the definition of, and references throughout each of the Continuing Finance Documents to the Loan Agreement and any of the other Continuing Finance Documents shall be construed as if the same referred to the Loan Agreement and those Continuing Finance Documents as amended and supplemented by this Supplemental Agreement; and

(b) by construing references throughout each of the Continuing Finance Documents to "this Agreement", "this Deed", "hereunder" and other like expressions as if the same referred to such Continuing Finance Documents as amended and supplemented by this Supplemental Agreement.

5.3 The Continuing Finance Documents shall remain in full force and effect as amended and supplemented by:

(a) the amendments to the Continuing Finance Documents contained or referred to in Clauses 5.1 and 5.2; and

(b) such further or consequential modifications as may be necessary to make the same consistent with, and to give full effect to, the terms of this Supplemental Agreement.

6. CONTINUANCE OF LOAN AGREEMENT AND CONTINUING FINANCE DOCUMENTS

6.1 Save for the alterations to the Loan Agreement and the other Finance Documents made or to be made pursuant to this Supplemental Agreement and such further modifications (if any) thereto as may be necessary to make the same consistent with the terms of this Supplemental Agreement, the Loan Agreement shall remain in full force and effect and the security constituted by the other Continuing Finance Documents shall continue and remain valid and enforceable.

7. FEES AND EXPENSES

7.1 The Borrower shall pay to the Agent on the date of this Agreement a non-refundable handling fee of $30,000 to be distributed between the Lenders pro rata to their respective Contribution.

7.2 The provisions of clause 20 (fees and expenses) of the Loan Agreement shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary amendments.

8. COMMUNICATIONS

8.1 The provisions of clause 28 (notices) of the Loan Agreement, as amended and supplemented by this Agreement, shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary modifications.

9. SUPPLEMENTAL

9.1 This Agreement may be executed in any number of counterparts.

9.2 A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

10. LAW AND JURISDICTION

10.1 This Agreement and any non-contractual obligations arising out of it, shall be governed by and construed in accordance with English law.

10.2 The provisions of clause 30 (law and jurisdiction) of the Loan Agreement, as amended and supplemented by this Agreement, shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary medications.

IN WITNESS WHEREOF the parties hereto have caused this Supplemental Agreement to be duly executed the day and year first above written.

SCHEDULE 1

LENDERS

Lender	Lending Office
Norddeutsche Landesbank Girozentrale	Friedrichswall 10D-30159Hannover Germany

EXECUTION PAGE

BORROWER
SIGNED by DIMITRIOS GLYNOS	)
for and on behalf of	)	/s/ Dimitrios Glynos
CRETAN TRADERS INC.	)

EXISTING GUARANTOR
SIGNED by DIMITRIOS GLYNOS	)
for and on behalf of	)	/s/ Dimitrios Glynos
MONTEAGLE SHIPPING SA	)

LENDERS
SIGNED by NADINE AKLEH	)
for and on behalf of	)	/s/ Nadine Akleh
NORDDEUTSCHE LANDESBANK GIROZENTRALE	) )

SWAP BANK
SIGNED by NADINE AKLEH	)
for and on behalf of	)	/s/ Nadine Akleh
NORDDEUTSCHE LANDESBANK GIROZENTRALE	) )

UNDERWRITER
SIGNED by NADINE AKLEH	)
for and on behalf of	)	/s/ Nadine Akleh
NORDDEUTSCHE LANDESBANK GIROZENTRALE	) )

MANDATED LEAD ARRANGER
SIGNED by NADINE AKLEH	)
for and on behalf of	)	/s/ Nadine Akleh
NORDDEUTSCHE LANDESBANK GIROZENTRALE	) )

BOOKRUNNER
SIGNED by NADINE AKLEH	)
for and on behalf of	)	/s/ Nadine Akleh
NORDDEUTSCHE LANDESBANK GIROZENTRALE	) )

AGENT
SIGNED by NADINE AKLEH	)
for and on behalf of	)	/s/ Nadine Akleh
NORDDEUTSCHE LANDESBANK GIROZENTRALE	) )

SECURITY TRUSTEE
SIGNED by NADINE AKLEH	)
for and on behalf of	)	/s/ Nadine Akleh
NORDDEUTSCHE LANDESBANK GIROZENTRALE	) )

Witness to all the	)
above signatures	)
Name:IRO D. BEI		/s/ Iro D. Bei
Address:		Attorney - at - law52, Ag. Komstautisou Street - 151 24 MarousiAthens, Greece Tel.: +30 210 6140810 - Fax: +30 210 6140267

COUNTERSIGNED on 11^th July 2014 for and on behalf of each of the following companieswhich by its execution hereof confirms and acknowledges that it has read and understood theterms and conditions of this Supplemental Agreement, that it agrees in all respects to the sameand that the Finance Documents to which it is a party shall remain in full force and effect andshall continue to stand as security for the obligations of the Borrower under the Loan Agreement and the Master Agreement.

 /s/ Dimitrios Glynos 

DIMITRIOS GLYNOSfor and on behalf ofDRYSHIPS INC.

 /s/ Dimitrios Glynos 

DIMITRIOS GLYNOSfor and on behalf ofROSCOE MARINE LTD.

 /s/ Dimitrios Glynos 

DIMITRIOS GLYNOSfor and on behalf ofPERGAMOS OWNINGCOMPANY LIMITED

for and on behalf ofTMS BULKERS LTD.

COUNTERSIGNED on 11^th July 2014 for and on behalf of each of the following companieswhich by its execution hereof confirms and acknowledges that it has read and understood theterms and conditions of this Supplemental Agreement, that it agrees in all respects to the sameand that the Finance Documents to which it is a party shall remain in full force and effect andshall continue to stand as security for the obligations of the Borrower under the Loan Agreement and the Master Agreement.

for and on behalf ofDRYSHIPS INC.

for and on behalf ofROSCOE MARINE LTD.

for and on behalf ofPERGAMOS OWNINGCOMPANY LIMITED

/s/ Dr. Adriano Cefai
DR. ADRIANO CEFAIfor and on behalf ofTMS BULKERS LTD.	Dr. ADRIANO CEFAIDIRECTORMARE SERVICES LTD5/1 MERCHANTS STREET VALLETTA VLT 1171

EX-4.180

Exhibit 4.180

Dated 17 July 2014

OLYMPIAN ARES OWNERS INC.OLYMPIAN ARTEMIS OWNERS INC.OLYMPIAN DEMETER OWNERS INC. andOLYMPIAN POSEIDON OWNERS INC. as joint and several Borrowers

and

DRYSHIPS INC. as Guarantor

and

ABN AMRO BANK N.V. as Facility Agent and Security Trustee

SUPPLEMENTAL AGREEMENT
relating to a loan of (originally) up to US$141,350,000

Watson, Farley & Williams

Index

Clause		Page
1	Interpretation	2
2	Agreement of the Finance Parties	2
3	Conditions Precedent	2
4	Representations and Warranties	3
5	Amendments to Loan Agreement, Guarantee and other Security Documents	3
6	Further Assurances	4
7	Fees and Expenses	5
8	Communications	5
9	Supplemental	5
10	Law and Jurisdiction	6
Schedule		7
Execution Page		8

THIS SUPPLEMENTAL AGREEMENT is made on 17 July 2014

BETWEEN

(1) OLYMPIAN ARES OWNERS INC., OLYMPIAN ARTEMIS OWNERS INC., OLYMPIAN DEMETER OWNERS INC. and OLYMPIAN POSEIDON OWNERS INC. each incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, The Marshal Islands, MH96960 as joint and several Borrowers;

(2) DRYSHIPS INC. as Guarantor;

(3) ABN AMRO BANK N.V. as Facility Agent; and

(4) ABN AMRO BANK N.V. as Security Trustee.

BACKGROUND

(A) By a loan agreement dated 26 October 2011 (the "Loan Agreement") and made between (i) the Borrowers as joint and several borrowers, (ii) the Arrangers, (iii) the Facility Agent, (iv) the Security Trustee, (v) the Account Bank, (vi) the Swap Provider and (vii) the Lenders, the Lenders have made available to the Borrowers a loan facility in an amount of (originally) up to US$141,350,000, of which an amount of US$117,190,000 is outstanding by way of principal on the date hereof.

(B) By a master agreement (on the 2002 ISDA Master Agreement (Multicurrency-Crossborder) form and including the Schedule thereto) (the "Master Swap Agreement") dated as of 26 October 2011 and made between (i) the Borrowers and (ii) the Swap Provider, the Swap Provider agreed to enter into Designated Transactions (as defined in the Loan Agreement) with the Borrowers from time to time to (inter alia) hedge the Borrowers' exposure under the Loan Agreement to interest rate fluctuations.

(C) By a guarantee dated 26 October 2011 and made between the Guarantor and the Security Trustee, the Guarantor guaranteed the obligations of the Borrowers under the Loan Agreement and the Master Swap Agreement (the "Guarantee").

(D) The Borrowers and the Guarantor have made a request to the Facility Agent that the Majority Lenders give their consent to:

(i) the amendment to the covenant set out in clause 5.2.1 of the Guarantee so that the Guarantor may create Encumbrances over any of its ORIG Shares (as defined below) for the purposes referred to in this Supplemental Agreement (the "First Guarantee Amendment");

(ii) the waiver of the financial covenant set out in clause 5.3.1(d) of the Guarantee in respect of each twelve-month period ended or (as the case may be) ending on 31 December 2012, 31 December 2013 and 31 December 2014, respectively (the "Second Guarantee Amendment" and, together with the First Guarantee Amendment, the "Guarantee Amendments");and

(iii) the consequential amendments and/or variations of certain other provisions of the Loan Agreement, the Guarantee and the other Security Documents in connection with those matters (the "Consequential Amendments").

(E) The Majority Lenders' consent to the requests referred to in Recital (D) above is subject to, inter alia:

(i) the payment of the fee set out in Clause 7 of this Supplemental Agreement;

(ii) the Consequential Amendments to the Loan Agreement, the Guarantee and the other Security Documents outlined in this Supplemental Agreement; and

(iii) all other terms and conditions contained herein.

(F) This Supplemental Agreement sets out the terms and conditions on which the Finance Parties agree, with effect on and from the Effective Date, to amend the Loan Agreement, the Guarantee and the other Security Documents.

IT IS AGREED as follows:

1. INTERPRETATION

1.1 Defined expressions

Words and expressions defined in the Loan Agreement and the other Security Documents shall have the same meanings when used in this Supplemental Agreement unless the context otherwise requires.

1.2 Definitions

In this Supplemental Agreement, unless the contrary intention appears:

"Effective Date" means the date on which the conditions precedent in Clause 3 are satisfied;

"Guarantee" means the guarantee dated 26 October 2011 (as amended and supplemented from time to time) referred to in Recital (C); and

"Loan Agreement" means the loan agreement dated 26 October 2011 (as amended and supplemented from time to time) referred to in Recital (A).

1.3 Application of construction and interpretation provisions of Loan Agreement

Clauses 1.2 and 1.4 of the Loan Agreement apply, with any necessary modifications, to this Supplemental Agreement.

2. AGREEMENT OF THE FINANCE PARTIES

2.1 Agreement of the Finance Parties

Each Finance Party agrees, subject to and upon the terms and conditions of this Supplemental Agreement, to:

(a) the Guarantee Amendments; and

(b) the Consequential Amendments.

2.2 Effective Date

The agreement of the Finance Parties contained in Clause 2.1 shall have effect on and from the Effective Date.

3. CONDITIONS PRECEDENT

3.1 General

The agreement of the Finance Parties contained in Clause 2.1 is subject to the fulfilment of the conditions precedent in Clause 3.2.

3.2 Conditions precedent

The conditions referred to in Clause 3.1 are that the Facility Agent shall have received the following documents and evidence in all respects in form and substance satisfactory to the Facility Agent and its lawyers on or before the Effective Date:

(a) documents of the kind specified in paragraphs 1, 2 and 3 of Schedule 4, Part 1 to the Loan Agreement in relation to each Borrower and the Guarantor in connection with its respective execution of this Supplemental Agreement, updated with appropriate modifications to refer to this Supplemental Agreement;

(b) an original of this Supplemental Agreement duly executed by the parties to it confirming their agreement to the terms and conditions of the same;

(c) such legal opinions as the Facility Agent may require in connection with this Supplemental Agreement;

(d) evidence that the agent referred to in clause 18.3 of the Loan Agreement has accepted its appointment as agent for service of process under this Supplemental Agreement; and

(e) receipt of the non-refundable fee referred to in Clause 7.1 of this Supplemental Agreement.

4. REPRESENTATIONS AND WARRANTIES

4.1 Repetition of Loan Agreement representations and warranties

Each Borrower represents and warrants to the Finance Parties that the representations and warranties in clause 7 of the Loan Agreement remain true and not misleading if repeated on the date of this Supplemental Agreement.

4.2 Repetition of Guarantee representations and warranties

The Guarantor represents and warrants to the Finance Parties that the representations and warranties in clause 4 of the Guarantee remain true and not misleading if repeated on the date of this Supplemental Agreement taking into account clause 4.3.2 of the Guarantee.

5. AMENDMENTS TO LOAN AGREEMENT, GUARANTEE AND OTHER SECURITY DOCUMENTS

5.1 Specific amendments to the Guarantee

With effect on and from the Effective Date the Guarantee shall be amended as follows:

(a) by adding the following new definitions in clause 1.2 of the Guarantee:

""ORIG Shares" means the 78,301,755 common shares of $0.01 par value of Ocean Rig UDW Inc., a Marshall Islands corporation, which are owned, as at the date of the Supplemental Agreement, by the Guarantor;"

""Supplemental Agreement" means the supplemental agreement dated 17 July 2014 made between (inter alias) the Guarantor and the Security Trustee supplemental to this Guarantee;" and

""Waiver Period" means the period commencing on 1 January 2012 (inclusive) and ending on 31 December 2014 (inclusive);";

(b) by adding at the end of clause 5.2.1 of the Guarantee the following words:

"Provided that the Guarantor may create Encumbrances over any of its ORIG Shares for the sole purpose of securing its obligations in respect of any Borrowed Money which it may incur solely for the purpose of refinancing in full or in part Borrowed Money of the Guarantor outstanding under its 5.00% Convertible Senior Notes due 1 December 2014 issued under an indenture dated 17 November 2009 (as amended from time to time) between the Guarantor as issuer and Law Debenture Trust Company of New York as trustee.";

(c) by deleting clause 5.3.1(d) of the Guarantee in its entirety and replacing it with the following new clause:

"(d)Interest Cover Ratio

at all times, other than during the Waiver Period, the Interest Cover Ratio in relation to any Four-Quarter Period (other than any Four-Quarter Period ending on a day falling within the Waiver Period) shall not be lower than 3.00:1.00."; and

(d) by construing references throughout to "this Guarantee", "hereunder" and other like • expressions as if the same referred to the Guarantee as amended and supplemented by this Supplemental Agreement.

5.2 Amendments to the Security Documents

With effect on and from the Effective Date each of the Security Documents (other than the Loan Agreement and the Guarantee) shall be, and shall be deemed by this Supplemental Agreement to have been, amended as follows:

(a) the definition of, and references throughout each of the Security Documents to, the Loan Agreement and any of the other Security Documents shall be construed as if the same referred to the Loan Agreement and the Security Documents as amended and supplemented by this Supplemental Agreement;

(b) by construing references throughout each of the Security Documents to the "Dryships Guarantee" as references to the Guarantee as if the same has been amended and supplemented pursuant to this Supplemental Agreement"; and

(c) by construing references throughout each of the Security Documents to "this Agreement", "this Deed", "hereunder" and other like expressions as if the same referred to such Security Documents as amended and supplemented by this Supplemental Agreement.

5.3 Security Documents to remain in full force and effect

The Security Documents shall remain in full force and effect as amended and supplemented by:

(a) the amendments to the Security Documents contained or referred to in Clauses 5.1 and 5.2; and

(b) such further or consequential modifications as may be necessary to give full effect to the terms of this Supplemental Agreement.

6. FURTHER ASSURANCES

6.1 Borrowers' and Guarantor's obligation to execute further documents etc.

Each Borrower and the Guarantor shall:

(a) execute and deliver to the Facility Agent (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Facility Agent may, in any particular case, specify;

(b) effect any registration or notarisation, give any notice or take any other step,   which the Facility Agent may, by notice to the Borrowers, specify for any of the purposes described in Clause 6.2 or for any similar or related purpose.

6.2 Purposes of further assurances

Those purposes are:

(a) validly and effectively to create any Encumbrance or right of any kind which the Facility Agent intended should be created by or pursuant to the Loan Agreement or any other Security Document, each as amended and supplemented by this Supplemental Agreement, and

(b) implementing the terms and provisions of this Supplemental Agreement.

6.3 Terms of further assurances

The Facility Agent may specify the terms of any document to be executed by the Borrowers or the Guarantor under Clause 6.1, and those terms may include any covenants, powers and provisions which the Facility Agent considers appropriate to protect its interests.

6.4 Obligation to comply with notice

The Borrowers and the Guarantor shall comply with a notice under Clause 6.1 by the date specified in the notice.

7. FEES AND EXPENSES

7.1 Fees

On the date of this Supplemental Agreement, the Borrowers shall pay to the Facility Agent for further distribution to the Lenders, in equal shares, a non-refundable fee of $10,000.

7.2 Expenses

The provisions of clause 5 (commitment, commission, fees and expenses) of the Loan Agreement shall apply to this Supplemental Agreement as if they were expressly incorporated in this Supplemental Agreement with any necessary modifications.

8. COMMUNICATIONS

8.1 General

The provisions of clause 17 (notices and other matters) of the Loan Agreement, as amended and supplemented by this Supplemental Agreement, shall apply to this Supplemental Agreement as if they were expressly incorporated in this Supplemental Agreement with any necessary modifications.

9. SUPPLEMENTAL

9.1 Counterparts

This Supplemental Agreement may be executed in any number of counterparts.

9.2 Third Party rights

A person who is not a party to this Supplemental Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Supplemental Agreement.

10. LAW AND JURISDICTION

10.1 Governing law

This Supplemental Agreement and any non-contractual obligations connected with it shall be governed by and construed in accordance with English law.

10.2 Incorporation of the Loan Agreement provisions

The provisions of clause 18 (governing law and jurisdiction) of the Loan Agreement, as amended and supplemented by this Supplemental Agreement, shall apply to this Supplemental Agreement as if they were expressly incorporated in this Supplemental Agreement with any necessary modifications.

THIS SUPPLEMENTAL AGREEMENT has been duly executed as a Deed on the date stated at the beginning of this Supplemental Agreement.

SCHEDULE

LENDERS	LENDING OFFICE
ABN AMRO BANK N.V.	Coolsingel 933012 AE Rotterdam The Netherlands
THE EXPORT-IMPORT BANK OF KOREA	16-1, Yoido-dong,Youngdeungpo-guSeoul, 150-996 Republic of Korea

EXECUTION PAGE

THE BORROWERS
EXECUTED as a DEED	)
by GEOFFROY GUNET	)
for and on behalf of	)	/s/ Geoffroy Gunet
OLYMPIAN ARES OWNERS INC.	)
such execution being witnessed by	)
Signature of witness		/s/ Anastasia G. Pavli
		ANASTASIA G. PAVLIAttorney-at-law52, Ag. Konstantinou Street - 151 24 MarousiAthens, Greece Telephones: +30 2106140810 – Fax: +30 2106140267

EXECUTED as a DEED	)
by GEOFFROY GUNET	)
for and on behalf of	)	/s/ Geoffroy Gunet
OLYMPIAN ARTEMIS OWNERS INC.	)
such execution being witnessed by	)
Signature of witness		/s/ Anastasia G. Pavli
		ANASTASIA G. PAVLIAttorney-at-law52, Ag. Konstantinou Street - 151 24 MarousiAthens, Greece Telephones: +30 2106140810 – Fax: +30 2106140267

EXECUTED as a DEED	)
by GEOFFROY GUNET	)
for and on behalf of	)	/s/ Geoffroy Gunet
OLYMPIAN DEMETER OWNERS INC.	)
such execution being witnessed by	)
Signature of witness		/s/ Anastasia G. Pavli
		ANASTASIA G. PAVLIAttorney-at-law52, Ag. Konstantinou Street - 151 24 MarousiAthens, Greece Telephones: +30 2106140810 – Fax: +30 2106140267

EXECUTED as a DEED	)
by GEOFFROY GUNET	)
for and on behalf of	)	/s/ Geoffroy Gunet
OLYMPIAN POSEIDON OWNERS INC.	)
such execution being witnessed by	)
Signature of witness		/s/ Anastasia G. Pavli
		ANASTASIA G. PAVLIAttorney-at-law52, Ag. Konstantinou Street - 151 24 MarousiAthens, Greece Telephones: +30 2106140810 – Fax: +30 2106140267

THE GUARANTOR
EXECUTED as a DEED	)
by GEOFFROY GUNET	)
for and on behalf of	)	/s/ Geoffroy Gunet
DRYSHIPS INC.	)
such execution being witnessed by	)
Signature of witness		/s/ Anastasia G. Pavli
		ANASTASIA G. PAVLIAttorney-at-law52, Ag. Konstantinou Street - 151 24 MarousiAthens, Greece Telephones: +30 2106140810 – Fax: +30 2106140267

THE FACILITY AGENT
EXECUTED as a DEED	)
by THEOCHARIS ALMPANIDIS	)
for and on behalf of	)	/s/ Theocharis Almpanidis
ABN AMRO BANK N.V.	)
such execution being witnessed by	)
Signature of witness		/s/ Anastasia G. Pavli
		ANASTASIA G. PAVLIAttorney-at-law52, Ag. Konstantinou Street - 151 24 MarousiAthens, Greece Telephones: +30 2106140810 – Fax: +30 2106140267

THE SECURITY TRUSTEE
EXECUTED as a DEED	)
by THEOCHARIS ALMPANIDIS	)
for and on behalf of	)	/s/ Theocharis Almpanidis
ABN AMRO BANK N.V.	)
such execution being witnessed by	)
Signature of witness		/s/ Anastasia G. Pavli
		ANASTASIA G. PAVLIAttorney-at-law52, Ag. Konstantinou Street - 151 24 MarousiAthens, Greece Telephones: +30 2106140810 – Fax: +30 2106140267

EX-4.181

Exhibit 4.181

Dated 31 July 2014

OLYMPIAN ATHENA OWNERS INC.OLYMPIAN APHRODITE OWNERS INC. andOLYMPIAN DIONYSUS OWNERS INC. as joint and several Borrowers

and

DRYSHIPS INC. as Guarantor

and

ABN AMRO BANK N.V. as Facility Agent and Security Trustee

SUPPLEMENTAL AGREEMENT

relating to a loan of (originally) up to US$107,668,750

Watson, Farley & Williams

Index

Clause		Page
1	Interpretation	2
2	Agreement of the Finance Parties	2
3	Conditions Precedent	2
4	Representations and Warranties	3
5	Amendments to Loan Agreement, Guarantee and other Security Documents	3
6	Further Assurances	4
7	Communications	5
8	Supplemental	5
9	Law and Jurisdiction	5
Schedule		7
Execution Page		8

THIS SUPPLEMENTAL AGREEMENT is made on 31 July 2014

BETWEEN

(1) OLYMPIAN ATHENA OWNERS INC., OLYMPIAN APHRODITE OWNERS INC. and OLYMPIAN DIONYSUS OWNERS INC., each incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, The Marshall Islands, MH96960 as joint and several Borrowers;

(2) DRYSHIPS INC. as Guarantor;

(3) ABN AMRO BANK N.V. as Facility Agent; and

(4) ABN AMRO BANK N.V. as Security Trustee.

BACKGROUND

(A) By a loan agreement dated 2.4 October 2012 (the "Loan Agreement")and made between (i) the Borrowers as joint and several borrowers, (ii) the Arrangers, (iii) the Facility Agent, (iv) the Security Trustee, (v) the Account Bank, (vi) the Swap Provider, (vii) the Lenders and (viii) ABN AMRO Bank N.V. (Singapore Branch) as K-Sure agent, the Lenders have made available to the Borrowers a loan facility in an amount of (originally) up to US$107,668,750, of which an amount of US$88,249,219 is outstanding by way of principal on the date hereof.

(B) By a master agreement (on the 2002 ISDA Master Agreement (Multicurrency-Crossborder) form and including the Schedule thereto) (the "Master Swap Agreement") dated as of 24 October 2012 and made between (i) the Borrowers and (ii) the Swap Provider, the Swap Provider agreed to enter into Designated Transactions (as defined in the Loan Agreement) with the Borrowers from time to time to (inter alia) hedge the Borrowers' exposure under the Loan Agreement to interest rate fluctuations.

(C) By a guarantee dated 24 October 2012 and made between the Guarantor and the Security Trustee, the Guarantor guaranteed the obligations of the Borrowers under the Loan Agreement and the Master Swap Agreement (the "Guarantee").

(D) The Borrowers and the Guarantor have made a request to the Facility Agent that the Lenders give their consent to:

(i) the amendment to the covenant set out in clause 5.2.1 of the Guarantee so that the Guarantor may create Encumbrances over any of its ORIG Shares (as defined below) for the purposes referred to in this Supplemental Agreement (the "First Guarantee Amendment");

(ii) the amendment to the financial covenant set out in clause 5.3.1(d) of the Guarantee in the manner set out in clause 5.1(c) (the "Second Guarantee Amendment" and, together with the First Guarantee Amendment, the "Guarantee Amendments"); and

(iii) the consequential amendments and/or variations of certain other provisions of the Loan Agreement, the Guarantee and the other Security Documents in connection with those matters (the "Consequential Amendments").

(E) The Lenders' consent to the requests referred to in Recital (D) above is subject to, inter alia:

(i) the Consequential Amendments to the Loan Agreement, the Guarantee and the other Security Documents outlined in this Supplemental Agreement; and

(ii) all other terms and conditions contained herein.

(F) This Supplemental Agreement sets out the terms and conditions on which the Finance Parties agree, with effect on and from the Effective Date, to amend the Loan Agreement, the Guarantee and the other Security Documents.

IT IS AGREED as follows:

1 INTERPRETATION

1.1 Defined expressions

Words and expressions defined in the Loan Agreement and the other Security Documents shall have the same meanings when used in this Supplemental Agreement unless the context otherwise requires.

1.2 Definitions

In this Supplemental Agreement, unless the contrary intention appears:

"Effective Date" means the date on which the conditions precedent in Clause 3 are satisfied;

"Guarantee" means the guarantee dated 24 October 2012 (as amended and supplemented from time to time) referred to in Recital (C); and

"Loan Agreement" means the loan agreement dated 24 October 2012 (as amended and supplemented from time to time) referred to in Recital (A).

1.3 Application of construction and interpretation provisions of Loan Agreement

Clauses 1.2 and 1.4 of the Loan Agreement apply, with any necessary modifications, to this Supplemental Agreement.

2 AGREEMENT OF THE FINANCE PARTIES

2.1 Agreement of the Finance Parties

Each Finance Party agrees, subject to and upon the terms and conditions of this Supplemental Agreement, to:

(a) the Guarantee Amendments; and

(b) the Consequential Amendments.

2.2 Effective Date

The agreement of the Finance Parties contained in Clause 2.1 shall have effect on and from the Effective Date.

3 CONDITIONS PRECEDENT

3.1 General

The agreement of the Finance Parties contained in Clause 2.1 is subject to the fulfilment of the conditions precedent in Clause 3.2.

3.2 Conditions precedent

The conditions referred to in Clause 3.1 are that the Facility Agent shall have received the following documents and evidence in all respects in form and substance satisfactory to the Facility Agent and its lawyers on or before the Effective Date:

(a) documents of the kind specified in paragraphs 1, 2 and 3 of Schedule 4, Part 1 to the Loan Agreement in relation to each Borrower and the Guarantor in connection with its respective execution of this Supplemental Agreement, updated with appropriate modifications to refer to this Supplemental Agreement;

(b) an original of this Supplemental Agreement duly executed by the parties to it confirming their agreement to the terms and conditions of the same;

(c) such legal opinions as the Facility Agent may require in connection with this Supplemental Agreement; and

(d) evidence that the agent referred to in clause 18.3 of the Loan Agreement has accepted its appointment as agent for service of process under this Supplemental Agreement.

4 REPRESENTATIONS AND WARRANTIES

4.1 Repetition of Loan Agreement representations and warranties

Each Borrower represents and warrants to the Finance Parties that the representations and warranties in clause 7 of the Loan Agreement remain true and not misleading if repeated on the date of this Supplemental Agreement.

4.2 Repetition of Guarantee representations and warranties

The Guarantor represents and warrants to the Finance Parties that the representations and warranties in clause 4 of the Guarantee remain true and not misleading if repeated on the date of this Supplemental Agreement taking into account clause 4.3.2 of the Guarantee.

5 AMENDMENTS TO LOAN AGREEMENT, GUARANTEE AND OTHER SECURITY DOCUMENTS

5.1 Specific amendments to the Guarantee

With effect on and from the Effective Date the Guarantee shall be amended as follows:

(a)by adding the following new definitions in clause 1.2 of the Guarantee:

""ORIG Shares" means the 78,301,755 common shares of $0.01 par value of Ocean Rig UDW Inc., a Marshall Islands corporation, which are owned, as at the date of the Supplemental Agreement, by the Guarantor;" and

"Supplemental Agreement" means the supplemental agreement dated 31 July 2014 made between (inter alias) the Guarantor and the Security Trustee supplemental to this Guarantee;";

(b)by adding at the end of clause 5.2.1 of the Guarantee the following words:

"Provided that the Guarantor may create Encumbrances over any of its ORIG Shares for the sole purpose of securing its obligations in respect of any Borrowed Money which it may incur solely for the purpose of refinancing in full or in part Borrowed Money of the Guarantor outstanding under Its 5.00% Convertible Senior Notes due 1 December 2014 issued under an indenture dated 17 November 2009 (as amended from time to time) between the Guarantor as issuer and Law Debenture Trust Company of New York as trustee.";

(c) by deleting clause 5.3.1(d) of the Guarantee in its entirety and replacing it with the following new clause:

"(d)Interest Cover Ratio

(i) the Interest Cover Ratio in relation to any Four Quarter Period ending on or before 31 December 2014 shall at all times during such period be not lower than 2.00:1.00; and

(ii) the Interest Cover Ratio in relation to any Four Quarter Period ending on or after 31 March 2015 shall at all times during such period be not lower than 3.00:1.00."; and

(d) by construing references throughout to "this Guarantee", "hereunder" and other like expressions as if the same referred to the Guarantee as amended and supplemented by this Supplemental Agreement.

5.2 Amendments to the Security Documents

With effect on and from the Effective Date each of the Security Documents (other than the Loan Agreement and the Guarantee) shall be, and shall be deemed by this Supplemental Agreement to have been, amended as follows:

(a) the definition of, and references throughout each of the Security Documents to, the Loan Agreement and any of the other Security Documents shall be construed as if the same referred to the Loan Agreement and the Security Documents as amended and supplemented by this Supplemental Agreement;

(b) by "construing references throughout each. of the Security Documents ,to the ::Dryships Guarantee" as references to the Guarantee as if the same has been amended and supplemented pursuant to this Supplemental Agreement"; and

(c) by construing references throughout each of the Security Documents to "this Agreement", "this Deed", "hereunder" and other like expressions as if the same referred to such Security

Documents as amended and supplemented by this Supplemental Agreement.

5.3 Security Documents to remain in full force and effect

The Security Documents shall remain in full force and effect as amended and supplemented by:

(a) the amendments to the Security Documents contained or referred to in Clauses 5.1 and 5.2; and

(b) such further or consequential modifications as may be necessary to give full effect to the terms of this Supplemental Agreement.

6 FURTHER ASSURANCES

6.1 Borrowers' and Guarantor's obligation to execute further documents etc.

Each Borrower and the Guarantor shall:

(a) execute and deliver to the Facility Agent (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Facility Agent may, in any particular case, specify;

(b) effect any registration or notarisation, give any notice or take any other step,

which the Facility Agent may, by notice to the Borrowers, specify for any of the purposes described in Clause 6.2 or for any similar or related purpose.

6.2 Purposes of further assurances

Those purposes are:

(a) validly and effective to create any Encumbrance or right of any kind which the Facility Agent intended should be created by or pursuant to the Loan Agreement or any other Security Document, each as amended and supplemented by this Supplemental Agreement, and

(b) implementing the terms and provisions of this Supplemental Agreement.

6.3 Terms of further assurances

The Facility Agent may specify the terms of any document to be executed by the Borrowers or the Guarantor under Clause 6.1, and those terms may include any covenants, powers and provisions which the Facility Agent considers appropriate to protect its interests and the interests of the Finance Parties.

6.4 Obligation to comply with notice

The Borrowers and the Guarantor shall comply with a notice under Clause 6.1 by the date specified in the notice.

7 COMMUNICATIONS

7.1 General

The provisions of clause 17 (notices and other matters) of the Loan Agreement, as amended and supplemented by this Supplemental Agreement, shall apply to this Supplemental Agreement as if they were expressly incorporated in this Supplemental Agreement with any necessary modifications.

8 SUPPLEMENTAL

8.1 Counterparts

This Supplemental Agreement may be executed in any number of counterparts.

8.2 Third Party rights

A person who is not a party to this Supplemental Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Supplemental Agreement.

9 LAW AND JURISDICTION

9.1 Governing law

This Supplemental Agreement and any non-contractual obligations connected with it shall be governed by and construed in accordance with English law.

9.2 Incorporation of the Loan Agreement provisions

The provisions of clause 18 (governing law and jurisdiction) of the Loan Agreement, as amended and supplemented by this Supplemental Agreement, shall apply to this

Supplemental Agreement as if they were expressly incorporated in this Supplemental Agreement with any necessary modifications.

THIS SUPPLEMENTAL AGREEMENT has been duly executed as a Deed on the date stated at the beginning of this Supplemental Agreement.

SCHEDULE

LENDERS	LENDING OFFICE
ABN AMRO BANK N.V.	Coolsingel 933012 AE Rotterdam The Netherlands
THE KOREA DEVELOPMENT BANK	14, Euhaeng-roYoungdeungpo-guSeoul, 150-973 Korea

EXECUTION PAGE

THE BORROWERS
EXECUTED as a DEED	)
by GEOFFROY GUNET	)
for and on behalf of	)	/s/ Geoffroy Gunet
OLYMPIAN ATHENA OWNERS INC.	)
such execution being witnessed by	)
ANASTASIA PAVLI
Signature of witness		/s/ Anastasia G. Pavli
		ANASTASIA G. PAVLIAttorney-at-law52, Ag. Konstantinou Street - 151 24 MarousiAthens, Greece Telephones: +30 2106140810 – Fax: +30 2106140267

EXECUTED as a DEED	)
by GEOFFROY GUNET	)
for and on behalf of	)	/s/ Geoffroy Gunet
OLYMPIAN APHRODITE OWNERS INC.	)
such execution being witnessed by	)
ANASTASIA PAVLI
Signature of witness		/s/ Anastasia G. Pavli
		ANASTASIA G. PAVLIAttorney-at-law52, Ag. Konstantinou Street - 151 24 MarousiAthens, Greece Telephones: +30 2106140810 – Fax: +30 2106140267

EXECUTED as a DEED	)
by GEOFFROY GUNET	)
for and on behalf of	)	/s/ Geoffroy Gunet
OLYMPIAN DIONYSUS OWNERS INC.	)
such execution being witnessed by	)
ANASTASIA PAVLI
Signature of witness		/s/ Anastasia G. Pavli
		ANASTASIA G. PAVLIAttorney-at-law52, Ag. Konstantinou Street - 151 24 MarousiAthens, Greece Telephones: +30 2106140810 – Fax: +30 2106140267

THE GUARANTOR
EXECUTED as a DEED	)
by GEOFFROY GUNET	)
for and on behalf of	)	/s/ Geoffroy Gunet
DRYSHIPS INC.	)
such execution being witnessed by	)
ANASTASIA PAVLI
Signature of witness		/s/ Anastasia G. Pavli
		ANASTASIA G. PAVLIAttorney-at-law52, Ag. Konstantinou Street - 151 24 MarousiAthens, Greece Telephones: +30 2106140810 – Fax: +30 2106140267

THE FACILITY AGENT
EXECUTED as a DEED	)
by MARINOS PAPADOPOULOS	)
for and on behalf of	)	/s/ Marinos Papadopoulos
ABN AMRO BANK N.V.	)
such execution being witnessed by	)
ANASTASIA PAVLI
Signature of witness		/s/ Anastasia G. Pavli
		ANASTASIA G. PAVLIAttorney-at-law52, Ag. Konstantinou Street - 151 24 MarousiAthens, Greece Telephones: +30 2106140810 – Fax: +30 2106140267

THE SECURITY TRUSTEE
EXECUTED as a DEED	)
by MARINOS PAPADOPOULOS	)
for and on behalf of	)	/s/ Marinos Papadopoulos
ABN AMRO BANK N.V.	)
such execution being witnessed by	)
ANASTASIA PAVLI
Signature of witness		/s/ Anastasia G. Pavli
		ANASTASIA G. PAVLIAttorney-at-law52, Ag. Konstantinou Street - 151 24 MarousiAthens, Greece Telephones: +30 2106140810 – Fax: +30 2106140267

EX-4.182

Exhibit 4.182

Dated 29 October 2014

_____________________________

THE ENTITIES LISTED IN Schedule 1 as Borrowers

and

NORDEA BANK FINLAND PLC, LONDON BRANCHas Arranger and Bookrunner

with

NORDEA BANK FINLAND PLC, LONDON BRANCH

as Agent

NORDEA BANK AB, LONDON BRANCHas Security Agent

guaranteed by DRYSHIPS INC.

AND THE OTHER ENTITIES LISTED IN Schedule 1

FACILITY AGREEMENT

Loan Facility of up to $170,000,000

NORTON ROSE FULBRIGHT

Contents

Clause	Page
Section 1 - Interpretation	1
1 Definitions and interpretation	1
Section 2 - The Facility	25
2 The Facility	25
3 Purpose	27
4 Conditions of Utilisation	27
Section 3 - Utilisation	29
5 Utilisation	29
Section 4 - Repayment, Prepayment and Cancellation	30
6 Repayment	30
7 Illegality, prepayment and cancellation	30
Section 5 - Costs of Utilisation	34
8 Interest	34
9 Interest Periods	34
10 Changes to the calculation of interest	35
11 Fees	36
Section 6 - Additional Payment Obligations	37
12 Tax gross-up and indemnities	37
13 Increased Costs	40
14 Other indemnities	41
15 Mitigation by the Lenders	44
16 Costs and expenses	45
Section 7 - Guarantee	46
17 Guarantee and indemnity	46
Section 8 - Representations, Undertakings and Events of Default	50
18 Representations	50
19 Information undertakings	57
20 Financial covenants	61
21 General undertakings	62

Contents

Clause	Page
22 Dealings with Ships	66
23 Condition and operation of Ship	68
24 Insurance	71
25 Minimum security value	75
26 Chartering undertakings	77
27 Bank accounts	78
28 Business restrictions	79
29 Hedging Contracts	82
30 Events of Default	83
31 Position of Hedging Providers	88
Section 9 - Changes to Parties	89
32 Changes to the Lenders	89
33 Changes to the Obligors/Restriction on Debt Purchase Transactions	92
Section 10 - The Finance Parties	94
34 Roles of Agent, Security Agent and Arranger	94
35 Conduct of business by the Finance Parties	114
36 Sharing among the Finance Parties	115
Section 11 - Administration	117
37 Payment mechanics	117
38 Set-off	120
39 Notices	121
40 Calculations and certificates	123
41 Partial invalidity	123
42 Remedies and waivers	123
43 Amendments and grant of waivers	123
44 Counterparts	126
45 Confidentiality	126
Section 12 - Governing Law and Enforcement	129
46 Governing law	129

Contents

Clause	Page
47 Enforcement	129
Ship and security conditions precedent	149
Schedule 1 The original parties	130
Schedule 2 Ship information	144
Schedule 3 Conditions precedent	147
Schedule 4 Utilisation Request	152
Schedule 5 Selection Notice	153
Schedule 6 Form of Transfer Certificate	154
Schedule 7 Form of Compliance Certificate	156
Schedule 8 Forms of Notifiable Debt Purchase Transaction Notice	157
Schedule 9 Initial Charters	159
Schedule 10 Designated Facilities	160
Schedule 11 Designated Entities	161

THIS AGREEMENT is dated 29 October 2014, and made between:

(1) THE ENTITIES listed in Schedule 1 (The original parties) as borrowers (the Borrowers);

(2) THE ENTITIES listed in Schedule 1 (The original parties) as guarantors (the Guarantors);

(3) DRYSHIPS INC. as parent (the Parent);

(4) NORDEA BANK FINLAND PLC, LONDON BRANCH as mandated lead arranger (the Arranger);

(5) NORDEA BANK FINLAND PLC, LONDON BRANCH as bookrunner (the Bookrunner);

(6) THE FINANCIAL INSTITUTIONS listed in Schedule 1 (The original parties) as lenders (the Original Lenders);

(7) THE FINANCIAL INSTITUTIONS listed in Schedule 1 (The original parties) as hedging providers (the Original Hedging Providers);

(8) NORDEA BANK FINLAND PLC, LONDON BRANCH as agent for the other Finance Parties (the Agent); and

(9) NORDEA BANK AB, LONDON BRANCH as security agent for the other Finance Parties (the Security Agent).

IT IS AGREED as follows:

Section 1 - Interpretation

1 Definitions and interpretation

1.1 Definitions

In this Agreement and (unless otherwise defined in the relevant Finance Document) the other Finance Documents:

Acceptable Bank means:

(a) a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of "A-" or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or "Baal" or higher by Moody's Investor Services Limited or a comparable rating from an internationally recognised credit rating agency; or

(b) any other bank or financial institution approved by the Majority Lenders,

and which is approved by the Borrowers.

Account means any bank account, deposit or certificate of deposit opened, made or established in accordance with clause 27 (Bank accounts).

Account Bank means, in relation to any Account, the Agent or any of its Affiliates (which for the avoidance of doubt includes Nordea Bank AB, London Branch (Company No. FC032077)) or another bank or financial institution approved by the Majority Lenders at the Borrowers' request.

Account Holder(s)means, in relation to any Account, the Obligor(s) in whose name(s) that Account is held.

Account Security means, in relation to an Account, a deed or other instrument by the relevant Account Holder(s) in favour of the Security Agent and/or the other Finance Parties in an agreed form conferring a Security Interest over that Account.

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Accounting Reference Date means 31 December or such other date as may be approved by the Majority Lenders.

Affiliate means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

Agent includes any person who may be appointed as such under clause 34.12 (Resignation of the Agent).

Approved Brokers means each of Lorentzen & Stemoco, H. Clarkson & Co. Ltd., Arrow Sale & Purchase (UK) Limited, Fearnleys A/S, RS Platou Shipbrokers, Braemar Seascope Ltd. and Simpson Spence & Young or any other independent firm of shipbrokers agreed in writing from time to time between the Borrowers and the Agent (acting on the instructions of the Majority Lenders).

Auditors means one of PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte & Touche or another approved firm.

Available Facility means, at any relevant time, such part of the Total Commitments (drawn and undrawn) which is available for borrowing under this Agreement at such time in accordance with clause 4 (Conditions of Utilisation).

Basel II Accord means the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 as updated prior to, and in the form existing on, the date of this Agreement, excluding any amendment thereto arising out of the Basel III Accord.

Basel II Approach means, in relation to any Finance Party, either the Standardised Approach or the relevant Internal Ratings Based Approach (each as defined in the Basel II Accord) adopted by that Finance Party (or any of its Affiliates) for the purposes of implementing or complying with the Basel II Accord.

Basel II Regulation means:

(a) any law or regulation implementing the Basel II Accord; or

(b) any Basel II Approach adopted by a Finance Party or any of its Affiliates,

but excludes any law or regulation implementing the Basel III Accord save and to the extent that it is a re-enactment of any law or regulation referred to in paragraph (a) of this definition.

Basel Ill Accord means, together:

(a) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

(b) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

(c) the rules of:

(i) the 2013/36/UE Capital Requirements Directive of the European Parliament and the Counhanging cil dated June 26, 2013 concerning the access to the activity of credit institutions and the prudential supervision of credit institutions and enterprises investment; and

2

(ii) the (EU) 575/2013 Regulation of the European Parliament and the Council dated June 26, 2013 on prudential requirements for credit institutions and investment firms, both implementing the solvency and capitalisation rules known as "Basel III" rules endorsed by the central bank governors and the heads of bank supervisory authorities in the G20 countries on 16 December 2010; and

(d) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "BaseII III".

Basel Ill Increased Cost means an Increased Cost which is attributable to the implementation or application of or compliance with any Basel III Regulation (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).

Basel Ill Regulation means any law or regulation implementing the Basel III Accord save and to the extent that it re-enacts a Basel II Regulation.

Break Costs means the amount (if any) by which:

(a) the interest (but excluding Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or Unpaid Sum to the last day of the current Interest Period in respect of the Loan or Unpaid Sum), had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

(b) the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in London, Frankfurt, Athens and (in relation to any date for payment or purchase of dollars) New York.

Change of Control occurs if at any time:

(a) a Borrower or a Guarantor (other than the Parent) ceases to be a wholly-owned direct or indirect Subsidiary of the Parent; or

(b) any of the shares of a Borrower or Guarantor (other than the Parent) cease to be directly and legally and beneficially owned by its respective Shareholder or Shareholders on the date of this Agreement; or

(c) a person or persons acting in concert (other than the Permitted Holders).

(I) acquire legally and/or beneficially, either directly or indirectly, more than 50 per cent of the aggregate issued voting share capital or of the aggregate issued share capital of the Parent; and/or

(ii) have the right or the ability to control, either directly or indirectly, the affairs or composition of the majority of the board of directors (or equivalent of it) of the Parent at any time.

Charged Property means all of the assets of the Obligors which from time to time are, or are expressed or intended to be, the subject of the Security Documents.

Charter means, in relation to a Ship, any charter commitment in relation to that Ship, which is entered during the Facility Period between the relevant Owner as owner and any person as charterer or counterparty of such Owner thereunder, and which is capable of lasting at least 24

3

months (taking into account any options to extend or renew contained therein) and includes any Initial Charter and Charters means all of them.

Charter Assignment means, in relation to a Ship and its Charter Documents, an assignment by the relevant Owner of its interest in such Charter Documents in favour of the Security Agent in the agreed form.

Charter Documents means, in relation to a Ship, the Charter (if any) of that Ship, any documents supplementing it and any guarantee or security given by any person for the Charterers obligations under it.

Charterer means, in relation to a Ship and a Charter of that Ship, the charterer or counterparty of the Owner of such Ship under that Charter and includes the Initial Charterer.

CISADA means the United States Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 as may be amended from time to time.

Classification means, in relation to a Ship, the highest classification available to vessels of this type (being on the date of this Agreement the classification specified in respect of such Ship in Schedule 2 (Ship information)) with the relevant Classification Society or another classification approved by the Majority Lenders as its classification, at the request of the relevant Owner.

Classification Society means, in relation to a Ship, the classification society specified in respect of such Ship in Schedule 2 (Ship information) or another classification society (being a member of the International Association of Classification Societies (IACS) or, if such association no longer exists, any similar association nominated by the Agent) approved by the Majority Lenders as its Classification Society, at the request of the relevant Owner.

Code means the US Internal Revenue Code of 1986, as amended.

Commitment means

(a) in relation to an Original Lender, the amount set opposite its name under the heading "Commitment" in Schedule 1 (The original parties) and the amount of any other Commitment transferred to it under this Agreement; and

(b) in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,

to the extent:

(i) not cancelled, reduced or transferred by it under this Agreement; and

(ii) not deemed to be zero pursuant to clauses 33.2.1 to 33.3.3.

Compliance Certificate means a certificate substantially in the form set out in Schedule 7 (Form of Compliance Certificate) or otherwise approved.

Confidential Information means all information relating to an Obligor, the Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:

(a) any member of the Group or any of its advisers; or

(b) another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,

4

in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:

(i) is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of clause 45 (Confidentiality); or

(ii) is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or

(iii) is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

Confirmation shall have, in relation to any Hedging Transaction, the meaning given to it in the Hedging Master Agreement.

Constitutional Documents means, in respect of an Obligor, such Obligor's articles of incorporation, by-laws or other constitutional documents including as referred to in any certificate relating to an Obligor delivered pursuant to Schedule 3 (Conditions precedent).

Debt Purchase Transaction means, in relation to a person, a transaction where such person:

(a) purchases by way of assignment or transfer;

(b) enters into any sub-participation in respect of; or

(c) enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of,

any Commitment or amount outstanding under this Agreement.

Deed of Covenant means, in relation to a Ship in respect of which the Mortgage is in account current form, a first deed of covenant in respect of such Ship by the relevant Owner in favour of the Security Agent and/or any of the other Finance Parties.

Default means an Event of Default or any event or circumstance which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of them) be an Event of Default.

Defaulting Lender means any Lender:

(a) which has failed to make its participation in the Loan available or has notified the Agent that it will not make its participation in the Loan available by the Utilisation Date in accordance with clause 5.4 (Lenders' participation);

(b) which has otherwise rescinded or repudiated a Finance Document; or

(c) with respect to which an Insolvency Event has occurred and is continuing, unless, in the case of paragraph (a) above:

(i) its failure to pay is caused by:

A) administrative or technical error; or

B) a Payment Disruption Event; and,

5

payment is made within 3 Business Days of its due date; or

(ii) the Lender is disputing in good faith whether it is contractually obliged to make the payment in question.

Designated Entities means the entities set out in Schedule 11 (Designated Entities).

Designated Events means, in relation to each Designated Facility, those events of default, breaches of covenants or representations set out in the final column of Schedule 10 (Designated Facilities) next to that Designated Facility, whether they exist on the date of this Agreement or they occur subsequently.

Designated Facilities means the credit agreements of Group Members set out in Schedule 10 (Designated Facilities).

Disposal Repayment Date means in relation to:

(a) a Total Loss of a Mortgaged Ship, the applicable Total Loss Repayment Date; or

(b) a sale of a Mortgaged Ship by the relevant Owner, the date upon which such sale is completed (and concurrently with such completion) by the transfer of title to the purchaser in exchange for payment of all or part of the relevant purchase price.

Disruption Event means either or both of:

(a) material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

(b) the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

(i) from performing its payment obligations under the Finance Documents; or

(ii) from communicating with other Parties in accordance with the terms of the Finance Documents

(and which (in either such case)) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

Earnings means, in relation to a Ship and a person, all money at any time payable to that person for or in relation to the use or operation of such Ship including (without limitation) freight, hire and passage moneys, money payable to that person for the provision of services by or from such Ship or under any charter commitment, requisition for hire compensation, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach and payments for termination or variation of any charter commitment.

Earnings Account means any Account designated as an "Earnings Account" under clause 27 (Bank accounts).

Enforcement Costs means any costs, expenses, liabilities or other amounts in respect of which any amount is payable under clauses 14.4 (Indemnity concerning security) or 16.3 (Enforcement, preservation and other costs) or under any other Finance Document to which those provisions apply and any remuneration payable to a Receiver in connection with any Security Documents.

6

Environmental Claims means:

(a) enforcement, clean-up, removal or other governmental or regulatory action or orders or claims instituted or made pursuant to any Environmental Laws or resulting from a Spill; or

(b) any claim made by any other person relating to a Spill.

Environmental Incident means any Spill from any vessel in circumstances where:

(a) any Fleet Vessel or its owner, operator or manager may be liable for Environmental Claims arising from the Spill (other than Environmental Claims arising and fully satisfied before the date of this Agreement); and/or

(b) any Fleet Vessel may be arrested or attached in connection with any such Environmental Claim.

Environmental Laws means all laws, regulations and conventions concerning pollution or protection of human health or the environment.

Event of Default means any event or circumstance specified as such in clause 30 (Events of Default).

Existing Indebtedness means the aggregate amount of principal outstanding and owing by certain Owners and secured on certain Ships under a $325,000,000 credit agreement, made between (inter alios) Nordea Bank Finland Plc, acting through its New York branch as administrative agent and certain Owners and dated as of 12 February 2008, as amended and/or supplemented and/or restated from time to time.

Facility means the term loan facility made available under this Agreement as described in clause 2 (The Facility).

Facility Office means:

(a) in respect of a Lender, the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five (5) Business Days' written notice) as the office through which it will perform its obligations under this Agreement; and

(b) in respect of any other Finance Party, the office in the jurisdiction in which it is resident for Tax purposes.

Facility Period means the period from and including the date of this Agreement to and including the date on which the Facility Agent notifies the Borrowers that the Total Commitments have reduced to zero and all indebtedness of the Obligors under the Finance Documents has irrevocably and unconditionally been fully paid and discharged.

FATCA means:

(a) sections 1471 to 1474 of the Code or any associated regulations;

(b) any treaty, law or a regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or

(c) any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

7

FATCA Application Date means:

(a) in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

(b) in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or

(c) in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017,

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

FATCA Deduction means a deduction or withholding from a payment under a Finance Document required by FATCA.

FATCA Exempt Party means a Party that is entitled to receive payments free from any FATCA Deduction.

Final Repayment Date means, subject to clause 37.7 (Business Days), the date falling 60 months after the Utilisation Date.

Finance Documents means this Agreement, the Hedging Contracts, any Hedging Master Agreement, the Security Documents, any Transfer Certificate and any other document designated as such by the Agent and the Borrowers.

Finance Party means the Agent, the Security Agent, the Arranger, the Bookrunner, any Hedging Provider or a Lender.

Financial Indebtedness means any indebtedness for or in respect of:

(a) monies borrowed;

(b) any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;

(e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

(f) any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close out of that Treasury Transaction, that amount) shall be taken into account);

(g) any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution;

(h) any amount of any liability under an advance or deferred purchase agreement if (a) one of the primary reasons behind entering into the agreement is to raise finance or (b) the agreement is in respect of the supply of assets or services and payment is due more than 180 days after the date of supply;

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(i) any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under GAAP; and

(j) the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs (a) to (i) above.

First Repayment Date means, subject to clause 37.7 (Business Days), the date falling 3 months after the Utilisation Date.

Flag State means, in relation to a Ship, the country specified in respect of such Ship in Schedule 2 (Ship information), or such other state or territory as may be approved by all the Lenders (and the Republic of the Marshall Islands, the Republic of Liberia, the Republic of Panama, the Republic of Malta and the Republic of Cyprus are hereby approved by the Lenders), at the request of the relevant Owner, as being the Flag State of such Ship for the purposes of the Finance Documents.

Fleet Vessel means each Mortgaged Ship and any other vessel owned by any Group Member.

GAAP means the most recent and up to date US GAAP at any relevant time.

General Assignment means, in relation to a Ship in respect of which the Mortgage is not in account current form, a first assignment of its interest in the Ship's Insurances, Earnings and Requisition Compensation by the relevant Owner in favour of the Security Agent and/or any other Finance Parties in the agreed form.

Group means the Parent and its Subsidiaries for the time being and, for the purposes of clause 19.1 (Financial statements) and clause 20 (Financial covenants), any other entity required to be treated as a subsidiary in the Parent's consolidated accounts in accordance with GAAP and/or any applicable law.

Group Member means any Obligor and any other entity which is part of the Group.

Guarantee means the obligations of the Guarantors under clause 17 (Guarantee and indemnity).

Hedging Contract means any Hedging Transaction of a non-speculative nature between the Parent and any Hedging Provider pursuant to any Hedging Master Agreement and otherwise on approved terms and includes any Hedging Master Agreement and any Confirmations from time to time exchanged under it and governed by its terms relating to that Hedging Transaction and any contract in relation to such a Hedging Transaction constituted and/or evidenced by them and Hedging Contracts means all of them.

Hedging Exposure means, as at any relevant date, the aggregate of the amount certified by each of the Hedging Providers to the Agent to be the net amount in dollars;

(a) in relation to all Hedging Contracts that have been closed out on or prior to the relevant date, that is due and owing by the Parent to the Hedging Providers in respect of such Hedging Contracts on the relevant date; and

(b) in relation to all Hedging Contracts that are continuing on the relevant date, that would be payable by the Parent to the Hedging Providers under (and calculated in accordance with) the early termination provisions of the Hedging Contracts as if an Early Termination Date (as defined in the relevant Hedging Master Agreement) had occurred on the relevant date in relation to all such continuing Hedging Contracts.

Hedging Guarantee means, in relation to a Hedging Master Agreement, each of the joint and several guarantees executed or (as the context may require) to be executed by the Owners in favour of the Hedging Provider who is a party pursuant to the terms of that Hedging Master Agreement as security for the Parent's obligations under that Hedging Master Agreement, in such form as is required by such Hedging Provider and the Agent and Hedging Guarantees means any or all of them.

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Hedging Master Agreements means the agreements made or (as the context may require) to be made between the Parent and any one of the Hedging Providers pursuant to clause 29 (Hedging Contracts), each comprising an ISDA Master Agreement and Schedule thereto in the agreed form and Hedging Master Agreement means any of them.

Hedging Providers means:

(a) any Original Hedging Providers; and

(b) any bank or financial institution (other than an Original Hedging Providers) which is a Lender or an Affiliate of a Lender who may at any time enter into or provide a Hedging Transaction and who accedes to the terms of this Agreement pursuant to clause 31 (Position of Hedging Providers),

and includes their respective successors in title and Hedging Provider means any of them.

Hedging Transaction has, in relation to any Hedging Master Agreement, the meaning given to the term "Transaction" in that Hedging Master Agreement.

HoldCos means together the Parent and OceanFreight (all being Guarantors) and HoldCo means any of them.

Holding Company means, in relation to a company or corporation or other person, any other company or corporation or other person in respect of which it is a Subsidiary.

Impaired Agent means the Agent at any time when:

(a) it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;

(b) the Agent otherwise rescinds or repudiates a Finance Document;

(c) (if the Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of Defaulting Lender; or

(d) an Insolvency Event has occurred and is continuing with respect to the Agent;

unless, in the case of paragraph (a) above:

(i) its failure to pay is caused by:

A) administrative or technical error; or

B) a Payment Disruption Event; and

payment is made within 3 Business Days of its due date; or

(ii) the Agent is disputing in good faith whether it is contractually obliged to make the payment in question.

Increased Costs has the meaning given to it in clause 13.1.2.

Indemnified Person means:

(a) each Finance Party and each Receiver and any attorney, agent or other person appointed by them under the Finance Documents;

(b) each Affiliate of those persons; and

(c) any officers, employees or agents of any of the above persons.

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Initial Charter means, in relation to each Ship, the charter commitment for that Ship details of which (including as to tenor and charter rate) are provided in Schedule 9 (Initial Charters) next to that Ship (and, for the avoidance of doubt, the start date and end date of the tenor of each such charter commitment stated therein is a firm tenor which does not take into account any options to extend or renew contained in such charter commitment).

Initial Charterer means, in relation to each Ship, the person named in Schedule 9 (Initial Charters) as Charterer of that Ship next to that Ship.

Insolvency Event in relation to a Finance Party means that the Finance Party:

(a) is dissolved (other than pursuant to a consolidation, amalgamation or merger);

(b) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;

(c) makes a general assignment, arrangement or composition with or for the benefit of its creditors;

(d) institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official;

(e) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and:

(i) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or

(ii) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;

(f) has exercised in respect of it one or more of the stabilisation powers pursuant to Part 1 of the Banking Act 2009 and/or has instituted against it a bank insolvency proceeding pursuant to Part 2 of the Banking Act 2009 or a bank administration proceeding pursuant to Part 3 of the Banking Act 2009;

(g) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);

(h) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets;

(i) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;

(j) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (i) above; or

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(k) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

Insurance Notice means, in relation to a Ship, a notice of assignment in the form scheduled to the Ship's General Assignment or Deed of Covenant or in another approved form.

Insurances means, in relation to a Ship:

(a) all policies and contracts of insurance; and

(b) all entries in a protection and indemnity or war risks or other mutual insurance association

in the name of such Ship's Owner or the joint names of its Owner and any other person in respect of or in connection with such Ship and/or its Owner's Earnings from the Ship and includes all benefits thereof (including the right to receive claims and to return of premiums, and which the Obligors undertake shall be taken out in accordance with the requirements of clause 24 (Insurance)).

Interbank Market means the London interbank market.

Interest Period means, in relation to the Loan or any part thereof, each period determined in accordance with clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with clause 8.3 (Default interest).

Interpolated Screen Rate means in relation to LIBOR and the Loan or any part of it or any Unpaid Sum, the rate which results from interpolating on a linear basis between:

(a) the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the relevant Interest Period for the Loan (or the relevant part of it) or the relevant Unpaid Sum; and

(b) the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the relevant Interest Period for the Loan (or the relevant part of it) or the relevant Unpaid Sum,

each as of 11:00 am on the relevant Quotation Day.

Last Availability Date means 31 December 2014 (or such later date as may be approved by all the Lenders).

Legal Reservations means:

(a) the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;

(b) the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for, or indemnify a person against, non-payment of UK stamp duty may be void and defences of set-off or counterclaim; and

(c) similar principles, rights and defences under the laws of any Relevant Jurisdiction.

Lender means:

(a) any Original Lender; and

(b) any bank, financial institution, trust, fund or other entity which has become a Party in accordance with clause 32 (Changes to the Lenders),

which in each case has not ceased to be a Party in accordance with the terms of this Agreement.

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LIBOR means, in relation to the Loan or any part of it or any Unpaid Sum:

(a) the applicable Screen Rate; or

(b) if no Screen Rate is available for the relevant Interest Period, the Interpolated Screen Rate for the Loan (or the relevant part of it) or that Unpaid Sum; or

(c) if:

(i) no Screen Rate is available for the relevant currency; or

(ii) no Screen Rate is available for the relevant Interest Period and is not possible to calculate an Interpolated Screen Rate for the Loan (or the relevant part of it) or that Unpaid Sum,

the Reference Bank Rate,

as of 11:00 a.m. on the Quotation Day for the offering of deposits in dollars for a period comparable to the Interest Period for the Loan or relevant part of it or Unpaid Sum and if that rate is less than zero, LIBOR shall be deemed to be zero.

Loan means the loan made or to be made available under the Facility or the principal amount outstanding for the time being of that loan.

Loss Payable Clauses means, in relation to a Ship, the provisions concerning payment of claims under the Ship's Insurances in the form scheduled to the Ship's General Assignment or Deed of Covenant or in another approved form.

Losses means any costs, expenses (including, but not limited to, legal fees), payments, charges, losses, demands, liabilities, taxes (including VAT), claims, actions, proceedings, penalties, fines, damages, judgments, orders or other sanctions.

Major Casualty means any casualty to a vessel for which the total insurance claim, inclusive of any deductible, exceeds or may exceed the Major Casualty Amount.

Major Casualty Amount means, in relation to a Ship, the amount specified as such against the name of that Ship in Schedule 2 (Ship information) or the equivalent in any other currency.

Majority Lenders means:

(a) if no part of the Loan is then outstanding, a Lender or Lenders whose Commitments aggregate more than 66.67% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66.67% of the Total Commitments immediately prior to the reduction); or

(b) at any other time, a Lender or Lenders whose participations in the Loan aggregate more than 66.67% of the Loan.

Management Agreement means, in relation to a Ship, the agreement between the relevant Owner and the Manager relating to the appointment of the Manager in respect of such Ship.

Management Agreement Assignment means, in relation to each Management Agreement in respect of a Ship, an assignment of that Management Agreement by the Owner of that Ship in favour of the Security Agent in the agreed form.

Manager means TMS Bulkers Ltd. with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 or any other company appointed in accordance with clause 22.3 (Manager) (subject to such company providing a Manager's Undertaking) and which the Agent may, with the authorisation of the Majority Lenders, approve from time to time (it being agreed that each such manager having the same ultimate beneficial

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ownership as TMS Bulkers Ltd. will always be approved by the Majority Lenders), in each case as the manager of that Ship and includes its successors in title.

Manager's Undertaking means, in relation to a Ship, an undertaking by any manager of the Ship to the Security Agent in the agreed form pursuant to clause 22.3 (Manager).

Margin means 2.75% per annum.

Material Adverse Effect means, in the reasonable opinion of the Majority Lenders, a material adverse effect on:

(a) the business, operations, property performance, prospects or condition (financial or otherwise) of any Obligor or of the Group taken as a whole; or

(b) the ability of an Obligor to perform its obligations under any of the Finance Documents; or

(c) the legality, validity or enforceability of, or the effectiveness or ranking of any Security Interest granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.

Minimum Value means the amount in dollars which is at any relevant time 130% of the Loan.

Mortgage means, in relation to a Ship, a first priority or (as the case may be) first preferred mortgage of the Ship in the agreed form by the relevant Owner in favour of the Security Agent and/or any of the other Finance Parties.

Mortgage Period means, in relation to a Mortgaged Ship, the period from the date the Mortgage over that Ship is executed and registered until the date such Mortgage is released and discharged or, if earlier, its Total Loss Date.

Mortgaged Ship means, at any relevant time, any Ship which is subject to a Mortgage and/or whose Earnings, Insurances and Requisition Compensation are subject to a Security Interest under the Finance Documents.

Non-Consenting Lender is a Lender who does not agree to a waiver, consent or amendment where:

(a) the Borrowers or the Agent have requested the Lenders to consent to a departure from, or waiver of, any provision of the Finance Documents or to agree to any amendment thereto;

(b) the waiver, consent or amendment in question requires the agreement of all the Lenders;

(c) a period of not less than 30 days has elapsed from the date the waiver, consent or amendment was requested;

(d) the Majority Lenders have agreed to such waiver, consent or amendment; and

(e) the Borrowers have notified such Lender that they will treat it as a Non-Consenting Lender.

Notifiable Debt Purchase Transaction has the meaning given to that term in clause 33.3.2.

Obligors means the parties to the Finance Documents (other than Finance Parties) and Obligor means any one of them.

OceanFreight means OceanFreight Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.

Original Financial Statements means the audited consolidated financial statements of the Parent and its Subsidiaries for the financial year ended 31 December 2013.

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Original Obligor means each party to this Agreement and the Original Security Documents (other than a Finance Party).

Original Security Documents means:

(a) the Mortgages over each of the Ships;

(b) the Deeds of Covenant in relation to each of the Ships in respect of which the Mortgage is in account current form;

(c) the General Assignments in relation to each of the Ships in respect of which the Mortgage is not in account current form;

(d) the Charter Assignment in relation to each Ship's Charter Documents;

(e) the Account Security in relation to each Account;

(f) the Share Security in relation to each Borrower and Guarantor (other than the Parent);

(g) the Hedging Guarantee in relation to each Hedging Master Agreement;

(h) the Management Agreement Assignment in relation to each Management Agreement for each Ship; and

(i) any Manager's Undertaking in relation to a Ship if required under clause 22.3 (Manager).

Owner means, in relation to a Ship, the Borrower specified against the name of that Ship in Schedule 2 (Ship information).

Parent means DryShips Inc. a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and includes its successors in title.

Parent Affiliate means the Parent, each of its Affiliates, any trust of which the Parent or any of its Affiliates is a trustee, any partnership of which the Parent or any of its Affiliates is a partner and any trust, fund or other entity which is managed by, or is under the control of, the Parent or any of its Affiliates.

Participating Member State means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

Party means a party to this Agreement.

Payment Disruption Event means either or both of:

(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

(b) the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

(i) from performing its payment obligations under the Finance Documents; or

(ii) from communicating with other Parties in accordance with the terms of the Finance Documents,

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(and which (in either such case)) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

Permitted Holders means each of:

(a) Mr. George Economou;

(b) any of his direct lineal descendants;

(c) the personal estate of any of the aforementioned persons; and

(d) any trust or similar entity created for the benefit of one or more of the aforementioned persons and their personal estates.

Permitted Maritime Liens means, in relation to a Ship:

(a) unless a Default is continuing, any ship repairer's or outfitter's possessory lien in respect of such Ship for an amount not exceeding the Major Casualty Amount for such Ship;

(b) any lien on such Ship for master's, officer's or crew's wages outstanding in the ordinary course of its trading; and

(c) any lien on such Ship for salvage.

Permitted Security Interests means, in relation to any Mortgaged Ship, any Security Interest over it which is:

(a) granted by the Finance Documents; or

(b) a Permitted Maritime Lien; or

(c) is approved by all the Lenders.

Pollutant means and includes crude oil and its products, any other polluting, toxic or hazardous substance and any other substance whose release into the environment is regulated or penalised by Environmental Laws.

Quotation Day means, in relation to any period for which an interest rate is to be determined, two (2) Business Days before the first day of that period unless market practice differs in the Interbank Market for a currency, in which case the Quotation Day for that currency shall be determined by the Agent in accordance with market practice in the Interbank Market (and if quotations would normally be given by leading banks in the Interbank Market on more than one day, the Quotation Day will be the last of those days).

Receiver means a receiver or a receiver and manager or an administrative receiver appointed in relation to the whole or any part of any Charged Property under any relevant Security Document.

Reference Bank Rate means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by each Reference Bank as the rate at which the relevant Reference Bank could borrow funds in the Interbank Market, in the relevant currency and for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period.

Reference Banks means, in respect of LIBOR, the principal London office of Nordea Bank Finland Plc (or any of its Affiliates including without limitation Nordea Bank AB, London Branch) and/or such other banks as may be appointed by the Agent in consultation with the Borrowers.

Registry means, in relation to each Ship, such registrar, commissioner or representative of the relevant Flag State who is duly authorised and empowered to register the relevant Ship, the relevant Owner's title to such Ship and the relevant Mortgage under the laws of its Flag State.

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Relevant Jurisdiction means, in relation to an Obligor:

(a) its jurisdiction of incorporation;

(b) any jurisdiction where any Charged Property owned by it is situated;

(c) any jurisdiction where it conducts its business; and

(d) any jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.

Repayment Date means:

(a) the First Repayment Date;

(b) each of the dates falling at 3 monthly intervals thereafter up to but not including the Final Repayment Date; and

(c) the Final Repayment Date,

being the due dates of the repayment instalments referred to in clause 6.2 (Scheduled repayment of Facility).

Repeating Representations means each of the representations and warranties set out in clause 18 (Representations) other than clauses 18.11 (No insolvency), 18.12 (No filing or stamp taxes) and 18.13 (Tax).

Representative means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

Requisition Compensation means, in relation to a Ship, any compensation paid or payable by a government entity for the requisition for title, confiscation or compulsory acquisition of such Ship.

Restricted Party means a person that:

(a) is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person) or otherwise a target of Sanctions (target of Sanctions signifying a person with whom a US person or other national of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities or against whom Sanctions are otherwise directed);

(b) is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country which is subject to Sanctions which attach legal effect to being domiciled, registered as located in, having its main place of business in, and/or being incorporated under the laws of such country;

(c) is directly or indirectly owned by or controlled by a person referred to in (a) and/or (b) above; or

(d) owns or controls a person referred to in (a) and/or (b) above.

Sanctions means the economic sanctions laws, regulations, resolutions, embargoes or restrictive measures administered, enacted or enforced by (a) the United States Government, (b) the European Union, (c) the United Kingdom and with regard to (a) to (c) above, the respective governmental institutions and agencies of any of the foregoing, including, without limitation, the Office of Foreign Assets Control of the US Department of Treasury (OFAC),the United States Department of State and Her Majesty's Treasury (HMT)(together the Sanctions Authorities).

Sanctions List means any list of persons or entities published in connection with Sanctions by or on behalf of any Sanctions Authority including, but not limited to, the "Specially Designated

17

Nationals and Blocked Persons" list maintained by OFAC, the Consolidated List of Financial Sanctions Targets and the Investment Ban List maintained by HMT.

Screen Rate means the London interbank offered rate administered by ICE Benchmark Administration Limited (or if ICE Benchmark Administration Limited ceases to act in the role of administering and publishing LIBOR rates, the equivalent rate published by a subsequently appointed administrator of LIBOR) for dollars for the relevant period displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or service ceases to be available, the Agent may specify another page or service displaying the appropriate rate after consultation with the Borrowers and the Lenders.

Security Agent includes any person as may be appointed security agent and trustee for the other Finance Parties under this Agreement.

Security Documents means:

(a) the Original Security Documents;

(b) any other document as may be executed to guarantee and/or secure any amounts owing to the Finance Parties under this Agreement or any other Finance Document.

Security Interest means a mortgage, charge, pledge, lien, assignment, trust, hypothecation or other security interest of any kind securing any obligation of any person or any other agreement or arrangement having a similar effect.

Security Value means, at any time, the amount in dollars which, at that time, is the aggregate of (a) the Vessel Values (or, if less in relation to an individual Ship, the maximum amount capable of being secured by the Mortgage of the relevant Ship) of all of the Mortgaged Ships which have not then become a Total Loss and (b) the value of any additional security then held by the Security Agent or any other Finance Party provided under clause 25 (Minimum security value), in each case as most recently determined in accordance with this Agreement.

Selection Notice means a notice substantially in the form set out in Schedule 5 (Selection Notice) given in accordance with clause 9 (Interest Periods).

Share Security means, in relation to each Borrower or Guarantor (other than the Parent), each document constituting a first Security Interest in respect of all the shares of such Borrower or (as the case may be) Guarantor (other than the Parent), each executed by the relevant Shareholder of that Borrower or (as the case may be) Guarantor in favour of the Security Agent in the agreed form.

Shareholder means, in relation to a Borrower or Guarantor (other than the Parent), the person or persons named in Schedule 1 (The original parties) as shareholder or (as the case may be) shareholders of that Borrower or (as the case may be) that Guarantor.

Ship Representations means each of the representations and warranties set out in clauses 18.28 (Ship status) and 18.29 (Ship's employment).

Ships means each of the ships described in Schedule 2 (Ship information), and Ship means any of them.

Spill means any actual or threatened spill, release or discharge of a Pollutant into the environment. Subsidiary of a person means any other person:

(a) directly or indirectly controlled by such person; or

(b) of whose dividends or distributions on ordinary voting share capital such person is entitled to receive more than 50%.

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Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same) and Taxation shall be construed accordingly.

Total Commitments means the aggregate of the Commitments, being $170,000,000 at the date of this Agreement.

Total Loss means, in relation to a Ship, its:

(a) actual, constructive, compromised or arranged total loss; or

(b) requisition for title, confiscation or other compulsory acquisition by a government entity; or

(c) hijacking, piracy, theft, condemnation, capture, seizure, arrest or detention for more than 45 days.

Total Loss Date means, in relation to the Total Loss of a Ship:

(a) in the case of an actual total loss, the date it happened or, if such date is not known, the date on which the vessel was last reported;

(b) in the case of a constructive, compromised, agreed or arranged total loss, the earliest of:

(i) the date notice of abandonment of the vessel is given to its insurers; or

(ii) if the insurers do not admit such a claim, the date later determined by a competent court of law to have been the date on which the total loss happened; or

(iii) the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the vessel's insurers;

(c) in the case of a requisition for title, confiscation or compulsory acquisition, the date it happened; and

(d) in the case of hijacking, piracy, theft, condemnation, capture, seizure, arrest or detention, the date 45 days after the date upon which it happened.

Total Loss Repayment Date means, where a Mortgaged Ship has become a Total Loss, the earlier of:

(a) the date 150 days after its Total Loss Date; and

(b) the date upon which insurance proceeds or Requisition Compensation for such Total Loss are paid by insurers or the relevant government entity.

Transaction Security means the Security Interests created by the Finance Documents.

Transfer Certificate means a certificate substantially in the form set out in Schedule 6 (Form of Transfer Certificate) or any other form agreed between the Agent and the Borrowers or, at any time after the occurrence of an Event of Default, required by the Agent.

Transfer Date means, in relation to a transfer pursuant to a Transfer Certificate, the later of:

(a) the proposed Transfer Date specified in the Transfer Certificate; and

(b) the date on which the Agent executes the Transfer Certificate.

Treasury Transaction means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price.

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Trust Property means, collectively:

(a) all moneys duly received by the Security Agent under or in respect of the Finance Documents;

(b) any portion of the balance on any Account held by or charged to the Security Agent at any time;

(c) the Security Interests, guarantees, security, powers and rights given to the Security Agent under and pursuant to the Finance Documents including, without limitation, the covenants given to the Security Agent in respect of all obligations of any Obligor;

(d) all assets paid or transferred to or vested in the Security Agent or its agent or received or recovered by the Security Agent or its agent in connection with any of the Finance Documents whether from any Obligor or any other person; and

(e) all or any part of any rights, benefits, interests and other assets at any time representing or deriving from any of the above, including all income and other sums at any time received or receivable by the Security Agent or its agent in respect of the same (or any part thereof).

Unpaid Sum means any sum due and payable but unpaid by an Obligor under the Finance Documents.

US means the United States of America.

US Tax Obligor means:

(a) a Borrower if it is resident for tax purposes in the United States of America; or

(b) an Obligor some or all of whose payments under the Finance Documents are from sources within the United States for US federal income tax purposes.

Utilisation means the making of the Loan.

Utilisation Date means the date on which the Utilisation is made.

Utilisation Request means a notice substantially in the form set out in Schedule 4 (Utilisation Request).

VAT means:

(a) any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

(b) any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.

Vessel Value means, in respect of a Mortgaged Ship, the value most recently attributed to that Mortgaged Ship as most recently determined pursuant to valuations undertaken in accordance with clause 19.2.1 and/or clause 25 (Minimum security value) and Vessel Values means the aggregate of the valuations of all the Mortgaged Ships.

1.2 Construction

1.2.1 Unless a contrary indication appears, any reference in any of the Finance Documents to:

(a) Sections, clauses and Schedules are to be construed as references to the Sections and clauses of, and the Schedules to, the relevant Finance Document and references to a Finance Document include its Schedules;

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(b) a Finance Document or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as it may from time to time be amended, restated, novated or replaced, however fundamentally;

(c) words importing the plural shall include the singular and vice versa;

(d) a time of day is to London time;

(e) any person includes its successors in title, permitted assignees or transferees;

(f) the knowledge, awareness and/or beliefs (and similar expressions) of any Obligor shall be construed so as to mean the knowledge, awareness and beliefs of the director and officers of such Obligor, having made due and careful enquiry;

(g) two or more persons are acting in concert if pursuant to an agreement or understanding (whether formal or informal) they actively co-operate, through the acquisition (directly or indirectly) of shares in an entity by any of them, either directly or indirectly to obtain or consolidate control of that entity;

(h) agreed form means:

(i) where a Finance Document has already been executed by all of the relevant parties, such Finance Document in its executed form;

(ii) prior to the execution of a Finance Document, the form of such Finance Document separately agreed in writing between the Agent (acting on the instructions of all the Lenders) and the Borrowers, whether before or after the date of this Agreement, as the form in which that Finance Document is to be executed or another form approved at the request of the Borrowers or, if not so agreed or approved, in the form reasonably required by the Agent;

(i) approved by the Majority Lenders or approved by the Lenders means approved in writing by the Agent acting on the instructions of the Majority Lenders or, as the case may be, all of the Lenders (on such conditions as they may respectively impose) and otherwise approved means approved in writing by the Agent acting on the instructions of the Majority Lenders (on such conditions as the Agent (acting on the instructions of the Majority Lenders) may impose) and approval and approve shall be construed accordingly;

(j) assets includes present and future properties, revenues and rights of every description;

(k) an authorisation means any authorisation, consent, concession, approval, resolution, licence, exemption, filing, notarisation or registration;

(I) charter commitment means, in relation to a vessel, any charter or contract for the use, employment or operation of that vessel or the carriage of people and/or cargo or the provision of services by or from it and includes any agreement for pooling or sharing income derived from any such charter or contract;

(m) control of an entity means:

(i) the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

A) cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of that entity; or

B) appoint or remove all, or the majority, of the directors or other equivalent officers of that entity; or

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C) give directions with respect to the operating and financial policies of that entity with which the directors or other equivalent officers of that entity are obliged to comply; and/or

(ii) the holding beneficially of more than 50% of the issued share capital of that entity (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital) (and, for this purpose, any Security Interest over share capital shall be disregarded in determining the beneficial ownership of such share capital);

and controlled shall be construed accordingly;

(n) the term disposal or dispose means a sale, transfer or other disposal (including by way of lease or loan but not including by way of loan of money) by a person of all or part of its assets, whether by one transaction or a series of transactions and whether at the same time or over a period of time, but not the creation of a Security Interest;

(o) dollar, $ and USD means the lawful currency of the United States of America;

(p) the equivalent of an amount specified in a particular currency (the specified currency amount)shall be construed as a reference to the amount of the other relevant currency which can be purchased with the specified currency amount in the London foreign exchange market at or about 11 a.m. on the date the calculation falls to be made for spot delivery, as conclusively determined by the Agent (with the relevant exchange rate of any such purchase being the Agent's spot rate of exchange);

(q) a government entity means any government, state or agency of a state;

(r) a group of Lenders includes all the Lenders;

(s) a guarantee means any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;

(t) indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

(u) month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month or the calendar month in which it is to end, except that:

(i) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that month (if there is one) or on the immediately preceding Business Day (if there is not); and

(ii) if there is no numerically corresponding day in that month, that period shall end on the last Business Day in that month

and the above rules in paragraphs (i) to (ii) will only apply to the last month of any period;

(v) an obligation means any duty, obligation or liability of any kind;

(w) something being in the ordinary course of business of a person means something that is in the ordinary course of that person's current day-to-day operational business (and not merely anything which that person is entitled to do under its Constitutional Documents);

(x) pay, prepay or repay in clause 28 (Business restrictions) includes by way of set-off, combination of accounts or otherwise;

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(y) a person includes any individual, firm, company, corporation, government entity or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);

(z) a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation and includes (without limitation) any Basel II Regulation or Basel III Regulation;

(aa) right means any right, privilege, power or remedy, any proprietary interest in any asset and any other interest or remedy of any kind, whether actual or contingent, present or future, arising under contract or law, or in equity;

(bb) trustee, fiduciary and fiduciary duty has in each case the meaning given to such term under applicable law;

(cc) (i) the liquidation, winding up, dissolution,or administration of person or (ii) a receiver or administrative receiver or administrator in the context of insolvency proceedings or security enforcement actions in respect of a person shall be construed so as to include any equivalent or analogous proceedings or any equivalent and analogous person or appointee (respectively) under the law of the jurisdiction in which such person is established or incorporated or any jurisdiction in which such person carries on business including (in respect of proceedings) the seeking or occurrences of liquidation, winding-up, reorganisation, dissolution, administration, arrangement, adjustment, protection or relief of debtors;

(dd) an entity is a wholly-owned subsidiary of another entity if it has no members except that other entity and that other entity's wholly-owned Subsidiaries or persons acting on behalf of that other entity or its wholly-owned Subsidiaries;

(ee) a provision of law is a reference to that provision as amended or re-enacted; and

(ff) a law includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the United States of America, any state thereof, Council of the European Union, the European Commission, the United Nations or its Security Council.

1.2.2 Where in this Agreement a provision includes a monetary reference level in one currency, unless a contrary indication appears, such reference level is intended to apply equally to its equivalent in other currencies as of the relevant time for the purposes of applying such reference level to any other currencies.

1.2.3 Section, clause and Schedule headings are for ease of reference only.

1.2.4 Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

1.2.5 A Default (other than an Event of Default) is continuing if it has not been remedied or waived and an Event of Default is continuing if it has not been waived or remedied to the satisfaction of the Agent acting on the instructions of the Lenders.

1.2.6 Unless a contrary indication appears, in the event of any inconsistency between the terms of this Agreement and the terms of any other Finance Document when dealing with the same or similar subject matter, the terms of this Agreement shall prevail.

1.3 Third party rights

1.3.1 Unless expressly provided to the contrary in a Finance Document for the benefit of a Finance Party or another Indemnified Person, a person who is not a party to a Finance Document has no right

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under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act)to enforce or to enjoy the benefit of any term of the relevant Finance Document.

1.3.2 Any Finance Document may be rescinded or varied by the parties to it without the consent of any person who is not a party to it (unless otherwise provided by this Agreement).

1.3.3 An Indemnified Person who is not a party to a Finance Document may only enforce its rights under that Finance Document through a Finance Party and if and to the extent and in such manner as the Finance Party may determine.

1.4 Finance Documents

Where any other Finance Document provides that this clause 1.4 shall apply to that Finance Document, any other provision of this Agreement which, by its terms, purports to apply to all or any of the Finance Documents and/or any Obligor shall apply to that Finance Document as if set out in it but with all necessary changes.

1.5 Conflict of documents

The terms of the Finance Documents (other than any Hedging Contracts and other than as relates to the creation and/or perfection of security) are subject to the terms of this Agreement and, in the event of any conflict between any provision of this Agreement and any provision of any Finance Document (other than any Hedging Contracts and other than in relation to the creation and/or perfection of security) the provisions of this Agreement shall prevail.

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Section 2 - The Facility

2 The Facility

2.1 The Facility

Subject to the terms of this Agreement, the Lenders make available to the Borrowers a term loan facility in an aggregate amount equal to the Total Commitments.

2.2 Finance Parties' rights and obligations

2.2.1 The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

2.2.2 The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.

2.2.3 A Finance Party may, except as otherwise stated in the Finance Documents (including clauses 34.26 (All enforcement action through the Security Agent)) and 35.2 (Finance Parties acting together), separately enforce its rights under the Finance Documents.

2.3 Borrowers' rights and obligations

2.3.1 The obligations of each Borrower under this Agreement are joint and several. Failure by a Borrower to perform its obligations under this Agreement shall constitute a failure by all of the Borrowers.

2.3.2 Each Borrower irrevocably and unconditionally jointly and severally with each other Borrower:

(a) agrees that it is responsible for the performance of the obligations of each other Borrower under this Agreement;

(b) acknowledges and agrees that it is a principal and original debtor in respect of all amounts due from the Borrowers under this Agreement; and

(c) agrees with each Finance Party that, if any obligation of another Borrower under this Agreement is or becomes unenforceable, invalid or illegal for any reason it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any and all Losses it incurs as a result of another Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by that other Borrower under this Agreement. The amount payable under this indemnity shall be equal to the amount which that Finance Party would otherwise have been entitled to recover.

2.3.3 The obligations of each Borrower under the Finance Documents shall continue until all amounts which may be or become payable by the Borrowers under or in connection with the Finance Documents have been irrevocably and unconditionally paid or discharged in full, regardless of any intermediate payment or discharge in whole or in part.

2.3.4 If any discharge, release or arrangement (whether in respect of the obligations of a Borrower or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Borrowers under this Agreement will continue or be reinstated as if the discharge, release or arrangement had not occurred.

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2.3.5 The obligations of each Borrower under the Finance Documents shall not be affected by an act, omission, matter or thing which, but for this clause (whether or not known to it or any Finance Party), would reduce, release or prejudice any of its obligations under the Finance Documents including:

(a) any time, waiver or consent granted to, or composition with, any Obligor or other person;

(b) the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any other Obligor;

(c) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

(d) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

(e) any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of a Finance Document or any other document or security;

(f) any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

(g) any insolvency or similar proceedings.

2.3.6 Each Borrower waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Borrower under any Finance Document. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

2.3.7 Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably and unconditionally paid or discharged in full, each Finance Party (or any trustee or agent on its behalf) may:

(a) refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Borrower will be entitled to the benefit of the same; and

(b) hold in an interest-bearing suspense account any money received from any Borrower or on account of any Borrower's liability under any Finance Document.

2.3.8 Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs (on such terms as it may require), no Borrower shall exercise any rights (including rights of set-off) which it may have by reason of performance by it of its obligations under the Finance Documents:

(a) to be indemnified by another Obligor;

(b) to claim any contribution from any other Obligor or any guarantor of any Obligor's obligations under the Finance Documents; and/or

(c) to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party; and/or

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(d) to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which that Borrower is liable under this Agreement or any of the other Finance Documents; and/or

(e) to exercise any right of set-off against any other Obligor; and/or

(f) to claim or prove as a creditor of any other Obligor in competition with any Finance Party.

If a Borrower receives any benefit, payment or distribution in relation to such rights it will promptly pay an equal amount to the Agent for application in accordance with clause 37 (Payment mechanics). This only applies until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full.

3 Purpose

3.1 Purpose

The Facility shall be made available solely (a) for the purpose of re-financing in full the Existing Indebtedness and (b) for general corporate and working capital purposes of the Group.

3.2 Monitoring

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

4 Conditions of Utilisation

4.1 Initial conditions precedent

The Borrowers may not deliver a Utilisation Request unless the Agent, or its duly authorised representative, has received all of the documents and other evidence listed in Part 1 of Schedule 3 (Conditions precedent) in form and substance satisfactory to the Agent.

4.2 Ship and security conditions precedent

The Total Commitments may only be drawn down under this Agreement if, on or before the Utilisation, the Agent, or its duly authorised representative, has received all of the documents and evidence listed in Part 2 of Schedule 3 (Conditions precedent) in relation to all the Ships in form and substance satisfactory to the Agent.

4.3 Notice to Lenders

The Agent shall notify the Borrowers and the Lenders promptly upon receiving and being satisfied with all of the documents and evidence delivered to it under this clause 4 in form and substance satisfactory to it. Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives any such notification, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

4.4 Further conditions precedent

The Lenders will only be obliged to comply with clause 5.4 (Lenders' participation) if on the date of the Utilisation Request and on the proposed Utilisation Date:

(a) no Default is continuing or would result from the proposed Utilisation;

(b) the Repeating Representations and all of the other representations set out in clause 18 (Representations) (except the Ship Representations), are true; and

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(c) no events, facts, conditions or circumstances shall exist or have arisen or occurred (and neither the Agent nor any Lender or Hedging Provider shall have become aware of other events, facts, conditions or circumstances not previously known to it), which the Agent (acting on the instructions of the Majority Lenders) shall determine, have had or could reasonably be expected to have, a Material Adverse Effect;

(d) the Ship Representations are true in respect of each Ship; and

(e) no Total Loss has occurred in relation to any Ship.

4.5 Waiver of conditions precedent

The conditions in this clause 4 are inserted solely for the benefit of the Finance Parties and may be waived on their behalf in whole or in part and with or without conditions by the Agent acting on the instructions of the Majority Lenders Provided however that the conditions set out under clause 2 of Part 1 of Schedule 3 (Conditions precedent), clause 4 of Part 1 of Schedule 3 (Conditions precedent), clause 5 of Part 1 of Schedule 3 (Conditions precedent), clause 2, paragraphs (a)-(d) of Part 2 of Schedule 3 (Conditions precedent), clause 4 of Part 2 of Schedule 3 (Conditions precedent) and clause 12 of Part 2 of Schedule 3 (Conditions precedent) may only be waived by the Agent acting on the instructions of all the Lenders.

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Section 3 - Utilisation

5 Utilisation

5.1 Delivery of a Utilisation Request

The Borrowers may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request not later than 11:00 a.m. one Business Day before the proposed Utilisation Date.

5.2 Completion of a Utilisation Request

5.2.1 A Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

(a) the proposed Utilisation Date is a Business Day falling not later than the Last Availability Date;

(b) the currency and amount of the Utilisation comply with clause 5.3 (Currency and amount);

(c) the proposed Interest Period complies with clause 9 (Interest Periods); and

(d) it identifies the purpose for the Utilisation and that purpose complies with clause 3 (Purpose).

5.2.2 The Total Commitments may only be drawn down in a single amount in a single Utilisation.

5.3 Currency and amount

5.3.1 The currency specified in a Utilisation Request must be dollars.

5.3.2 The amount of the proposed Loan specified in a Utilisation Request and advanced shall not exceed the lower of:

(a) $170,000,000; and

(b) the amount in dollars which is equal to 60% of the aggregate market value of all the Ships as determined pursuant to the valuations of the Ships obtained under Part 2 of Schedule 3 (Conditions precedent).

5.4 Lenders' participation

5.4.1 If the conditions set out in this Agreement have been met, each Lender shall make its participation in the Loan available by the Utilisation Date through its Facility Office.

5.4.2 The amount of each Lender's participation in the Loan will be equal to the proportion borne by its Commitment to the Total Commitments immediately prior to making the Loan.

5.4.3 The Agent shall promptly notify each Lender of the amount of the Loan and the amount of its participation in the Loan, in each case by 11:00 a.m. on the Quotation Day.

5.4.4 The Agent shall pay all amounts received by it in respect of the Loan (and its own participation in it, if any) to the Borrowers or the account of any of them, or to Nordea Bank Finland plc, London Branch (as agent of all the creditors of the Existing Indebtedness), in each case in accordance with the instructions contained in the Utilisation Request.

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Section 4 - Repayment, Prepayment and Cancellation

6 Repayment

6.1 Repayment

The Borrowers shall repay on each Repayment Date such part of the Loan as is required to be repaid by clause 6.2 (Scheduled repayment of Facility).

6.2 Scheduled repayment of Facility

To the extent not previously reduced, the Loan shall be repaid by twenty (20) instalments, one payable on each Repayment Date. The amount of each such instalment (other than the final instalment) shall be an amount in dollars equal to 1/30^th of the amount of the Loan actually drawn down on the Utilisation Date and the amount of the final instalment shall be an amount in dollars equal to 11/30^th of the amount of the Loan actually drawn down on the Utilisation Date (as each such amount may be revised from time to time by clause 6.3 (Adjustment of scheduled repayments)).

On the Final Repayment Date (without prejudice to any other provision of this Agreement), the Loan shall be repaid in full.

6.3 Adjustment of scheduled repayments

If the Total Commitments have been partially reduced under this Agreement and/or any part of the Loan is prepaid (other than under clause 6.2 (Scheduled repayment of Facility)) before any Repayment Date, the amount of the instalments (including the Balloon Instalment) by which the Loan shall be repaid under clause 6.2 (Scheduled repayment of Facility) on any such Repayment Date (as reduced by any earlier operation of this clause 6.3) shall be reduced pro rata to such reduction in the Total Commitments and/or the Loan.

6.4 Revision of table

At the time of the Utilisation and at the time of any reduction in the amount of the Total Commitments and/or prepayment of the Loan, the Agent shall be entitled to produce a revised repayment table and deliver the same to the Borrowers and the Lenders showing the amount of each instalment to be repaid on each Repayment Date and any such repayment table shall, in the absence of manifest error, be binding on each of the Parties.

7 Illegality, prepayment and cancellation

7.1 Illegality

If it becomes unlawful in any applicable jurisdiction (including as a result of any Sanctions) for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in the Loan:

(a) that Lender shall promptly notify the Agent upon becoming aware of that event;

(b) upon the Agent notifying the Borrowers, the Commitment of that Lender will be immediately cancelled and the remaining Total Commitments shall each be reduced rateably; and

(c) the Borrowers shall repay that Lender's participation in the Loan on the last day of the Interest Period occurring after the Agent has notified the Borrowers or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law).

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7.2 Change of control

If there is a Change of Control, the Borrowers shall notify the Agent of the same upon its occurrence, and the Agent, upon becoming notified by any Party of a Change of Control and if so instructed by the Majority Lenders, shall, by notice to the Borrowers:

(a) cancel the Total Commitments, with effect from the date specified in that notice; and/or

(b) declare that all or part of the Loan be payable within 60 days of such notice, in which case the Borrowers shall repay the Loan in full together with all amounts outstanding under this Agreement and the other Finance Documents within 60 days of such notice.

7.3 Voluntary cancellation

The Borrowers may, if they give the Agent not less than three (3) Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part of the Available Facility which is undrawn at the proposed date of cancellation. Upon any such cancellation the Total Commitments shall be reduced by the same amount.

7.4 Voluntary prepayment

The Borrowers may, if they give the Agent not less than three (3) Business Days' (or such shorter period as the Majority Lenders may agree) prior written notice, prepay the whole or any part of the Loan (but if in part, being an amount that reduces the amount of the Loan by a minimum amount of $1,000,000 and is a multiple of $1,000,000), on the last day of an Interest Period in respect of the amount to be prepaid or on any other date subject to payment of any Break Costs.

7.5 Right of replacement or cancellation and prepayment in relation to a single Lender/Right of cancellation in relation to a Defaulting Lender

7.5.1 If:

(a) any sum payable to any Lender by an Obligor is required to be increased under clause 12.2 (Tax gross-up); or

(b) any Lender claims indemnification from the Borrowers under clause 12.3 (Tax indemnity)or clause 13.1 (Increased Costs);or

(c) any Lender becomes a Non-Consenting Lender,

the Borrowers may, whilst the circumstance giving rise to the requirement for that increase or indemnification or the relevant Lender becoming a Non-Consenting Lender continues for a maximum period of 30 days, give the Agent notice of cancellation of the Commitment of that Lender and their intention to procure the repayment of that Lender's participation in the Loan or give the Agent notice of their intention to replace that Lender in accordance with clause 7.5.4.

7.5.2 On receipt of a notice referred to in clause 7.5.1 above, the Commitment of that Lender shall immediately be reduced to zero and (unless the Commitment of the relevant Lender is replaced in accordance with clause 7.5.4) the remaining Total Commitments shall each be reduced rateably.

7.5.3 On the last day of each Interest Period which ends after the Borrowers have given notice under clause 7.5.1 above in relation to a Lender (or, if earlier, the date specified by the Borrowers in that notice), the Borrowers shall repay that Lender's participation in the Loan.

7.5.4 The Borrowers may, in the circumstances set out in clause 7.5.1, on 10 Business Days' prior notice to the Agent and that Lender, replace that Lender by requiring that Lender to transfer (and, to the extent permitted by law, that Lender shall transfer) pursuant to clause 32 (Changes to the Lenders) and subject always to clause 33.2 (Prohibition on Debt Purchase Transactions by the Group) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity selected by the Borrowers which confirms its

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willingness to assume and does assume all the obligations of the transferring Lender in accordance with clause 32 (Changes to the Lenders) for a purchase price in cash or other cash payment payable at the time of the transfer equal to the aggregate of:

(a) the outstanding principal amount of such Lender's participation in the Loan;

(b) all accrued interest owing to such Lender to the extent that the Agent has not given a notification under clause 32.8 (Pro rata interest settlement);

(c) the Break Costs which would have been payable to such Lender pursuant to clause 10.4(Break Costs) had the Borrowers prepaid in full that Lender's participation in the Loan on the date of the transfer; and

(d) all other amounts payable to that Lender under the Finance Documents on the date of the transfer.

7.5.5 The replacement of a Lender pursuant to clause 7.5.4 shall be subject to the following conditions:

(a) the Borrowers shall have no right to replace the Agent;

(b) neither the Agent nor any Lender shall have any obligation to find a replacement Lender;

(c) in no event shall the Lender replaced under clause 7.5.4 be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents; and

(d) the Lender shall only be obliged to transfer its rights pursuant to clause 7.5.4 above once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer.

7.5.6 A Lender shall perform the checks described in clause 7.5.5(d) above as soon as reasonably practicable following delivery of a notice referred to in clause 7.5.4 above and shall notify the Agent and the Borrowers when it is satisfied that it has complied with those checks.

7.5.7 If any Lender becomes a Defaulting Lender, the Borrowers may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent five (5) Business Days' notice of cancellation of the Commitment of that Lender.

7.5.8 On the notice referred to in clause 7.5.7 above becoming effective, the undrawn Commitment of the Defaulting Lender shall immediately be reduced to zero and (unless the Commitment of the relevant Lender is replaced in accordance with clause 43.5 (Replacement of a Defaulting Lender)) the remaining Total Commitments shall each be reduced rateably.

7.5.9 The Agent shall, as soon as practicable after receipt of a notice referred to in clause 7.5.7 above, notify all Lenders.

7.6 Sale or Total Loss

7.6.1 On a Mortgaged Ship's Disposal Repayment Date the Borrowers shall prepay the Loan by an amount equal to the Relevant Amount.

7.6.2 For the purposes of this clause 7.6, Relevant Amount means, in respect of a Mortgaged Ship which has become a Total Loss or is sold, a part of the Loan equal to the total amount of the Loan multiplied by a fraction having as its numerator the Vessel Value of the relevant Mortgaged Ship lost or sold and as its denominator the aggregate of the Vessel Values of all Mortgaged Ships (including the Mortgaged Ship lost or sold).

7.7 Automatic cancellation

Any part of the Total Commitments which has not become available by the Last Availability Date shall be automatically cancelled at close of business in London on the Last Availability Date.

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7.8 Restrictions

7.8.1 Any notice of cancellation or prepayment given by any Party under this clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

7.8.2 Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

7.8.3 The Borrowers may not re-borrow any part of the Facility which is repaid or prepaid.

7.8.4 The Borrowers shall not repay or prepay all or any part of the Loan or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

7.8.5 No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

7.8.6 If the Agent receives a notice under this clause 7 it shall promptly forward a copy of that notice to either the Borrowers or the affected Lender, as appropriate.

7.8.7 If the Total Commitments are partially reduced under this Agreement (other than under clause 7.1 (Illegality), clause 7.5 (Right of replacement or cancellation and prepayment in relation to a single Lender/Right of cancellation in relation to a Defaulting Lender) and clause 7.9 (Mandatory prepayment and cancellation following non-compliance with Sanctions)), the Commitments of the Lenders shall be reduced rateably.

7.8.8 If the Loan is partially prepaid under this Agreement (other than under clause 7.1 (Illegality), clause 7.5 (Right of replacement or cancellation and prepayment in relation to a single Lender/Right of cancellation in relation to a Defaulting Lender) and clause 7.9 (Mandatory prepayment and cancellation following non-compliance with Sanctions)), the amount prepaid shall reduce the participation of the Lenders in the Loan rateably.

7.8.9 Any prepayment under this Agreement shall be made, where applicable, together with payment to each relevant Hedging Provider of any amount falling due to any relevant Hedging Provider under a Hedging Contract as a result of the termination or close out of that Hedging Contract or any Hedging Transaction under it in relation to that prepayment.

7.9 Mandatory prepayment and cancellation following non-compliance with Sanctions

7.9.1 If any Obligor is at any time not in compliance with any of the provisions of clause 21.11 (Sanctions) or any of clauses 21.3 (Compliance with laws) and 23.6 (Maintenance of class; compliance with laws and codes) (but only insofar as they relate to Sanctions not imposed by Germany, the European Union or the United Nations), or any representation or statement made or deemed to be made under clause 18.34 (Sanctions) (but only insofar as it relates to Sanctions not imposed by Germany, the European Union or the United Nations) is or proves to have been incorrect or misleading when made or deemed to be made then, without prejudice to any other rights of the Finance Parties under this Agreement and the other Finance Documents:

(a) the Commitment of each Lender (other than Lenders established under the laws of Germany and/or with its Facility Office in Germany) will be immediately cancelled; and

(b) the Borrowers shall repay each Lender's participation in the Loan (other than the participation of Lenders established under the laws of Germany and/or with its Facility Office in Germany) on the earlier of (i) the date falling 10 days after the Agent notifies the Borrowers of such non-compliance and (ii) the date falling 10 days after the Borrowers becomes aware of such non-compliance and (iii) the last day of the current Interest Period when the said non-compliance has occurred.

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Section 5 - Costs of Utilisation

8 Interest

8.1 Calculation of interest

The rate of interest on the Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:

(a) Margin; and

(b) LIBOR.

8.2 Payment of interest

The Borrowers shall pay accrued interest on the Loan on the last day of each Interest Period (and, if an Interest Period is longer than three (3) months, on the dates falling at three monthly intervals after the first day of that Interest Period).

8.3 Default interest

8.3.1 If an Obligor fails to pay any amount payable by it under a Finance Document (other than a Hedging Contract) on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to clause 8.3.2 below, is 2 percentage points higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted the Loan for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing in accordance with this clause 8.3 shall be immediately payable by the Obligors on demand by the Agent.

8.3.2 If any overdue amount consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan or the relevant part of it:

(a) the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan; and

(b) the rate of interest applying to the overdue amount during that first Interest Period shall be 2 percentage points higher than the rate which would have applied if the overdue amount had not become due.

8.3.3 Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

8.4 Notification of rates of interest

The Agent shall notify the Lenders and the Borrowers of the determination of a rate of interest under this Agreement.

9 Interest Periods

9.1 Selection of Interest Periods

9.1.1 The Borrowers may select an Interest Period for the Loan in the Utilisation Request or (if the Loan has already been borrowed) in a Selection Notice.

9.1.2 Each Selection Notice is irrevocable and must be delivered to the Agent by the Borrowers not later than 11:00 a.m. five (5) Business Days before the last day of the then current Interest Period.

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9.1.3 If the Borrowers fail to deliver a Selection Notice to the Agent in accordance with clause 9.1.2, the relevant Interest Period will, subject to clause 9.2 (Interest Periods overrunning Repayment Dates), be 3 months.

9.1.4 Subject to this clause 9, the Borrowers may select an Interest Period of three (3) or six (6) months or any other period (including one (1) month) agreed between the Borrowers and the Agent on the instructions of all the Lenders.

9.1.5 No Interest Period shall extend beyond the Final Repayment Date.

9.1.6 The first Interest Period for the Loan shall start on the Utilisation Date and each subsequent Interest Period for the Loan shall start on the last day of its preceding Interest Period.

9.2 Interest Periods overrunning Repayment Dates

If the Borrowers select an Interest Period which would overrun any later Repayment Date, the Loan shall be divided into parts corresponding to the amounts by which the Total Commitments are scheduled to be reduced under clause 6.2 (Scheduled repayment of Facility) on each of the Repayment Dates falling during such Interest Period (each of which shall have a separate Interest Period ending on the relevant Repayment Date) and to the balance of the Loan (which shall have the Interest Period selected by the Borrowers).

9.3 Non-Business Days

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

10 Changes to the calculation of interest

10.1 Absence of quotations

Subject to clause 10.2 (Market Disruption Event), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by 11:00 a.m. on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

10.2 Market Disruption Event

10.2.1 If a Market Disruption Event occurs in relation to the Loan for any Interest Period, then the rate of interest on each affected Lender's share of the Loan for the Interest Period shall be the rate per annum which is the sum of:

(a) the Margin; and

(b) the rate notified to the Agent by that Lender as soon as practicable and in any event prior to the first day of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan from whatever source it may reasonably select.

10.2.2 In this Agreement Market Disruption Event means that:

(a) at or about noon on the Quotation Day for the relevant Interest Period LIBOR is to be determined by reference to the Reference Banks and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for the relevant Interest Period; or

(b) before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in the Loan equal or exceed 50% of the Loan or, if prior to the Utilisation Date, whose Commitments

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equal or exceed 50% of the Total Commitments) that the cost to it of obtaining matching deposits in the Interbank Market would be in excess of LIBOR.

10.3 Alternative basis of interest or funding

10.3.1 If a Market Disruption Event occurs and the Agent or the Borrowers so require, the Agent and the Borrowers shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest.

10.3.2 Any alternative basis agreed pursuant to clause 10.3.1 above shall, with the prior consent of all the Lenders be binding on all Parties.

10.4 Break Costs

10.4.1 The Borrowers shall, within three (3) Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrowers on a day other than the last day of an Interest Period for the Loan or Unpaid Sum or relevant part of it.

10.4.2 Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

11 Fees

11.1 Commitment commission

11.1.1 The Borrowers shall pay to the Agent (for the account of each Lender) a fee in dollars computed at the rate of 1% per annum on the undrawn and uncancelled portion of that Lender's Commitment calculated from the earlier of (a) the date of this Agreement and (b) 30 September 2014 (the start date).

11.1.2 The Borrowers shall pay the accrued commitment commission on each of 30 March, 30 June, 30 September and 31 December of each calendar year, until the earlier of (a) the Last Availability Date and (b) the Utilisation Date, and on the earlier of such dates and, if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective.

11.1.3 No commitment commission is payable to the Agent (for the account of a Lender) on the undrawn portion of the Commitment of that Lender for any day on which that Lender is a Defaulting Lender.

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Section 6 - Additional Payment Obligations

12 Tax gross-up and indemnities

12.1 Definitions

12.1.1 In this Agreement:

Protected Party means a Finance Party or, in relation to clause 14.4 (Indemnity concerning security) and clause 14.7 (Interest) insofar as it relates to interest on any amount demanded by that Indemnified Person under clause 14.4 (Indemnity concerning security), any Indemnified Person, which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.

Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a Finance Document (other than a Hedging Contract) other than a FATCA Deduction.

Tax Payment means either the increase in a payment made by an Obligor to a Finance Party under clause 12.2 (Tax gross-up) or a payment under clause 12.3 (Tax indemnity).

12.1.2 Unless a contrary indication appears, in this clause 12 a reference to determines or determined means a determination made in the absolute discretion of the person making the determination.

12.1.3 This clause 12.1 shall not apply in respect of any payments under any Hedging Contract, where the gross-up provisions of the relevant Hedging Master Agreement itself shall apply.

12.2 Tax gross-up

12.2.1 Each Obligor shall make all payments to be made by it under any Finance Document without any Tax Deduction, unless a Tax Deduction is required by law.

12.2.2 The Borrowers shall, promptly upon any of them becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction), notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrowers and that Obligor.

12.2.3 If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor under the relevant Finance Document shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

12.2.4 If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

12.2.5 Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party (including by way of receipts) that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

12.2.6 This clause 12.2 shall not apply in respect of any payments under any Hedging Contract, where the gross-up provisions of the relevant Hedging Master Agreement itself shall apply.

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12.3 Tax indemnity

12.3.1 Each Obligor who is a Party shall (within three (3) Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.

12.3.2 Clause 12.3.1 above shall not apply:

(a) with respect to any Tax assessed on a Finance Party:

(I) under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or

(ii) under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party;

(b) to the extent a loss, liability or cost is compensated for by an increased payment under clause 12.2 (Tax gross-up);

(c) to the extent a loss, liability or cost is compensated for by a payment under clause 12.4 (Indemnities on after Tax basis); or

(d) to the extent a loss, liability or cost relates to a FATCA Deduction required to be made by a Party.

12.3.3 A Protected Party making, or intending to make a claim under clause 12.3.1 above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrowers and the Guarantors.

12.3.4 A Protected Party shall, on receiving a payment from an Obligor under this clause 12.3, notify the Agent.

12.4 Indemnities on after Tax basis

12.4.1 If and to the extent that any sum payable to any Protected Party by the Borrowers under any Finance Document by way of indemnity or reimbursement proves to be insufficient, by reason of any Tax suffered thereon, for that Protected Party to discharge the corresponding liability to a third party, or to reimburse that Protected Party for the cost incurred by it in discharging the corresponding liability to a third party, the Borrowers shall pay that Protected Party such additional sum as (after taking into account any Tax suffered by that Protected Party on such additional sum) shall be required to make up the relevant deficit.

12.4.2 If and to the extent that any sum (the Indemnity Sum)constituting (directly or indirectly) an indemnity to any Protected Party but paid by the Borrowers to any person other than that Protected Party, shall be treated as taxable in the hands of the Protected Party, the Borrowers shall pay to that Protected Party such sum (the Compensating Sum)as (after taking into account any Tax suffered by that Protected Party on the Compensating Sum) shall reimburse that Protected Party for any Tax suffered by it in respect of the Indemnity Sum.

12.4.3 For the purposes of this clause 12.4 a sum shall be deemed to be taxable in the hands of a Protected Party if it falls to be taken into account in computing the profits or gains of that Protected Party for the purposes of Tax and, if so, that Protected Party shall be deemed to have suffered Tax on the relevant sum at the rate of Tax applicable to that Protected Party's profits or gains for the period in which the payment of the relevant sum falls to be taken into account for the purposes of such Tax.

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12.5 FATCA Information

12.5.1 Subject to clause 12.5.3 below, each Party shall, within ten (10) Business Days of a reasonable request by another Party:

(a) confirm to that other Party whether it is:

(i) a FATCA Exempt Party; or

(ii) not a FATCA Exempt Party;

(b) supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and

(c) supply to that other Party such forms, documentation and other information relating to its status as that other party reasonably requests for the purposes of that other Party's compliance with any other law, regulation or exchange of information regime.

12.5.2 If a Party confirms to another Party pursuant to clause 12.5.1(a) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

12.5.3 Clause 12.5.1 above shall not oblige any Finance Party to do anything, and clause 12.5.1(c) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:

(a) any law or regulation;

(b) any fiduciary duty; or

(c) any duty of confidentiality.

12.5.4 If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with clause 12.5.1 above (including, for the avoidance of doubt, where clause 12.5.3 above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.

12.6 FATCA Deduction

12.6.1 Each Party may make any FATCA Deduction it is required by FATCA to make, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

12.6.2 Each Party shall promptly upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrowers and the Agent and the Agent shall notify the other Finance Parties.

12.7 Stamp taxes

The Borrowers shall pay and, within three (3) Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

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12.8 Value added tax

12.8.1 All amounts set out, or expressed in a Finance Document to be payable by any party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to clause 12.8.3 below, if VAT is or becomes chargeable on any supply made by any Finance Party to any party under a Finance Document, that party shall pay to the Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such party).

12.8.2 If VAT is or becomes chargeable on any supply made by any Finance Party (the Supplier)to any other Finance Party (the Recipient)under a Finance Document, and any party to a Finance Document other than the Recipient (the Subject Party)is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration):

(a) (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Subject Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this paragraph (i) applies) promptly pay to the Subject Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

(b) (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Subject Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

12.8.3 Where a Finance Document requires any party to it to reimburse or indemnify a Finance Party for any cost or expense, that party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment of in respect of such VAT from the relevant tax authority.

12.8.4 Any reference in this clause 12.8 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994).

12.8.5 In relation to any supply made by a Finance Party to any party under a Finance Document, if reasonably requested by such Finance Party, that party must promptly provide such Finance Party with details of that party's VAT registration and such other information as is reasonably requested in connection with such Finance Party's VAT reporting requirements in relation to such supply.

13 Increased Costs

13.1 Increased Costs

13.1.1 Subject to clause 13.3 (Exceptions), the Borrowers shall, within three (3) Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Cost incurred by that Finance Party or any of its Affiliates which:

(a) arises as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Agreement; and/or

(b) is a Basel III Increased Cost.

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13.1.2 In this Agreement Increased Costs means:

(a) a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital;

(b) an additional or increased cost; or

(c) a reduction of any amount due and payable under any Finance Document,

which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.

13.2 Increased Cost claims

13.2.1 A Finance Party intending to make a claim pursuant to clause 13.1 (Increased Costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall notify the Borrowers.

13.2.2 Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.

13.3 Exceptions

13.3.1 Clause 13.1 (Increased Costs) does not apply to the extent any Increased Cost is:

(a) attributable to a Tax Deduction required by law to be made by an Obligor;

(b) compensated for by clause 12.3 (Tax indemnity) (or would have been compensated for under clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in clause 12.3.2 applied);

(c) attributable to a FATCA Deduction required to be made by a Party; or

(d) attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.

13.3.2 In this clause 13.3, a reference to a Tax Deduction has the same meaning given to the term in clause 12.1 (Definitions).

14 Other indemnities

14.1 Currency indemnity

14.1.1 If any sum due from an Obligor under the Finance Documents (a Sum),or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the First Currency)in which that Sum is payable into another currency (the Second Currency)for the purpose of:

(a) making or filing a claim or proof against that Obligor; and/or

(b) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

that Obligor shall, as an independent obligation, within three (3) Business Days of demand by a Finance Party, indemnify each Finance Party to whom that Sum is due against any Losses arising out of or as a result of the conversion including any discrepancy between (i) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (ii) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

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14.1.2 Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

14.2 Other indemnities

14.2.1 The Borrowers shall (or shall procure that another Obligor will), within three (3) Business Days of demand by a Finance Party, indemnify each Finance Party against any and all Losses incurred by that Finance Party as a result of:

(a) the occurrence of any Event of Default;

(b) a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any and all Losses arising as a result of clause 36 (Sharing among the Finance Parties);

(c) funding, or making arrangements to fund, its participation in the Loan requested by the Borrowers in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or

(d) the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers.

14.2.2 The Borrowers shall (or shall procure that another Obligor will), within three (3) Business Days of demand by an Indemnified Person, indemnify each Indemnified Person against any and all Losses, joint or several that may be incurred by or asserted or awarded against any Indemnified Person, in each case arising out of or in connection with or relating to any claim investigation, litigation or proceeding (or the preparation of any defence with respect thereto) commenced or threatened in relation to this Agreement (or the transactions contemplated hereby) or any use made or proposed to be made with the proceeds of the Facility (including an Environmental Claim made or asserted against such Indemnified Person if such Environmental Claim would not have been, or been capable of being, made or asserted against such Indemnified Person if the Finance Parties had not entered into any of the Finance Documents and/or exercised any of their rights, powers and discretions thereby conferred and/or performed any of their obligations thereunder and/or been involved in any of the transactions contemplated by the Finance Documents). This indemnity shall apply whether or not such claims, investigation, litigation or proceedings is brought by any Obligor, any other Group Member, any of their shareholders, their Affiliates, or creditors, or an Indemnified Person or any other person, or an Indemnified Person is otherwise a party thereto, except to the extent such Losses are found in a final non-appealable judgement by a court of competent jurisdiction to have resulted from such Indemnified Person's gross negligence or wilful misconduct. Each Indemnified Person may enforce and enjoy the benefit of this clause 14.2.2 under the Third Parties Act.

14.3 Indemnity to the Agent and the Security Agent

The Borrowers shall promptly indemnify the Agent and the Security Agent against:

14.3.1 any and all Losses incurred by the Agent or the Security Agent (acting reasonably) as a result of:

(a) without prejudice to clause 34.7.2(a) as extended to the Security Agent by clause 34.22 (Application of certain clauses to Security Agent) investigating any event which it reasonably believes is a Default;

(b) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;

(c) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; or

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(d) any action taken by the Agent or the Security Agent or any of their representatives, agents or contractors in connection with any powers conferred by any Security Document to enforce any Security Interest thereunder or to remedy any breach of any Obligor's obligations under the Finance Documents; and

14.3.2 any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent or the Security Agent (otherwise than by reason of the Agent's or the Security Agent's gross negligence or wilful default) (or, in the case of any cost, loss or liability pursuant to clause 37.11 (Disruption to Payment Systems etc.) notwithstanding the Agent's or the Security Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent or the Security Agent under the Finance Documents.

14.4 Indemnity concerning security

14.4.1 The Borrowers shall (or shall procure that another Obligor will) promptly indemnify each Indemnified Person against any and all Losses incurred by it in connection with:

(a) any failure by the Borrowers to comply with clause 16 (Costs and expenses);

(b) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;

(c) the taking, holding, protection or enforcement of the Security Documents;

(d) the exercise or purported exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and/or any other Finance Party and each Receiver by the Finance Documents or by law unless and to the extent that it was caused by its gross negligence or wilful default;

(e) any claim (whether relating to the environment or otherwise) made or asserted against the Indemnified Person which would not have arisen but for the execution or enforcement of one or more Finance Documents (unless and to the extent it is caused by the gross negligence or wilful default of that Indemnified Person); or

(f) any breach by any Obligor of any of its obligations expressed to be assumed by it in the Finance Documents.

14.4.2 The Security Agent may, in priority to any payment to the other Finance Parties, indemnify itself out of the Trust Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this clause 14.4 and shall have a lien on the Security Documents and the proceeds of the enforcement of those Security Documents for all monies payable to it.

14.5 Continuation of indemnities

The indemnities by the Borrowers in favour of the Indemnified Persons contained in this Agreement shall continue in full force and effect notwithstanding any breach by any Finance Party or any Borrower of the terms of this Agreement, the repayment or prepayment of the Loan, the cancellation of the Total Commitments or the repudiation by the Agent or any Borrower of this Agreement.

14.6 Third Parties Act

Each Indemnified Person may rely on the terms of clause 14.4 (Indemnity concerning security) and clauses 12 (Tax gross-up and indemnities) and 14.7 (Interest) insofar as it relates to interest on any amount demanded by that Indemnified Person under clause 14.4 (Indemnity concerning security), subject to clause 1.3 (Third party rights) and the provisions of the Third Parties Act.

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14.7 Interest

Moneys becoming due by the Borrowers to any Indemnified Person under the indemnities contained in this clause 14 or elsewhere in this Agreement shall be paid on demand made by such Indemnified Person and shall be paid together with interest on the sum demanded from the date of demand therefor to the date of reimbursement by the Borrowers to such Indemnified Person (both before and after judgment) at the rate referred to in clause 8.3 (Default interest).

14.8 Exclusion of liability

No Indemnified Person will be in any way liable or responsible to any Obligor (whether as mortgagee in possession or otherwise) who is a Party or is a party to a Finance Document to which this clause applies for any loss or liability arising from any act, default, omission or misconduct of that Indemnified Person, except to the extent caused by its own gross negligence or wilful default. Any Indemnified Person may rely on this clause 14.8 subject to clause 1.3 (Third party rights) and the provisions of the Third Parties Act.

14.9 Fax and email indemnity

The Borrowers shall indemnify each Finance Party against any and all Losses together with any VAT thereon which any of the Finance Parties may sustain or incur as a consequence of any fax or email communication purporting to originate from the Borrowers to the Agent or the Security Agent being made or delivered fraudulently or without proper authorisation (unless such Losses are the direct result of the gross negligence or wilful default of the relevant Finance Party or the Agent or the Security Agent).

14.10 Waiver

In no event shall any of the Finance Parties be liable on any theory of liability for any special, indirect, consequential or punitive damages and the Obligors hereby waive, release and agree not to sue upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in their favour.

14.11 Sanctions

14.11.1 Each Obligor shall, within three (3) Business Days of demand by a Finance Party, indemnify each Finance Party against any cost, loss or liability incurred by it as a result of any civil penalty or fine against, and all reasonable costs and expenses (including reasonable counsel fees and disbursements) incurred in connection with the defense thereof by, the Agent or any Lender as a result of conduct of any Obligor or any of their partners, directors, officers, employees, agents or advisors, that violates any Sanctions.

14.11.2 The indemnity in 14.11.1 above shall cover any Losses incurred by each Finance Party in any jurisdiction arising or asserted under or in connection with any law relating to any Sanctions.

15 Mitigation by the Lenders

15.1 Mitigation

15.1.1 Each Finance Party shall, in consultation with the Borrowers, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of clause 7.1 (Illegality), clause 12 (Tax gross-up and indemnities) or clause 13 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

15.1.2 Clause 15.1.1 does not in any way limit the obligations of any Obligor under the Finance Documents.

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15.2 Limitation of liability

15.2.1 The Borrowers shall indemnify each Finance Party for all costs and expenses incurred by that Finance Party as a result of steps taken by it under clause 15.1 (Mitigation).

15.2.2 A Finance Party is not obliged to take any steps under clause 15.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

16 Costs and expenses

16.1 Transaction expenses

The Borrowers shall promptly within five (5) Business Days of demand pay the Agent, the Arranger, the Bookrunner, the Hedging Providers and the Security Agent the amount of all costs and expenses (including fees, costs and expenses of legal advisers and insurance and other consultants and advisers) reasonably incurred by any of them (and by any Receiver) in connection with the negotiation, preparation, printing, execution, syndication, registration and perfection and any release, discharge or reassignment of:

(a) this Agreement, the Hedging Master Agreements and any other documents referred to in this Agreement and the Original Security Documents;

(b) any other Finance Documents executed or proposed to be executed after the date of this Agreement including any executed to provide additional security under clause 25 (Minimum security value);or

(c) any Security Interest expressed or intended to be granted by a Finance Document.

16.2 Amendment costs

If an Obligor requests an amendment, waiver or consent, the Borrowers shall, within five (5) Business Days of demand by the Agent, reimburse the Agent for the amount of all costs and expenses (including fees, costs and expenses of legal advisers and insurance and other consultants and advisers) reasonably incurred by the Agent or by the Security Agent (and by any Receiver) in responding to, evaluating, negotiating or complying with that request or requirement.

16.3 Enforcement, preservation and other costs

The Borrowers shall on demand by a Finance Party, pay to each Finance Party the amount of all costs and expenses (including fees, costs and expenses of legal advisers and insurance and other consultants, brokers, surveyors and advisers) incurred by that Finance Party in connection with:

(a) the enforcement of, or the preservation of any rights under, any Finance Document and any proceedings initiated by or against any Indemnified Person and as a consequence of holding the Charged Property or enforcing those rights and any proceedings instituted by or against any Indemnified Person as a consequence of taking or holding the Security Documents or enforcing those rights;

(b) any valuation carried out under clause 25 (Minimum security value); or

(c) any inspection carried out under clause 23.8 (Inspection and notice of drydockings) or any survey carried out under clause 23.16 (Survey report) or any inspection carried out under clause 21.14 (Inspection).

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Section 7 - Guarantee

17 Guarantee and indemnity

17.1 Guarantee and indemnity

Each Guarantor hereby irrevocably and unconditionally and jointly and severally with the other Guarantors:

(a) guarantees to the Security Agent (as trustee for the Finance Parties) and the other Finance Parties punctual performance by each other Obligor of all such Obligor's obligations under the Finance Documents;

(b) undertakes with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, it shall immediately on demand pay that amount as if it was the principal obligor; and

(c) agrees with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that it will, as an independent and primary obligation, indemnify each Finance Party immediately on demand against any cost, loss or liability it incurs (i) if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal where such cost, loss or liability arises as a result of the Borrowers not paying any amount which would, but for such unenforceability, invalidity or illegality have been payable by the Borrowers under any Finance Document on the date when it would have been due, or (ii) if as a result (directly or indirectly) of the introduction of or any change in (or the interpretation, administration or application of) any law or regulation, or compliance with any law, regulation or administrative procedure made after entry into this Agreement (a Change in Law),there is a change in the currency, the value of the currency or the timing, place or manner in which any obligation guaranteed by any Guarantor is payable.

The amount payable by any Guarantor under this indemnity:

(i) in respect of paragraph (c)(i) above, shall be the amount it would have had to pay under this clause 17.1 if the amount claimed had been recoverable on the basis of a guarantee but for any relevant unenforceability, invalidity or illegality; and

(ii) in respect of paragraph (c)(ii) above, shall include (1) the difference between (x) the amount (if any) received by the Agent and the other Finance Parties from the Borrowers and (y) the amount that the Borrowers were obliged to pay under the original express terms of the Finance Documents in the currency specified in the Finance Documents, disregarding any Change in Law (the Original Currency), and (2) all further costs, losses and liabilities suffered or incurred by the Agent and the other Finance Parties as a result of a Change in Law.

For the purposes of (1)(x) above, if payment was not received by the Agent or the other Finance Parties in the Original Currency, the amount received by the Agent and the other Finance Parties shall be deemed to be that payment's equivalent in the Original Currency converted, actually or notionally at the Agent's discretion, on the day of receipt at the then prevailing spot rate of exchange of the Agent or if, in the Agent's opinion, it could not reasonably or properly have made a conversion on the day of receipt of the equivalent of that payment in the Original Currency, that payment's equivalent as soon as the Agent could, in its opinion, reasonably and properly have made a conversion of the Original Currency with the currency of payment.

If the Original Currency no longer exists, the Guarantors shall make such payment in such currency as is, in the reasonable opinion of the Agent, required, after taking into account any payments by the Borrowers, to place the Agent and the other Finance Parties in a position reasonably comparable to that it would have been in had the Original Currency continued to exist.

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17.2 Continuing guarantee

This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part. For the avoidance of doubt, it is agreed that, subject to the other terms of this Guarantee, any such irrevocable and unconditional intermediate payment or discharge of any amounts guaranteed by this Guarantee will reduce pro tanto the ultimate balance guaranteed by this Guarantee.

17.3 Reinstatement

If any payment is made by an Obligor, or any discharge, release or arrangement is given by a Finance Party (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) in whole or in part on the basis of any payment, security or other disposition, and the same is avoided or reduced or must be restored in, or as a result of, insolvency, liquidation, administration or any other similar event or otherwise, then:

(a) the liability of each Obligor under this clause 17 shall continue as if the payment, discharge, release, arrangement, avoidance or reduction had not occurred; and

(b) each Finance Party shall be entitled to recover the value or amount of that security or payment from each Obligor, as if the payment, discharge, release, arrangement, avoidance or reduction had not occurred.

17.4 Waiver of defences

The obligations of each Guarantor under this clause 17 will not be affected by an act, omission, matter or thing (whether or not known to it or any Finance Party) which, but for this clause, would reduce, release or prejudice any of its obligations under this clause 17 including (without limitation):

(a) any time, waiver or consent granted to, or composition with, any Obligor or other person;

(b) the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any other Obligor;

(c) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

(d) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

(e) any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security;

(f) any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

(g) any insolvency or similar proceedings.

17.5 Immediate recourse

Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this clause 17. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

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17.6 Appropriations

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

(a) refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and

(b) hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor's liability under this clause 17.

17.7 Deferral of Guarantors' rights

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor shall exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this clause 17:

(a) to be indemnified by another Obligor;

(b) to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents;

(c) to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;

(d) to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which that Guarantor has given a guarantee, undertaking or indemnity under clause 17 (Guarantee and indemnity);

(e) to exercise any right of set-off against any other Obligor; and/or

(f) to claim or prove as a creditor of any other Obligor in competition with any Finance Party.

If any Guarantor receives any benefit, payment or distribution in relation to such rights it will promptly pay an equal amount to the Agent for application in accordance with clause 37 (Payment mechanics). This only applies until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full.

17.8 Additional security

This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

17.9 Guarantors' rights and obligations

17.9.1 The obligations of each Guarantor under the Guarantee and under this Agreement are joint and several. Failure by a Guarantor to perform its obligations under the Guarantee and/or this Agreement shall constitute a failure by all of the Guarantors.

17.9.2 Each Guarantor irrevocably and unconditionally jointly and severally with each other Guarantor:

(a) agrees that it is responsible for the performance of the obligations of each other Guarantor under the Guarantee and this Agreement;

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(b) acknowledges and agrees that it is a principal and original debtor in respect of all amounts due from the Guarantors under the Guarantee and under this Agreement; and

(c) agrees with each Finance Party that, if any obligation of another Guarantor under the Guarantee and this Agreement is or becomes unenforceable, invalid or illegal for any reason it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any and all Losses it incurs as a result of another Guarantor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by that other Guarantors under the Guarantee and/or this Agreement. The amount payable under this indemnity shall be equal to the amount which that Finance Party would otherwise have been entitled to recover.

17.9.3 The obligations of each Guarantor under the Finance Documents shall continue until all amounts which may be or become payable by the Guarantors under or in connection with the Finance Documents have been irrevocably and unconditionally paid or discharged in full, regardless of any intermediate payment or discharge in whole or in part.

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Section 8 - Representations, Undertakings and Events of Default

18 Representations

Each Obligor who is a Party makes and repeats the representations and warranties set out in this clause 18 to each Finance Party at the times specified in clause 18.36 (Times when representations are made) except that the representations and warranties of clause 18.34 (Sanctions) insofar as they relate to Sanctions not imposed by Germany, the European Union or the United Nations will not be so made and repeated to any Finance Party established under the laws of Germany and/or with its Facility Office in Germany.

18.1 Status

18.1.1 Each Obligor is duly incorporated and validly existing under the laws of the jurisdiction of its incorporation as a company or corporation and has no centre of main interests, permanent establishment or place of business outside the jurisdiction in which it is incorporated.

18.1.2 Each Obligor has power and authority to carry on its business as it is now being conducted and to own its property and other assets.

18.2 Binding obligations

Subject to the Legal Reservations, the obligations expressed to be assumed by each Obligor in each Finance Document or any Charter Document to which it is, or is to be, a party are or, when entered into by it, will be legal, valid, binding and enforceable obligations and each Security Document to which an Obligor is, or will be, a party, creates or will create the Security Interests which that Security Document purports to create and those Security Interests are or will be valid and effective.

18.3 Power and authority

18.3.1 Each Obligor has power to enter into, perform and deliver and comply with its obligations under, and has taken all necessary action to authorise its entry into, each Finance Document and any Charter Document to which it is or is to be a party.

18.3.2 No limitation on any Obligor's powers to borrow, create security or give guarantees will be exceeded as a result of any transaction under, or the entry into of, any Finance Document or any Charter Document to which such Obligor is, or is to be, a party.

18.4 Non-conflict

The entry into and performance by each Oligor of, and the transactions contemplated by the Finance Documents and the Charter Documents and the granting of the Security Interests purported to be created by the Security Documents do not and will not conflict with:

(a) any law or regulation applicable to any Obligor;

(b) the Constitutional Documents of any Obligor; or

(c) any agreement or other instrument binding upon any Obligor or its assets,

or constitute a default or termination event (however described) under any such agreement or instrument or result in the creation of any Security Interest (save for a Permitted Maritime Lien or under a Security Document) on any Obligor's assets, rights or revenues.

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18.5 Validity and admissibility in evidence

18.5.1 All authorisations required or desirable:

(a) to enable each Obligor lawfully to enter into, exercise its rights and comply with its obligations under each Finance Document and any Charter Document to which it is a party;

(b) to make each Finance Document and any Charter Document to which it is a party admissible in evidence in its Relevant Jurisdiction; and

(c) to ensure that each of the Security Interests created under the Security Documents has the priority and ranking contemplated by them,

have been obtained or effected and are in full force and effect except any authorisation or filing referred to in clause 18.12 (No filing or stamp taxes), which authorisation or filing will be promptly obtained or effected within any applicable period.

18.5.2 All authorisations necessary for the conduct of the business, trade and ordinary activities of each Obligor have been obtained or effected and are in full force and effect if failure to obtain or effect those authorisations might have a Material Adverse Effect.

18.6 Governing law and enforcement

18.6.1 The choice of English law or any other applicable law as the governing law of any Finance Document and any Charter Document will be recognised and enforced in each Obligor's Relevant Jurisdiction.

18.6.2 Any judgment obtained in England in relation to an Obligor will be recognised and enforced in each Obligor's Relevant Jurisdictions.

18.7 Information

18.7.1 Any Information is true and accurate in all material respects at the time it was given or made.

18.7.2 There are no facts or circumstances or any other information which could make the Information incomplete, untrue, inaccurate or misleading in any material respect.

18.7.3 The Information does not omit anything which could make the Information incomplete, untrue, inaccurate or misleading in any material respect.

18.7.4 All opinions, projections, forecasts or expressions of intention contained in the Information and the assumptions on which they are based have been arrived at after due and careful enquiry and consideration and were believed to be reasonable by the person who provided that Information as at the date it was given or made.

18.7.5 For the purposes of this clause 18.7, Information means: any information provided by any Obligor to any of the Finance Parties in connection with the Finance Documents or the Charter Documents or the transactions referred to in them (including any information memorandum).

18.8 Original Financial Statements

18.8.1 The Original Financial Statements were prepared in accordance with GAAP consistently applied.

18.8.2 The Original Financial Statements give a true and fair view of the consolidated financial condition and results of operations of the relevant Obligors and their respective Subsidiaries during the relevant financial year.

18.8.3 There has been no material adverse change in the assets, business or financial condition (consolidated in the case of each HoldCo) or operations of any of the relevant Obligors and their respective Subsidiaries, since the date of the Original Financial Statements.

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18.9 Pari passu ranking

Each Obligor's payment obligations under the Finance Documents to which it is, or is to be, a party rank at least pari passu with all its other present and future unsecured and unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally.

18.10 Ranking and effectiveness of security

Subject to the Legal Reservations and any filing, registration or notice requirements which is referred to in any legal opinion delivered to the Agent under clause 4.1 (Initial conditions precedent), the security created by the Security Documents has (or will have when the Security Documents have been executed) the priority which it is expressed to have in the Security Documents, the Charged Property is not subject to any Security Interest other than Permitted Security Interests and such security will constitute perfected security on the assets described in the Security Documents.

18.11 No insolvency

No corporate action, legal proceeding or other procedure or step described in clause 30.9 (Insolvency proceedings) or creditors' process described in clause 30.10 (Creditors' process) has been taken or, to the knowledge of any Obligor, threatened in relation to an Obligor and none of the circumstances described in clause 30.8 (Insolvency) applies to any Obligor.

18.12 No filing or stamp taxes

Under the laws of each Obligor's Relevant Jurisdictions it is not necessary that any Finance Document or any Charter Document to which it is, or is to be, party be filed, recorded or enrolled with any court or other authority (other than the filing and recordation of the Mortgages with the relevant Registry) in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to any such Finance Document or any Charter Document or the transactions contemplated by the Finance Documents except any filing, recording or enrolling or any tax or fee payable in relation to any Finance Document which is referred to in any legal opinion delivered to the Agent under clause 4.1 (Initial conditions precedent) and which will be made or paid promptly after the date of the relevant Finance Document.

18.13 Tax

No Obligor is required to make any deduction for or on account of Tax from any payment it may make under any Finance Document to which it is, or is to be, a party and no other party is required to make any such deduction from any payment it may make under any Charter Document.

18.14 No Default

18.14.1 No Default is continuing or might reasonably be expected to result from the making of the Utilisation or the entry into, the performance of, or any transaction contemplated by, any Finance Document or any Charter Document.

18.14.2 No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (however described) under any other agreement or instrument which is binding on any Obligor or to which any Obligor's assets are subject which might have a Material Adverse Effect.

18.14.3 No other events, conditions, facts or circumstances exist or have arisen or occurred since 31 December 2013, which have had or could reasonably be expected to have a Material Adverse Effect.

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18.15 No proceedings pending or threatened

No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency (including, without limitation, investigative proceedings) which, if adversely determined, might reasonably be expected to have a Material Adverse Effect, have (to the best of any Obligor's knowledge and belief) been started against any Obligor (other than the Manager).

18.16 No breach of laws

18.16.1 No Obligor has breached any law or regulation which might have a Material Adverse Effect.

18.16.2 No labour dispute is current against any Obligor (other than the Manager) which may have a Material Adverse Effect.

18.16.3 No Obligor has breached any of the Obligors' general risk management policy, which breach might have a Material Adverse Effect.

18.17 Environmental matters

18.17.1 No Environmental Law applicable to any Fleet Vessel and/or any Obligor has been violated in a manner or circumstances which might have, a Material Adverse Effect.

18.17.2 All consents, licences and approvals required under such Environmental Laws have been obtained and are currently in force.

18.17.3 No Environmental Claim has been made or is pending against any Obligor (other than the Manager) or any Fleet Vessel where that claim might have a Material Adverse Effect and there has been no Environmental Incident which has given, or might give, rise to such a claim.

18.18 Tax Compliance

18.18.1 No Obligor is materially overdue in the filing of any Tax returns or overdue in the payment of any amount in respect of Tax.

18.18.2 No claims or investigations are being, or are reasonably likely to be, made or conducted against any Obligor (other than the Manager) with respect to Taxes such that a liability of, or claim against, any Obligor (other than the Manager) is reasonably likely to arise for an amount for which adequate reserves have not been provided in the Original Financial Statements and which might have a Material Adverse Effect.

18.18.3 Each Obligor is in compliance with its Tax obligations within the jurisdiction of its incorporation.

18.19 Anti-corruption law

Each Obligor has conducted its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.

18.20 Security and Financial Indebtedness

18.20.1 No Security Interest exists over all or any of the present or future assets of any Obligor in breach of this Agreement.

18.20.2 No Obligor has any Financial Indebtedness outstanding in breach of this Agreement.

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18.21 Legal and beneficial ownership

18.21.1 Ownership of assets

Each Obligor is the sole legal and beneficial owner of the respective assets over which it purports to grant a Security Interest under the Security Documents.

18.21.2 Ownership of shares

(a) All of the issued share capital of, and all of the issued voting share capital of, each Borrower and each Guarantor (other than the Parent), is legally and beneficially owned by its respective Shareholder(s).

(b) Each Borrower and each Guarantor (other than the Parent) is a wholly-owned direct or indirect Subsidiary of the Parent.

(c) The Manager is controlled by the Permitted Holders.

(d) The Manager is ultimately beneficially owned by the Permitted Holders.

18.22 Shares

The shares of each Obligor are fully paid (other than the shares of the Parent) and not subject to any option to purchase or similar rights. The Constitutional Documents of each Obligor do not and could not restrict or inhibit any transfer of those shares on creation or enforcement of the Security Documents. There are no agreements in force which provide for the issue or allotment of, or grant any person the right to call for the issue or allotment of, any share or loan capital of each Obligor (including any option or right of pre-emption or conversion).

18.23 Accounting Reference Date

The financial year-end of each Obligor is the Accounting Reference Date.

18.24 No adverse consequences

18.24.1 It is not necessary under the laws of the Relevant Jurisdictions of any Obligor:

(a) in order to enable any Finance Party to enforce its rights under any Finance Document; or

(b) by reason of the execution of any Finance Document or the performance by any Obligor of its obligations under any Finance Document to which it is, or is to be, a party,

that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of such Relevant Jurisdictions.

18.24.2 No Finance Party is or will be deemed to be resident, domiciled or carrying on business in any Relevant Jurisdiction by reason only of the execution, performance and/or enforcement of any Finance Document.

18.25 Copies of documents

The copies of the Charter Documents and the Constitutional Documents of the Obligors delivered to the Agent under clause 4 (Conditions of Utilisation) will be true, complete and accurate copies of such documents and include all amendments and supplements to them as at the time of such delivery and no other agreements or arrangements exist between any of the parties to any Charter Document which would materially affect the transactions or arrangements contemplated by any Charter Document or modify or release the obligations of any party under that Charter Document.

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18.26 No breach of any Charter Document: Designated Events

18.26.1 No Obligor nor (so far as the Obligors are aware) any other person is in breach of any Charter Document to which it is a party nor has anything occurred which entitles or may entitle any party to any Charter Document to rescind or terminate it or decline to perform their obligations under it.

18.26.2 No events of default, breaches of covenants or representations exist or have occurred and remain unremedied or unwaived as at the date of this Agreement and the Utilisation Date under any Designated Facility, other than the Designated Events relevant to such Designated Facility.

18.27 No immunity

No Obligor or any of its assets is immune to any legal action or proceeding.

18.28 Ship status

Each Ship will on the first day of the relevant Mortgage Period be:

(a) registered in the name of the relevant Owner through the relevant Registry as a ship under the laws and flag of the relevant Flag State;

(b) operationally seaworthy and in every way fit for service;

(c) classed with the relevant Classification free of all requirements and recommendations of the relevant Classification Society; and

(d) insured in the manner required by the Finance Documents.

18.29 Ship's employment

(a) Each Ship which is subject to an Initial Charter (except for m.v.s Partagas and Raiatea) shall, on the first day of the relevant Mortgage Period, have been delivered and accepted for service under its Initial Charter.

(b) Each Ship which is subject to an Initial Charter shall, on the first day of the relevant Mortgage Period, be free of any other charter commitment which, if entered into after that date, would require approval under the Finance Documents.

18.30 Address commission

There are no rebates, commissions or other payments in connection with any Charter other than those referred to in it.

18.31 No Money Laundering

In relation to the borrowing by the Borrowers of the Loan or any part of it, the performance and discharge of the Obligors' obligations and liabilities under the Finance Documents, and the transactions and other arrangements effected or contemplated by this Agreement and the Finance Documents, the Obligors are acting for their own account and the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure which has been implemented by any relevant regulatory authority or otherwise to combat Money Laundering (as defined in clause 21.15 (No bribery and corruption)).

18.32 Use of proceeds

The proceeds of the Utilisation have been or (as the case may be) on the Utilisation Date will be used exclusively for the purposes specified in clause 3 (Purpose).

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18.33 Maintenance of properties

Each Obligor has maintained in good working order and condition (ordinary wear and tear excepted) all of its assets necessary or desirable in the conduct of its business.

18.34 Sanctions

18.34.1 No Obligor (other than the Manager), nor any other Group Member, nor any of their respective joint ventures, nor any of their respective directors, officers or employees nor, to the best of any Obligor's knowledge, any Affiliate of a Group Member or any agents or representatives of an Obligor (other than the Manager) or other Group Member:

(a) has breached any Sanctions;

(b) is a Restricted Party; or

(c) has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions.

18.34.2 No proceeds of the Loan:

(a) shall be made available, directly or indirectly, to or for the benefit of a Restricted Person nor shall they be otherwise directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions; or

(b) will be used by any Obligor:

(i) to finance equipment or sectors under embargo decisions of the United Nations or the World Bank; or

(ii) in breach of the provisions of CISADA,

unless appropriate approvals and/or exceptions have been obtained from any relevant authorities.

18.35 No corrupt practices

The Loan will not be used by any Obligor for and no Obligor shall engage in:

(a) Corrupt Practices, Fraudulent Practices, Collusive Practices or Coercive Practices, including the procurement or the execution of any contract for goods or works relating to its functions;

(b) the Financing of Terrorism,

as each of the above terms is defined in clause 21.15.3.

18.36 Times when representations are made

18.36.1 All of the representations and warranties set out in this clause 18 (other than Ship Representations) are deemed to be made and repeated on the dates of:

(a) this Agreement;

(b) the Utilisation Request; and

(c) the Utilisation.

18.36.2 The Repeating Representations are also deemed to be made and repeated on the first day of each Interest Period.

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18.36.3 All of the Ship Representations are deemed to be made and repeated on the first day of the Mortgage Period for the relevant Ship.

18.36.4 Each representation or warranty deemed to be made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances then existing at the date the representation or warranty is deemed to be made.

19 Information undertakings

Each Obligor who is a Party undertakes that this clause 19 will be complied with throughout the Facility Period.

In this clause 19:

Annual Financial Statements means the audited consolidated financial statements for a financial year of the Parent delivered pursuant to clause 19.1.1.

Semi-Annual Financial Statements means the unaudited consolidated financial statements for each financial half-year of the Parent (namely each 6-month period ending on 30 June and 31 December of each financial year of the Parent) delivered pursuant to clause 19.1.1.

19.1 Financial statements

19.1.1 The Obligors shall supply to the Agent:

(a) the Annual Financial Statements for each financial year of the Parent as soon as the same become available, but in any event within 150 days after the end of each financial year; and

(b) the Semi-Annual Financial Statements for each financial half-year of the Parent as soon as the same become available, but in any event within 90 days after the end of each such financial half-year; and

(c) not later than 31 March of each calendar year, a 3 year financial forecast (together with assumptions) of the Group in respect of the then current calendar year and the two subsequent calendar years.

19.2 Provision and contents of Compliance Certificate and valuations

19.2.1 The Obligors shall supply to the Agent with each set of Semi-Annual Financial Statements and Annual Financial Statements and at any other time required by the Agent or any Lender following an Event of Default, a Compliance Certificate (including any supporting schedules or other information and evidence as the Agent or any Lender may require) and valuations of the Mortgaged Ships made in accordance with clause 25 (Minimum security value) at the cost and expense of the Borrowers.

19.2.2 Each Compliance Certificate shall, amongst other things, set out (in reasonable detail) computations as to compliance with clause 20.2 (Financial condition) and shall be signed by an authorised signatory of the Parent.

19.3 Requirements as to financial statements

19.3.1 The Borrowers shall procure that each set of financial statements includes a profit and loss account, a balance sheet and a cash flow statement and that, in addition, each set of Annual Financial Statements shall be audited by the Auditors.

19.3.2 Each set of financial statements delivered pursuant to clause 19.1 (Financial statements) shall:

(a) be prepared in accordance with GAAP;

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(b) give a true and fair view of (in the case of Annual Financial Statements for any financial year), or fairly represent (in other cases), the financial condition and operations of the Group, as at the date as at which those financial statements were drawn up; and

(c) in the case of annual audited financial statements, not be the subject of any qualification in the Auditors' opinion. For the avoidance of doubt, a qualification shall not include an "emphasis of matter paragraph" which in accordance with GAAP is not considered a qualification.

19.3.3 The Borrowers shall procure that each set of financial statements delivered pursuant to clause 19.1 (Financial statements) shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements, unless, in relation to any set of financial statements, the Borrowers notify the Agent that there has been a change in GAAP or the accounting practices and the Auditors deliver to the Agent:

(a) a description of any change necessary for those financial statements to reflect the GAAP or accounting practices and reference periods upon which corresponding Original Financial Statements were prepared; and

(b) sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether clause 20 (Financial covenants) has been complied with and to make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements.

Any reference in this Agreement to any financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.

19.4 Presentations

If required by the Agent, once in every financial year (or more frequently if requested to do so by the Agent if the Agent reasonably suspects a Default is continuing or may have occurred or may occur), the Borrowers shall procure that a representative of the Parent gives a presentation to the Finance Parties about the on-going business and financial performance of the Group and any other matter which a Finance Party may reasonably request.

19.5 Year-end

The Borrowers shall procure that each financial year-end of each Obligor and each Group Member falls on the Accounting Reference Date.

19.6 Information: miscellaneous

The Borrowers shall supply to the Agent:

(a) at the same time as they are dispatched, copies of all documents dispatched by the Parent to its shareholders generally (or any class of them) or dispatched by the Parent or any Obligors to its creditors generally (or any class of them) unless such documents have been disclosed through the Parent's public filings and reports in which case this paragraph (a) shall not apply;

(b) promptly upon becoming aware of them, the details of any litigation, labour dispute, arbitration or administrative proceedings which are current, threatened or pending against any Group Member, and which, if adversely determined, might have a Material Adverse Effect or which would involve a liability, or a potential or alleged liability, exceeding $2,000,000 (or its equivalent in other currencies);

(c) promptly upon becoming aware of it, the details of any Environmental Claim threatened against any Obligor or any Fleet Vessel where that claim might have a Material Adverse Effect;

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(d) promptly, such information as the Agent may reasonably require about the Charged Property and compliance of the Obligors with the terms of any Security Documents;

(e) promptly upon becoming aware of them, details of any claim, action, suit, proceeding or investigation with respect to Sanctions against it, any other Group Member, any of their respective direct or indirect owners, Subsidiaries, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives promptly upon becoming aware of the same;

(f) promptly upon becoming aware of them, any material event, circumstances or developments in connection with any Designated Facility (including an event of default, breach of covenant or representation) or any event which constitutes an acceleration of any Financial Indebtedness of Group Members (including under a Designated Facility) by any of its lenders or the exercise of any rights or remedies by any of its lenders in connection with the same; and

(g) promptly on request, such further information regarding the financial condition, assets and operations of the Group and/or any Group Member as any Finance Party through the Agent may reasonably request.

19.7 Notification of Default

The Borrowers shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon any Obligor becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).

19.8 Sufficient copies

The Borrowers, if so requested by the Agent, shall deliver sufficient copies of each document to be supplied under the Finance Documents to the Agent to distribute to each of the Lenders and the Hedging Providers.

19.9 Use of websites

19.9.1 Unless otherwise agreed, the Borrowers shall satisfy their obligation under this Agreement to deliver any information by submitting the information to the Agent for posting onto Intralinks or Debt domain system or other electronic website designated by the Agent (the Designated Website).

19.9.2 The Agent shall supply each Lender and the Borrowers with the address of and any relevant password specifications for the Designated Website following designation of that website by the Borrowers and the Agent in order for the Borrowers and the Lenders to obtain their respective passwords.

19.9.3 Each of the Borrowers and the Lenders shall promptly upon any of them becoming aware of its occurrence notify the Agent if:

(a) the Designated Website cannot be accessed due to technical failure;

(b) the password specifications for the Designated Website change;

(c) any new information which is required to be provided under this Agreement is posted onto the Designated Website;

(d) any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or

(e) any Borrower or Lender becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.

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If the Agent is notified under paragraphs (a) or (e) above, and until the Agent and each Lender is satisfied that the circumstances giving rise to the notification are no longer continuing (i) all information to be provided by the Borrowers under this Agreement after the date of that notice shall be supplied to the Agent in paper form and (ii) any Lender may request that the Borrowers supply such Lender, through the Agent, with a paper copy of any information required to be provided under this Agreement. The Borrowers shall comply with any such request within ten (10) Business Days.

19.10 "Know your customer" checks

19.10.1 If:

(a) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

(b) any change in the status of an Obligor (other than the Parent) or the composition of the shareholders of an Obligor (other than the Parent) after the date of this Agreement; or

(c) a proposed assignment or transfer by a Lender pursuant to clause 32 (Changes to the Lenders) or a Hedging Provider pursuant to clause 31 (Position of Hedging Providers) and the relevant Hedging Contract, of any of its rights and/or obligations under this Agreement or any Hedging Contract to a party that is not already a Lender or Hedging Provider prior to such assignment or transfer,

obliges the Agent, the Security Agent, a Hedging Provider or any Lender (or, in the case of paragraph (c) above, any prospective new Lender or Hedging Provider) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent, the Security Agent, or any Lender or any Hedging Provider supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender or any Hedging Provider) or any Lender, the Security Agent or a Hedging Provider (for itself or, in the case of the event described in paragraph (c) above, on behalf of any prospective new Lender, the Security Agent, the Agent or a Hedging Provider) in order for the Agent, the Security Agent, such Lender or Hedging Provider or, in the case of the event described in paragraph (c) above, any prospective new Lender or Hedging Provider to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

19.10.2 Each Finance Party shall promptly upon the request of the Agent or the Security Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent or the Security Agent (for itself) in order for it to carry out and be satisfied with the results of all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

19.11 Anti-Money Laundering

The Borrowers will:

19.11.1 provide the Agent with information, certificates and any documents required by the Agent or any other Finance Party to ensure compliance with any law official requirement or other regulatory measure or procedure implemented to combat Money Laundering (as defined in clause 21.15 (No bribery and corruption)) throughout the Facility Period; and

19.11.2 notify the Agent as soon as it becomes aware of any matters evidencing that a breach of any law official requirement or other regulatory measure or procedure implemented to combat Money Laundering (as defined in clause 21.15 (No bribery and corruption) may or is about to occur or that the person(s) who have or will receive the commercial benefit of this Agreement have changed from the date hereof.

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20 Financial covenants

Each Obligor (other than the Manager) who is a Party undertakes that this clause 20 will be complied with throughout the Facility Period.

20.1 Financial definitions

In clauses 20.2 (Financial condition) and 20.3 (Financial testing):

Cash and Cash Equivalents means, at any relevant time, the amount of "Cash and Cash Equivalents" (including any amount of "Restricted Cash"), each as demonstrated by the then most recent Financial Statements, which are free from any Security Interest and/or restriction, to which any Group member is beneficially entitled and are available for use by any Group Member at that time and which are capable of being applied against Financial Indebtedness, but also including any cash deposit which is subject to a Security Interest and/or restriction (but is not blocked) if the sole purpose of such deposit and/or Security Interest and/or restriction is the maintenance of a minimum liquidity covenant under borrowing arrangements of any Group Member.

Financial Statements means any of the Annual Financial Statements or the Semi-Annual Financial Statements of the Parent referred to and defined as such in clause 19.1 (Financial statements).

Measurement Period means each financial year of the Parent and each financial half-year of the Parent for which Financial Statements are to be delivered to the Agent under clause 19.1 (Financial statements).

Shareholders' Equity means, at any time and in relation to any Measurement Period, the shareholders' equity for the Group as shown in the then most recent Financial Statements.

Tangible Net Worth means, at any time and in relation to any Measurement Period, the Shareholders' Equity as demonstrated by the then most recent Financial Statements but:

(a) after adding any additional paid-in capital not provided for in the relevant Financial Statements; and

(b) after subtracting:

(i) any amount shown in the relevant Financial Statements for goodwill, including on consolidation, or any other intangible property;

(ii) distributions or proposed distributions not provided for in the relevant Financial Statements; and

(iii) assets pledged to secure any liabilities not provided for in the relevant Financial Statements; and

(iv) those assets which would be deemed by the Agent, in its reasonable opinion, to be non-acceptable in calculating net worth in accordance with its reasonable requirements as in effect of such date.

Total Assets means, at any time and in relation to any Measurement Period, the value of the "Total Assets" of the Group as demonstrated by the then most recent Financial Statements.

20.2 Financial condition

Each Obligor who is a Party shall ensure that:

(a) Tangible Net Worth: at all times during and in respect of each Measurement Period, the Tangible Net Worth shall not be lower than $500,000,000.

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(b) Equity ratio: at all times during and in respect of each Measurement Period, the ratio of the Shareholders' Equity to Total Assets shall not be lower than 0.30:1.0.

(c) Minimum liquidity: at all times during and in respect of each Measurement Period, the Cash and Cash Equivalents shall not be less than $50,000,000.

20.3 Financial testing

The financial covenants set out in clause 20.2 (Financial condition) shall be calculated in accordance with GAAP on a consolidated basis and tested by reference to each of the Financial Statements of the Group delivered pursuant to, and defined as such in, clause 19.1 (Financial statements) and/or each Compliance Certificate delivered pursuant to clause 19.2 (Provision and contents of Compliance Certificate and valuations).

21 General undertakings

Each Obligor who is a Party undertakes with each Finance Party that this clause 21 will be complied with throughout the Facility Period, except that the undertakings in clause 21.3 (Compliance with laws), and clause 21.11 (Sanctions) insofar as they relate to Sanctions not imposed by Germany, the European Union or the United Nations are not given in favour of any Finance Party established under the laws of Germany and/or with its Facility Office in Germany.

21.1 Use of proceeds

The proceeds of the Utilisation will be used exclusively for the purposes specified in clause 3 (Purpose).

21.2 Authorisations

Each Obligor will promptly:

(a) obtain, comply with and do all that is necessary to maintain in full force and effect; and

(b) supply certified copies to the Agent of,

any authorisation required under any law or regulation of a Relevant Jurisdiction to:

(i) enable it to perform its obligations under the Finance Documents and the Charter Documents;

(ii) ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document or Charter Document; and

(iii) carry on its business, where failure to do so has, or is reasonably likely to have, a Material Adverse Effect.

21.3 Compliance with laws

Each Obligor will comply in all respects with its Constitutional Documents and all laws and regulations (including Environmental Laws) to which it may be subject.

21.4 Tax Compliance

21.4.1 Each Obligor shall pay and discharge all Taxes imposed upon it or its assets within such time period as may be allowed by law without incurring penalties unless and only to the extent that:

(a) such payment is being contested in good faith;

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(b) adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under clause 19.1 (Financial statements); and

(c) such payment can be lawfully withheld.

21.4.2 Except as approved by the Majority Lenders, each Obligor shall ensure that it is and it remains in compliance with its Tax obligations in the jurisdiction in which it is incorporated.

21.5 Change of business

Except as approved by the Majority Lenders, no substantial change will be made to the general nature of the business of the Guarantors, the Obligors or the Group taken as a whole from that carried on at the date of this Agreement.

21.6 Merger

Except as approved by the Majority Lenders, no Obligor will enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction or change its legal name except in the case of the Parent who may enter into any such transaction provided that (a) no Event of Default has occurred, (b) no Change of Control or Event of Default results from any such transaction and (c) the Parent is the surviving entity of such amalgamation, demerger, merger, consolidation or corporate reconstruction.

21.7 Further assurance

21.7.1 Each Obligor shall promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Agent may reasonably specify (and in such form as the Agent may reasonably require):

(a) to perfect the Security Interests created or intended to be created by that Obligor under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other security over all or any of the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Security Agent or any other Finance Party provided by or pursuant to the Finance Documents or by law;

(b) to confer on the Security Agent and/or any other Finance Party Security Interests over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security Interest intended to be conferred by or pursuant to the Security Documents;

(c) to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents; and/or

(d) to facilitate either the accession by a New Lender to any Security Document following an assignment in accordance with clause 32.1 (Assignments and transfers by the Lenders) or the accession by a Hedging Provider to this Agreement in accordance with clause 31.1 (Hedging Providers) and the conferring on such Hedging Provider of the rights contemplated in clause 31.2 (Rights of Hedging Providers).

21.7.2 Each Obligor shall take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security Interest conferred or intended to be conferred on the Security Agent and/or any other Finance Party by or pursuant to the Finance Documents.

21.8 Negative pledge in respect of Charged Property

Except as approved by all the Lenders and for Permitted Maritime Liens, no Obligor will grant or allow to exist any Security Interest over any Charged Property.

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21.9 Environmental matters

21.9.1 The Obligors (other than the Manager) will notify the Agent as soon as reasonably practicable of any Environmental Claim being made against any Obligor (other than the Manager) or any Fleet Vessel which, if successful to any extent, might have a Material Adverse Effect and of any Environmental Incident which may give rise to such a claim and they will keep the Agent regularly and promptly informed in reasonable detail of the nature of, and response to, any such Environmental Incident and the defence to any such claim.

21.9.2 The Obligors will procure that Environmental Laws (and any consents, licences or approvals obtained under them) applicable to Fleet Vessels will not be violated in a way which might have a Material Adverse Effect.

21.10 Maintenance of satisfactory properties and insurances

21.10.1 Each Obligor shall maintain in good working order and condition (ordinary wear and tear excepted) all of its assets necessary or desirable in the conduct of its business.

21.10.2 Each Obligor shall maintain insurances (in addition to the Insurances required to be maintained under clause 24 (Insurance)) on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business.

21.11 Sanctions

Each Obligor shall ensure that none of their, nor any of their Subsidiaries', respective directors, officers or employees and each Obligor shall use its best efforts to ensure that none of their agents or representatives or other persons acting on their behalf:

(a) is a person listed on any Sanctions List or is designated as a "designated person" under CISADA.

(b) shall permit or authorize any other person to, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of the Loan or other transaction(s) contemplated by this Agreement to fund any trade, business or other activities:

(i) involving or for the benefit of any Restricted Party; or

(ii) in any other manner that would reasonably be expected to result in any Obligor being in breach of any Sanctions or becoming a Restricted Party.

(c) shall permit or authorize and shall prevent any Ship being used directly or indirectly:

(i) by or for the benefit of any Restricted Party; and/or

(ii) in any trade which will expose any Ship, any Obligor, the Manager, crew or insurers to enforcement proceedings or any other consequences whatsoever arising from Sanctions.

21.12 Pari passu

Each Obligor will ensure that its obligations under the Finance Documents shall, without prejudice to the security intended to be created by the Security Documents, at all times rank at least pari passu with all its other present and future unsecured and unsubordinated Indebtedness with the exception of any obligations which are mandatorily preferred by law and not by contract.

21.13 Borrowers' own account

Each Obligor will ensure that any borrowing by it and/or the performance of its obligations hereunder and under the other Finance Documents to which it is a party will be for its own account

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and will not involve any breach by it of any law, or regulatory measure relating to Money Laundering (as defined in clause 21.15 (No bribery and corruption)).

21.14 Inspection

Each Obligor (other than the Manager) who is a party undertakes with the Finance Parties that, from the date of this Agreement and so long as any moneys are owing under any of the Finance Documents, upon the request of the Agent it shall provide the Finance Parties or any of their representatives, professional advisors and contractors with access to, and permit inspection of, books and records of any Obligor (other than the Manager), in each case at reasonable times and upon reasonable notice.

21.15 No bribery and corruption

21.15.1 No Obligor shall engage in:

(a) Corrupt Practices, Fraudulent Practices, Collusive Practices or Coercive Practices, including the procurement or the execution of any contract for goods or works relating to its functions;

(b) Money Laundering or acted in breach of any applicable law relating to Money Laundering; or

(c) the Financing of Terrorism.

21.15.2 Without prejudice to the generality of clause 21.15.1:

(a) no Obligor or other Group Member will directly or indirectly use the proceeds of the Facility for any purpose which would breach the Bribery Act 2010 or the United States Foreign Corrupt Practices Act of 1977;

(b) the Obligor shall procure that each Group Member:

(i) conducts its businesses in compliance with the Bribery Act 2010 or the United States Foreign Corrupt Practices Act of 1977; and

(ii) maintains policies and procedures designed to promote and achieve compliance with such laws.

21.15.3 For the purposes of this clause 21.15 and clauses 18.35 (No corrupt practices) and 19.11 (Anti‑Money Laundering), the following definitions shall apply:

Coercive Practice means impairing or harming or threatening to impair or harm, directly or indirectly, any party or its property or to improperly influence the actions of that party.

Collusive Practice means an arrangement between two or more parties without the knowledge, but designed to improperly influence the actions, of another party.

Corrupt Practice means the offering, giving, receiving, or soliciting, directly or indirectly, anything of value to improperly influence the actions of another party.

Financing of Terrorism means the act of providing or collecting funds with the intention that they be used, or in the knowledge that they are to be used, in order to carry out terrorist acts.

Fraudulent Practice means any action, including misrepresentation, to obtain a financial or other benefit or avoid an obligation, by deception.

Money Laundering has the meaning given in Article I of the Directive (2001/97 EC of the European Parliament and of December 2001) including, but not limited to, Directive 2005/60 amending Council Directive 91/308) and includes:

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(a) the conversion or transfer of property, knowing it is derived from a criminal offence, for the purpose of concealing or disguising its illegal origin or of assisting any person who is involved in the commission of the crime to evade the legal consequences of its actions;

(b) the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of, property knowing that it is derived from a criminal offence; or

(c) the acquisition, possession or use of property knowing at the time of its receipt that it is derived from a criminal offence.

22 Dealings with Ships

Each Borrower undertakes that this clause 22 will be complied with in relation to each Mortgaged Ship throughout the relevant Ship's Mortgage Period.

22.1 Ship's name and registration

(a) The Ship's name shall only be changed after prior notice of at least 1 day to the Agent.

(b) The Ship shall be registered with the relevant Registry under the laws of its Flag State. Except with approval by all the Lenders, the Ship shall not be registered under any other flag or at any other port or fly any other flag (other than that of its Flag State). If that registration is for a limited period, it shall be renewed at least 45 days before the date it is due to expire and the Agent shall be notified of that renewal at least 30 days before the date it is due to expire.

(c) Nothing will be done and no action will be omitted if that might result in such registration being forfeited or imperilled or the Ship being required to be registered under the laws of another state of registry.

22.2 Sale or other disposal of Ship

Except with approval of the Agent (acting on the instructions of all the Lenders), an Owner will not sell, or agree to, transfer, abandon or otherwise dispose of its Ship or any share or interest in it if the net proceeds of sale would be insufficient to discharge the prepayment obligations of the Borrowers in respect of such sale under clause 7.6 (Sale or Total Loss). Where no approval is required under this clause, the Borrowers shall provide advance notice to the Agent of any such proposed sale and such sale shall be subject to the provisions of the same clause 7.6 (Sale or Total Loss).

22.3 Manager

A manager of the Ship (other than the Manager) shall not be appointed unless that manager is approved and it and the relevant Owner have delivered a duly executed Manager's Undertaking and a Management Agreement Assignment to the Security Agent. The relevant Owner shall not agree to any change to the terms of appointment of a manager which have been approved unless such change is approved by the Majority Lenders.

22.4 Copy of Mortgage on board

A properly certified copy of the relevant Mortgage shall be kept on board the Ship with its papers and shown to anyone having business with the Ship which might create or imply any commitment or Security Interest over or in respect of the Ship (other than a lien for crew's wages and salvage) and to any representative of the Agent or the Security Agent.

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22.5 Notice of Mortgage

A framed printed notice of the Ship's Mortgage shall be prominently displayed in the navigation room and in the Master's cabin of the Ship. The notice must be in plain type and read as follows:

"NOTICE OF MORTGAGE

This Ship is subject to a first mortgage in favour of [here insert name of mortgagee] of [here insert address of mortgagee]. Under the said mortgage and related documents, neither the Owner nor any charterer nor the Master of this Ship has any right, power or authority to create, incur or permit to be imposed upon this Ship any commitments or encumbrances whatsoever other than for crew's wages and salvage".

No-one will have any right, power or authority to create, incur or permit to be imposed upon the Ship any lien whatsoever other than for crew's wages and salvage.

22.6 Conveyance on default

Where the Ship is (or is to be) sold in exercise of any power conferred by the Security Documents, the relevant Owner shall, upon the Agent's request, immediately execute such form of transfer of title to the Ship as the Agent may require.

22.7 Chartering

22.7.1 Except with approval by the Majority Lenders, the relevant Owner shall not enter into any charter commitment for the Ship, which is:

(a) a bareboat or demise charter or passes possession and operational control of the Ship to another person;

(b) on terms as to payment or amount of hire which are materially less beneficial to it than the terms which at that time could reasonably be expected to be obtained on the open market for vessels of the same age and type as the Ship under charter commitments of a similar type and period; or

(c) to another Group Member.

22.7.2 Without prejudice to the rights of the Finance Parties under clause 22.7.1 above and any other provisions of the Finance Documents, the Borrowers shall advise the Agent promptly of any proposed Charter of a Ship (other than the Initial Charters) and:

(a) forthwith after its execution deliver a certified copy of each such Charter to the Agent;

(b) forthwith following demand by the Agent procure that the relevant Owner executes in favour of the Security Agent a Charter Assignment of any such Charter and any notice of assignment required in connection therewith and promptly procure the service of any such notice of assignment on the relevant Charterer (but, in the case of a Charter Assignment in respect of a Ship executed on or before the Utilisation Date, deliver evidence of such service within 10 Business Days from the delivery of such Ship by the relevant Owner to the relevant Charterer thereunder) and use its commercially reasonable endeavours to procure the acknowledgement of such notice by the relevant Charterer; and

(c) pay on demand by the Agent all legal and other costs properly incurred by the Agent or the Security Agent in connection with each such Charter Assignment.

22.8 Merchant use

The relevant Owner shall use the Ship only as a civil merchant trading ship.

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22.9 Sharing of Earnings

Except with approval by the Majority Lenders, the relevant Owner shall not enter into any arrangement under which its Earnings from the Ship may be shared with anyone else.

22.10 Payment of Earnings

The relevant Owner's Earnings from the Ship shall be paid in the way required by the Ship's General Assignment or Deed of Covenant. If any Earnings are held by brokers or other agents, they shall be paid to the Security Agent or the Agent (as the case may be), if it requires this after the Earnings have become payable to it under the Ship's General Assignment or Deed of Covenant.

22.11 Lay-up

Except with prior written notice to the Agent, no Ship shall be laid up or deactivated.

23 Condition and operation of Ship

Each Borrower undertakes with each Finance Party that this clause 23 will be complied with in relation to each Mortgaged Ship throughout the relevant Ship's Mortgage Period except that the undertakings in clause 23.6 (Maintenance of class; compliance with laws and codes) insofar as they relate to Sanctions not imposed by Germany, the European Union or the United Nations are not given in favour of any Finance Party established under the laws of Germany and/or with its Facility Office in Germany.

23.1 Defined terms

In this clause 23 and in Schedule 3 (Conditions precedent):

applicable code means any code or prescribed procedures required to be observed by the Ship or the persons responsible for its operation under any applicable law (including but not limited to those currently known as the ISM Code and the ISPS Code).

applicable law means all laws and regulations applicable to vessels registered in the Ship's Flag State or which for any other reason apply to the Ship or to its condition or operation at any relevant time.

applicable operating certificate means any certificates or other document relating to the Ship or its condition or operation required to be in force under any applicable law or any applicable code.

23.2 Repair

The Ship shall be kept in a good, safe and efficient state of repair. The quality of workmanship and materials used to repair the Ship or replace any damaged, worn or lost parts or equipment shall be sufficient to ensure that the Ship's value is not reduced.

23.3 Modification

Except with approval by the Majority Lenders, the structure, type or performance characteristics of the Ship shall not be modified in a way which could or might materially alter the Ship or materially reduce its value.

23.4 Removal of parts

Except with approval by the Majority Lenders, no material part of the Ship or any equipment shall be removed from the Ship if to do so would materially reduce its value (unless at the same time it is replaced with equivalent parts or equipment owned by the relevant Owner free of any Security Interest except under the Security Documents).

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23.5 Third party owned equipment

Except with approval by the Majority Lenders, equipment owned by a third party shall not be installed on the Ship if it cannot be removed without risk of causing damage to the structure or fabric of the Ship or incurring significant expense.

23.6 Maintenance of class; compliance with laws and codes

The Ship's class shall be the relevant Classification with the relevant Classification Society and neither the Classification nor the Classification Society of the Ship shall be changed without approval. The Ship and every person who owns, operates or manages the Ship shall comply with all applicable laws and the requirements of all Sanctions and all applicable codes and regulations (including but not limited to all Environmental Laws). There shall be kept in force and on board the Ship or in such person's custody any applicable operating certificates which are required by applicable laws or applicable codes to be carried on board the Ship or to be in such person's custody.

23.7 Surveys

The Ship shall be submitted to continuous surveys and any other surveys which are required for it to maintain the Classification as its class. Copies of reports of those surveys shall be provided promptly to the Agent if it so requests.

23.8 Inspection

The Agent and/or surveyors or other persons appointed by it for such purpose shall be allowed to board the Ship at all reasonable times to inspect it and given all proper facilities needed for that purpose. The Borrowers shall bear, and reimburse the Agent where incurred by the Agent, all costs and expenses of such inspection but, in the absence of an Event of Default, not more than once per year.

23.9 Prevention of arrest

All debts, damages, liabilities and outgoings which have given, or may give, rise to maritime, statutory or possessory liens on, or claims enforceable against, the Ship, its Earnings or Insurances shall be promptly paid and discharged.

23.10 Release from arrest

The Ship, its Earnings and Insurances shall promptly be released from any arrest, detention, attachment or levy, and any legal process against the Ship shall be promptly discharged, by whatever action is required to achieve that release or discharge.

23.11 Information about Ship

The Agent or any Lender shall promptly be given any information which it may reasonably require about the Ship or its employment, position, use or operation, including details of towages and salvages, and copies of all its charter commitments entered into by or on behalf of any Owner and copies of any applicable operating certificates.

23.12 Notification of certain events

The Agent shall promptly be notified of:

(a) any damage to the Ship where the cost of the resulting repairs may exceed the Major Casualty Amount for such Ship;

(b) any occurrence which may result in the Ship becoming a Total Loss;

(c) any requisition of the Ship for hire;

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(d) any Environmental Incident involving the Ship and Environmental Claim being made in relation to such an incident;

(e) any withdrawal or threat to withdraw any applicable operating certificate;

(f) the issue of any operating certificate required under any applicable code;

(g) the receipt of notification that any application for such a certificate has been refused;

(h) any requirement or recommendation made in relation to the Ship by any insurer or the Ship's Classification Society or by any competent authority which is not, or cannot be, complied with in the manner or time required or recommended; and

(i) any arrest, hijacking or detention of the Ship or any exercise or purported exercise of a lien or other claim on the Ship or its Earnings or Insurances.

23.13 Payment of outgoings

All tolls, dues and other outgoings whatsoever in respect of the Ship and its Earnings and Insurances shall be paid promptly. Proper accounting records shall be kept of the Ship and its Earnings.

23.14 Evidence of payments

The Agent shall be allowed proper and reasonable access to those accounting records when it requests it and, when it requires it, shall be given satisfactory evidence that:

(a) the wages and allotments and the insurance and pension contributions of the Ship's crew are being promptly and regularly paid;

(b) all deductions from its crew's wages in respect of any applicable Tax liability are being properly accounted for; and

(c) the Ship's master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress.

23.15 Repairers' liens

Except with approval by the Majority Lenders, the Ship shall not be put into any other person's possession for work to be done on the Ship if the cost of that work will exceed or is likely to exceed the Major Casualty Amount for such Ship unless that person gives the Security Agent a written undertaking in approved terms not to exercise any lien on the Ship or its Earnings for any of the cost of such work.

23.16 Survey report

As soon as reasonably practicable after the Agent requests it, the Agent shall be given a report on the seaworthiness and/or safe operation of the Ship, from surveyors or inspectors approved by the Agent (acting on the instructions of the Majority Lenders). If any recommendations are made in such a report they shall be complied with in the way and by the time recommended in the report.

23.17 Lawful use

The Ship shall not be employed:

(a) in any way or in any activity which is unlawful under international law or the domestic laws of any relevant country;

(b) in carrying illicit or prohibited goods;

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(c) in a way which may make it liable to be condemned by a prize court or destroyed, seized or confiscated; or

(d) if there are hostilities in any part of the world (whether war has been declared or not), in carrying contraband goods

and the persons responsible for the operation of the Ship shall take all necessary and proper precautions to ensure that this does not happen, including participation in industry or other voluntary schemes available to the Ship and in which leading operators of ships operating under the same flag or engaged in similar trades generally participate at the relevant time.

23.18 War zones

No Ship shall enter or remain in any zone which has been declared a war zone by any government entity or that Ship's war risk insurers except if any requirements of the Agent and/or that Ship's insurers necessary to ensure that such Ship remains properly insured in accordance with the Finance Documents (including any requirement for the payment of extra insurance premiums) are complied with.

24 Insurance

Each Borrower undertakes that this clause 24 shall be complied with in relation to each Mortgaged Ship and its Insurances throughout the relevant Ship's Mortgage Period.

24.1 Insurance terms

In this clause 24

excess risks means the proportion (if any) of claims for general average, salvage and salvage charges not recoverable under the hull and machinery insurances of a vessel in consequence of the value at which the vessel is assessed for the purpose of such claims exceeding its insured value.

excess war risk P&I cover means cover for claims only in excess of amounts recoverable under the usual war risk cover including (but not limited to) hull and machinery, crew and protection and indemnity risks.

hull cover means insurance cover against the risks identified in clause 24.2(a).

minimum hull cover means, in relation to a Mortgaged Ship, an amount equal to or greater than its Vessel Value and which, when taken together with the insured value of the other Mortgaged Ships, is at the relevant time 110 per cent of the aggregate of the Loan at such time.

P&I risks means the usual risks (including liability for oil pollution, excess war risk P&I cover) covered by a protection and indemnity association which is a member of the International Group of protection and indemnity associations (or, if the International Group ceases to exist, any other leading protection and indemnity association or other leading provider of protection and indemnity insurance) (including, without limitation, the proportion (if any) of any collision liability not covered under the terms of the hull cover).

24.2 Coverage required

The Ship (including its hull and machinery, hull interest, freight interest, disbursements and/or increased value) shall at all times be insured at the Ship's Owner's cost:

(a) against (i) fire and usual marine risks (including excess risks) and (ii) war risks (including war protection and indemnity risks and terrorism, piracy and confiscation risks) on an agreed value basis, in each case, for at least its minimum hull cover and in the case of sub-section (i), provided that the hull and machinery insurances for the Ship shall at all times cover at

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least 80 per cent of its Vessel Value and the remaining minimum hull cover may be insured by way of excess risks cover or hull interest or freight interest;

(b) against P8,1 risks for the highest amount then available in the insurance market for vessels of similar age, size and type as the Ship (but, in relation to liability for oil pollution, for an amount of not less than $1,000,000,000);

(c) against such other risks and matters which the Agent notifies it that it considers reasonable for a prudent shipowner or operator to insure against at the time of that notice; and

(d) on terms which comply with the other provisions of this clause 24.

24.3 Placing of cover

The insurance coverage required by clause 24.2 (Coverage required) shall be:

(a) in the name of the Ship's Owner and the Manager and (in the case of the Ship's hull cover) no other person (other than the Security Agent and any other Finance Party if required by the Agent) (unless such other person is approved and, if so required by the Agent, has duly executed and delivered a first priority assignment of its interest in the Ship's Insurances to the Security Agent or the other Finance Parties in an approved form and provided such supporting documents and opinions in relation to that assignment as the Agent requires);

(b) in dollars or another approved currency;

(c) arranged through approved brokers or direct with approved insurers or protection and indemnity or war risks associations; and

(d) on approved terms and with approved insurers or associations.

24.4 Deductibles

The aggregate amount of any excess or deductible under the Ship's hull cover shall not exceed an approved amount.

24.5 Mortgagee's insurance

The Borrowers shall promptly reimburse to the Agent the cost (as conclusively certified by the Agent) of taking out and keeping in force in respect of the Ship and the other Mortgaged Ships on terms approved by the Agent (acting on the instructions of the Majority Lenders), or in considering or making claims under:

(a) a mortgagee's interest insurance and a mortgagee's additional perils (Pollution) cover for the benefit of the Finance Parties for an aggregate amount up to 120% of the Loan; and

(b) any other insurance cover which the Agent reasonably requires in respect of any Finance Party's interests and potential liabilities (whether as mortgagee of the Ship or beneficiary of the Security Documents).

24.6 Fleet liens, set off and cancellations

If the Ship's hull cover also insures other vessels, the Security Agent shall either be given an undertaking in approved terms by the brokers or (if such cover is not placed through brokers or the brokers do not, under any applicable laws or insurance terms, have such rights of set off and cancellation) the relevant insurers that the brokers or (if relevant) the insurers will not:

(a) set off against any claims in respect of the Ship any premiums due in respect of any of such other vessels insured (other than other Mortgaged Ships); or

(b) cancel that cover because of non-payment of premiums in respect of such other vessels,

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or the Borrowers shall ensure that hull cover for the Ship and any other Mortgaged Ships is provided under a separate policy from any other vessels.

24.7 Payment of premiums

All premiums, calls, contributions or other sums payable in respect of the Insurances shall be paid punctually and the Agent shall be provided with all relevant receipts or other evidence of payment upon request.

24.8 Details of proposed renewal of Insurances

At least fourteen (14) days before any of the Ship's Insurances are due to expire, the Agent shall be notified of the names of the brokers, insurers and associations proposed to be used for the renewal of such Insurances and the amounts, risks and terms in, against and on which the Insurances are proposed to be renewed.

24.9 Instructions for renewal

At least two (2) days before any of the Ship's Insurances are due to expire, instructions shall be given to brokers, insurers and associations for them to be renewed or replaced on or before their expiry.

24.10 Confirmation of renewal

The Ship's Insurances shall be renewed upon their expiry in a manner and on terms which comply with this clause 24 and confirmation of such renewal given by approved brokers or insurers to the Agent at least two (2) days (or such shorter period as may be approved) before such expiry.

24.11 P&I guarantees

Any guarantee or undertaking required by any protection and indemnity or war risks association in relation to the Ship shall be provided when required by the association.

24.12 Insurance documents

The Agent shall be provided with pro forma copies of all insurance policies and other documentation issued by brokers, insurers and associations in connection with the Ship's Insurances as soon as they are available after they have been placed or renewed and all insurance policies and other documents relating to the Ship's Insurances shall be deposited with any approved brokers or (if not deposited with approved brokers) the Agent or some other approved person.

24.13 Letters of undertaking

Unless otherwise approved where the Agent (upon the instructions of the Majority Lenders) is satisfied that equivalent protection is afforded by the terms of the relevant Insurances and/or any applicable law and/or a letter of undertaking provided by another person, on each placing or renewal of the Insurances, the Agent shall be provided promptly with letters of undertaking in an approved form (having regard to general insurance market practice and law at the time of issue of such letter of undertaking) from the relevant brokers, insurers and associations.

24.14 Insurance Notices and Loss Payable Clauses

The interest of the Security Agent or any other Finance Parties as assignees of the Insurances shall be endorsed on all insurance policies and other documents by the incorporation of a Loss Payable Clause and an Insurance Notice in respect of the Ship and its Insurances signed by its Owner and, unless otherwise approved, each other person assured under the relevant cover (other than the Security Agent or any other Finance Party, if it is itself an assured).

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24.15 Insurance correspondence

If so requested by the Agent (such request to be reasonable), the Agent shall promptly be provided with copies of all written communications between the assureds and brokers, insurers and associations relating to any of the Ship's Insurances as soon as they are available.

24.16 Qualifications and exclusions

All requirements applicable to the Ship's Insurances shall be complied with and the Ship's Insurances shall only be subject to approved exclusions or qualifications.

24.17 Independent report

If the Agent requires and obtains a detailed report from an approved independent firm of marine insurance brokers giving their opinion on the adequacy of the Ship's Insurances then the Borrowers shall reimburse the Agent for the cost of obtaining that report.

24.18 Collection of claims

All documents and other information and all assistance required by the Agent to assist it and/or the Security Agent in trying to collect or recover any claims under the Ship's Insurances shall be provided promptly.

24.19 Employment of Ship

24.19.1 The Ship shall only be employed or operated in conformity with the terms of the Ship's Insurances (including any express or implied warranties) and not in any other way (unless the insurers have consented and any additional requirements of the insurers have been satisfied).

24.19.2 The Ship shall not enter or remain in any zone which has been declared a war, conditional or excluded zone by any government entity or the Ship's insurers for war risks and/or allied perils (including piracy) unless:

(a) appropriate insurances have been taken out by the relevant Owner; and

(b) any requirements of the Agent and/or the Ship's insurers necessary to ensure that the Ship remains properly insured in accordance with the Finance Documents (including any requirement for the payment of extra insurance premiums) have been complied with.

24.20 Declarations and returns

If any of the Ship's Insurances are on terms that require a declaration, certificate or other document to be made or filed before the Ship sails to, or operates within, an area, those terms shall be complied with within the time and in the manner required by those Insurances.

24.21 Application of recoveries

All sums paid under the Ship's Insurances to anyone other than the Security Agent shall be applied in repairing the damage and/or in discharging the liability in respect of which they have been paid except to the extent that the repairs have already been paid for and/or the liability already discharged.

24.22 Settlement of claims

Any claim under the Ship's Insurances for a Total Loss or Major Casualty shall only be settled, compromised or abandoned with prior approval.

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25 Minimum security value

Each Borrower undertakes that this clause 25 (including in relation to the requirement of clause 25.12 (Security shortfall) that the Security Value must be no less than the Minimum Value) will be complied with throughout the Facility Period.

25.1 Valuation of assets

For the purpose of the Finance Documents, the value at any time of any Mortgaged Ship or a Ship before the Utilisation, or any other asset over which additional security is provided under this clause 25 will be its value as most recently determined in accordance with this clause 25.

25.2 Valuation frequency

Valuation of each Mortgaged Ship or each Ship before the Utilisation and each such other asset in accordance with this clause 25 may be required by the Agent at any time (but in any event not less frequently than twice per calendar year).

25.3 Expenses of valuation

The Borrowers shall bear, and reimburse to the Agent where incurred by the Agent, all costs and expenses of providing any valuation of each Mortgaged Ship under this clause 25 or clause 19.2 (Provision and contents of Compliance Certificate and valuations) and any valuation of a Ship obtained under Part 2 of Schedule 3 (Conditions precedent) Provided however that if no Event of Default has occurred and is continuing, in the case of valuations of Mortgaged Ships under this clause 25 and clause 19.2 (Provision and contents of Compliance Certificate and valuations) (i.e. without taking into account the valuations of the Ships obtained under Part 2 of Schedule 3 (Conditions precedent)) the Borrowers shall bear the cost of such valuations of a Mortgaged Ship not more than twice per year.

25.4 Valuations procedure

The value of any Mortgaged Ship before the Utilisation shall be determined in accordance with, and by valuers approved and appointed in accordance with, this clause 25. Additional security provided under this clause 25 shall be valued in such a way, on such a basis and by such persons (including the Agent itself) as may be approved by the Majority Lenders or as may be agreed in writing by the Borrowers and the Agent (on the instructions of the Majority Lenders).

25.5 Currency of valuation

Valuations shall be provided by valuers in dollars or, if a valuer is of the view that the relevant type of vessel is generally bought and sold in another currency, in that other currency. If a valuation is provided in another currency, for the purposes of this Agreement it shall be converted into dollars at the Agent's spot rate of exchange for the purchase of dollars with that other currency as at the date to which the valuation relates.

25.6 Basis of valuation

Each valuation will be addressed to the Agent in its capacity as such, it will be not more than 30 days' old and made:

(a) without physical inspection (unless required by the Agent) (acting on the instructions of the Majority Lenders);

(b) on the basis of a sale for prompt delivery for a price payable in full in cash on delivery at arm's length on normal commercial terms between a willing buyer and a willing seller; and

(c) without taking into account the benefit or detriment of any charter commitment.

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25.7 Information required for valuation

The Borrowers shall promptly provide to the Agent and any such valuer any information which they reasonably require for the purposes of providing such a valuation.

25.8 Approved Brokers

All valuers must be Approved Brokers. The Agent may from time to time notify the Borrowers and the Lenders of any additional independent ship brokers which have been approved by the Borrowers and the Agent (acting on the instructions of the Majority Lenders) as Approved Brokers for the purposes of this clause 25.

25.9 Appointment of Approved Brokers

When a valuation is required for the purposes of this clause 25, the Borrowers shall promptly appoint the relevant Approved Brokers to provide such a valuation. If the Borrowers fail to do so promptly, the Agent may appoint the relevant Approved Brokers to provide that valuation.

25.10 Number of valuers

Each valuation must be carried out by two (2) Approved Brokers both of whom shall be nominated by the Borrowers. If the Borrowers fail promptly to nominate an Approved Broker then the Agent may nominate that valuer.

25.11 Differences in valuations

If valuations provided by individual Approved Brokers differ, the value of the relevant Ship for the purposes of the Finance Documents will be the mean average of those valuations.

25.12 Security shortfall

If at any time the Security Value is less than the Minimum Value, the Agent may, and shall, if so directed by the Majority Lenders, by notice to the Borrowers require that such deficiency be remedied. The Borrowers shall then within 45 days of receipt of such notice ensure that the Security Value equals or exceeds the Minimum Value. For this purpose, the Borrowers may:

(a) provide additional security over other assets reasonably approved by all Lenders in accordance with this clause 25 (including in the form of charged and/or pledged dollar cash deposits which are hereby approved by all Lenders); and/or

(b) prepay part of the Loan under clause 7.4 (Voluntary prepayment) but on three (3) Business Days' notice instead of the period required by such clause.

25.13 Creation of additional security

The value of any additional security which the Borrowers offer to provide to remedy all or part of a shortfall in the amount of the Security Value will only be taken into account for the purposes of determining the Security Value if and when:

(a) that additional security, its value and the method of its valuation have been approved by all the Lenders, it being agreed that cash collateral provided in pledged and/or charged dollar cash deposits or in the form of letters of credit denominated in dollars shall always be acceptable to the Lenders, and shall be valued at par;

(b) a Security Interest over that security has been constituted in favour of the Security Agent or (if appropriate) the Finance Parties in a form and manner approved by the Majority Lenders;

(c) this Agreement has been unconditionally amended in such manner as the Agent requires in consequence of that additional security being provided; and

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(d) the Agent, or its duly authorised representative, has received such documents and evidence it may require in relation to that amendment and additional security including documents and evidence of the type referred to in Schedule 3 (Conditions precedent) in relation to that amendment and additional security and its execution and (if applicable) registration.

26 Chartering undertakings

Each Borrower undertakes that this clause 26 will be complied with in relation to each Mortgaged Ship and its Charter Documents throughout the Facility Period.

26.1 Variations

Except with approval by the Majority Lenders (or, in the case of an Initial Charter, all the Lenders), the Charter Documents shall not be materially varied (and, for the avoidance of doubt, any reduction of the charter rate or shortening of the tenor of an Initial Charter or any assignment, transfer or novation of a Charter Document, whether from the relevant Owner or the relevant Charterer, without approval shall constitute a material variation), and the relevant Owner shall not grant any consent to the relevant Charterer in respect of any such material variation.

26.2 Releases and waivers

Except with approval by the Majority Lenders (or, in the case of an Initial Charter, all the Lenders), there shall be no release by the relevant Owner of any material obligation of any other person under the Charter Documents (including by way of novation, assignment or transfer), no waiver of any breach of any such material obligation and no consent to anything which would otherwise be such a breach.

26.3 Termination by Owner

Except with approval by the Majority Lenders (or, in the case of an Initial Charter, all the Lenders), the relevant Owner shall not terminate or rescind any Charter Document or withdraw the Ship from service under the Charter or take any similar action.

26.4 Charter performance

The relevant Owner shall perform its obligations under the Charter Documents and use its best endeavours to ensure that each other party to them performs their obligations under the Charter Documents.

26.5 Notice of assignment

The relevant Owner shall give notice of assignment of the Charter Documents to the other parties to such documents in the form specified by the Charter Assignment for the relevant Charter and Ship and shall exercise its commercially reasonable endeavours to ensure that the Agent receives a copy of that notice acknowledged by each addressee in the form specified therein as soon as practically possible after the relevant Charter Assignment has been executed and in any event in accordance with clause 22.7.2 (but in the case of the Initial Charters, the Borrowers shall procure such acknowledgment by the Initial Charterer in respect of a Ship, within 10 Business Days from the delivery of such Ship by the relevant Owner to the relevant Charterer thereunder).

26.6 Payment of Charter Earnings

All Earnings which the relevant Owner is entitled to receive under the Charter Documents shall be paid in the manner required by the Security Documents.

26.7 Delivery under each Initial Charter

Each of m.v.s Partagas and Raiatea shall be delivered by their Owners to the relevant Charterers and accepted for service under the relevant Initial Charters on 31 October 2014 and 31 January 2015 respectively (or, in any case, within 45 days after each such respective date).

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27 Bank accounts

Each Borrower undertakes that this clause 27 will be complied with throughout the Facility Period.

27.1 Earnings Account

27.1.1 Each Owner shall be the holder(s) of one or more Accounts with an Account Bank which is designated as an Earnings Account for the purposes of the Finance Documents.

27.1.2 The Earnings of the Mortgaged Ships and all moneys payable to each Owner under each Ship's Insurance and any net amount payable to the Parent under any Hedging Contract shall be paid by the persons from whom they are due to an Earnings Account unless required to be paid to the Security Agent or any other Finance Parties under the relevant Finance Documents.

27.1.3 The relevant Account Holder(s) shall not withdraw amounts standing to the credit of an Earnings Account except as permitted by clause 27.1.4.

27.1.4 If there is no Event of Default which is continuing, the relevant Account Holder(s) may withdraw any amounts from an Earnings Account without approval, for the following purposes:

(a) to make payments then due to Finance Parties under the Finance Documents;

(b) to make payments of the proper costs and expenses of insuring, repairing, operating and maintaining any Mortgaged Ship;

(c) to make payments to purchase other currencies in amounts and at times required to make payments referred to above in the currency in which they are due; and

(d) to pay cash dividends and distributions to its shareholders to the extent not prohibited by the Finance Documents.

27.2 Other provisions

27.2.1 An Account may only be designated for the purposes described in this clause 27 if:

(a) such designation is made in writing by the Agent and acknowledged by the Borrowers and specifies the names and addresses of the relevant Account Bank and the Account Holder(s) and the number and any designation or other reference attributed to the Account;

(b) an Account Security has been duly executed and delivered by the relevant Account Holder(s) in favour of the Security Agent or the other Finance Parties;

(c) any notice required by the Account Security to be given to an Account Bank has been given to, and acknowledged by, the Account Bank in the form required by the relevant Account Security; and

(d) the Agent, or its duly authorised representative, has received such documents and evidence it may require in relation to the Account and the Account Security including documents and evidence of the type referred to in Schedule 3 (Conditions precedent) in relation to the Account and the relevant Account Security.

27.2.2 The rates of payment of interest and other terms regulating any Account will be a matter of separate agreement between the relevant Account Holder(s) and Account Bank. If an Account is a fixed term deposit account, the relevant Account Holder(s) may select the terms of deposits to be applied until the relevant Account Security has become enforceable and the Security Agent directs otherwise.

27.2.3 The relevant Account Holder(s) shall not close any Account or alter the terms of any Account from those in force at the time it is designated for the purposes of this clause 27 or waive any of its rights in relation to an Account except with approval.

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27.2.4 The relevant Account Holder(s) shall deposit with the Security Agent all certificates of deposit, receipts or other instruments or securities relating to any Account, notify the Security Agent of any claim or notice relating to an Account from any other party and provide the Agent with any other information it may request concerning any Account.

27.2.5 Each of the Agent and the Security Agent agrees that if it is an Account Bank in respect of an Account then there will be no restrictions on creating a Security Interest over that Account as contemplated by this Agreement and it shall not (except with the approval of the Majority Lenders) exercise any right of combination, consolidation or set-off which it may have in respect of that Account in a manner adverse to the rights of the other Finance Parties.

28 Business restrictions

Except as otherwise approved by the Majority Lenders each Obligor (other than the Manager) undertakes that throughout the Facility Period this clause 28 will be complied with by and in respect of each Group Member (other than the Manager) to which each of the provisions below is expressed to apply.

28.1 General negative pledge

28.1.1 In this clause 28.1, Quasi-Security means an arrangement or transaction described in clause 28.1.3.

28.1.2 No Obligor (other than the Parent) shall permit any Security Interest to exist, arise or be created or  extended over all or any part of its assets. No Obligor shall permit any Security Interest to exist, arise or be created or extended over the shares of any Obligor (other than the Parent).

28.1.3 (Without prejudice to clauses 28.2 (Financial Indebtedness) and 28.5 (Disposals)), no Obligor (other than the Parent) shall:

(a) sell, transfer or otherwise dispose of any of its assets on terms whereby that asset is or may be leased to, or re-acquired by, any other Group Member other than pursuant to disposals permitted under clause 28.5 (Disposals);

(b) sell, transfer, factor or otherwise dispose of any of its receivables on recourse terms (except for the discounting of bills or notes in the ordinary course of business);

(c) enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or

(d) enter into any other preferential arrangement having a similar effect,

in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.

28.1.4 Clauses 28.1.2 and 28.1.3 above do not apply to any Security Interest or (as the case may be) Quasi-Security, listed below:

(a) those granted or expressed to be granted by any of the Security Documents; and

(b) in relation to a Mortgaged Ship, Permitted Maritime Liens.

28.2 Financial Indebtedness

No Obligor (other than the Parent) shall incur or permit to exist, any Financial Indebtedness owed by it to anyone else except:

(a) Financial Indebtedness incurred under the Finance Documents and Hedging Contracts for Hedging Transactions entered into pursuant to clause 29.1 (Hedging);

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(b) Financial Indebtedness owed to another Borrower or Guarantor (provided that any such Financial Indebtedness owed by an Obligor is unsecured and subordinated to the Finance Documents on approved terms);

(c) Financial Indebtedness owed to trade creditors of an Obligor given in the ordinary course of its business;

(d) Financial Indebtedness permitted under clause 28.3 (Loans and credit).

28.3 Loans and credit

No Obligor (other than the Parent) shall make, grant or permit to exist any loans or any credit by it to anyone else other than:

(a) loans or credit to another Borrower or Guarantor permitted under clause 28.2 (Financial Indebtedness); and

(b) trade credit granted by it to its customers on normal commercial terms in the ordinary course of its trading activities.

28.4 Bank accounts and other financial transactions

No Obligor (other than the Parent) shall:

(a) maintain any current or deposit account with a bank or financial institution except for the Accounts and the deposit of money, operation of current accounts and the conduct of electronic banking operations through the Accounts;

(b) hold cash in any account other than the Accounts;

(c) be party to any banking or financial transaction, whether on or off balance sheet, that is not expressly permitted under this clause 28.

28.5 Disposals

28.5.1 No Obligor (other than the Parent) shall enter into a single transaction or a series of transactions, whether related or not and whether voluntarily or involuntarily, to dispose of any asset except for any of the following disposals so long as they are not prohibited by any other provision of the Finance Documents:

(a) disposals of assets made in (and on terms reflecting) the ordinary course of trading of the disposing entity;

(b) disposals of obsolete assets, or assets which are no longer required for the purpose of the business of the relevant Obligor, in each case for cash on normal commercial terms and on an arm's length basis;

(c) disposals permitted by clauses 28.1 (General negative pledge) or 28.2 (Financial Indebtedness) or 22.2 (Sale or other disposal of Ship);

(d) dealings with its own trade creditors with respect to book debts in the ordinary course of trading; and

(e) the application of cash or cash equivalents in the acquisition of assets or services in the ordinary course of its business.

28.5.2 No Obligor shall enter into a single transaction or a series of transactions, whether related or not and whether voluntarily or involuntarily, to dispose of any of the shares in another Obligor without the prior written consent of all Lenders.

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28.6 Contracts and arrangements with Affiliates

No Obligor shall be party to any arrangement or contract with any of its Affiliates unless such arrangement or contract is on an arm's length basis.

28.7 Subsidiaries

No Obligor (other than the Parent) shall own, establish or acquire a company or other entity other than another Obligor and except that Oceanfreight may own directly or indirectly the Designated Entities.

28.8 Acquisitions and investments

No Obligor (other than the Parent) shall acquire any person, business, assets or liabilities or make any investment in any person or business or enter into any joint-venture arrangement except:

(a) acquisitions of assets in the ordinary course of business (not being new businesses or vessels);

(b) the incurrence of liabilities in the ordinary course of its business;

(c) any loan or credit not otherwise prohibited under this Agreement; or

(d) pursuant to any Finance Documents or Charter Documents to which it is party.

28.9 Reduction of capital

No Obligor (other than the Parent) shall redeem or purchase or otherwise reduce any of its equity or any other share capital or any warrants or any uncalled or unpaid liability in respect of any of them or reduce the amount (if any) for the time being standing to the credit of its share premium account or capital redemption or other undistributable reserve in any manner.

28.10 Increase in capital

No Obligor (other than the Parent) shall issue shares or other equity interests to anyone other than its Shareholder(s).

28.11 Distributions and other payments

28.11.1 The Parent shall not:

(a) declare or pay (including by way of set-off, combination of accounts or otherwise) any dividend or redeem or make any other distribution or payment (whether in cash or in specie), including any interest and/or unpaid dividends, in respect of its equity or any other share capital or any warrants for the time being in issue; or

(b) make any payment (including by way of set-off, combination of accounts or otherwise) by way of interest, or repayment, redemption, purchase or other payment, in respect of any shareholder loan, loan stock or similar instrument,

except if:

(i) no Default is continuing at the time of the declaration or payment of any such dividend, distribution or other payment; and

(ii) no Default would result from the declaration or payment of the same; and

(iii) the Security Value is no less than the Minimum Value; and

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(iv) in relation to any dividends, distributions or other payments declared or made by the Parent:

A) the Obligors would be in compliance with their obligations under clause 20 (Financial covenants) immediately after declaration and payment of the same if the financial covenants were tested then; and

B) any such dividends, distributions or other payments by the Parent are declared and made up to four times a year in respect of each fiscal quarter of the Parent, and the aggregate amount of all such dividends, distributions and payments in respect of a fiscal quarter does not exceed 50% of the consolidated net income of the Group for that fiscal quarter as shown in the relevant Financial Statements (as defined in clause 20 (Financial covenants) or any quarterly consolidated financial statements of the Parent for that period.

28.11.2 The Borrowers shall not:

(a) declare or pay (including by way of set-off, combination of accounts or otherwise) any dividend or redeem or make any other distribution or payment (whether in cash or in specie), including any interest and/or unpaid dividends, in respect of its equity or any other share capital or any warrants for the time being in issue (but subject to clause 28.11.2); or

(b) make any payment (including by way of set-off, combination of accounts or otherwise) by way of interest, or repayment, redemption, purchase or other payment, in respect of any shareholder loan, loan stock or similar instrument,

except if (i) no Default is continuing at the time of the declaration or payment of any such dividend, distribution or other payment and (ii) no Default would result from the declaration or payment of the same.

28.12 No other vessels

No Obligor (other than the Parent and the Manager) shall charter in or operate or enter into any agreement to do so, any vessel other than the Mortgaged Ships.

29 Hedging Contracts

Each Borrower and Guarantor undertakes that this clause 29 (Hedging Contracts) will be complied with throughout the Facility Period.

29.1 Hedging

29.1.1 If, at any time during the Facility Period, the Borrowers and/or Guarantors wish to enter into any Treasury Transaction so as to hedge all or any part of their exposure under this Agreement to interest rate fluctuations, they shall advise the Agent in writing. The Borrowers and the Guarantors agree that they shall not enter into a speculative hedging transaction (which would include hedging transactions which are (i) not entered into to hedge a real risk or exposure which the Obligors or any of them have under this Agreement or (ii) which are entered into by the Obligors or any of them have for the main purpose of financial losses or gains) under any Treasury Transaction with a Hedging Provider.

29.1.2 Any such Treasury Transaction shall be concluded by the Parent only, with a Hedging Provider on the terms of the Hedging Master Agreement with that Hedging Provider.

29.1.3 If and when any such Treasury Transaction has been concluded, it shall constitute a Hedging Contract for the purposes of the Finance Documents.

29.1.4 Simultaneously with the execution of any Hedging Agreement by the Parent with a Hedging Provider, the Parent shall forthwith:

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(a) send to the Agent a duly executed copy of that Hedging Master Agreement; and

(b) deliver to the Agent documents of the type referred to in Schedule 3 (Conditions precedent) in respect of such Hedging Master Agreement,

each to the satisfaction of the Agent and at the cost and expense of the Borrowers.

29.2 Unwinding of Hedging Contracts

If, at any time, and whether as a result of any repayment, prepayment (in whole or in part) of the Loan or any cancellation (in whole or in part) of any Commitment or otherwise, the aggregate notional principal amount under all Hedging Transactions in respect of the Loan entered into by the Parent exceeds or will exceed the amount of Loan outstanding at that time after such prepayment or cancellation, then (unless otherwise approved by the Hedging Providers) the Parent shall immediately wholly or partially reverse, offset, unwind or otherwise terminate one or more of the Hedging Transactions as are necessary to ensure that the aggregate notional principal amount under the remaining continuing Hedging Transactions equals, and will in the future be equal to, the amount of the Loan at that time and as scheduled to be repaid from time to time thereafter pursuant to clause 6.2 (Scheduled repayment of Facility).

29.3 Releases and waivers

Except with approval, there shall be no release by the Parent of any obligation of any other person under the Hedging Contracts (including by way of novation), no waiver of any breach of any such obligation and no consent to anything which would otherwise be such a breach.

29.4 Assignment of Hedging Contracts by Parent

Except with approval, the Parent shall not assign or otherwise dispose of its rights under any Hedging Contract.

29.5 Performance of Hedging Contracts by Parent

The Parent shall perform its obligations under the Hedging Contracts to which it is party.

29.6 Information concerning Hedging Contracts

The Parent shall provide the Agent with any information it may request concerning any Hedging Contract, including all reasonable information, accounts and records that may be necessary or of assistance to enable the Agent to verify the amounts of all payments and any other amounts payable under the Hedging Contracts.

30 Events of Default

Each of the events or circumstances set out in clauses 30.1 (Non-payment) to 30.22 (Charters) is an Event of Default.

30.1 Non-payment

An Obligor (other than the Manager) does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:

(a) its failure to pay is caused by administrative or technical error or by a Payment Disruption Event; and

(b) payment is made within 1 Business Day of its due date.

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30.2 Financial covenants

The Obligors do not comply with clause 20 (Financial covenants) unless such failure to comply is remedied within one (1) Business Day of the Agent (acting on the instructions of the Majority Lenders) giving notice to the Borrowers of such non-compliance.

30.3 Value of security

The Borrowers do not comply with clause 25 (Minimum security value) unless such failure to comply is remedied within one (1) Business Day of the Agent (acting on the instructions of the Majority Lenders) giving notice to the Borrowers of such non-compliance.

30.4 Insurance

30.4.1 The Insurances of a Mortgaged Ship are not placed and kept in force in the manner required by clause 24 (Insurance).

30.4.2 Any insurer either:

(a) cancels any such Insurances; or

(b) disclaims liability under them by reason of any mis-statement or failure or default by any person.

30.5 Other obligations

30.5.1 An Obligor does not comply with any provision of the Finance Documents other than:

(a) those referred to in any of clauses 21.11 (Sanctions), 21.3 (Compliance with laws) or 23.6 (Maintenance of class; compliance with laws and codes) but only insofar as they relate to Sanctions not imposed by Germany, the European Union or the United Nations; or

(b) any of clauses 30.1 (Non-payment), 30.2 (Financial covenants), 30.3 (Value of security) and 30.4 (Insurance).

30.5.2 No Event of Default under clause 30.5.1 above will occur if the Agent (acting on the instructions of the Majority Lenders) considers that the failure to comply is capable of remedy and the failure is remedied within one (1) Business Day of the Agent giving notice to the Borrowers.

30.6 Misrepresentation

Any representation or statement made or deemed to be made by an Obligor in the Finance Documents (other than under clause 18.34 (Sanctions) but only insofar as it relates to Sanctions not imposed by Germany, the European Union or the United Nations) or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading when made or deemed to be made.

30.7 Cross default

30.7.1 Any Financial Indebtedness of any Group Member (other than the Manager) is not paid when due nor within any originally applicable grace period.

30.7.2 Any Financial Indebtedness of any Group Member (other than the Manager) is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

30.7.3 Any commitment for any Financial Indebtedness of any Group Member (other than the Manager) is cancelled or suspended by a creditor of that Group Member as a result of an event of default (however described).

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30.7.4 The counterparty to a Treasury Transaction (other than a Treasury Transaction entered into within the transactional scope of, and for the purpose of hedging interest rate risks under, a Designated Facility) entered into by any Group Member (other than the Manager) becomes entitled to terminate that Treasury Transaction early by reason of an event of default (however described).

30.7.5 Any creditor of any Group Member (other than the Manager) becomes entitled to declare any Financial Indebtedness of that Group Member due and payable prior to its specified maturity as a result of an event of default (however described).

30.7.6 Any event or development occurs in connection with a Designated Facility (other than a Designated Event) which in the reasonable opinion of the Agent is adverse, detrimental or otherwise material to any Group Member (other than the Manager) or which is likely to have a Material Adverse Effect.

30.7.7 The counterparty to a Treasury Transaction entered into by any Group Member (other than the Manager) terminates that Treasury Transaction early by reason of an event of default (however described).

30.7.8 No Event of Default will occur under this clause 30.7 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within clauses 30.7.1 to 30.7.6 above in relation to any Group Member (other than the Manager) is less than $10,000,000 (or its equivalent in any other currency or currencies) in the case of a Group Member (other than the Parent) or less than $25,000,000 (or its equivalent in any other currency or currencies) in the case of the Parent.

30.7.9 No Event of Default will occur under any of clauses 30.7.3 or 30.7.5 as a result of any event or circumstance described in any such clause having occurred under a Designated Facility and which event or circumstance constitutes a Designated Event in relation to such Designated Facility.

30.8 Insolvency

30.8.1 A Group Member (other than the Manager) is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.

30.8.2 The value of the assets of any Group Member (other than the Manager) is less than its liabilities (taking into account contingent and prospective liabilities).

30.8.3 A moratorium is declared in respect of any indebtedness of any Group Member (other than the Manager). If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.

30.9 Insolvency proceedings

30.9.1 Any corporate action, legal proceedings or other procedure or step is taken in relation to:

(a) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Group Member (other than the Manager) other than a solvent liquidation or reorganisation of any Group Member which is not an Obligor;

(b) a composition, compromise, assignment or arrangement with any creditor of any Group Member (other than the Manager);

(c) the appointment of a liquidator (other than in respect of a solvent liquidation of a Group Member which is not an Obligor), receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any Group Member (other than the Manager) or any of its assets (including the directors of any Group Member (other than the Manager) requesting a person to appoint any such officer in relation to it or any of its assets); or

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(d) enforcement of any Security Interest over any assets of any Group Member (other than the Manager),

or any analogous procedure or step is taken in any jurisdiction.

30.9.2 Clause 30.9.1 shall not apply to any winding-up petition (or analogous procedure or step) which is frivolous or vexatious and is discharged, stayed or dismissed within seven (7) days of commencement or, if earlier, the date on which it is advertised.

30.10 Creditors' process

30.10.1 Any expropriation, attachment, sequestration, distress, execution or analogous process affects any asset or assets of any Obligor (other than the Manager) having an aggregate value in excess of $500,000 and is not discharged within seven (7) days.

30.10.2 Any judgment or order for an amount in excess of $2,000,000 is made against any Group Member (other than the Manager) and is not stayed or complied with in accordance with its terms.

30.11 Unlawfulness and invalidity

30.11.1 It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents or any Security Interest created or expressed to be created or evidenced by the Security Documents ceases to be effective.

30.11.2 Any obligation or obligations of any Obligor under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents.

30.11.3 Any Finance Document or any Security Interest created or expressed to be created or evidenced by the Security Documents ceases to be in full force and effect or is alleged by a party to it (other than a Finance Party) to be ineffective for any reason.

30.11.4 Any Security Document does not create legal, valid, binding and enforceable security over the assets charged under that Security Document or the ranking or priority of such security is adversely affected.

30.12 Cessation of business

Any Group Member suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.

30.13 Expropriation

The authority or ability of any Obligor (other than the Manager) to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any Obligor (other than the Manager) or any of its assets.

30.14 Repudiation and rescission of Finance Documents

An Obligor (or any other relevant party) repudiates or purports to repudiate a Finance Document or evidences an intention to rescind or purports to rescind a Finance Document.

30.15 Litigation

Any litigation, alternative dispute resolution, arbitration or administrative proceeding is taking place against any Group Member (other than the Manager) (including, without limitation, investigative proceedings) or any of its assets, rights or revenues which, if adversely determined, might have a Material Adverse Effect.

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30.16 Material Adverse Effect

Any event or circumstance or series of events (including any Environmental Incident or any change of law) occurs which the Majority Lenders reasonably believe has, or might have, or is reasonably likely to have, a Material Adverse Effect.

30.17 Security enforceable

Any Security Interest (other than a Permitted Maritime Lien) in respect of Charged Property becomes enforceable.

30.18 Arrest of Ship

Any Mortgaged Ship is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim and the relevant Owner fails to procure the release of such Ship within a period of 7 days thereafter (or such longer period as may be approved).

30.19 Ship registration

Except with approval, the registration of any Mortgaged Ship under the laws and flag of its Flag State is cancelled or terminated or, where applicable, not renewed or, if such Ship is only provisionally registered on the date of its Mortgage, such Ship is not permanently registered under such laws within 90 days of such date.

30.20 Political risk

The Flag State of any Mortgaged Ship or any Relevant Jurisdiction of an Obligor becomes involved in hostilities or civil war or there is a seizure of power in the Flag State or any such Relevant Jurisdiction by unconstitutional means if, in any such case, such event or circumstance, in the reasonable opinion of the Agent, has or is reasonably likely to have, a Material Adverse Effect and, within 14 days of notice from the Agent to do so, such preparatory action (including a written action plan) as the Agent may require and within 45 days of such notice from the Agent such other action (including implementation of a plan approved by the Majority Lenders) as the Agent may require, in each case to ensure that such event or circumstance will not have such an effect has not been taken by the Borrowers.

30.21 Breach of Ministerial Decision

If the Flag State of any Mortgaged Ship is the Hellenic Republic, the relevant Owner commits any breach of or varies the Ministerial Decision (as defined in the relevant Mortgage) with respect to a Mortgaged Ship or cancels or varies such Ministerial Decision except with approval.

30.22 Charters

Except with approval by all the Lenders, an Initial Charter is cancelled or rescinded or (except as a result of the relevant Ship being a Total Loss) frustrated or the relevant Ship is withdrawn from service under an Initial Charter, in each case before the time that Initial Charter was scheduled to expire, provided however that no Event of Default shall occur under this clause 30.22 in relation to an Initial Charter, if within ninety (90) days of any such event occurring, the relevant Owner has:

(a) entered into a new Charter in respect of the relevant Ship which is in all respects acceptable to all the Lenders (including as to the charter rate, tenor, Charterer and its other material terms);

(b) executed a Charter Assignment in respect of such Charter in favour of the Security Agent;

(c) delivered to the Agent in respect of the same, any documents and evidence of the type described in Schedule 3 (Conditions precedent) as required by the Agent (acting on the instructions of the Majority Lenders); and

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(d) procured that the relevant Ship has been delivered for service under such Charter.

30.23 Listing

The shares of the Parent are de-listed or cease to trade permanently on the NASDAQ.

30.24 Acceleration

On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrowers:

(a) cancel the Total Commitments at which time they shall immediately be cancelled; and/or

(b) declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, at which time they shall become immediately due and payable; and/or

(c) declare that all or part of the Loan be payable on demand, at which time it shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or

(d) declare that no withdrawals be made from any Account; and/or

(e) exercise or direct the Security Agent and/or any other beneficiary of the Security Documents to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.

31 Position of Hedging Providers

31.1 Hedging Providers

It is acknowledged that as at the date hereof the Hedging Providers comprise only the Original Hedging Providers but that at the time any Hedging Contract is entered into after the date hereof, any Hedging Provider who is party to such Hedging Contract (and who is not an Original Hedging Provider) shall accede to, and become a party to, this Agreement by entering into a deed of adherence in a form to be agreed by the parties and upon the execution of such deed of adherence the relevant Hedging Provider shall have the rights and obligations on the part of the Hedging Providers contained in this Agreement and the other Finance Documents.

31.2 Rights of Hedging Providers

Each Hedging Provider is a Finance Party and as such, will be entitled to share in the security constituted by the Security Documents in respect of any liabilities of the Parent under the Hedging Contracts with such Hedging Provider in the manner and to the extent contemplated by the Finance Documents.

31.3 No voting rights

No Hedging Provider shall be entitled to vote on any matter where a decision of the Lenders alone is required under this Agreement, whether before or after the termination or close out of the Hedging Contracts with such Hedging Provider, provided that each Hedging Provider shall be entitled to vote on any matter where a decision of all the Finance Parties is expressly required.

31.4 Acceleration and enforcement of security

Neither the Agent nor the Security Agent or any other beneficiary of the Security Documents shall be obliged, in connection with any action taken or proposed to be taken under or pursuant to clause 30 (Events of Default) or pursuant to the other Finance Documents, to have any regard to the requirements of the Hedging Provider except to the extent that the relevant Hedging Provider is also a Lender.

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Section 9 - Changes to Parties

32 Changes to the Lenders

32.1 Assignments and transfers by the Lenders

Subject to this clause 32, a Lender (the Existing Lender)may assign any of its rights to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the New Lender).

32.2 Conditions of assignment

32.2.1 The Agent will immediately advise the Borrowers of the assignment.

32.2.2 The prior consent of the Borrowers shall be required for an assignment by a Lender (such consent not to be unreasonably withheld or delayed). The Borrowers' consent however shall not be required if (a) the assignment is to an Affiliate of a Lender or to another Lender or (b) a Default exists at the time of such assignment.

32.2.3 The consent of the Agent shall be required for an assignment by a Lender (such consent not to be unreasonably withheld or delayed).

32.2.4 An assignment will only be effective:

(a) on receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the Borrowers and the other Finance Parties as it would have been under if it was an Original Lender;

(b) on the New Lender entering into any documentation required for it to accede as a party to any Security Document to which the Original Lender is a party in its capacity as a Lender and, in relation to such Security Documents, completing any filing, registration or notice requirements;

(c) if an assignment takes effect after the Utilisation, the assignment of an Existing Lender's participation in the Utilisation under the Facility shall take effect in respect of the same fraction of the Utilisation;

(d) if the aggregate amount of the Commitment and participation in the Loan which are the subject of the assignment is no less than $20,000,000, or any lower amount which is the aggregate Commitment and participation in the Loan of the relevant Existing Lender (or such other amount as the Agent and the Borrowers may agree);

(e) on the New Lender having submitted to the Agent all necessary "know your customer" information and documentation and the performance by the Agent of all "know your customer" or other checks under all applicable laws and regulations relating to any person that it is required to carry out in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender; and

(f) if that Existing Lender assigns equal fractions of its Commitment and participation in the Loan and the Utilisation (if any) under the Facility.

32.2.5 Each New Lender, by executing the relevant Transfer Certificate, confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with the Finance Documents on or prior to the date on which the assignment and/or transfer becomes

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effective in accordance with the Finance Documents and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.

32.3 Fee

The New Lender shall, on the date upon which an assignment takes effect (but excluding any assignment taking place in the context of the general primary syndication, anticipated to take place within a few months after the date of this Agreement), pay to the Agent (for its own account) a fee of $3,500.

32.4 Limitation of responsibility of Existing Lenders

32.4.1 Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

(a) the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;

(b) the financial condition of any Obligor;

(c) the performance and observance by any Obligor or any other person of its obligations under the Finance Documents or any other documents;

(d) the application of any Basel II Regulation or any Basel Ill Regulation to the transactions contemplated by the Finance Documents; or

(e) the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

and any representations or warranties implied by law are excluded.

32.4.2 Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

(a) has made (and shall continue to make) its own independent investigation and assessment of:

(i) the financial condition and affairs of the Obligors and their related entities in connection with its participation in this Agreement; and

(ii) the application of any Basel II Regulation or any Basel Ill Regulation to the transactions contemplated by the Finance Documents;

and has not relied exclusively on any information provided to it by the Existing Lender or any other Finance Party in connection with any Finance Document;

(b) will continue to make its own independent appraisal of the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents; and

(c) will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

32.4.3 Nothing in any Finance Document obliges an Existing Lender to:

(a) accept a re-assignment from a New Lender of any of the rights assigned under this clause 32; or

(b) support any losses directly or indirectly incurred by the New Lender by reason of the non­performance by any Obligor of its obligations under the Finance Documents or by reason

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of the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents or otherwise.

32.5 Procedure for transfer

32.5.1 Subject to the conditions set out in clause 32.2 (Conditions of assignment) an assignment may be effected in accordance with clause 32.5.4 below when (a) the Agent executes an otherwise duly completed Transfer Certificate and (b) the Agent executes any document required under clause 32.2.4 which it may be necessary for it to execute in each case delivered to it by the Existing Lender and the New Lender duly executed by them and, in the case of any such other document, any other relevant person. The Agent shall, as soon as reasonably practicable after receipt by it of a Transfer Certificate and any such other document each duly completed, appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate and such other document. The Obligors and the other Finance Parties irrevocably authorise the Agent to execute any Transfer Certificate on their behalf without any consultations with them.

32.5.2 The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.

32.5.3 For the avoidance of doubt, the Obligors and the other Finance Parties irrevocably authorise the Agent to execute any Transfer Certificate on their behalf without any consultations with them.

32.5.4 Subject to clause 32.8 (Pro rata interest settlement), on the Transfer Date:

(a) the Existing Lender will assign absolutely to the New Lender the rights under the Finance Documents expressed to be the subject of the assignment in the Transfer Certificate;

(b) the Existing Lender will be released by each Obligor and the other Finance Parties from the obligations owed by it (the Relevant Obligations)and expressed to be the subject of the release in the Transfer Certificate (but the obligations owed by the Obligors under the Finance Documents shall not be released); and

(c) the New Lender shall become a Party to the Finance Documents as a "Lender" for the purposes of all the Finance Documents and will be bound by obligations equivalent to the Relevant Obligations.

32.5.5 Lenders may utilise procedures other than those set out in this clause 32.5 (Procedure for transfer) to assign their rights under the Finance Documents (but not, without the consent of the relevant Obligor or unless in accordance with clause 32.5 (Procedure for transfer) to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in clause 32.2 (Conditions of assignment).

32.6 Copy of Transfer Certificate to Borrowers

The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate and any other document required under clause 32.2.4, send a copy of that Transfer Certificate and such documents to the Borrowers.

32.7 Security over Lenders' rights

In addition to the other rights provided to Lenders under this clause 32.7, each Lender may without consulting with or obtaining consent from an Obligor, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

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(a) any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and

(b) in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities, except that no such charge, assignment or Security Interest shall:

(i) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or

(ii) require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

32.8 Pro rata interest settlement

If the Agent has notified the Lenders that it is able to distribute interest payments on a "pro rata basis" to Existing Lenders and New Lenders then (in respect of any assignment pursuant to clause 32.5 (Procedure for transfer) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):

32.8.1 any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (Accrued Amounts)and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six (6) months, on the next of the dates which falls at six monthly intervals after the first day of that Interest Period); and

32.8.2 the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:

(a) when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

(b) the amount payable to the New Lender on that date will be the amount which would, but for the application of this clause 32.8, have been payable to it on that date, but after deduction of the Accrued Amounts.

33 Changes to the Obligors/Restriction on Debt Purchase Transactions

33.1 Changes to the Obligors

Except with the prior written consent of all the Lenders, no Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

33.2 Prohibition on Debt Purchase Transactions by the Group

33.2.1 The Obligors shall not, and the Parent shall procure that each Group Member shall not, enter into any Debt Purchase Transaction or be a Lender or beneficially own all or any part of the share capital of a company that is a Lender or a party to a Debt Purchase Transaction of the type referred to in paragraphs (b) or (c) of the definition of Debt Purchase Transaction.

33.3 Disenfranchisement on Debt Purchase Transactions entered into by Parent Affiliates

33.3.1 For so long as a Parent Affiliate (i) beneficially owns a Commitment or (ii) has entered into a sub-participation agreement relating to a Commitment or other agreement or arrangement

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having a substantially similar economic effect and such agreement or arrangement has not been terminated:

(a) in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, such Commitment shall be deemed to be zero; and

(b) for the purposes of clause 43.2 (Exceptions), such Parent Affiliate or the person with whom it has entered into such sub-participation, other agreement or arrangement shall be deemed not to be a Lender (unless, in the case of a person not being a Parent Affiliate, it is a Lender by virtue otherwise than by beneficially owning the relevant Commitment).

33.3.2 Each Lender shall, unless such Debt Purchase Transaction is an assignment or transfer, promptly notify the Agent in writing if it knowingly enters into a Debt Purchase Transaction with a Parent Affiliate (a Notifiable Debt Purchase Transaction),such notification to be substantially in the form set out in Part 1 of Schedule 8 (Forms of Notifiable Debt Purchase Transaction Notice).

33.3.3 A Lender shall promptly notify the Agent if a Notifiable Debt Purchase Transaction to which it is a party:

(a) is terminated; or

(b) ceases to be with a Parent Affiliate,

such notification to be substantially in the form set out in Part 2 of Schedule 8 (Forms of Notifiable Debt Purchase Transaction Notice).

33.3.4 Each Parent Affiliate that is a Lender agrees that:

(a) in relation to any meeting or conference call to which all the Lenders are invited to attend or participate, it shall not attend or participate in the same if so requested by the Agent or, unless the Agent otherwise agrees, be entitled to receive the agenda or any minutes of the same; and

(b) in its capacity as Lender, unless the Agent otherwise agrees, it shall not be entitled to receive any report or other document prepared at the behest of, or on the instructions of, the Agent or one or more of the Lenders.

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Section 10 - The Finance Parties

34 Roles of Agent, Security Agent and Arranger

34.1 Appointment of the Agent

34.1.1 Each other Finance Party (other than the Security Agent) appoints the Agent to act as its agent under and in connection with the Finance Documents.

34.1.2 Each such other Finance Party (other than the Security Agent) authorises the Agent:

(a) to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions; and

(b) to execute each of the Security Documents and all other documents that may be approved by the Majority Lenders for execution by it.

34.2 Instructions to Agent

34.2.1 The Agent shall:

(a) unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by:

(i) all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

(ii) in all other cases, the Majority Lenders; and

(b) not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (a) above.

34.2.2 The Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Agent may refrain from acting unless and until it receives those instructions or that clarification.

34.2.3 Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

34.2.4 The Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.

34.2.5 In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.

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34.2.6 The Agent is not authorised to act on behalf of a Lender or any Hedging Provider (without first obtaining that Lender's or any Hedging Provider's consent) in any legal or arbitration proceedings relating to any Finance Document. This clause 34.26 shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Security Documents.

34.3 Duties of the Agent

34.3.1 The Agent's duties under the Finance Documents are solely mechanical and administrative in nature.

34.3.2 The Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.

34.3.3 Without prejudice to clause 32.6 (Copy of Transfer Certificate to Borrowers), clause 34.3.2 shall not apply to any Transfer Certificate.

34.3.4 Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

34.3.5 If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

34.3.6 If the Agent is aware of the non-payment of any principal, interest, commitment commission or other fee payable to a Finance Party (other than the Agent or an Arranger or the Security Agent for their own account) under this Agreement it shall promptly notify the other Finance Parties.

34.3.7 The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).

34.4 Role of the Arranger and Bookrunner

Except as specifically provided in the Finance Documents, neither an Arranger nor the Bookrunner has any obligations of any kind to any other Party under or in connection with any Finance Document or the transactions contemplated by the Finance Documents.

34.5 No fiduciary duties

34.5.1 Nothing in this Agreement constitutes the Agent or an Arranger or the Bookrunner as a trustee or fiduciary of any other person.

34.5.2 None of the Agent, the Security Agent, the Arranger or the Bookrunner shall be bound to account to any Lender or any Hedging Provider for any sum or the profit element of any sum received by it for its own account or have any obligations to the other Finance Parties beyond those expressly stated in the Finance Documents.

34.6 Business with the Group

The Agent, the Security Agent, the Arranger and the Bookrunner may accept deposits from, lend money to and generally engage in any kind of banking or other business with any Obligor or other Group Member of their Affiliates and shall not be obliged to account to the other Finance Parties for any profits.

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34.7 Rights and discretions of the Agent

34.7.1 The Agent may:

(a) rely on any representation, communication, notice or document (including, without limitation, any notice given by a Lender pursuant to clause 33.3 (Disenfranchisement on Debt Purchase Transactions entered into by Parent Affiliates)) believed by it to be genuine, correct and appropriately authorised;

(b) assume that:

(i) any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and

(ii) unless it has received notice of revocation, that those instructions have not been revoked; and

(c) rely on a certificate from any person:

(i) as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

(ii) to the effect that such person approves of any particular dealing, transaction, step, action or thing,

as sufficient evidence that that is the case and, in the case of paragraph (i) above, may assume the truth and accuracy of that certificate.

34.7.2 The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the other Finance Parties) that:

(a) no Default has occurred (unless it has actual knowledge of a Default arising under clause 30.1 (Non-payment));

(b) any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised;

(c) any notice or request made by a Borrower (other than a Utilisation Request or Selection Notice) is made on behalf of and with the consent and knowledge of all the Obligors; and

(d) no Notifiable Debt Purchase Transaction:

(i) has been entered into;

(ii) has been terminated; or

(iii) has ceased to be with a Parent Affiliate.

34.7.3 The Agent may engage, and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts in the conduct of its obligations and responsibilities under the Finance Documents.

34.7.4 Without prejudice to the generality of clause 34.7.3 or clause 34.7.5, the Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent (and so separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be desirable.

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34.7.5 The Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying except in the case of gross negligence or wilful misconduct.

34.7.6 The Agent may act in relation to the Finance Documents through its officers, employees and agents and the Agent shall not:

(a) be liable for any error of judgment made by any such person; or

(b) be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part, of any such person,

unless such error or such loss was directly caused by the Agent's gross negligence or wilful default.

34.7.7 Unless a Finance Document expressly provides otherwise, the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

34.7.8 Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent, nor the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality. The Agent and the Arranger may do anything which in its opinion, is necessary or desirable to comply with any law or regulation of any jurisdiction.

34.7.9 Without prejudice to the generality of clause 34.7.7, the Agent may disclose the identity of a Defaulting Lender to the other Finance Parties and the Borrowers and shall disclose the same upon the written request of the Majority Lenders.

34.7.10 Notwithstanding any provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

34.7.11 Neither the Agent nor the Arranger shall be obliged to request any certificate, opinion or other information under clause 19 (Information undertakings) unless so required in writing by a Lender or any Hedging Provider, in which case the Agent shall promptly make the appropriate request of the Borrowers if such request would be in accordance with the terms of this Agreement.

34.8 Responsibility for documentation and other matters

Neither the Agent nor the Arranger is responsible or liable for:

(a) the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, an Obligor or any other person given in or in connection with any Finance Document or the transactions contemplated in the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or of any representations in any Finance Document or of any copy of any document delivered under any Finance Document;

(b) the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any Charter Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or any Charter Document;

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(c) the application of any Basel II Regulation or Basel Ill Regulation to the transactions contemplated by the Finance Documents;

(d) any loss to the Trust Property arising in consequence of the failure, depreciation or loss of any Charged Property or any investments made or retained in good faith or by reason of any other matter or thing;

(e) accounting to any person for any sum or the profit element of any sum received by it for its own account;

(f) the failure of any Obligor or any other party to perform its obligations under any Finance Document or any Charter Document or the financial condition of any such person;

(g) ascertaining whether all deeds and documents which should have been deposited with it (or the Security Agent and/or any other beneficiary of a Security Document) under or pursuant to any of the Security Documents have been so deposited;

(h) investigating or making any enquiry into the title of any Obligor to any of the Charged Property or any of its other property or assets;

(i) failing to register any of the Security Documents with the Registrar of Companies or any other public office;

(j) failing to register any of the Security Documents in accordance with the provisions of the documents of title of any Obligor to any of the Charged Property;

(k) failing to take or require any Obligor to take any steps to render any of the Security Documents effective as regards property or assets outside England or Wales or to secure the creation of any ancillary charge under the laws of the jurisdiction concerned;

(I) (unless it is the same entity as the Security Agent) the failure of the Security Agent and/or any other beneficiary of a Security Document failing to perform or discharge any of its duties or obligations under the Security Documents;

(m) any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by any applicable law or regulation relating to insider dealing or otherwise;

(n) making any investigation in respect of or in any way be liable whatsoever for the existence, accuracy or sufficiency of any legal or other opinions, reports, certificates or investigations delivered or obtained or required to be delivered or obtained at any time in connection herewith;

(o) any unsuitability, inadequacy or unfitness of any Charged Property as security for the Loan and shall not be obliged to make any investigation into, and shall be entitled to assume, the suitability, adequacy and fitness of the Charged Property as security for the Loan; or

(p) any damage to or any unauthorised dealing with the Charged Property nor shall it have any responsibility or liability arising from the fact that the Charged Property, or documents relating thereto, may be registered in its name or held by it or any other bank or agent selected by the Agent or the Security Agent.

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34.9 No duty to monitor

The Agent shall not be bound to enquire:

(a) whether or not any Default has occurred;

(b) as to the performance, default or any breach by any Party of its obligations under any Finance Document; or

(c) whether any other event specified in any Finance Document has occurred.

34.10 Exclusion of liability

34.10.1 Without limiting clause 34.10.2 (and without prejudice to any other provision of the Finance Documents excluding or limiting the liability of the Agent) the Agent will not be liable (including, without limitation, for negligence or any other category of liability whatsoever) for:

(a) any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document or the Charged Property, unless directly caused by its gross negligence or wilful default. For the avoidance of doubt and notwithstanding anything contained in the Finance Documents, the Agent shall not in any event be liable for any indirect or consequential loss (including, without limitation, loss of profit, business or goodwill) regardless of whether it was informed of the likelihood of such loss and irrespective of whether any such claim is made for breach of contract, in tort or otherwise;

(b) exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, the Charged Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document or the Charged Property, unless directly caused by the gross negligence or wilful default of the Agent and in the course of the exercise or non exercise by it of any right, power, authority or discretion given to it expressly under a Finance Document; or

(c) without prejudice to the generality of paragraphs (a) and (b) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

(d) any act, event or circumstance not reasonably within its control; or

(e) the general risks of investment in, or the holding of assets in, any jurisdiction,

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

34.10.2 No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent may rely on this clause 34.10 subject to clause 1.3 (Third party rights) and the provisions of the Third Parties Act.

34.10.3 The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has

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taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose.

34.10.4 Nothing in this Agreement shall oblige the Agent or the Arranger to carry out

(a) any "know your customer" or other checks in relation to any person; or

(b) any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender,

on behalf of any Lender or any Hedging Provider and each Lender and any Hedging Provider confirms to the Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or the Arranger.

34.10.5 Without prejudice to any provision of any Finance Document excluding or limiting the Agent's liability, any liability of the Agent arising under or in connection with any Finance Document or the Charged Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent at any time which increase the amount of that loss. In no event shall the Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent has been advised of the possibility of such loss or damages.

34.11 Lenders' indemnity to the Agent

34.11.1 Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero indemnify the Agent, within three (3) Business Days of demand, against:

(a) any Losses for negligence or any other category of liability whatsoever incurred by the Agent in the circumstances contemplated pursuant to clause 37.11 (Disruption to Payment Systems etc.) notwithstanding the Agent's negligence, gross negligence, or any other category of liability whatsoever but not including any claim based on the fraud of the Agent); and

(b) any other Losses (otherwise than by reason of the Agent's gross negligence or wilful default) including the costs of any person engaged in accordance with clause 34.7 (Rights and discretions of the Agent) and any Receiver in acting as its agent under the Finance Documents,

in each case incurred by the Agent in acting as such under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document or out of the Trust Property) and this clause 34.11 as applied in favour of the Security Agent pursuant to clause 34.22 (Application of certain clauses to Security Agent) shall be without prejudice to any right to indemnity by law given to trustees generally and any other indemnity in the Security Agent's favour in any other Finance Document.

The indemnities contained in this clause 34.11 shall survive the termination or discharge of this Agreement.

34.11.2 Subject to clause 34.11.3, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent pursuant to clause 34.11.1.

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34.11.3 Clause 34.11.2 shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Agent to an Obligor.

34.12 Resignation of the Agent

34.12.1 The Agent may resign and appoint one of its Affiliates (including, without limitation, Nordea Bank AB, London Branch) as successor by giving notice to the Lenders, each Hedging Provider, the Security Agent and the Borrowers.

34.12.2 Alternatively the Agent may resign by giving 30 days notice to the other Finance Parties and the Borrowers, in which case the Majority Lenders (after consultation with the Borrowers) may appoint a successor Agent.

34.12.3 If the Majority Lenders have not appointed a successor Agent in accordance with clause 34.12.2 above within 30 days after notice of resignation was given, the retiring Agent (after consultation with the Borrowers) may appoint a successor Agent.

34.12.4 If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor Agent under clause 34.12.3, the Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent) agree with the proposed successor Agent amendments to this clause 34 and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Agent's normal fee rates and those amendments will (subject to approval by the Majority Lenders, which approval shall not be unreasonably withheld or delayed) bind the Parties.

34.12.5 The retiring Agent shall, either at the Lenders' expense if it has been required to resign pursuant to clause 34.13 (Replacement of the Agent) or otherwise at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. The Borrowers shall, within three (3) Business Days of demand, reimburse the retiring Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.

34.12.6 The Agent's resignation notice shall only take effect upon the appointment of a successor.

34.12.7 The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under clause 34.12.5) but shall remain entitled to the benefit of clause 14.3 (Indemnity to the Agent and the Security Agent) and this clause 34 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

34.12.8 The Agent shall resign in accordance with clause 34.12.2 (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to 34.12.3) if on or after the date which is three (3) months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:

(a) the Agent fails to respond to a request under clause 12.5 (FATCA Information) and a Borrower or a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

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(b) the information supplied by the Agent pursuant to clause 12.5 (FATCA Information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

(c) the Agent notifies the Borrowers and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date,

and (in each case) a Borrower or a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and such Borrower or that Lender, by notice to the Agent, requires it to resign.

34.13 Replacement of the Agent

34.13.1 After consultation with the Borrowers, the Majority Lenders may, by giving 30 days' notice to the Agent, (or, at any time the Agent is an Impaired Agent, by giving any shorter notice determined by the Majority Lenders) replace the Agent by appointing a successor Agent.

34.13.2 The retiring Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents.

34.13.3 The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under clause 34.13.2) but shall remain entitled to the benefit of clause 14.3 (Indemnity to the Agent and the Security Agent) and this clause 34 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date).

34.13.4 Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

34.14 Confidentiality

34.14.1 In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its department, division or team directly responsible for the management of the Finance Documents which shall be treated as a separate entity from any other of its divisions, departments or teams.

34.14.2 If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.

34.14.3 Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent, nor the Arranger is obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty.

34.15 Relationship with the Lenders and Hedging Providers

34.15.1 Subject to clause 32.8 (Pro rata interest settlement) the Agent may treat the person shown in its records as Lender or as each Hedging Provider at the opening of business (in the place of its principal office as notified to the Finance Parties from time to time) as the Lender or (as the case may be) a Hedging Provider acting through its Facility Office:

(a) entitled to or liable for any payment due under any Finance Document on that day; and

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(b) entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,

unless it has received not less than five (5) Business Days prior notice from that Lender or (as the case may be) a Hedging Provider to the contrary in accordance with the terms of this Agreement.

34.15.2 Any Lender or any Hedging Provider may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender or (as the case may be) a Hedging Provider under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under clause 39.5 (Electronic communication)) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender or (as the case may be) that Hedging Provider for the purposes of clause 39.2 (Addresses) and clause 39.5 (Electronic communication) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender or (as the case may be) that Hedging Provider.

34.15.3 Each Lender and each Hedging Provider shall supply the Agent with any information that the Agent may reasonably specify as being necessary or desirable to enable the Agent or the Security Agent to perform its functions as Agent or Security Agent. Each Lender and each Hedging Provider shall deal with the Security Agent exclusively through the Agent and shall not deal directly with the Security Agent.

34.16 Credit appraisal by the Lenders and Hedging Providers

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender and each Hedging Provider confirms to each other Finance Party that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

(a) the financial condition, status and nature of each Obligor and other Group Member;

(b) the legality, validity, effectiveness, adequacy or enforceability of any Finance Document , any Charter Document or any Contract and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document, any Charter Document or any Contract;

(c) the application of any Basel II Regulation or Basel III Regulation to the transactions contemplated by the Finance Documents;

(d) whether any Finance Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

(e) the adequacy, accuracy and/or completeness of any information provided by the Agent, any Party or by any other person under or in connection with any Finance Document, any Charter Document or any Contract, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document, any Charter Document or any Contract; and

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(f) the right of title of any person to, or the value or sufficiency of, any part of the Charged Property, the priority of the Security Documents or the existence of any Security Interest affecting the Charged Property.

34.17 Reference Banks

If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with the Borrowers) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank.

34.18 Agent's management time and additional remuneration

Any amount payable to the Agent under clause 14.3 (Indemnity to the Agent and the Security Agent), clause 16 (Costs and expenses) and clause 34.11 (Lenders' indemnity to the Agent) (and in the case of the Security Agent, as extended to it by virtue of clause 34.22 (Application of certain clauses to Security Agent)) shall include the cost of utilising the Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Agent may notify to the Borrowers and the Lenders, and is in addition to any fee paid or payable to the Agent under clause 11 (Fees).

34.19 Deduction from amounts payable by the Agent

If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

34.20 Common parties

Although the Agent and the Security Agent may from time to time be the same entity, that entity will have entered into the Finance Documents (to which it is party) in its separate capacities as agent for the Finance Parties and (as appropriate) security agent and trustee for the Finance Parties. Where any Finance Document provides for the Agent or Security Agent to communicate with or provide instructions to the other, while they are the same entity, such communication or instructions will not be necessary.

34.21 Security Agent

34.21.1 Each other Finance Party appoints the Security Agent to act as its agent and (to the extent permitted under any applicable law) trustee under and in connection with the Security Documents and confirms that the Security Agent shall have a lien on the Security Documents and the proceeds of the enforcement of those Security Documents for all monies payable to the beneficiaries of those Security Documents.

34.21.2 Each other Finance Party authorises the Security Agent:

(a) to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions; and

(b) to execute each of the Security Documents and all other documents that may be approved by the Agent and/or the Majority Lenders for execution by it.

34.21.3 The Security Agent accepts its appointment under clause 34.21 (Security Agent) as trustee of the Trust Property with effect from the date of this Agreement and declares that it holds the

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Trust Property on trust for itself, the other Finance Parties (for so long as they are Finance Parties) on and subject to the terms set out in clauses 34.21 (Security Agent) - 34.28 (Indemnity from Trust Property) (inclusive) and the Security Documents to which it is a party.

34.22 Application of certain clauses to Security Agent

34.22.1 Clauses 34.7 (Rights and discretions of the Agent), 34.8 (Responsibility for documentation and other matters), clause 34.9 (No duty to monitor), 34.10 (Exclusion of liability), 34.11 (Lenders' indemnity to the Agent), 34.12 (Resignation of the Agent), 34.13 (Replacement of the Agent), 34.14 (Confidentiality), 34.15 (Relationship with the Lenders and Hedging Providers), 34.16 (Credit appraisal by the Lenders and Hedging Providers), 34.18 (Agent's management time and additional remuneration) and 34.19 (Deduction from amounts payable by the Agent) shall each extend so as to apply to the Security Agent in its capacity as such and for that purpose each reference to the "Agent" in these clauses shall extend to include in addition a reference to the "Security Agent" in its capacity as such and, in clause 34.7 (Rights and discretions of the Agent), references to the Lenders and a group of Lenders shall refer to the Agent.

34.22.2 In addition, clause 34.12 (Resignation of the Agent) and clause 34.13 (Replacement of the Agent) shall, for the purposes of their application to the Security Agent pursuant to clause 34.22.1, have the following additional sub-clause inserted after them:

At any time after the appointment of a successor, the retiring Security Agent shall do and execute all acts, deeds and documents reasonably required by its successor to transfer to it (or its nominee, as it may direct) any property, assets and rights previously vested in the retiring Security Agent pursuant to the Security Documents and which shall not have vested in its successor by operation of law. All such acts, deeds and documents shall be done or, as the case may be, executed at the cost of the retiring Security Agent (except where the Security Agent is retiring under clause 34.12.5 as extended to it by clause 34.22.1, in which case such costs shall be borne by the Lenders (in proportion (if no part of the Loan is then outstanding) to their share of the Total Commitments or (at any other time) to their participations in the Loan).

34.22.3 Clause 34.7 (Rights and discretions of the Agent) shall, for the purposes of its application to the Security Agent pursuant to clause 34.22.1 shall read as follows:

"The Security Agent may, at the cost of the Borrowers, rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Security Agent or by any other Party), whether or not liability thereunder is limited by reference to monetary cap or otherwise, and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying except in the case of gross negligence or wilful misconduct.".

34.22.4 Clause 34.10 (Exclusion of liability) shall, for the purposes of its application to the Security Agent pursuant to clause 34.22.1 shall include the following after sub clause 34.10.1(b):

"(c) any shortfall which arises on the enforcement or realisation of the Transaction Security.".

34.22.5 Clause 34.14 (Confidentiality) shall, for the purposes of its application to the Security Agent pursuant to clause 34.22.1, be read and construed as to refer to "its agency and trust department" instead of "its department, division or team directly responsible for the management of the Finance Documents".

34.22.6 Without prejudice to the generality of any other provision of this Agreement or any other Security Document, the entry into possession of the Charged Property shall not render the Security Agent or any Receiver liable to account as mortgagee in possession thereunder (or its equivalent in any other applicable jurisdiction) or take any action which would expose it to any liability in respect of Environmental Claims in respect of which it has not been indemnified and/or secured and/or pre-funded to its satisfaction or to be liable for any loss on realisation or for any default or omission on realisation or for any default or omission for which a mortgagee in

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possession might be liable unless such loss, default or omission is caused by its own gross negligence or wilful default.

34.22.7 The Security Agent shall not be bound to take any steps to ascertain whether any event, condition or act, the happening of which would cause a right or remedy to become exercisable by the Security Agent or any agent under this Agreement or the other Security Documents has happened or to monitor or supervise the observance and performance by the Borrowers, any agent or any of the other parties thereto of their respective obligations thereunder and, until it shall have actual knowledge or express notice to the contrary, the Security Agent shall be entitled to assume that no such event, condition or act has happened and that the Borrowers, the agents and the other parties thereto are observing and performing all their respective obligations thereunder.

34.23 Instructions to Security Agent

34.23.1 The Security Agent shall:

(a) unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by the Agent; and

(b) not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (a) above even though it may subsequently be found that there was a defect on the giving of such instruction.

34.23.2 The Security Agent shall be entitled to (but not obliged to) request instructions, or clarification of any instruction, from the Agent as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Security Agent may refrain from acting unless and until it receives those instructions or that clarification.

34.23.3 Unless a contrary indication appears in a Finance Document, any instructions given to the Security Agent by the Agent shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

34.23.4 The Security Agent may refrain from acting in accordance with any instructions of the Agent until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability (together with any associated VAT or other applicable tax) which it may incur in complying with those instructions.

34.23.5 For the avoidance of doubt, no provision of this Agreement shall require the Security Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity and/or security and/or prefunding against such risk or liability is not assured to it.

34.23.6 In the absence of instructions, the Security Agent may act (or refrain from acting) as it considers to be in the best interest of the Finance Parties.

34.23.7 The Security Agent is not authorised to act on behalf of a Lender or any Hedging Provider (without first obtaining that Lender's or the relevant Hedging Provider's consent) in any legal or arbitration proceedings relating to any Finance Document. This clause 34.23.7 shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the Security Documents.

34.23.8 The Security Agent shall have no responsibility whatsoever to the Borrowers, the Agent, or any Finance Party as regards any deficiency which might arise because the Security Agent is

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subject to any Tax in respect of all or any of the Charged Property, the income therefrom or the proceeds thereof.

34.23.9 Until the delivery of an enforcement notice pursuant to clause 30.24 (Acceleration), the moneys standing to the credit of any accounts comprised in the Security Documents shall be dealt with in accordance with the provisions of this Agreement and the Security Documents and the Security Agent shall not be responsible in such circumstances or at any other time for any liabilities (howsoever described) suffered by any person, whether by reason of depreciation in value or by fluctuation in exchange rates or otherwise.

34.24 Order of application

34.24.1 The Security Agent agrees to apply the Trust Property and each other beneficiary of the Security Documents agrees to apply all moneys received by it in the exercise of its rights under the Security Documents in accordance with the following respective claims:

(a) first, as to a sum equivalent to the amounts payable to the Security Agent under the Finance Documents (excluding any amounts received by the Security Agent pursuant to clause 34.11 (Lenders' indemnity to the Agent) as extended to the Security Agent pursuant to clause 34.22 (Application of certain clauses to Security Agent)), for the Security Agent absolutely;

(b) secondly, as to a sum equivalent to the amounts payable to the Agent under the Finance Documents (excluding any amounts received by the Agent pursuant to clause 34.11 (Lenders' indemnity to the Agent)), for the Agent absolutely;

(c) thirdly, as to a sum equivalent to the aggregate amount then due and owing to the other Finance Parties (other than the Hedging Providers) under the Finance Documents (but excluding any Hedging Contracts), for those Finance Parties absolutely for application between them in accordance with clause 37.5 (Partial payments);

(d) fourthly, until such time as the Security Agent is satisfied that all obligations owed to the Finance Parties (other than the Hedging Providers) have been irrevocably and unconditionally discharged in full, held by the Security Agent on a suspense account for payment of any further amounts owing to those Finance Parties (other than the Hedging Providers) under the Finance Documents (but excluding any Hedging Contracts), and further application in accordance with this clause 3424.1 as and when any such amounts later fall due;

(e) fifthly, as to a sum equivalent to the aggregate net amounts then due to the Hedging Providers but unpaid under any Hedging Contracts, for the Hedging Providers absolutely, and pro rata to the net amounts owing to them under the Hedging Contracts;

(f) sixthly, to such other persons (if any) as are legally entitled thereto in priority to the Obligors; and

(g) seventhly, as to the balance (if any), for the Obligors by or from whom or from whose assets the relevant amounts were paid, received or recovered or other person entitled to them.

34.24.2 The Security Agent and each other beneficiary of the Security Documents shall make each application as soon as is practicable after the relevant moneys are received by, or otherwise become available to, it save that (without prejudice to any other provision contained in any of the Security Documents) the Security Agent (acting on the instructions of the Agent), any other beneficiary of the Security Documents or any receiver or administrator may credit any moneys received by it to a suspense account for so long and in such manner as the Security Agent, such other beneficiary of the Security Documents or such receiver or administrator may from time to time determine with a view to preserving the rights of the Finance Parties or any of them

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to prove for the whole of their respective claims against the Borrowers or any other person liable.

34.24.3 The Security Agent and/or any other beneficiary of the Security Documents shall obtain a good discharge in respect of the amounts expressed to be due to the other Finance Parties as referred to in this clause 34.24 by paying such amounts to the Agent for distribution in accordance with clause 37 (Payment mechanics).

34.25 Powers and duties of the Security Agent as trustee of the security

In its capacity as trustee in relation to the Trust Property, the Security Agent:

(a) shall, without prejudice to any of the powers, discretions and immunities conferred upon trustees by law (and to the extent not inconsistent with the provisions of this Agreement or any of the Security Documents), have all the same powers and discretions as a natural person acting as the beneficial owner of such property and/or as are conferred upon the Security Agent by this Agreement and/or any Security Document but so that the Security Agent may only exercise such powers and discretions to the extent that it is authorised to do so by the provisions of this Agreement;

(b) shall (subject to clause 34.24 (Order of application)) be entitled (in its own name or in the names of nominees) to invest moneys from time to time forming part of the Trust Property or otherwise held by it as a consequence of any enforcement of the security constituted by any Finance Document which, in the reasonable opinion of the Security Agent, it would not be practicable to distribute immediately, by placing the same on deposit in the name or under the control of the Security Agent as the Security Agent may think fit without being under any duty to diversify the same and the Security Agent shall not be responsible for any loss due to interest rate or exchange rate fluctuations except for any loss arising from the Security Agent's gross negligence or wilful default and shall not be liable to account for an amount of interest greater than the standard amount that would be payable to an independent customer;

(c) may, in the conduct of its obligations under and in respect of the Security Documents instead of acting personally, employ and pay any agent (whether being a lawyer or any other person) to transact or concur in transacting any business and to do or concur in doing any acts required to be done by the Security Agent (including the receipt and payment of money) or may delegate to any person on any terms (including the power to sub-delegate) and on the basis that (i) any such agent or delegate engaged in any profession or business shall be entitled to be paid all usual professional and other charges for business transacted and acts done by him or any partner or employee of his or her in connection with such employment and (ii) the Security Agent shall not be bound to supervise, or be responsible for any loss incurred by reason of any act or omission of, any such agent or delegate if the Security Agent shall have exercised reasonable care in the selection of such agent; and

(d) may place all deeds and other documents relating to the Trust Property which are from time to time deposited with it pursuant to the Security Documents in any safe deposit, safe or receptacle selected by the Security Agent or with any firm of solicitors or company whose business includes undertaking the safe custody of documents selected by the Security Agent and may make any such arrangements as it thinks fit for allowing Obligors access to, or its solicitors or auditors possession of, such documents when necessary or convenient and the Security Agent shall not be responsible for any loss incurred in connection with any such deposit, access or possession if it has exercised reasonable care in the selection of a safe deposit, safe, receptacle or firm of solicitors or company:

(e) may, unless and to the extent the express provisions of any Security Document provide otherwise, do any act or thing in the exercise of any of its duties under the Finance Documents which in its absolute discretion (in the absence of any instructions of the

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Agent as to the doing of such act or thing) it deems advisable for the protection and benefit of all the Finance Parties;

(f) may, unless the express provisions of any such Security Document provide otherwise, if authorised by the Agent, amend or vary the terms of or waive breaches of or defaults under, or otherwise excuse performance of any provision of, or grant consents under any of the Security Documents to which it is a party, any such amendment, variation, waiver or consent so authorised to be binding on all the parties hereto and that Security Agent to be under no liability whatsoever in respect thereof;

(g) shall not be bound to disclose to any other person (including but not limited to any other Finance Party) (i) any confidential information or (ii) any other information, if disclosure would, or might in its reasonable opinion, constitute a breach of any law or be a breach of fiduciary duty;

(h) shall have no responsibility to make any payment, deduction or withholding of any Tax or governmental charge as a result of the Security Agent (i) holding the Transaction Security or (ii) enforcing the Transaction Security;

(i) shall not have, or be deemed to have, any relationship of trust or agency with any Obligor; and

(j) shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied) and the role and functions of the Security Agent under this Agreement shall be purely mechanical and administrative in nature and, subject to the terms of this Agreement, acting on the instructions of the Agent.

34.25.2 The rights, powers and discretions conferred upon the Security Agent by this Agreement shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Agent by general law or otherwise. Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement. Where there are any inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 and the provisions of this Agreement, the provisions of this Agreement shall, to the extent allowed by law, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement shall constitute a restriction or exclusion for the purposes of that Act.

34.26 All enforcement action through the Security Agent

34.26.1 None of the other Finance Parties shall have any independent power to enforce any of those Security Documents which are executed in favour of the Security Agent only, or to exercise any rights, discretions or powers or to grant any consents or releases under or pursuant to such Security Documents or otherwise have direct recourse to the security and/or guarantees constituted by such Security Documents except through the Security Agent.

34.26.2 None of the other Finance Parties shall have any independent power to enforce any of those Security Documents which are executed in their favour or to exercise any rights, discretions or powers or to grant any consents or releases under or pursuant to such Security Documents or otherwise have direct recourse to the security and/or guarantees constituted by such Security Documents except with the prior written consent of the Agent (acting through the Security Agent and on the instructions of the Majority Lenders). If any Finance Party (other than the Security Agent) is a party to any Security Document it shall promptly upon being requested by the Agent to do so grant a power of attorney or other sufficient authority to the Security Agent to enable the Security Agent to exercise any rights, discretions or powers or to grant any consents or releases under such Security Document.

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34.27 Co-operation to achieve agreed priorities of application

The other Finance Parties shall co-operate with each other and with the Security Agent and any receiver or administrator under the Security Documents in realising the property and assets subject to the Security Documents and in ensuring that the net proceeds realised under the Security Documents after deduction of the expenses of realisation are applied in accordance with clause 34.24 (Order of application).

34.28 Indemnity from Trust Property

34.28.1 In respect of all liabilities, costs or expenses for which the Obligors are liable under this Agreement, the Security Agent and each Affiliate of the Security Agent and each officer or employee of the Security Agent or its Affiliate (each a Relevant Person) shall be entitled to be indemnified out of the Trust Property in respect of all liabilities, damages, costs, claims, charges or expenses whatsoever properly incurred or suffered by such Relevant Person:

(a) in the execution or exercise or bona fide purported execution or exercise of the trusts, rights, powers, authorities, discretions and duties created or conferred by or pursuant to the Finance Documents;

(b) as a result of any breach by an Obligor of any of its obligations under any Finance Document;

(c) in respect of any Environmental Claim made or asserted against a Relevant Person which would not have arisen if the Finance Documents had not been executed; and

(d) in respect of any matter or thing done or omitted in any way in accordance with the terms of the Finance Documents relating to the Trust Property or the provisions of any of the Finance Documents.

34.28.2 The rights conferred by this clause 34.28 are without prejudice to any right to indemnity by law given to trustees generally and to any provision of the Finance Documents entitling the Security Agent or any other person to an indemnity in respect of, and/or reimbursement of, any liabilities, costs or expenses incurred or suffered by it in connection with any of the Finance Documents or the performance of any duties under any of the Finance Documents. Nothing contained in this clause 34.28 shall entitle the Security Agent or any other person to be indemnified in respect of any liabilities, damages, costs, claims, charges or expenses to the extent that the same arise from such person's own gross negligence or wilful misconduct.

34.29 Finance Parties to provide information

The other Finance Parties shall provide the Security Agent with such written information as it may reasonably require for the purposes of carrying out its duties and obligations under the Security Documents and, in particular, with such necessary directions in writing so as to enable the Security Agent to make the calculations and applications contemplated by clause 34.24 (Order of application) above and to apply amounts received under, and the proceeds of realisation of, the Security Documents as contemplated by the Security Documents, clause 37.5 (Partial payments) and clause 34.24 (Order of application).

34.30 No Reliance on Security Agent

It is understood and agreed by each Finance Party (other than the Security Agent) that it has itself been, and will continue to be, solely responsible for making its own independent appraisal of and investigations into the financial condition, creditworthiness, condition, affairs, status and nature of each Obligor and, accordingly, each other Finance Party warrants to the Security Agent that it has not relied and will not hereafter rely on the Security Agent:

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(a) to check or enquire on its behalf into the adequacy, accuracy or completeness of any information provided to it by the Obligors or any other person in connection with any of the Finance Documents, the Charged Property or the transactions therein contemplated (whether or not such information has been or is hereafter circulated to such Finance Party by the Security Agent);

(b) to check or enquire on its behalf into the adequacy, accuracy or completeness of any communication delivered to it under any of the Finance Documents, the Charged Property, any legal or other opinions, reports, valuations, certificates, appraisals or other documents delivered or made or required to be delivered or made at any time in connection with any of the Finance Documents, the Charged Property, any security to be constituted thereby or any other report or other document, statement or information circulated, delivered or made, whether orally or otherwise and whether before, on or after the date of this Agreement;

(c) to check or enquire on its behalf into the due execution, delivery, validity, legality, adequacy, suitability, performance, enforceability or admissibility in evidence of any of the Finance Documents, the Charged Property or any other document referred to in paragraph (b) above or of any guarantee, indemnity or security given or created thereby or any obligations imposed thereby or assumed thereunder;

(d) to check or enquire on its behalf into the ownership, value, existence or sufficiency of any Charged Property, the priority of any of the Security Interests, the right or title of any person in or to any property comprised therein or the existence of any encumbrance affecting the same; or

(e) to assess or keep under review on its behalf the identity, financial condition, creditworthiness, condition, affairs, status or nature of any Obligor or other Group Member.

34.31 Release to facilitate enforcement and realisation

Each Finance Party acknowledges that pursuant to any enforcement action by the Security Agent (or a Receiver) carried out on the instructions of the Agent it may be desirable for the purpose of such enforcement and/or maximising the realisation of the Charged Property being enforced against, that any rights or claims of or by the Security Agent (for the benefit of the Finance Parties) and/or any Finance Parties against any Obligor and/or any Security Interest over any assets of any Obligor (in each case) as contained in or created by any Finance Document, other than such rights or claims or security being enforced, be released in order to facilitate such enforcement action and/or realisation and, notwithstanding any other provision of the Finance Documents, each Finance Party hereby irrevocably authorises the Security Agent (acting on the instructions of the Agent or the Majority Lenders or all the Lenders (as the case may be), as required under the Finance Documents) to grant any such releases to the extent necessary to fully effect such enforcement action and realisation including, without limitation, to the extent necessary for such purposes to execute release documents in the name of and on behalf of the Finance Parties. Where the relevant enforcement is by way of disposal of shares in a Borrower, the requisite release shall include releases of all claims (including under guarantees) of the Finance Parties and/or the Security Agent against that Borrower and of all Security Interests over the assets of that Borrower.

34.32 Undertaking to pay

Each Obligor which is a Party undertakes with the Security Agent on behalf of the Finance Parties that it will, on demand by the Security Agent, pay to the Security Agent all money from time to time owing, and discharge all other obligations from time to time incurred, by it under or in connection with the Finance Documents.

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34.33 Additional trustees

The Security Agent shall have power by notice in writing to the other Finance Parties and the Borrowers to appoint any person approved by the Borrowers (such approval not to be unreasonably withheld or delayed) either to act as separate trustee or as co-trustee jointly with the Security Agent:

(a) if the Security Agent reasonably considers such appointment to be in the best interests of the Finance Parties;

(b) for the purpose of conforming with any legal requirement, restriction or condition in any jurisdiction in which any particular act is to be performed; or

(c) for the purpose of obtaining a judgment in any jurisdiction or the enforcement in any jurisdiction against any person of a judgment already obtained, and any person so appointed shall (subject to the provisions of this Agreement) have such rights (including as to reasonable remuneration), powers, duties and obligations as shall be conferred or imposed by the instrument of appointment. The Security Agent shall have power to remove any person so appointed. At the request of the Security Agent, the other parties to this Agreement shall forthwith execute all such documents and do all such things as may be required to perfect such appointment or removal and each such party irrevocably authorises the Security Agent in its name and on its behalf to do the same. Such a person shall accede to this Agreement as a Security Agent to the extent necessary to carry out their role on terms satisfactory to the Security Agent and (subject always to the provisions of this Agreement) have such trusts, powers, authorities, liabilities and discretions (not exceeding those conferred on the Security Agent by this Agreement and the other Finance Documents) and such duties and obligations as shall be conferred or imposed by the instrument of appointment (being no less onerous than would have applied to the Security Agent but for the appointment). The Security Agent shall not be bound to supervise, or be responsible for any loss incurred by reason of any act or omission of, any such person if the Security Agent shall have exercised reasonable care in the selection of such person.

34.34 Non-recognition of trust

It is agreed by all the parties to this Agreement that:

(a) in relation to any jurisdiction the courts of which would not recognise or give effect to the trusts expressed to be constituted by this clause 34, the relationship of the Security Agent and the other Finance Parties shall be construed as one of principal and agent, but to the extent permissible under the laws of such jurisdiction, all the other provisions of this Agreement shall have full force and effect between the parties to this Agreement; and

(b) the provisions of this clause 34 insofar as they relate to the Security Agent in its capacity as trustee for the Finance Parties and the relationship between themselves and the Security Agent as their trustee may be amended by agreement between the other Finance Parties and the Security Agent. The Security Agent may amend all documents necessary to effect the alteration of the relationship between the Security Agent and the other Finance Parties and each such other party irrevocably authorises the Security Agent in its name and on its behalf to execute all documents necessary to effect such amendments.

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34.35 Security Agent's Ongoing Fees

34.35.1 The Borrowers shall pay to the Agent and the Security Agent certain fees in accordance with clause 11 (Fees).

34.35.2 If:

(a) a Default has occurred; or

(b) the Security Agent considers it expedient and/or necessary or is requested by the Borrowers or any Finance Party or group of Finance Parties to undertake duties which the Security Agent considers to be of an exceptional nature and/or outside the scope of the normal duties of the Security Agent under the Finance Documents (which for the avoidance of doubt shall include any amendments to the Finance Documents and the time incurred in relation thereto),

the Borrowers shall pay to the Security Agent any additional remuneration (together with any applicable taxes thereon) which shall be calculated by reference to its hourly rates in force from time to time.

34.36 Insurance by Security Agent

Where the Security Agent is named on any insurance policy (including the Insurances) as an insured party and/or loss payee, the Security Agent shall not be responsible for any loss which may be suffered by reason of, directly or indirectly, its failure to notify the insurers of any material fact relating to the risk assumed by such insurers or any other information of any kind, unless the Agent shall have requested it to do so in writing and the Security Agent shall have failed to do so within 14 days after receipt of that request. The Security Agent shall have no obligation to, nor any liability for any failure to, insure any of the Charged Property.

34.37 Custodians and nominees

The Security Agent may (to the extent legally permitted) appoint and pay any person to act as a custodian or nominee on any terms in relation to any assets of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the proceedings or acts of any person.

34.38 Acceptance of title

The Security Agent shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any of the Obligors have to any of the Charged Property and shall not be liable for or bound to require any Debtor to remedy any defect in its right or title.

34.39 Refrain from illegality

Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Security Agent may refrain from doing anything which in its opinion will or may be contrary to any relevant law, directive or regulation of any applicable jurisdiction and the Security Agent may do anything which is, in its opinion, necessary to comply with any such law, directive or regulation.

34.40 Interest on Demand

If the Borrowers fail to pay any amount payable by them to the Security Agent under this Agreement on its due date, interest shall accrue on the overdue amount (and be compounded

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with it) from the due date up to the date of actual payment (both before and after judgment and to the extent interest at a default rate is not otherwise being paid on such sum) at the rate which is two per cent. (2%) per annum over the rate at which the Security Agent was being offered, by prime banks in the London interbank market, deposits in an amount comparable to the unpaid amounts in the currencies of those amounts for such period(s) as the Security Agent may from time to time select.

34.41 Release of Security

If the Agent, with the approval of all the other Finance Parties, shall determine that all of the amounts owing under the Finance Documents and all other obligations the discharge of which is secured by any of the Security Documents have been fully and finally discharged and none of the Finance Parties is under any commitment, obligation or liability (whether actual or contingent) to make advances or provide other financial accommodation to the Borrowers under or pursuant to this Agreement or any other Finance Document, the trusts herein set out shall be wound up and the Security Agent shall, at the request and cost of the Borrowers and acting on the instructions of the Agent, release, without recourse or warranty, all of the security then held by it, whereupon the Security Agent, the Agent, the Hedging Providers, the Lenders and the Obligors shall be released from their obligations hereunder (save for those which arose prior to such winding up).

35 Conduct of business by the Finance Parties

35.1 Finance Parties tax affairs

No provision of this Agreement will:

(a) interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

(b) oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

(c) oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

35.2 Finance Parties acting together

Notwithstanding clause 2.2 (Finance Parties' rights and obligations), if the Agent makes a declaration under clause 30.24 (Acceleration) the Agent shall, in the names of all the Finance Parties, take such action on behalf of the Finance Parties and conduct such negotiations with the Borrowers and any other Obligors and generally administer the Facility in accordance with the wishes of the Majority Lenders. All the Finance Parties shall be bound by the provisions of this clause and no Finance Party shall be entitled to take action independently against any Obligor or any of its assets without the prior consent of the Majority Lenders.

This clause shall not override clause 34 (Roles of Agent, Security Agent and Arranger) as it applies to the Security Agent.

35.3 Majority Lenders

35.3.1 Where any Finance Document provides for any matter to be determined by reference to the opinion of, or to be subject to the consent, approval or request of, the Majority Lenders or for any action to be taken on the instructions of the Majority Lenders (a majority decision),such majority decision shall (as between the Lenders) only be regarded as having been validly given or issued by the Majority Lenders if all the Lenders shall have received prior notice of the matter on which such majority decision is required and the relevant majority of Lenders shall have

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given or issued such majority decision. However (as between any Obligor and the Finance Parties) the relevant Obligor shall be entitled (and bound) to assume that such notice shall have been duly received by each Lender and that the relevant majority shall have been obtained to constitute Majority Lenders when notified to this effect by the Agent whether or not this is the case.

35.3.2 If, within fifteen (15) Business Days of the Agent despatching to each Lender a notice requesting instructions (or confirmation of instructions) from the Lenders or the agreement of the Lenders to any amendment, modification, waiver, variation or excuse of performance for the purposes of, or in relation to, any of the Finance Documents, the Agent has not received a reply specifically giving or confirming or refusing to give or confirm the relevant instructions or, as the case may be, approving or refusing to approve the proposed amendment, modification, waiver, variation or excuse of performance, then (irrespective of whether such Lender responds at a later date) the Agent shall treat any Lender which has not so responded as having indicated a desire to be bound by the wishes of 662/3 per cent. of those Lenders (measured in terms of the total Commitments of those Lenders) which have so responded except if such reply has not been received due to technical errors in connection with any Designated Website (as defined in clause 19.9 (Use of websites)).

35.3.3 For the purposes of clause 35.3.2, any Lender which notifies the Agent of a wish or intention to abstain on any particular issue shall be treated as if it had not responded.

35.3.4 Clauses 35.3.2 and 35.3.3 shall not apply in relation to those matters referred to in, or the subject of, clause 43.2 (Exceptions).

35.4 Conflicts

35.4.1 Each Borrower acknowledges that the Arranger and its parent undertaking, subsidiary undertakings and fellow subsidiary undertakings (together an Arranger Group) may be providing debt finance, equity capital or other services (including financial advisory services) to other persons with which the Borrowers may have conflicting interests in respect of the Facility or otherwise.

35.4.2 No member of an Arranger Group shall use confidential information gained from any Obligor by virtue of the Facility or its relationships with any Obligor in connection with their performance of services for other persons. This shall not, however, affect any obligations that any member of an Arranger Group has as Agent in respect of the Finance Documents. The Borrowers also acknowledge that no member of an Arranger Group has any obligation to use or furnish to any Obligor information obtained from other persons for their benefit.

35.4.3 The terms parent undertaking, subsidiary undertaking and fellow subsidiary undertaking when used in this clause have the meaning given to them in sections 1161 and 1162 of the Companies Act 2006.

36 Sharing among the Finance Parties

36.1 Payments to Finance Parties

If a Finance Party (a Recovering Finance Party)receives or recovers any amount from an Obligor other than in accordance with clause 37 (Payment mechanics) (a Recovered Amount)and applies that amount to a payment due under the Finance Documents then:

(a) the Recovering Finance Party shall, within three (3) Business Days, notify details of the receipt or recovery, to the Agent;

(b) the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been

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received or made by the Agent and distributed in accordance with clause 37 (Payment mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and

(c) the Recovering Finance Party shall, within three (3) Business Days of demand by the Agent, pay to the Agent an amount (the Sharing Payment)equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with clause 37.5 (Partial payments).

36.2 Redistribution of payments

The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the Sharing Finance Parties)in accordance with clause 37.5 (Partial payments) towards the obligations of that Obligor to the Sharing Finance Parties.

36.3 Recovering Finance Party's rights

On a distribution by the Agent under clause 36.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.

36.4 Reversal of redistribution

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

(a) each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the Redistributed Amount);and

(b) as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.

36.5 Exceptions

36.5.1 This clause 36 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this clause, have a valid and enforceable claim against the relevant Obligor.

36.5.2 A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings in accordance with the terms of this Agreement, if:

(a) it notified that other Finance Party of the legal or arbitration proceedings; and

(b) the taking legal or arbitration proceedings was in accordance with the terms of this Agreement; and

that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

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Section 11 - Administration

37 Payment mechanics

37.1 Payments to the Agent

37.1.1 On each date on which an Obligor or a Lender is required to make a payment under a Finance Document (other than a Hedging Contract), that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

37.1.2 Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in a Participating Member State or London as specified by the Agent) with such bank as the Agent, in each case specifies.

37.2 Distributions by the Agent

Each payment received by the Agent under the Finance Documents for another Party shall, subject to clause 37.3 (Distributions to an Obligor) and clause 37.4 (Clawback) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five (5) Business Days' notice with a bank specified by that Party in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London as specified by that Party).

37.3 Distributions to an Obligor

The Agent may (with the consent of the Obligor or in accordance with clause 38 (Set-oft)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

37.4 Clawback

37.4.1 Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

37.4.2 If the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.

37.5 Partial payments

37.5.1 If the Agent receives a payment for application against amounts due under the Finance Documents that is insufficient to discharge all the amounts then due and payable by an Obligor under those Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under those Finance Documents in the following order:

(a) first, in or towards payment pro rata of any unpaid fees, costs and expenses (ignoring any fees payable under clause 11 (Fees)) of the Agent, the Security Agent or the Arranger under those Finance Documents;

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(b) secondly, in or towards payment to the Lenders pro rata of any amount owing to the Lenders under clause 34.11 (Lenders' indemnity to the Agent) including any amount resulting from the indemnity to the Security Agent under clause 34.22.1;

(c) thirdly, in or towards payment to the Lenders pro rata of any accrued interest, fee or commission due but unpaid under those Finance Documents;

(d) fourthly, in or towards payment to the Lenders pro rata of any principal which is due but unpaid under those Finance Documents;

(e) fifthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents (other than the Hedging Contracts); and

(f) sixthly, in or towards payment to the Hedging Providers pro rata of any net amounts due to them but unpaid under the Hedging Contracts.

37.5.2 The Agent shall, if so directed by all the Lenders and the Hedging Providers, vary the order set out in paragraphs (b) to (d) of clause 37.5.1.

37.5.3 Clauses 37.5.1 and 37.5.2 above will override any appropriation made by an Obligor.

37.6 No set-off by Obligors

All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

37.7 Business Days

37.7.1 Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

37.7.2 During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

37.8 Payments on demand

For the purposes of clause 30.1 (Non-payment) and subject to the Agent's right to demand interest under clause 8.3 (Default interest), payments on demand shall be treated as paid when due if paid within three (3) Business Days of demand.

37.9 Currency of account

37.9.1 Subject to clauses 37.9.2 to 37.9.3, dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document.

37.9.2 A repayment of all or part of the Loan or an Unpaid Sum and each payment of interest shall be made in dollars on its due date.

37.9.3 Each payment in respect of the amount of any costs, expenses or Taxes or other losses shall be made in dollars and, if they were incurred in a currency other than dollars, the amount payable under the Finance Documents shall be the equivalent in dollars of the relevant amount in such other currency on the date on which it was incurred.

37.9.4 All moneys received or held by the Security Agent or by a Receiver under a Security Document in a currency other than dollars may be sold for dollars and the Obligor which executed that

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Security Document shall indemnify the Security Agent against the full cost in relation to the sale. Neither the Security Agent nor such Receiver will have any liability to that Obligor in respect of any loss resulting from any fluctuation in exchange rates after the sale.

37.10 Change of currency

37.10.1 Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

(a) any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Borrowers); and

(b) any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably).

37.10.2 If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrowers) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the London interbank market and otherwise to reflect the change in currency.

37.11 Disruption to Payment Systems etc.

If either the Agent determines (in its discretion) that a Payment Disruption Event has occurred or the Agent is notified by the Borrowers that a Payment Disruption Event has occurred:

(a) the Agent may, and shall if requested to do so by the Borrowers, consult with the Borrowers with a view to agreeing with the Borrowers such changes to the operation or administration of the Facility as the Agent may deem necessary in the circumstances;

(b) the Agent shall not be obliged to consult with the Borrowers in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;

(c) the Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;

(d) any such changes agreed upon by the Agent and the Borrowers shall (whether or not it is finally determined that a Payment Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of clause 43 (Amendments and grant of waivers);

(e) the Agent shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this clause 37.11; and

(f) the Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.

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37.12 Impaired Agent

37.12.1 If,at any time, the Agent becomes an Impaired Agent, an Obligor or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with clause 37.1 (Payments to the Agent) may instead either pay that amount direct to the required recipient or pay that amount to an interest-bearing account held with an Acceptable Bank within the meaning of paragraph (a) of the definition of Acceptable Bank and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Obligor or the Lender making the payment and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents. In each case such payments must be made on the due date for payment under the Finance Documents.

37.12.2 All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the beneficiaries of that trust account pro rata to their respective entitlements.

37.12.3 A Party which has made a payment in accordance with clause 37.1 (Payments to the Agent shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.

37.12.4 Promptly upon the appointment of a successor Agent in accordance with clause 34.13 (Replacement of the Agent), each Party which has made a payment to a trust account in accordance with clauses 37.1 (Payments to the Agent) shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution in accordance with clause 37.2 (Distributions by the Agent).

37.13 Settlement or discharge conditional

Any settlement or discharge under any Finance Document between any Finance Party and any Obligor shall be conditional upon no security or payment to any Finance Party by any Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

37.14 Irrevocable payment

If the Agent considers that an amount paid or discharged by, or on behalf of, an Obligor or by any other person in purported payment or discharge of an obligation of that Obligor to a Finance Party under the Finance Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Obligor or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Finance Documents.

38 Set-off

A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. For the purpose of this clause the term "Finance Party" includes each of the relevant Finance Party's holding companies and subsidiaries and each subsidiary of the relevant Finance Party's holding companies (as defined in the Companies Act 2006).

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39 Notices

39.1 Communications in writing

Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.

39.2 Addresses

The address, and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Obligor or Finance Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:

(a) in the case of any Obligor which is a Party, that identified with its name in Schedule 1 (The original parties);

(b) in the case of any Obligor which is not a Party, that identified in any Finance Document to which it is a party;

(c) in the case of the Security Agent, the Agent and any other original Finance Party that identified with its name in Schedule 1 (The original parties); and

(d) in the case of each Lender or other Finance Party, that notified in writing to the Agent on or prior to the date on which it becomes a Party in the relevant capacity,

or, in each case, any substitute address, fax number, or department or officer as an Obligor or Finance Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five (5) Business Days' notice.

39.3 Delivery

39.3.1 Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

(a) if by way of fax, when received in legible form; or

(b) if by way of letter, when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;

and, if a particular department or officer is specified as part of its address details provided under clause 39.2 (Addresses), if addressed to that department or officer.

39.3.2 Any communication or document to be made or delivered to the Agent or the Security Agent will be effective only when actually received by the Agent or the Security Agent and then only if it is expressly marked for the attention of the department or officer identified in Schedule 1 (The original parties) (or any substitute department or officer as the Agent or the Security Agent shall specify for this purpose).

39.3.3 All notices from or to an Obligor shall be sent through the Agent.

39.3.4 Any communication or document made or delivered to the Borrowers in accordance with this clause will be deemed to have been made or delivered to each of the Obligors.

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39.4 Notification of address and fax number

Promptly upon receipt of notification of an address and fax number or change of address or fax number pursuant to clause 39.2 (Addresses) or changing its own address or fax number, the Agent shall notify the other Parties.

39.5 Electronic communication

39.5.1 Any communication to be made between the Agent and a Lender, a Hedging Provider or an Obligor under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including by way of the Agent's Intralinks or Debtdomain system or other Designated Website, as defined in and pursuant to, clause 19.9 (Use of websites)), if the Agent and the relevant Lender, Hedging Provider or Obligor:

(a) agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

(b) notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

(c) notify each other of any change to their address or any other such information supplied by them.

39.5.2 Any electronic communication made between the Agent and a Lender or a Hedging Provider or an Obligor will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender or a Hedging Provider or an Obligor to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose.

39.5.3 All Lenders, Hedging Providers and Obligors confirm that they have consented to the use of the Agent's Intralinks or Debtdomain systems as an accepted method of communication under or in connection with the Finance Documents and agree that the Intralinks or Debtdomain system will be the primary method of communication between the Agent, the Lenders, a Hedging Provider or the Obligors. The Lenders, the Hedging Providers and the Obligors acknowledge that a communication via Intralinks or Debtdomain will be effective once the communication is posted to Intralinks or Debtdomain by the Agent.

39.6 English language

39.6.1 Any notice given under or in connection with any Finance Document shall be in English.

39.6.2 All other documents provided under or in connection with any Finance Document shall be:

(a) in English; or

(b) if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

39.7 Communication when Agent is Impaired Agent

If the Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Agent, communicate with each other directly and (while the Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Agent has been appointed.

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40 Calculations and certificates

40.1 Accounts

In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.

40.2 Certificates and determinations

Any certification or determination by the Agent of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

40.3 Day count convention

Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Interbank Market differs, in accordance with that market practice.

41 Partial invalidity

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

42 Remedies and waivers

No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in the Finance Documents are cumulative and not exclusive of any rights or remedies provided by law.

43 Amendments and grant of waivers

43.1 Required consents

43.1.1 Subject to clause 43.2 (Exceptions) and clause 43.3 (All Lenders matters), any term of the Finance Documents may be amended or waived with the consent of the Agent (acting on the instructions of the Majority Lenders and, if it affects the rights and obligations of the Security Agent or the Agent, the consent of the Agent or the Security Agent) and any such amendment or waiver agreed or given by the Agent will be binding on the other Finance Parties.

43.1.2 The Agent may (or, in the case of the Security Documents, instruct the Security Agent to) effect, on behalf of any Finance Party, any amendment or waiver permitted by this clause.

43.2 Exceptions

43.2.1 Without prejudice to the generality of sub-clauses 34.7.3, 34.7.4 and 34.7.5 of clause 34.7 (Rights and discretions of Agent), the Agent may engage, pay for and rely on the services of lawyers in determining the consent level required for and effecting any amendment, waiver or consent under this Agreement.

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43.2.2 Each Obligor agrees to any such amendment or waiver permitted by this clause 43 which is agreed to by the Borrowers. This includes any amendment or waiver which would, but for this clause 43.2.2, require the consent of a Guarantor.

43.2.3 Amendments to or waivers in respect of a Hedging Contract may only be agreed by the relevant Hedging Provider who is a party to such Hedging Contract.

43.2.4 An amendment or waiver which relates to the rights or obligations of the Agent, the Security Agent or the Arranger in their respective capacities as such (and not just as a Lender) may not be effected without the consent of the Agent, Security Agent or the Arranger (as the case may be).

43.2.5 Notwithstanding clauses 43.1 (Required consents) and 43.2.1 to 43.2.4 (inclusive), the Agent may make technical amendments to the Finance Documents arising out of manifest errors on the face of the Finance Documents, where such amendments would not prejudice or otherwise be adverse to the interests of any Finance Party without any reference or consent of the Finance Parties.

43.3 All Lenders matters

43.3.1 An amendment, waiver or discharge or release or a consent of, or in relation to, the terms of any Finance Document that has the effect of changing or which relates to:

(a) the definition of "Change of Control" in clause 1.1 (Definitions);

(b) the definition of "Majority Lenders" in clause 1.1 (Definitions);

(c) the definition of "Last Availability Date" in clause 1.1 (Definitions);

(d) an extension to the date of payment of any amount under the Finance Documents;

(e) a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable or the rate at which they are calculated;

(f) an increase in, or an extension of, any Commitment or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders pro rata under the Facility;

(g) a change to the Borrowers or any other Obligor;

(h) any provision which expressly requires the consent or approval of all the Lenders;

(i) clause 2.2 (Finance Parties' rights and obligations), clause 32 (Changes to the Lenders), clause 36.1 (Payments to Finance Parties), clause 46 (Governing law), clause 47 (Enforcement) or this clause 43;

(j) the order of distribution under clause 37.5 (Partial payments);

(k) the order of distribution under clause 34.24.1 (Order of application);

(I) the currency in which any amount is payable under any Finance Document;

(m) the nature or scope of the Charged Property or the manner in which the proceeds of enforcement of the Security Documents are distributed;

(n) the nature or scope of the guarantee and indemnity granted under clause 17 (Guarantee and indemnity); or

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(o) the circumstances in which the security constituted by the Security Documents are permitted or required to be released under any of the Finance Documents,

shall not be made without the prior consent of all the Lenders which are directly and negatively affected by any such amendment, waiver, discharge, release or consent (as the case may be).

43.4 Disenfranchisement of Defaulting Lenders

43.4.1 For so long as a Defaulting Lender has any Commitment, in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitment has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, that Defaulting Lender's Commitment will be reduced by the amount of its Commitment.

43.4.2 For the purposes of this clause 43.4, the Agent may assume that the following Lenders are

Defaulting Lenders:

(a) any Lender which has notified the Agent that it has become a Defaulting Lender; and

(b) any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of Defaulting Lender has occurred, unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Agent) or the Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.

43.5 Replacement of a Defaulting Lender

43.5.1 The Borrowers may, at any time a Lender has become and continues to be a Defaulting Lender, by giving 10 Business Days' prior written notice to the Agent and such Lender replace such Lender by requiring such Lender to (and, to the extent permitted by law such Lender shall) transfer pursuant to clause 32 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity (a Replacement Lender)selected by the Borrowers, and which (unless the Agent is an Impaired Agent) is acceptable to the Agent (acting reasonably) and which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender (including the assumption of the transferring Lender's participations or unfunded participations (as the case may be) on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lender's participation in the outstanding Utilisation and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents (or at any other purchase price approved by all of the other Lenders who are not Defaulting Lenders at the time).

43.5.2 Any transfer of rights and obligations of a Defaulting Lender pursuant to this clause shall be subject to the following conditions:

(a) the Borrowers shall have no right to replace the Agent or Security Agent;

(b) neither the Agent nor the Defaulting Lender shall have any obligation to the Borrowers to find a Replacement Lender;

(c) the transfer must take place no later than 20 Business Days after the notice referred to in clause 43.5.1 above; and

(d) in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents.

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43.6 Releases

Except with the approval of all the Lenders or as is expressly permitted or required by the Finance Documents, the Agent shall not have authority to authorise the Security Agent to release:

(a) any Charged Property from the security constituted by any Security Document; or

(b) any Obligor from any of its guarantee or other obligations under any Finance Document.

44 Counterparts

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

45 Confidentiality

45.1 Confidential Information

Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by clause 45.2 (Disclosure of Confidential Information), and to ensure that all Confidential information is protected with security measures and a degree of care that would apply to its own confidential information.

45.2 Disclosure of Confidential Information

Any Finance Party may disclose (without the consent of the Obligors) to any of its Affiliates, employees (including service and settlement employees) or any of its employees, officers, directors, representatives or advisers, and to any other person:

(a) in the case of a Lender, to (or through) whom that Lender assigns (or may potentially assign) all or any of its rights and obligations under the Finance Documents;

(b) in the case of a Lender, to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to clause 32.7 (Security over Lenders' rights);

(c) in the case of a Lender, with (or through) whom that Lender enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made by reference to, the Finance Documents or any Obligor;

(d) to whom, and to the extent that, information is required to be disclosed by any applicable law or regulation;

(e) in order to preserve or enforce any rights any Finance Party may have under the Security Documents;

(f) which is a rating agency (including its professional advisers) or such Finance Party's professional advisers (including auditors, lawyers, accountants, surveyors, valuers, insurers, insurance advisors and brokers); or

(g) in the case of the Security Agent, in the course of the performance of its functions under the Finance Documents,

any information about any Obligor, the Group and the Finance Documents as that Finance Party shall consider appropriate; and any Finance Party may disclose (with the consent of the

126

Borrowers) to any other person not included in paragraphs (a) - (f) above, any information about any Obligor, the Group and the Finance Documents as that Finance Party shall consider appropriate.

45.3 Disclosure to numbering service providers

45.3.1 Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Obligors the following information:

(a) names of Obligors;

(b) place of incorporation of Obligors;

(c) date of this Agreement;

(d) clause 46 (Governing law);

(e) the names of the Agent and the Arranger;

(f) date of each amendment and restatement of this Agreement;

(g) amount of Total Commitments;

(h) currency of the Facility;

(1) type of the Facility;

(j) ranking of the Facility;

(k) the term of the Facility;

(I) changes to any of the information previously supplied pursuant to paragraphs (a) to (k) above; and

(m) such other information agreed between such Finance Party and the Borrowers,

to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

45.3.2 The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

45.3.3 The Borrowers represent that none of the information set out in clauses (a) to (I) above is, nor will at any time be, unpublished price-sensitive information.

45.3.4 The Agent shall notify the Borrowers and the other Finance Parties of:

(a) the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Facility and/or one or more Obligors; and

(b) the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Obligors by such numbering service provider.

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45.4 Entire agreement

This clause 45 constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

45.5 Inside information

Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.

45.6 Continuing obligations

The obligations in this clause 45 are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve (12) months from the earlier of:

(a) the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and

(b) the date on which such Finance Party otherwise ceases to be a Finance Party.

128

Section 12 - Governing Law and Enforcement

46 Governing law

This Agreement and any non-contractual obligations connected with it are governed by English law.

47 Enforcement

47.1 Jurisdiction of English courts

47.1.1 The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement or any non-contractual obligations connected with it (including a dispute regarding the existence, validity or termination of this Agreement) (a Dispute).

47.1.2 The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

47.1.3 This clause 47.1 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.

47.2 Service of process

Without prejudice to any other mode of service allowed under any relevant law, each Obligor which is a Party:

(a) irrevocably appoints the person named in Schedule 1 (The original parties) as that Obligor's English process agent as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document;

(b) agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned; and

(c) if any person appointed as process agent for an Obligor is unable for any reason to act as agent for service of process, that Obligor must immediately (and in any event within ten (10) days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

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Schedule 1 The original parties

Borrowers

Name:	Oceanfire Owners Inc.
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	36362
English process agent (if not incorporated In England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	Oceanfire Shareholders Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

Name:	Oceanrunner Owners Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	36232
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	Oceanrunner Shareholders Limited of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

130

Name:	Oceanpower Owners Inc.
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	35668
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1 W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	Oceanpower Shareholders Inc. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

Name:	Oceantrade Owners Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	23405
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	Oceantrade Shareholdings Limited of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

131

Name:	Oceanwave Owners Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	36069
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	Oceanwave Shareholders Limited of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

Name:	Oceanenergy Owners Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	23392
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	Oceanenergy Shareholdings Limited of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

132

Name:	Team-Up Owning Company Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	25320
English process agent (if not incorporated in England)	Ince Process Agents Ltd of international House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	Team-Up Shareholdings Limited of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

Name:	Pergamos Owning Company Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	39579
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	Pergamos Shareholders Limited of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

133

Name:	Chloe Owning Company Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	67928
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	Chloe Shareholders Limited of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

Parent

Name:	DryShips Inc.
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	11911
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
Address for service of notices	c/o Athens Shipping Office, 109 Kifisias Avenue and Sine Street, GR 151 24, Marousi, Athens, Greece

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Guarantors

Name:	OceanFreight Inc.
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	20097
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W lAY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
Address for service of notices	c/o Dryships Inc., Athens Shipping Office, 109 Kifisias Avenue and Sina Street, GR 151 24, Marousi, Athens, Greece
Shareholder	DryShips Inc. of the Republic of the Marshall Islands (the Parent)

Name:	DryShips Inc.
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	11911
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
Address for service of notices	c/o Athens Shipping Office, 109 Kifisias Avenue and Sina Street, GR 151 24, Marousi, Athens, Greece

135

Name:	Oceanfire Shareholders Inc.
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	36363
English process agent (if not incorporated in England)	lnce Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	OceanFreight Inc. of the Republic of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

Name:	Oceanrunner Shareholders Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	36233
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	OceanFreight Inc. of the Republic of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

136

Name:	Oceanpower Shareholders Inc.
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	35669
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	Ocean Freight Inc. of the Republic of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

Name:	Oceantrade Shareholdings Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	23406
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	OceanFreight Inc. of the Republic of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

137

Name:	Oceanwave Shareholders Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	36070
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	OceanFreight Inc. of the Republic of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

Name:	Oceanenergy Shareholdings Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	23393
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	OceanFreight Inc. of the Republic of Trust Company Complex, Ajeltake Road, Ajeltake island, Majuro, Marshall Islands MH96960

138

Name:	Team-Up Shareholdings Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	25321
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W lAY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	DryShips Inc. of the Republic of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

Name:	Pergamos Shareholders Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	39580
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1 AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	DryShips Inc. of the Republic of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

139

Name:	Chloe Shareholders Limited
Jurisdiction of incorporation	Republic of the Marshall Islands
Registration number (or equivalent, if any)	67929
English process agent (if not incorporated in England)	Ince Process Agents Ltd of International House, 1 St. Katharine's Way, London E1W 1AY, England
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
Address for service of notices	c/o TMS Bulkers Ltd., Athens Shipping Office, 11 Fragkokklisias Street, GR 151 24, Marousi, Athens, Greece
Shareholder	DryShips Inc. of the Republic of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

The Original Lenders

Name:	Nordea Bank Finland Plc, London Branch
Commitment $	92,500,000
Name	Norddeutsche Landesbank Girozentrale
Commitment $	42,500,000
Name	ITF International Transport Finance Suisse AG
Commitment $	35,000,000
TOTAL $	170,000,000

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The Agent

Name:	Nordea Bank Finland Plc, London Branch
Facility Office, address, fax number and	Name:	Loan Administration
attention details for notices and account
details for payments	Address:	8th Floor, City Place House, 55 Basinghall Street,
		London EC2V 5NB, United Kingdom
	Telephone:	+ 44 (0)20 7726 9222
	Telefax:	+ 44 (0)20 7726 9188
	E-mail:	andrew.searle@nordea.com
		glenn.johnson@nordea.com
	with a copy to:	niklas.t.nilsson@nordea.com
		erik.venold@nordea.com

The Security Agent

Name:	Nordea Bank AB, London Branch
Facility Office, address, fax number and	Name:	Loan Administration
attention details for notices and account
details for payments	Address:	8th Floor, City Place House, 55 Basinghall Street,
		London EC2V 5NB, United Kingdom
	Telephone:	+ 44 (0)20 7726 9222
	Telefax:	+ 44 (0)20 7726 9188
	E-mail:	andrew.searle@nordea.com
		glenn.johnson@nordea.com
	with a copy to:	niklas.t.nilsson@nordea.com
		erik.venold@nordea.com

141

The Original Hedging Providers

Name:	Nordea Bank Finland Plc
Facility Office, address, fax number and	Address:	2747 Securities Services, FIN 00020 Nordea,
attention details for notices and account		Helsinki, Finland
details for payments
	Telephone:	+358 9 165 59820
	Telefax:	+358 9 165 59311
	E-mail:	custody.settlement.fi@nordea.com
	with a copy to
	nicolai.woxholt@nordea.com

The Arranger

Name:	Nordea Bank Finland Plc, London Branch
Facility Office, address, fax number and	Name:	Shipping Department
attention details for notices and account
details for payments	Address:	8th Floor, City Place House, 55 Basinghall Street,
		London EC2V 5NB, United Kingdom
	Telephone:	+44 (0)20 7726 9247 19107
	Telefax:	+44 (0)20 7726 9102
	E-mail:	niklas.t.nilsson@nordea.com
	with a copy to:	erik.venold@nordea.com

142

The Bookrunner

Name:	Nordea Bank Finland Plc, London Branch
Facility Office, address, fax number and	Name:	Shipping Department
attention details for notices and account
details for payments	Address:	8th Floor, City Place House, 55 Basinghall Street,
		London EC2V 5NB, United Kingdom
	Telephone:	+44 (0)20 7726 9247 /9107
	Telefax:	+44 (0)20 7726 9102
	E-mail:	niklas.t.nilsson@nordea.com
	with a copy to:	erik.venold@nordea.com

143

Schedule 2 Ship information

m.v. Cohiba

Owner:	Oceanfire Owners Inc.
Flag State	Republic of Malta
Classification:	I [Maltese Cross]HULL [Maltese Cross]MACH Bulk carrier ESP —heavycargo —nonhomload Holds 2-4-6-8 may be empty Unrestricted navigation [Maltese Cross]STAR-HULL, [Maltese Cross]AUT-UMS , MON-SHAFT , INWATERSURVEY
Classification Society:	Bureau Veritas
Major Casualty Amount	$2,000,000

m.v. Robusto

Owner:	Oceanrunner Owners Limited
Flag State	Republic of Malta
Classification:	[Maltese Cross]A1, Bulk Carrier, Ⓔ, [Maltese Cross]AMS, [Maltese Cross] ACCU, SH, HCS, SHCM
Classification Society:	American Bureau of Shipping
Major Casualty Amount	$2,000,000

m.v. Montecristo

Owner:	Oceanpower Owners Inc.
Flag State	Republic of Malta
Classification:	NS* (Bulk Carrier, Strengthened for Heavy Cargoes, Nos. 2,4,6 & 8 Holds may be empty)(ESP)(IWS) MNS*
Classification Society:	Nippon Kaiji Kyokai
Major Casualty Amount	$2,000,000

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m.v. Topeka

Owner:	Oceantrade Owners Limited
Flag State	Republic of Malta
Classification:	I  [Maltese Cross]HULL [Maltese Cross]MACH Bulk carrier ESP —nonhomload Unrestricted navigation [Maltese Cross]AUT-UMS , MON-SHAFT , GRABLOADING , INWATERSURVEY
Classification Society:	Bureau Veritas
Major Casualty Amount	$2,000,000

m.v. Partagas

Owner:	Oceanwave Owners Limited
Flag State	Republic of Malta
Classification:	[Maltese Cross]A1, Bulk Carrier, Ⓔ, [Maltese Cross]AMS, [Maltese Cross]ACCU, SH, HCS, SHCM
Classification Society:	American Bureau of Shipping
Major Casualty Amount	$2,000,000

m.v. Helena

Owner:	Oceanenergy Owners Limited
Flag State	Republic of the Marshall Islands
Classification:	NS* (Bulk Carrier)(ESP) MNS*
Classification Society:	Nippon Kaiji Kyokal
Major Casualty Amount	$2,000,000

m.v. Saldanha

Owner:	Team-Up Owning Company Limited
Flag State	Republic of Malta
Classification:	NS* (Buik Carrier, Strengthened for Heavy Cargoes, Nos. 2,4 & Holds may be empty)(ESP) MNS*
Classification Society:	Nippon Kaiji Kyokal
Major Casualty Amount	$2,000,000

145

m.v. Woolloomooloo

Owner:	Pergamos Owning Company Limited
Flag State	Republic of Malta
Classification:	[Maltese Cross]A1, Bulk Carrier, BC-A [Holds No.2, 4, 6 may be empty], Ⓔ, [Maltese Cross]AMS, [Maltese Cross]ACCU, TCM, GRAB 20, AB-CM. CSR, ENVIRO, GP
Classification Society:	American Bureau of Shipping
Major Casualty Amount	$2,000,000

m.v. Raiatea

Owner:	Chloe Owning Company Limited
Flag State	Republic of the Marshall Islands
Classification:	+KRS1 — BULK CARRIER 'ESP' (CSR) BC-A (Hold Nos. 2, 4, 6 And 8 may be empty) GRAB[20] SeaTrust(HCM) IWS ENV(IBWM,IAFS,IOPP,ISPP,IGPP,IAPP,IIHM,IEE) PSPC CHA LI +KRM1 — UMA STCM
Classification Society:	Korean Register of Shipping
Major Casualty Amount	$2,000,000

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Schedule 3 Conditions precedent

Part 1 Initial conditions precedent

1 Original Obligors' corporate documents

(a) Acopy of the Constitutional Documents of each Original Obligor.

(b) A copy of a resolution of the board of directors of each Original Obligor (or any committee of such board empowered to approve and authorise the following matters):

(i) approving the terms of, and the transactions contemplated by, the Finance Documents or any Charter (Relevant Documents)to which it is a party and resolving that it execute the Relevant Documents;

(ii) authorising a specified person or persons to execute the Relevant Documents on its behalf; and

(iii) authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, the Utilisation Request) to be signed and/or despatched by it under or in connection with the Relevant Documents to which it is a party.

(c) If applicable, a copy of a resolution of the board of directors of the relevant company, establishing any committee referred to in paragraph (b) above and conferring authority on that committee.

(d) A certified copy of the passport of each person authorised by the resolution referred to in paragraph (b) above.

(e) (If required by the Agent) a copy of a resolution signed by all the holders of the issued shares in each Original Obligor (other than the Parent), approving the terms of, and the transactions contemplated by, the Relevant Documents to which such Obligor is a party.

(f) A certificate of the Parent (signed by a director or officer) confirming that borrowing or guaranteeing or securing, as appropriate, the Total Commitments and the transactions contemplated by the Finance Documents, would not cause any borrowing, guaranteeing or similar limit binding on any Original Obligor to be exceeded or render any Original Obligor or the Group as a whole insolvent.

(g) A copy of any power of attorney under which any person is to execute any of the Relevant Documents on behalf of any Original Obligor.

(h) A certificate of an authorised signatory of the relevant Original Obligor certifying that each copy document relating to it specified in this Part of this Schedule is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement and that any such resolutions or power of attorney have not been revoked.

2 Legal opinions

(a) A legal opinion of Norton Rose Fulbright Greece, addressed to the Arranger, the Security Agent and the Agent on matters of English law, substantially in the form approved by the Agent.

147

(b) A legal opinion of the legal advisers to the Arranger, the Security Agent and the Agent in each jurisdiction in which an Obligor is incorporated substantially in the form approved by the Agent.

3 Other documents and evidence

(a) Evidence that any process agent referred to in clause 47.2 (Service of process) or any equivalent provision of any other Finance Document entered into on or before the Utilisation Date, if not an Original Obligor, has accepted its appointment.

(b) A copy of any other authorisation or other document, opinion or assurance which the Agent (acting on the instructions of the Majority Lenders) considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document.

(c) The Original Financial Statements.

4 "Know your customer" information

Such documentation and information as any Finance Party may reasonably request through the Agent or as the Security Agent may reasonably require (including specimen signatures) to comply with "know your customer" or similar identification procedures under all laws and regulations applicable to that Finance Party.

5 Share Security

The Share Security in respect of each Borrower and each Guarantor (other than the Parent) duly executed by the relevant Shareholders together with all letters, transfers, certificates and other documents required to be delivered under each such Share Security.

148

Part 2 Ship and security conditions precedent

1 Existing Indebtedness

(a) Evidence in all respects satisfactory to the Agent that the Existing Indebtedness has been, or will be immediately following the Utilisation, repaid in full, together with interest thereon together with any other amounts in relation to it owing by the Owners, and that any undrawn or available commitments in relation to it have been cancelled.

(b) Evidence that all Security Interests created by the Owners over or in relation to the Ships in respect of the Existing Indebtedness have been discharged.

(c) Evidence that all amounts outstanding under the $700,000,000 5% convertible senior unsecured notes of the Parent maturing on 1 December 2014, have been, or will be immediately following the Utilisation, repaid in full, in each case in a manner, form and substance in all respects acceptable to the Agent in its sole discretion (acting on the instructions of the Majority Lenders, acting reasonably).

2 Security

(a) The Mortgage and Deed of Covenant or General Assignment in respect of each Ship.

(b) If a Ship is subject to a Charter (including an Initial Charter) on the Utilisation Date, a Charter Assignment in respect of that Charter.

(c) Any Manager's Undertaking required pursuant to the Finance Documents duly executed by the relevant Owner of each Ship.

(d) Any Management Agreement Assignment in respect of each Management Agreement of each Ship.

(e) Duly executed notices of assignment in connection with the above Security Documents.

3 Registration of Ships

Evidence that each Ship (except m.v.s Woolloomooloo, Saldanha, Topeka, Helena, Partagas and Raiatea) in the case of paragraph (d) below):

(a) is legally and beneficially owned by the relevant Owner and registered in the name of the relevant Owner free from any Security Interests (other than Security Interests created under the Finance Documents) through the relevant Registry as a ship under the laws and flag of the relevant Flag State;

(b) is classed with the relevant Classification free of all requirements and recommendations of the relevant Classification Society;

(c) is insured in the manner required by the Finance Documents; and

(d) has been delivered for service to the initial Charterer under its Initial Charter.

4 Mortgage registration

Evidence that the Mortgage in respect of each Ship has been registered against the relevant Ship through the relevant Registry under the laws and flag of the relevant Flag State.

149

5 Insurance

In relation to each Ship's Insurances:

(a) an opinion from approved insurance consultants appointed by the Agent on such Insurances;

(b) evidence that such Insurances have been placed in accordance with clause 24 (Insurance); and

(c) evidence that approved brokers, insurers and/or associations have issued or will issue letters of undertaking in favour of the Security Agent in an approved form in relation to the Insurances.

6 ISM and ISPS Code

Copies of:

(a) the document of compliance issued in accordance with the ISM Code to the person who is the operator of each Ship for the purposes of that code;

(b) the safety management certificate in respect of each Ship issued in accordance with the ISM Code; and

(c) the international ship security certificate in respect of each Ship issued under the ISPS Code.

7 Value of security

Valuations (dated not more than 30 days before the Utilisation Date) of all Ships, each prepared by two (2) Approved Brokers, made on the basis of, and in accordance with, clause 25 (Minimum security value), in each case made at the cost and expense of the Borrowers.

8 Fees and expenses

Evidence that the fees, commissions, costs and expenses that are due from the Borrowers pursuant to clause 11 (Fees) and clause 16 (Costs and expenses) have been paid or will be paid by the Utilisation Date.

9 Environmental matters

If applicable, copies of each Ship's certificate of financial responsibility and vessel response plan required under United States law and evidence of their approval by the appropriate United States government entity and (if requested by the Agent) an environmental report in respect of each Ship from an approved person.

10 Management Agreement

Where a manager has been approved in accordance with clause 22.3 (Manager), a copy, certified by an approved person to be a true and complete copy, of the Management Agreement in respect of each Ship.

11 Legal Opinions

A legal opinion of the legal advisers to the Arranger, the Security Agent and the Agent in England and also in each jurisdiction in which an Obligor is incorporated and/or which is or is to be the Flag State of a Ship, substantially in the form approved by the Agent.

150

12 Initial Charters

Certified true copies of the initial Charters in a form acceptable to the Agent in its absolute discretion.

13 Structure chart

A copy of the Group structure chart as at the Utilisation Date.

14 Bank Accounts

Evidence that any Account required to be established under clause 27 (Bank accounts) has been opened and established, that any Account Security in respect of each such Account has been executed and delivered by the relevant Account Holder(s) in favour of the Security Agent and/or any of the other Finance Parties and that any notice required to be given to an Account Bank under that Account Security has been given to it and acknowledged by it in the manner required by that Account Security and that an amount has been credited to it.

151

Schedule 4 Utilisation Request

From:	The entities listed as Borrowers in the Agreement referred to below
To:	Nordea Bank Finland Plc, London Branch (as Agent)
Dated:	[·]

Dear Sirs

$170,000,000

Facility Agreement dated [·] 2014 (the "Agreement")

1 We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.

2 We wish to borrow the Loan on the following terms:

Proposed Utilisation Date:	[·] (or, if that is not a Business Day, the next Business Day)
Amount:	$ [·]

3 We confirm that each condition specified in clause 4.4 (Further conditions precedent) (including in relation to no Default and accuracy of representations and warranties) is satisfied on the date of this Utilisation Request.

4 The purpose of the Loan is [specify purpose complying with clause 3 of the Agreement] and its proceeds should be credited to [·] [specify account].

5 We request that the first Interest Period for the Loan be [·] months.

6 This Utilisation Request is irrevocable.

Yours faithfully

authorised signatory for

and on behalf of the following corporations

[NB: insert all 9 Borrowers]

152

Schedule 5 Selection Notice

From:	The entities listed as Borrowers in the Agreement referred to below
To:	Nordea Bank Finland Plc, London Branch (as Agent)
Dated:	[·]

Dear Sirs

$170,000,000

Facility Agreement dated [·] 2014 (the "Agreement")

1 We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.

2 We request that the next interest Period be [·] months.

3 This Selection Notice is irrevocable.

Yours faithfully

authorised signatory for

and on behalf of the following corporations

[NB: insert all 9 Borrowers]

153

Schedule 6 Form of Transfer Certificate

To:	[·] as Agent
From:	[The Existing Lender] (the Existing Lender) and [The New Lender] (the New Lender)
Dated:

$170,000,000 Facility Agreement dated [•] 2014 as amended, supplemented and restated to date (the "Agreement")

1 We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

2 We refer to clause 32.5 (Procedure for transfer):

(a) The Existing Lender and the New Lender agree to the Existing Lender assigning to the New Lender all or part of the Existing Lender's Commitment rights and assuming the Existing Lender's obligations referred to in the Schedule in accordance with clause 32.5 (Procedure for transfer) and the Existing Lender assigns and agrees to assign such rights to the New Lender with effect from the Transfer Date]

(b) The proposed Transfer Date is [•].

(c) The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of clause 39.2 (Addresses) are set out in the Schedule.

3 The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in clause 32.4.3.

4 The New Lender confirms that it is [not] a Parent Affiliate.

5 This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.

6 [Consider including reference to accession to an intercreditor agreement, mortgage or other Finance Documents to which Lenders may need to be party and checklist of steps necessary for the New Lender to obtain the benefit of the Security Documents.]

7 This Transfer Certificate and any non-contractual obligations connected with it are governed by English law.

8 This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.

Note: The execution of this Transfer Certificate alone may not assign a proportionate share of the Existing Lender's interest in the Security Interests constituted by the Security Documents in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect an assignment of such a share in the Existing Lender's interest in the Security Interests constituted by the Security Documents in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

154

The Schedule

Commitment/rights to be assigned and obligations to be assumed

[insert relevant details]

Facility Office address, fax number and attention details for notices and account details for payments

[insert relevant details]

[Existing Lender]	[New Lender]
By:	By:

This Transfer Certificate is accepted by the Agent and the Transfer Date is confirmed to be as stated above.

[Agent]

By:

155

Schedule 7

Form of Compliance Certificate

To:	Nordea Bank Finland Plc, London Branch as Agent
From:	DryShips Inc.
Dated:	[·]

Dear Sirs

$170,000,000 Facility Agreement dated [·] 2014 as amended, supplemented and restated to date (the "Agreement")

1 We refer to the Agreement. This is a Compliance Certificate. Terms defined in clause 20.1 (Financial definitions) of the Agreement and otherwise in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

2 I/We confirm that, as at the end of the Measurement Period ended on [·]:

(a) Tangible Net Worth: the Tangible Net Worth was $[·], calculated as shown in Appendix A and compared against a minimum required amount of $500,000,000.

(b) Equity ratio: the ratio of (i) Shareholders' Equity to (ii) Total Assets was [·]:1, calculated as shown in Appendix B and compared against a minimum required ratio of 0.30:1.00.

(c) Minimum liquidity: Cash and Cash Equivalents are $[·], calculated as shown in Appendix C and compared against a minimum required amount of $50,000,000.

(d) Dividend Amount: the aggregate amount of all dividends, distributions and payments made or declared by the Parent in respect of each fiscal quarter that ended during the Measurement Period is $[·] versus the maximum permitted amount of $[·] for each relevant fiscal quarter, being an amount equal to 50% of the consolidated net income of the Group for the relevant fiscal quarter (which was $[•], as shown in Appendix D).

3 We confirm that the Security Value is $[·], calculated pursuant to valuations dated [S] (insert date of valuations, not older than 30 days) attached in Appendix E, compared against a Minimum Value of $[·]calculated as shown in Appendix E.]

4 [We confirm that no Default is continuing.] [If this statement cannot be made, the certificate should identify any Default that is continuing and the steps, if any, being taken to remedy it.]

Signed by:

Signed by:

Authorised signatory

DRYSHIPS INC.

156

Schedule 8 Forms of Notifiable Debt Purchase Transaction Notice

Form of Notice on Entering into Notifiable Debt Purchase Transaction

To:	Nordea Bank Finland Plc, London Branch as Agent
From:	[The Lender]
Dated:

$170,000,000 Facility Agreement dated [·] 2014 as amended, supplemented and restated to date (the "Facility Agreement")

1 We refer to clause 33.3 (Disenfranchisement on Debt Purchase Transactions entered into by Parent Affiliates) of the Facility Agreement. Terms defined in the Facility Agreement have the same meaning in this notice unless given a different meaning in this notice.

2 We have entered into a Notifiable Debt Purchase Transaction.

3 The Notifiable Debt Purchase Transaction referred to in paragraph 2 above relates to the amount of our Commitment(s) as set out below.

	Commitment	Amount of our Commitment to which Notifiable Debt Purchase Transaction relates
	[·]	[insert amount (of Commitment) to which the relevant Debt Purchase Transaction applies]
[Lender]
			By:

157

Form of Notice on Termination of Notifiable Debt Purchase Transaction / Notifiable Debt Purchase Transaction ceasing to be with Parent Affiliate

To:	Nordea Bank Finland Plc, London Branch as Agent
From:	[The Lender]
Dated:

$170,000,000 Facility Agreement dated  [·] 2014 as amended, supplemented and restated to date (the "Facility Agreement")

1. We refer to clause 33.3 (Disenfranchisement on Debt Purchase Transactions entered into by Parent Affiliates) of the Facility Agreement. Terms defined in the Facility Agreement have the same meaning in this notice unless given a different meaning in this notice.

2 A Notifiable Debt Purchase Transaction which we entered into and which we notified you of in a notice dated [ ] has [terminated]/[ceased to be with a Parent Affiliate].

3 The Notifiable Debt Purchase Transaction referred to in paragraph 2 above relates to the amount of our Commitment(s) as set out below.

	Commitment	Amount of our Commitment to which Notifiable Debt Purchase Transaction relates (Base Currency)
	[·]	[insert amount (of Commitment) to which the relevant Debt  Purchase Transaction applies]
[Lender]
By

158

Schedule 9 Initial Charters

Ship	Initial Charterer	Date of Initial Charter	Start date	Expiry date	Gross daily charter-rate
Raiatea	Classic Maritime Inc.	6 August 2014	31 January 2015	31 December 2019 or 31 February 2019 (at the Initial Charterer's option)	$23,500
Cohiba	Classic Maritime Inc.	6 August 2014	9 October 2014	9 September 2019 or 9 November 2019 (at the Initial Charterer's option)	$23,500
Robusto	Classic Maritime Inc.	6 August 2014	20 August 2014	20 July 2019 or 20 September 2019 (at the Initial Charterer's option)	$23,500
Montecristo	Classic Maritime Inc.	6 August 2014	15 August 2014	15 April 2019 or 15 September 2019 (at the Initial Charterer's option)	$23,500
Partagas	Classic Maritime Inc.	6 August 2014	31 October 2014	31 September 2019 or 31 November 2019 (at the Initial Charterer's option)	$23,500

159

Schedule 10 Designated Facilities

160

Designated Facilities

#	Document Title	Date	Maturity	Borrowers	Agent/Lender	Original Amount	Outstanding Amount (as of 30.09.14)	Current/Potential Covenant Breach	Status
1	US$518.8 million senior loan facilities and US$110.0 million junior loan facilities (Vessels Various)	31-Mar-06	Q2-16	Dryships Inc.	HSH Nordbank AG	US$518.8m & US$110.0m	US$174.4m	Market Adjusted Equity Ratio (40%) Interest Coverage Ratio (3:0) Value Maintenance Clause: (Senior 170%, Senior Junior 140%)	Relaxation of MAER (25%) and ICR (1.5) until 31.12.14 (inclusive), VMC in unconfirmed but potential breach, documentation complete
2	US$ 35.0 million secured term loan facility (Vessel Byron)	02-Oct-07	Q4-16	Ioli Owning Company Limited	Commerzbank AG	US$35.0m	US$12.8m	Market Adjusted Equity Ratio (40%) Value Maintenance Clause (125%)	VMC in unconfirmed but potential breach, No waiver in place, not yet approached by the Lenders
3	US$90.0 million secured term loan facility (Vessel: Samatan Galveston)	05-Oct-07	Q4-15	Boone Star Owners Inc. Iekasti Owning Company Limited	Piraeus Bank	US$90.0m	US$54.5m	Value Maintenance Clause (125%)	VMC waiver until 31.12.14 (inclusive); pending documentation
4	US$47.0 million secured term loan facility (Vessel: Oregon)	16-Nov-07	Q4-15	Iason Owning Company Limited	EFG Eurobank Ergasias SA	US$47.0m	US$14.5m	Interest Coverage Ratio (3:0) Value Maintenance Clause (130%)	No waiver in place; not yet approached by the Lenders
5	US130.0 million secured term loan facility (Vessel: Amalfi)	13-Mar-08	Q1-15	Ialysos Owning Company Limited	Piraeus Bank	US$130.0m	US$30.2m	Value Maintenance Clause (125%)	VMC waiver until 31.12.14 (inclusive); pending documentation
6	US$90.0 million secured term loan facility (Vessel: Mystic)	05-May-08	Q4-15	Dalian Star Owners Inc.	Commerzbank AG	US$90.0m	US$33.0m	Interest Coverage Ratio (3:0)	No waiver in place; not yet approached by Lenders
7	US$125.0 million secured term loan facility (Vessel: Capri)	13-May-08	Q2-16	Norwalk Star Owners Inc.	Commerzbank AG	US$125.0m	US$17.2	Market Adjusted Equity Ratio (40%) Interest Coverage Ratio (3:0)	No waiver in place; not yet approached by the Lenders
8	US$103.2 million secured loan facility (Vessel: Sorrento)	20-Jun-08	Q3-16	Aegean Traders Inc.	Portigon AG	US$103.2m	US$22.0m	Interest Coverage Ratio (3:0)	Relaxation of ICR until 31.12.14 (inclusive); documentation pending
9	US$126.4 million secured laon facility (Vessels: Flecha, Rapallo)	23-Jul-08	Q2-18	Cretan Traders Inc.	Nord LB	US$126.4m	US$42.3m	Value Maintenance Clause (125%)	VMC in unconfirmed but potential breach
10	US$141.4 million secured term loan facility (Vessels: Belmar, Calida, Lipari and Petalidi)	26-Oct-11	Q2-19	Olympian Ares Owners Inc. Olympian Artemis Owners Inc. Olympian Demeter Owners Inc. Olympian Poseidon Owners Inc.	ABN Amro Bank NV	US$141.1m	US$115m	Interest Coverage Ratio (3:0)	Waiver of ICR until 31.12.14 (inclusive); documentation complete
11	US$87.7 million secured term loan facility (Vessel: Raraka)	19-Mar-12	Q1-20	Amathus Owning Company Limited	HSH Nordbank AG	US$87.7m	US$16.1m	Market Adjusted Equity Ratio (40%) Interest Coverage Ratio (3:0)	Relaxation of MAER (25%) and ICR (1.5) until 31.12.14 (inclusive); documentation complete
12	US$107.7 million secured term loan facility (Vessel: Alicante, Mareta, Bordeira)	24-Oct-12	Q1-19	Olympian Athena Owners Inc. Olympian Aphrodite Owners Inc. Olympian Dionysus Owners Inc.	ABN Amro Bank NV	US$107.7	US$88.2m	Interest Coverage Ratio (3:0)	Waiver of ICR until 31.12.14 (inclusive); documentation complete

Schedule 11 Designated Entities

1 Oceanship Shareholdings Limited of 80 Broad Street, Monrovia, Republic of Liberia

2 Oceanship Owners Limited of 80 Broad Street, Monrovia, Republic of Liberia

3 Oceanwealth Shareholdings Limited of 80 Broad Street, Monrovia, Republic of Liberia

4 Oceanwealth Owners Limited of 80 Broad Street, Monrovia, Republic of Liberia

5 Oceanventure Shareholdings Limited of 80 Broad Street, Monrovia, Republic of Liberia

6 Oceanventure Owners Limited of 80 Broad Street, Monrovia, Republic of Liberia

7 Oceanresources Shareholdings Limited of 80 Broad Street, Monrovia, Republic of Liberia

8 Oceanresources Owners Limited of 80 Broad Street, Monrovia, Republic of Liberia

9 Oceanstrength Shareholdings Limited of 80 Broad Street, Monrovia, Republic of Liberia

10 Oceanstrength Owners Limited of 80 Broad Street, Monrovia, Republic of Liberia

11 Oceanprime Shareholdings Limited of 80 Broad Street, Monrovia, Republic of Liberia

12 Oceanprime Owners Limited of 80 Broad Street, Monrovia, Republic of Liberia

13 Oceanclarity Shareholdings Limited of 80 Broad Street, Monrovia, Republic of Liberia

14 Oceanclarity Owners Limited of 80 Broad Street, Monrovia, Republic of Liberia

15 Oceanfighter Shareholders Inc. of 80 Broad Street, Monrovia, Republic of Liberia

16 Oceanfighter Owners Inc. of 80 Broad Street, Monrovia, Republic of Liberia

17 Ocean faith Shareholders Inc. of 80 Broad Street, Monrovia, Republic of Liberia

18 Ocean faith Owners Inc. of 80 Broad Street, Monrovia, Republic of Liberia

19 Ocean Blue Spirit Shareholders Inc. of 80 Broad Street, Monrovia, Republic of Liberia

20 Ocean Blue Spirit Owners Inc. of 80 Broad Street, Monrovia, Republic of Liberia

21 Kifissia Star Shareholders Inc. of 80 Broad Street, Monrovia, Republic of Liberia

22 Kifissia Star Owners Inc. of 80 Broad Street, Monrovia, Republic of Liberia

23 Pasifai Shareholders Limited of 80 Broad Street, Monrovia, Republic of Liberia

24 Pasifai Owning Company Limited of 80 Broad Street, Monrovia, Republic of Liberia

25 Amazon Shareholders Limited of 80 Broad Street, Monrovia, Republic of Liberia

26 Amazon Owning Company Limited of 80 Broad Street, Monrovia, Republic of Liberia

27 Freightwise Investments Ltd. of 80 Broad Street, Monrovia, Republic of Liberia

161

28 Oceanview Shareholders Limited of 80 Broad Street, Monrovia, Republic of Liberia

29 Oceansurf Shareholders Limited of 80 Broad Street, Monrovia, Republic of Liberia

30 Oceancentury Shareholders Limited of 80 Broad Street, Monrovia, Republic of Liberia

31 Oceanview Owners Limited of 80 Broad Street, Monrovia, Republic of Liberia

32 Oceansurf Owners Limited of 80 Broad Street, Monrovia, Republic of Liberia

33 Oceancentury Owners Limited of 80 Broad Street, Monrovia, Republic of Liberia

162

SIGNATURES
THE BORROWERS
OCEANFIRE OWNERS INC.	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
	)	Attorney-in-fact

OCEANRUNNER OWNERS LIMITED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
	)	Attorney-in-fact

OCEANPOWER OWNERS INC.	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
	)	Attorney-in-fact

OCEANTRADE OWNERS LIMITED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
	)	Attorney-in-fact

OCEANWAVE OWNERS LIMITED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
	)	Attorney-in-fact

OCEANENERGY OWNERS LIMITED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
	)	Attorney-in-fact

TEAM-UP OWNING COMPANY LIMITED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
	)	Attorney-in-fact

PERGAMOS OWNING COMPANY LIMITED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
	)	Attorney-in-fact

CHLOE OWNING COMPANY LIMITED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
	)	Attorney-in-fact

THE PARENT

DRYSHIPS INC.	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
	)	Attorney-in-fact

163

THE GUARANTORS

DRYSHIPS INC.	)
EXECUTED as of DEED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
In the presence of:	)	Attorney-in-fact

/s/ Anthony Paizes

Witness

Name: Anthony Paizes

Address:  1 Palea Leof, Posidonio, Athens

Occupation:  Solicitor

OCEANFREIGHT INC.	)
EXECUTED as of DEED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
In the presence of:	)	Attorney-in-fact

/s/ Anthony Paizes

Witness

Name: Anthony Paizes

Address:  1 Palea Leof, Posidonio, Athens

Occupation:  Solicitor

OCEANFIRE SHAREHOLDERS INC.	)
EXECUTED as of DEED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
In the presence of:	)	Attorney-in-fact

/s/ Anthony Paizes

Witness

Name: Anthony Paizes

Address:  1 Palea Leof, Posidonio, Athens

Occupation:  Solicitor

OCEANRUNNER SHAREHOLDERS LIMITED.	)
EXECUTED as of DEED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
In the presence of:	)	Attorney-in-fact

/s/ Anthony Paizes

Witness

Name: Anthony Paizes

Address:  1 Palea Leof, Posidonio, Athens

Occupation:  Solicitor

164

OCEANPOWER SHAREHOLDERS INC.	)
EXECUTED as of DEED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
In the presence of:	)	Attorney-in-fact

/s/ Anthony Paizes

Witness

Name: Anthony Paizes

Address:  1 Palea Leof, Posidonio, Athens

Occupation:  Solicitor

OCEANTRADE SHAREHOLDINGS LIMITED	)
EXECUTED as of DEED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
In the presence of:	)	Attorney-in-fact

/s/ Anthony Paizes

Witness

Name: Anthony Paizes

Address:  1 Palea Leof, Posidonio, Athens

Occupation:  Solicitor

OCEANWAVE SHAREHOLDERS LIMITED	)
EXECUTED as of DEED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
In the presence of:	)	Attorney-in-fact

/s/ Anthony Paizes

Witness

Name: Anthony Paizes

Address:  1 Palea Leof, Posidonio, Athens

Occupation:  Solicitor

OCEANENERGY SHAREHOLDINGS LIMITED	)
EXECUTED as of DEED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
In the presence of:	)	Attorney-in-fact

/s/ Anthony Paizes

Witness

Name: Anthony Paizes

Address:  1 Palea Leof, Posidonio, Athens

Occupation:  Solicitor

165

TEAM-UP SHAREHOLDINGS LIMITED	)
EXECUTED as of DEED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
In the presence of:	)	Attorney-in-fact

/s/ Anthony Paizes

Witness

Name: Anthony Paizes

Address:  1 Palea Leof, Posidonio, Athens

Occupation:  Solicitor

PERGAMOS SHAREHOLDERS LIMITED	)
EXECUTED as of DEED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
In the presence of:	)	Attorney-in-fact

/s/ Anthony Paizes

Witness

Name: Anthony Paizes

Address:  1 Palea Leof, Posidonio, Athens

Occupation:  Solicitor

CHLOE SHAREHOLDERS LIMITED	)
EXECUTED as of DEED	)
By:  Dimitrios Glynos	)	/s/ Dimitrios Glynos
In the presence of:	)	Attorney-in-fact

/s/ Anthony Paizes

Witness

Name: Anthony Paizes

Address:  1 Palea Leof, Posidonio, Athens

Occupation:  Solicitor

THE ARRANGER

NORDEA BANK FINLAND PLC, LONDON BRANCH	)
By:  Evangelia Platsidaki	)	/s/ Evagelia Platsidaki
	)	Attorney-in-fact

THE BOOKRUNNER

NORDEA BANK FINLAND PLC, LONDON BRANCH	)
By:  Evangelia Platsidaki	)	/s/ Evagelia Platsidaki
	)	Attorney-in-fact

166

THE AGENT

NORDEA BANK FINLAND PLC, LONDON BRANCH	)
By:  Evangelia Platsidaki	)	/s/ Evagelia Platsidaki
	)	Attorney-in-fact

THE SECURITY AGENT

NORDEA BANK AB, LONDON BRANCH	)
By:  Evangelia Platsidaki	)	/s/ Evagelia Platsidaki
	)	Attorney-in-fact

THE ORIGINAL LENDER

NORDEA BANK FINLAND PLC, LONDON BRANCH	)
By:  Evangelia Platsidaki	)	/s/ Evagelia Platsidaki
	)	Attorney-in-fact

NORDDEUTSCHE LANDESBANK GIROZENTRALE	)
By:  Evangelia Platsidaki	)	/s/ Evagelia Platsidaki
	)	Attorney-in-fact

ITF INTERNATIONAL TRANSPORT FINANCE SUISSE AG	)
By:  Evangelia Platsidaki	)	/s/ Evagelia Platsidaki
	)	Attorney-in-fact

THE ORIGINAL HEDGING PROVIDERS

NORDEA BANK FINLAND PLC	)
By:  Evangelia Platsidaki	)	/s/ Evagelia Platsidaki
	)	Attorney-in-fact

167

EX-4.183

Exhibit 4.183

Dated 12 November 2014

AEGEAN TRADERS INC. as Borrower

and

DRYSHIPS INC. as Corporate Guarantor

and

PORTIGON AG, LONDON BRANCH(formerly known as WestLB AG, London Branch) as Lender

SECOND SUPPLEMENTAL AGREEMENT
in relation to a Loan Agreement dated 20 June 2008 as amended on 8 October 2009 and as amended and restated on 18 January 2010 in respect of a loan facility of (originally) up to US$103,200,000

INDEX

Clause		Page
1	Definitions	2
2	Representations and Warranties	2
3	Agreement of the Lenders	3
4	Conditions	3
5	Variations to Guarantee and Finance Documents	4
6	Fees and Expenses	5
7	Communications	5
8	Supplemental	6
9	Law and Jurisdiction	6
Schedule 1 Lender		7
Execution		8

THIS SUPPLEMENTAL AGREEMENT is dated 12 November 2014 and made

BETWEEN:

(1) AEGEAN TRADERS INC., a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH96960 (the "Borrower");

(2) DRYSHIPS INC., a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH96960 (the "Corporate Guarantor"); and

(3) PORTIGON AG, LONDON BRANCH (formerly known as WestLB AG, London Branch), a company incorporated in Germany having its registered office at Herzogstrasse 15, 40217 Duesseldorf, Germany and acting through its London branch at Woolgate Exchange, 25 Basinghall Street, London EC2V 5HA, England (the "Lender", which expression shall include its successors and assigns).

BACKGROUND

(A) By a loan agreement originally dated 20 June 2008, (as amended by a first supplemental letter dated 8 October 2009 and as amended and restated on 18 January 2010, the "Loan Agreement") made between (i) the Borrower and Iguana Shipping Company Limited ("Iguana") as joint and several borrowers (together, the "Borrowers") and (ii) the Lender as lender, it was agreed that the Lender would make available to the Borrowers a loan facility of (originally) up to US$103,200,000 (the "Loan") of which US$21,250,000 remains outstanding by way of principal on the date of this Agreement.

(B) By a guarantee (the "Guarantee") dated 20 June 2008 executed by the Corporate Guarantor in favour of the Lender, the Corporate Guarantor guaranteed the obligations of the Borrowers under the Loan Agreement and the other Finance Documents (as defined in the Loan Agreement).

(C) Pursuant to the repayment in full of the portion of the Loan which relates to Iguana, Iguana has requested, and the Lender has agreed, to release Iguana from its obligations under the Finance Documents to which it is a party on or before the date of this Agreement.

(D) The Borrower and the Corporate Guarantor have requested that the Lender agrees to reduce (the "Waiver") the interest cover ratio set out in clause 11.15(b) of the Guarantee from 3:1 to 1:1 in respect of the period 31 December 2012 to 31 December 2014 (inclusive, and with retroactive effect).

(E) This Supplemental Agreement sets out the terms and conditions on which the Lender agrees to:

(i) the Waiver; and

(ii) the consequential amendments to the Loan Agreement and the other Finance Documents in connection with those matters (the "Consequential Amendments").

NOW THEREFORE IT IS HEREBY AGREED

1 DEFINITIONS

1.1 Defined Expressions

Words and expressions defined in the Loan Agreement and Guarantee (each as hereby amended) and the recitals hereto and not otherwise defined herein shall have the same meanings when used in this Supplemental Agreement.

1.2 Definitions

In this Supplemental Agreement, "Effective Date"means the date on which the conditions precedent in Clause 4 are satisfied,

1.3 Application of construction and interpretation of Loan Agreement.

Clauses 1.2 and 1.5 of the Loan Agreement and clauses 1.2 and 1.3 of the Guarantee apply, with any necessary modifications to this Supplemental Agreement.

2 REPRESENTATIONS AND WARRANTIES

2.1 Repetition of representations and warranties

The Borrower and the Corporate Guarantor hereby represent and warrant to the Lender, as at the date of this Supplemental Agreement, that the representations and warranties set forth in clause 9 of the Loan Agreement and, in the case of the Corporate Guarantor, clause 10 of the Guarantee (each updated mutatis mutandis to the date of this Supplemental Agreement) are true and correct as if all references therein to "this Agreement" or, in the case of the Guarantee, this "Guarantee" were references to the Loan Agreement and the Guarantee, respectively, each as amended by this Supplemental Agreement.

2.2 Further representations and warranties

The Borrower and the Corporate Guarantor hereby further represent and warrant to the Lender that as at the date of this Supplemental Agreement:

(a) each is existing and in good standing under the laws of the Marshall Islands and has full power to enter into and perform its obligations under this Supplemental Agreement and has complied with all statutory and other requirements relative to its business, and does not have an established place of business in any part of the United Kingdom or the United States of America;

(b) all necessary governmental or other official consents, authorisations, approvals, licences, consents or waivers for the execution, delivery, performance, validity and/or enforceability of this Supplemental Agreement and all other documents to be executed in connection with the amendments to the Loan Agreement or, as the case may be, the Guarantee as contemplated hereby have been obtained and will be maintained in full force and effect, from the date of this Supplemental Agreement and so long as any moneys are owing under any of the Finance Documents and while all or any part of the Commitment remains outstanding;

(c) each has taken all necessary corporate and other action to authorise the execution, delivery and performance of its obligations under this Supplemental Agreement and such other documents to which it is a party and such documents do or will upon execution thereof constitute its valid and binding obligations enforceable in accordance with their respective terms;

(d) the execution, delivery and performance of this Supplemental Agreement and all such other documents as contemplated hereby does not and will not, from the date of this Supplemental Agreement and so long as any moneys are owing under any of the Finance Documents and while all or any part of the Commitment remains outstanding, constitute a breach of any contractual restriction or any existing applicable law, regulation, consent or authorisation binding on the Borrower and/or the Corporate Guarantor or on any of their property or assets and will not result in the creation or imposition of any security interest, lien, charge or encumbrance (other than under the Finance Documents) on any of such property or assets; and

(e) each has fully disclosed in writing to the Lender all facts which it knows or which it should reasonably know and which are material for disclosure to the Lender in the context of this Supplemental Agreement and all information furnished by that Borrower and/or the Corporate Guarantor or on its behalf relating to its business and affairs in connection with this Supplemental Agreement was and remains true, correct and complete in all material respects and there are no other material facts or considerations the omission of which would render any such information misleading.

3 AGREEMENT OF THE LENDERS

3.1 Agreement of the Lenders

The Lender, relying upon each of the representations and warranties set out in Clauses 2.1 and 2.2 of this Supplemental Agreement, hereby agrees with the Corporate Guarantor and the Borrower, subject to and upon the terms and conditions of this Supplemental Agreement and in particular, but without limitation, subject to the fulfilment of the conditions precedent set out in Clause 4, to:

(a) the Waiver; and

(b) the Consequential Amendments.

3.2 Other parties' agreement and confirmation

The Borrower and the Corporate Guarantor agree and confirm that the Guarantee, the Loan Agreement and the Finance Documents to which each is a party shall remain in full force and effect and each of the Borrower and the Corporate Guarantor shall remain liable under the Loan Agreement, the Guarantee and the Finance Documents to which each is a party for all obligations and liabilities assumed by it thereunder.

3.3 Agreement of Lenders

The agreement of the Lenders contained in Clause 3.1 shall have effect on and from the Effective Date.

4 CONDITIONS

4.1 Conditions precedent

The agreements of the Lender contained in Clause 3.1 of this Supplemental Agreement shall all be expressly subject to the condition that the Lender shall have received in form and substance satisfactory to it and its legal advisers on or before on or before the Effective Date:

(a) up-to-date certificates of goodstanding in respect of the Borrower and the Corporate Guarantor;

(b) evidence that the persons executing this Supplemental Agreement on behalf of the Borrower and the Corporate Guarantor are duly authorised to execute the same;

(c) true and complete copy of the resolutions passed at separate meetings of the directors and members of the Borrower and the Corporate Guarantor authorising and approving the execution of this Supplemental Agreement and, in each case, any other document or action to which it is or is to be a party and authorising its directors or other representatives to execute the same on the relevant party's behalf;

(d) the original of any power of attorney issued by the Borrower and the Corporate Guarantor pursuant to such resolutions aforesaid;

(e) all documentation required by the Lender in relation to the Borrower and any Security Party pursuant to the Lender's "know your customer" requirements";

(f) evidence that the amendment fee referred to in Clause 6.1 has been paid in full;

(g) certified copies of all documents (with a certified translation if an original is not in English) evidencing any other necessary action, approvals or consents with respect to this Supplemental Agreement (including without limitation all necessary governmental and other official approvals and consents in such pertinent jurisdictions as the Lender deems appropriate);

(h) no Event of Default or Potential Event of Default being in existence on the Effective Date;

(i) such legal opinions as the Lender may require in respect of the matters contained in this Supplemental Agreement; and

(j) evidence that the agent referred to in clause 30.4 of the Loan Agreement and clause 18.4 of the Guarantee has accepted its appointment as agent for service of process under this Supplemental Agreement.

5 VARIATIONS TO GUARANTEE AND FINANCE DOCUMENTS

5.1 Specific amendments to the Loan Agreement and the Guarantee

In consideration of the agreement of the Lender contained in Clause 3.1 of this Supplemental Agreement, the Borrower and the Corporate Guarantor hereby agree with the Lender that upon satisfaction of the conditions referred to in Clause 4.1, the provisions of the Loan Agreement and the Guarantee shall be varied and/or amended and/or supplemented with effect on and from the Effective Date as follows:

(a) by adding the following new definitions in clause 1.1 of the Loan Agreement:

" "Additional Waiver Period" means the period starting on 31 December 2012 to 31 December 2014 (inclusive);";

" "Second Supplemental Agreement" means the second supplemental agreement to this Agreement dated 12 November 2014 and entered into between Aegean Traders Inc., the Corporate Guarantor and the Lender;

(b) by adding the following new definition in clause 1.1 of the Guarantee:

" "Additional Guarantor Waiver Period" means the period starting on 31 December 2012 to 31 December 2014 (inclusive); ";

(c) by substituting clause 11.15(b) of the Guarantee with the following:

" "(b) the Interest Coverage Ratio shall not be less than 3:1, except for during the Additional Guarantor Waiver Period, during which the Interest Cover Ratio shall not be less than 1:1;" "; and

(d) by construing references throughout the Loan Agreement and the Guarantee to "this Agreement", "this Guarantee", "hereunder" and other like expressions as if the same referred to the Loan Agreement or, as the case may be to the Guarantee as amended and supplemented by this Supplemental Agreement.

5.2 Amendments to Finance Documents

With effect on and from the Effective Date each of the Finance Documents other than the Loan Agreement and the Guarantee shall be, and shall be deemed by this Supplemental Agreement to have been, amended as follows:

(a) the definition of, and references throughout each of the Finance Documents to the Loan Agreement and Guarantee and any of the other Finance Documents shall be construed as if the same referred to the Loan Agreement and Guarantee and those Finance Documents as amended and supplemented by this Supplemental Agreement; and

(b) by construing references throughout each of the Finance Documents to "this Agreement", "this Deed", "hereunder" and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this Supplemental Agreement.

5.3 Finance Documents to remain in full force and effect

The Finance Documents shall remain in full force and effect as amended and supplemented by:

(a) the amendments to the Finance Documents contained or referred to in Clauses 5.1 and 5.2; and

(b) such further or consequential modifications as may be necessary to make the same consistent with, and to give full effect to, the terms of this Supplemental Agreement.

6 FEES AND EXPENSES

6.1 Amendment fee

The Borrower shall pay to the Lender a non-refundable amendment fee of $10,000 on the date of this Supplemental Agreement.

6.2 Fees and expenses

The provisions of clause 19 (fees and expenses) of the Loan Agreement shall apply to this Supplemental Agreement as if they were expressly incorporated in this Supplemental Agreement with any necessary amendments.

7 COMMUNICATIONS

7.1 General

The provisions of clause 27 (notices) of the Loan Agreement and clause 16 of the Guarantee, as amended and supplemented by this Supplemental Agreement, shall apply to this Supplemental Agreement as if they were expressly incorporated in this Agreement with any necessary modifications.

8 SUPPLEMENTAL

8.1 Counterparts

This Supplemental Agreement may be executed in any number of counterparts.

8.2 Third Party rights

A person who is not a party to this Supplemental Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Supplemental Agreement.

9 LAW AND JURISDICTION

9.1 Governing law

This Supplemental Agreement and any non-contractual obligations arising out of, or in connection with, it shall be governed by and construed in accordance with English law.

9.2 Incorporation of the Loan Agreement provisions

The provisions of clause 30 of the Loan Agreement (law and jurisdiction) and clause 18 (governing law and jurisdiction) of the Guarantee, as amended and supplemented by this Supplemental Agreement, shall apply to this Supplemental Agreement as if they were expressly incorporated in this Supplemental Agreement with any necessary modifications.

IN WITNESS WHEREOF the parties hereto have caused this Supplemental Agreement to be duly executed the day and year first above written.

SCHEDULE 1

LENDER

Lender	Lending Office
PORTIGON AG, LONDON BRANCH	Woolgate Exchange25 Basinghall StreetLondon EC2V SHA England

EXECUTION

BORROWER
SIGNED by GEOFFROY GUNET	)
for and on behalf of	)	/s/ Geoffroy Gunet
AEGEAN TRADERS INC.	)

CORPORATE GUARANTOR
SIGNED by GEOFFROY GUNET	)
for and on behalf of	)	/s/ Geoffroy Gunet
DRYSHIPS INC.	)

LENDER
SIGNED by MARINOS PAPADOPOULOS	)
for and on behalf of	)	/s/ Marinos Papadopoulos
PORTIGON AG, LONDON BRANCH	)
(formerly known as WestLB AG, London Branch)	)

Witness to all the	)
above signatures	)	/s/ Daphne Elektra A. Stamatopoulos
Name: Address:		DAPHNE ELEKTRA A. STAMATOPOULOSSOLICITORWATSON, FARLEY & WILLIAMS348 SYNGROU AVENUE176 74 KALLITHEAATHENS - GREECE

EX-4.184

Exhibit 4.184

Dated 14 November 2014

US$200,000,000

TERM LOAN FACILITY

DRYSHIPS INC. as Borrower

THE FINANCIAL INSTITUTIONSLISTED IN PART B OF SCHEDULE 1 as Original Lenders

ABN AMRO BANK N.V. as Arranger

ABN AMRO BANK N.V. as Facility Agent

And

ABN AMRO BANK N.V. as Security Agent

FACILITY AGREEMENT

relating to a senior secured bridge loan facility of up to US$200,000,000 to re-finance existing indebtedness under a convertible bond

Watson, Farley & Williams

Index

Clause		Page
		2
	Section 1 Interpretation
1	Definitions and Interpretation	2
	Section 2 The Facility
2	The Facility	18
3	Purpose	18
4	Conditions of Utilisation	18
	Section 3 Utilisation
5	Utilisation	20
	Section 4 Repayment, Prepayment and Cancellation
6	Repayment	22
7	Repayment, Prepayment and Cancellation	22
	Section 5 Costs of Utilisation
8	Interest	25
9	Interest Periods	26
10	Changes to the Calculation of Interest	27
11	Fees	28
	Section 6 Additional Payment Obligations
12	Tax Gross Up, Indemnities and FATCA	29
13	Increased Costs	33
14	Other Indemnities	34
15	Mitigation by the Finance Parties	36
16	Costs and Expenses	37
	Section 7 Representations, Undertakings and Events of Default
17	Representations	39
18	Information Undertakings	43
19	General Undertakings	46
20	Security Cover	56
21	Events of Default	58
	Section 8 Changes to Parties
22	Changes to the Lenders	63
23	Changes to the Borrower	67
	Section 9 The Finance Parties
24	The Facility Agent and the Arranger	68
25	The Security Agent	74
26	Conduct of Business by the Finance Parties	85
27	Sharing among the Finance Parties	85
	Section 10 Administration
28	Payment Mechanics	87
29	Set-Off	90
30	Notices	90
31	Calculations and Certificates	92
32	Partial Invalidity	92
33	Remedies and Waivers	92
34	Settlement or Discharge Conditional	92
35	Irrevocable Payment	92
36	Amendments and Waivers	93
37	Confidentiality	94
38	Counterparts	98
	Section 11 Governing Law and Enforcement
39	Governing Law	99
40	Enforcement	99
Schedule 1 The Parties		100
Schedule 2 Conditions Precedent		103

Schedule 3 Requests	107
Schedule 4 Form of Transfer Certificate	109
Schedule 5 Form of Assignment Agreement	111
Schedule 6 Timetables	114
Execution Pages	115

THIS AGREEMENT is made on 14 November 2014

PARTIES

(1) DRYSHIPS INC., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, MH96960, Majuro, The Republic of the Marshall Islands as borrower (the "Borrower")

(2) ABN AMRO BANK N.V. as mandated lead arranger (the "Arranger")

(3) THE FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 (The Parties) as lenders (the "Original Lenders")

(4) ABN AMRO BANK N.V. as agent of the other Finance Parties (the "Facility Agent")

(5)ABN AMRO BANK N.V. as security agent for the Secured Parties (the "Security Agent")

BACKGROUND

The Lenders have agreed to make available to the Borrower, in a single advance, a senior secured term loan facility in an amount of up to US$200,000,000 for the purpose stated in Clause 3.1 (Purpose) of this Agreement.

OPERATIVE PROVISIONS

SECTION 1

INTERPRETATION

1 DEFINITIONS AND INTERPRETATION

1.1 Definitions

In this Agreement:

"Affected Lender"has the meaning given to it in Clause 10.2 (Market disruption).

"Affiliate"means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company (excluding, in the case of ABN AMRO Bank NM., the State of the Netherlands, Stichting NLFI and their respective Subsidiaries other than the subsidiaries of ABN AMRO Bank N.V.).

"Assignment Agreement"means a certificate in the form set out in Schedule 5 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and relevant assignee.

"Authorisation"means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, legalisation or registration.

"Availability Period"means the period from and including the date of this Agreement to and ending on (inclusive) 1 December 2014.

"Available Commitment"means a Lender's Commitment minus:

(a)the amount of its participation in the outstanding Loan; and

(b) in relation to any proposed Utilisation, the amount of its participation in the Loan that is due to be made on or before the proposed Utilisation Date.

"Available Facility"means the aggregate for the time being of each Lender's Available Commitment.

"Basel III"means:

(a) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated; and

(b) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III";

"Break Costs"means the amount (if any) by which:

(a) the interest (excluding Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or Unpaid Sum to the last day of the current Interest Period in relation to the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

2

exceeds

(b) the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

"Broker"means Deutsche Bank Trust Company Americas or any other financial institution acting in the capacity of a "securities intermediary" (as such term is defined in the UCC) and approved by all the Lenders.

"Business Day"means a day (other than a Saturday or Sunday) on which banks are open for general business in London, Athens, Rotterdam, Amsterdam, Piraeus and New York.

"Charged Property"means all of the assets which from time to time are, or are expressed to be, the subject of the Transaction Security.

"Closing Share Price"means, on any day, the closing share price of the Common Stock on the immediately preceding Trading Day.

"Code"means the US Internal Revenue Code of 1986, as amended.

"Commitment"means:

(a) in relation to an Original Lender, the amount set opposite its name under the heading "Commitment" in Part B of Schedule 1 (The Parties) and the amount of any other Commitment transferred to it under this Agreement; and

(b) in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement, to the extent not cancelled, reduced or transferred by it under this Agreement.

"Common Stock"means the duly authorised and issued common stock of Ocean Rig with a par value of $0.01 per share.

"Confidential Information"means all information relating to any Transaction Obligor, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:

(a) any Transaction Obligor or any of its advisers; or

(b) another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Transaction Obligor or any of its advisers,

in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:

(i) is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 37 (Confidentiality); or

(ii) is identified in writing at the time of delivery as non-confidential by any Transaction Obligor or any of its advisers; or

3

(iii) is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with any Transaction Obligor and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

"Confidentiality Undertaking"means a confidentiality undertaking in substantially the appropriate form recommended by the LMA from time to time or in any other form agreed between the Borrower and the Facility Agent.

"Control Agreement"means an agreement granting to the Security Agent "control" (as such term is defined in the UCC) with respect to the Securities Account and all financial assets (as such term is defined in the UCC), cash and other property credited thereto from time to time, executed between the Borrower, the Security Agent and the Broker in the agreed form.

"Convertible Bond"means the convertible bond in the principal amount of $700,000,000 issued under an indenture dated 17 November 2009 (as amended from time to time) maturing on 1 December 2014.

"Corresponding Debt"means any amount, other than any Parallel Debt, which the Borrower owes to a Secured Party under or in connection with the Finance Documents.

"Counterparty"means the individual nominated by the Borrower and approved by the Security Agent or any substitute individual acceptable to the Security Agent.

"Counterparty Undertaking"means an irrevocable and unconditional undertaking executed or, as the context may require, to be executed by the Counterparty in favour of the Security Agent in the agreed form.

"CRD IV"means Directive 2013/36/EU of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directive 200⁶/₄8/EC and 2006/29/EC.

"CRR"means Regulation (EU) No. 575/2013 of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012.

"Default"means an Event of Default or a Potential Event of Default.

"Delegate"means any delegate, agent, attorney, co-trustee or other person appointed by the Security Agent.

"Disruption Event"means either or both of:

(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

(b) the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other, Party:

(i) from performing its payment obligations under the Finance Documents; or

4

(ii) from communicating with other Parties in accordance with the terms of the Finance Documents,

and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

"dollars"and "$" mean the lawful currency, for the time being, of the United States of America.

"Earnings"means all dividends, interest and other moneys paid or payable after the date of this Agreement in respect of all or any of the Ocean Rig Shares and all rights accruing at any time to or in respect of all or any of the Ocean Rig Shares (including, without limitation, put and call options, pre-emption rights and any proceeds of sale or other realisation of all or any part of the Ocean Rig Shares).

"Event of Default"means any event or circumstance specified as such in Clause 21 (Events of Default).

"Existing Indebtedness"means, at any date, the outstanding Financial Indebtedness of the Borrower at any relevant time under the Convertible Bond.

"Existing Lender"has the meaning given in Clause 22.1 (Assignment and transfers by the Lenders).

"Extended Tenor"has the meaning given in Clause 6.4 (Extension of facility).

"Extension Date"means either the Initial Maturity Date or the date failing 6 months after the Initial Maturity Date.

"Facility"means the term loan facility made available under this Agreement as described in Clause 2 (The Facility).

"Facility Office"means the office or offices notified by a Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than 5 Business Days' written notice) as the office or offices through which it will perform its obligations under this Agreement.

"FATCA"means:

(a) sections 1471 to 1474 of the Code or any associated regulations;

(b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or

(c) any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

"FATCA Application Date"means:

(a) in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

5

(b) in relation to a "withholdable payment" described in section 1473(1)(A)00 of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or

(c) in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017,

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

"FATCA Deduction"means a deduction or withholding from a payment under a Finance Document required by FATCA.

"FATCA Exempt Party"means a Party that is entitled to receive payments free from any FATCA Deduction.

"Fee Letter"means any letter or letters dated on or about the date of this Agreement between the relevant Finance Party and the Borrower setting out any of the fees referred to in Clause 11 (Fees).

"Finance Document"means:

(a) this Agreement;

(b) any Fee Letter;

(c) the Securities Account Pledge;

(d) the Control Agreement;

(e) the Counterparty Undertaking;

(f) the Ocean Rig Undertaking;

(g) any other document (whether or not it creates Security) which is executed as security for, or for the purpose of establishing any priority or subordination arrangement in relation to, the Secured Liabilities; and

(h) any other document designated as such by the Facility Agent and the Borrower.

"Finance Party"means the Facility Agent, the Security Agent, the Arranger or a Lender.

"Financial Indebtedness"means any indebtedness for or in relation to:

(a) moneys borrowed;

(b) any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d) the amount of any liability in relation to any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;

(e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

6

(f) any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;

(g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);

(h) any counter-indemnity obligation in relation to a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and

(i) the amount of any liability in relation to any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.

"GAAP"means generally accepted accounting principles.

"Group"means the Borrower and its Subsidiaries for the time being and from time to time.

"Holding Company"means, in relation to a person, any other person in relation to which it is a Subsidiary.

"Indemnified Person"has the meaning given to it in Clause 14.2 (Other indemnities).

"Initial Maturity Date"means the earlier of (a) the date falling 12 months after the Utilisation Date and (b) 1 December 2015.

"Initial Ocean Rig Shares"means a number of shares of Common Stock which, on the date falling 3 Business Days prior to the Utilisation Date, have a combined Market Value equal to 300 per cent. of the Loan.

"Interest Period"means, in relation to the Loan, each period determined in accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest).

"Interpolated Screen Rate"means, in relation to LIBOR for the Loan, any part of the Loan or any Unpaid Sum, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:

(a) the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of the Loan, that part of the Loan or that Unpaid Sum; and

(b) the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of the Loan, that part of the Loan or that Unpaid Sum,

each as of the Specified Time on the Quotation Day for the currency of the Loan, that part of the Loan or that Unpaid Sum.

"Lender"means:

(a) any Original Lender; and

(b) any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 22 (Changes to the Lenders),

which in each case has not ceased to be a Party in accordance with this Agreement.

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"LIBOR"means, in relation to the Loan, any part of the Loan or any Unpaid Sum:

(a) the applicable Screen Rate; or

(b) (if no Screen Rate is available for the Interest Period of the Loan, that part of the Loan or that Unpaid Sum), the applicable Interpolated Screen Rate; or

(c) if:

(i) no Screen Rate is available for the currency of the Loan, that part of the Loan or that Unpaid Sum); or

(ii) no Screen Rate is available for the Interest Period of the Loan, that part of the Loan or that Unpaid Sum and it is not possible to calculate an Interpolated Screen Rate for the Loan, that part of the Loan or that Unpaid Sum,

the Reference Bank Rate,

as of, in the case of paragraphs (a) and (c) above, the Specified Time on the Quotation Day for dollars for the Loan, that part of the Loan or that Unpaid Sum and for a period equal in length to the Interest Period of the Loan, that part of the Loan or that Unpaid Sum and, if any such rate is below zero, LIBOR shall be deemed to be zero.

"LMA"means the Loan Market Association.

"Loan"means the loan to be made available under the Facility or the aggregate principal amount outstanding for the time being of the borrowing under the Facility.

"Majority Lenders"means:

(a) If the Loan has not yet been advanced, a Lender or Lenders whose Commitments aggregate more than 66% per cent. of the Total Commitments; or

(b) at any other time, a Lender or Lenders whose participations in the Loan aggregate more than 66% per cent. of the amount of the Loan then outstanding or, if the Loan has been repaid or prepaid in full, a Lender or Lenders whose participations in the Loan immediately before repayment or prepayment in full aggregate more than 66% per cent. of the Loan immediately before such repayment.

"Mandatory Cost"means any cost calculated by the Facility Agent pursuant to Clause 14.3 (Mandatory Cost).

"Margin"means during the period commencing:

(a) on (and including) the Utilisation Date and ending on the date falling 3 months thereafter (the "First Date"), 5 per cent. per annum;

(b) on (and including) the first day falling after the First Date and ending on the date falling 3 months thereafter (the "Second Date"), 6.75 per cent. per annum;

(c) on the first day falling after Second Date and ending on the date falling 3 months thereafter (the "Third Date"), 7.75 per cent. per annum; and

(d) on the first day falling after the Third Date and ending on the Initial Maturity Date, 8.75 per cent. per annum.

"Margin Readjustment Date"has the meaning given in Clause 8.5 (Readjustment of Margin).

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"Market Disruption Event"has the meaning given in Clause 10.2 (Market disruption).

"Market Value"means, in relation to the Ocean Rig Shares, the market value thereof determined in accordance with paragraph (a) of Clause 20.3 (Value of security).

"Maturity Date"means either:

(a) the Initial Maturity Date; or

(b) if the tenor of the Loan is extended pursuant to Clause 6.4 (Extension of facility), the date falling 6 months after the Initial Maturity Date or, as the case may be, the date falling 12 months after the Initial Maturity Date.

"Material Adverse Effect"means a material adverse effect on:

(a) the business, operations, property, condition (financial or otherwise) or prospects of any Transaction Obligor (save for the Counterparty); or

(b) the ability of any Transaction Obligor (save for the Counterparty) to perform its obligations under any Finance Document; or

(c) the validity or enforceability of, or the effectiveness or ranking of any Security granted or intended to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.

"Month"means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

(a) (subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;

(b) if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and

(c) if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.

The above rules will only apply to the last Month of any period.

"New Lender"has the meaning given in Clause 22.1 (Assignment and transfers by the Lenders).

"Non-Permitted Financial Indebtedness"means the incurrence of any Financial Indebtedness (including, without limitation, a convertible, exchangeable or high yield bond or other form of debt) which is (i) unsecured unless incurred pursuant to any derivative transactions entered into in connection with protection against or benefit from fluctuation in any rate or price or (ii) secured by any Common Stock.

"Obligors"means each of the Borrower, Ocean Rig and any other party except a Finance Party who becomes a party to this Agreement as a borrower or a guarantor at any time after the date hereof and, in the plural, means all of the aforementioned.

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"Ocean Rig"means Ocean Rig UDW Inc. a corporation incorporated in The Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall Islands.

"Ocean Rig Facility Agreement"means the facility agreement to be made between the Borrower as borrower and Ocean Rig as lender pursuant to which Ocean Rig will make available to the Borrower an unsecured loan facility of up to $120,000,000.

"Ocean Rig Shares"means the aggregate of the shares of Common Stock credited to the Securities Account at any time.

"Ocean Rig Undertaking"means an irrevocable and unconditional undertaking executed or, as the context may require, to be executed by Ocean Rig in favour of the Security Agent in the agreed form.

"Overseas Regulations"means the Overseas Companies Regulations 2009 (SI 2009/1801).

"Parallel Debt"means any amount which a Transaction Obligor owes to the Security Agent under Clause 25.2 (Parallel Debt (Covenant to pay the Security Agent)).

"Party"means a party to this Agreement.

"Potential Event of Default"means any event or circumstance specified in Clause 21 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

"Prospectus"means the prospectus included in a registration statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement or free-writing prospectus with respect to the terms of the offering of any portion of the Ocean Rig Shares covered by a registration statement, and by all other amendments and supplements to such prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein.

"Protected Party"has the meaning given to it in Clause 12.1 (Definitions).

"Quotation Day"means, in relation to any period for which an interest rate is to be determined, the first day of that period unless market practice differs in the Relevant Interbank Market in which case the Quotation Day will be determined by the Facility Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).

"Receiver"means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.

"Reference Bank Rate"means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Facility Agent at its request by the Reference Banks as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in dollars for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period.

"Reference Banks"means ABN AMRO Bank N.V. and any other bank or financial institutions as may be appointed by the Facility Agent in consultation with the Borrower.

"Registration Statement"means, in respect of all of the Ocean Rig Shares, a registration statement on Form F-1 or F-3 (or equivalent) filed with SEC under which the resale of all of

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the Ocean Rig Shares by the Security Agent is registered (including, if applicable, by means of a prospectus supplement) as may be amended and/or supplemented from time to time.

"Related Fund"in relation to a fund (the "first fund"), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.

"Relevant Interbank Market"means the London interbank market. "Relevant Jurisdiction"means, in relation to a Transaction Obligor:

(a) its jurisdiction of incorporation;

(b) any jurisdiction where any asset subject to, or intended to be subject to, any of the Transaction Security created, or intended to be created, under the Finance Documents is situated;

(c) any jurisdiction where it conducts its business; and

(d) the jurisdiction whose laws govern the perfection of any of the Transaction Security created, or intended to be created, under the Finance Documents to which it is a party.

"Repeating Representation"means each of the representations set out in Clause 17 (Representations) except Clause 17.9 (Insolvency), Clause 17.10 (No filing or stamp taxes) and Clause 17.11 (Deduction of Tax) and any representation of any Transaction Obligor made in any other Finance Document that is expressed to be a "Repeating Representation" or is otherwise expressed to be repeated.

"Representative"means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

"Restricted Person"means a person that:

(a) is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person) or otherwise a target of Sanctions (target of Sanctions signifying a person with whom a US person or other national of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities or against whom Sanctions are otherwise directed);

(b) is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of or, such country which is subject to Sanctions which attach legal effect to being domiciled, registered as located in, having its main place of business in, and/or being incorporated under the laws of such country;

(c) is directly or indirectly owned by or controlled by a person referred to in (a) and/or (b) above; or

(d) owns or controls a person referred to in (a) and/or (b) above.

"Sanctions"means any economic sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by: (i) the United States of America government; (ii) the United Nations; (iii) the European Union or its Member States, including without limitation, the United Kingdom; (iv) any country to which any Transaction Obligor, or any other member of the Group or any Affiliate of any of them is bound; or (v) the respective governmental institutions and agencies of any of the foregoing, including without

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limitation, the Office of Foreign Assets Control of the US Department of Treasury (OFAC), the United States Department of State, and Her Majesty's Treasury (HMT) (together "Sanctions Authorities").

"Sanctions List"means the "Specially Designated Nationals and Blocked Persons" and the "Sectoral Sanctions Identification" lists issued by OFAC, the Consolidated List of Financial Sanctions Targets and Investment Ban List issued by HMT, or any similar list issued or maintained or made public by any of the Sanctions Authorities.

"Screen Rate"means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for dollars for the relevant period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters. If such page or service ceases to be available, the Facility Agent may specify another page or service displaying the relevant rate after consultation with the Borrower.

"SEC"means U.S. Securities and Exchange Commission.

"Secured Liabilities"means all present and future obligations and liabilities, (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Transaction Obligor to any Secured Party under or in connection with each Finance Document.

"Secured Party"means each Finance Party from time to time party to this Agreement and any Receiver or Delegate.

"Securities Account"means an account in the name of the Borrower with the Broker in New York, New York designated "Dryships Inc. — Securities Account" which is a "securities account" (as such term is defined in the UCC), or any other such "securities account" in the name of the Borrower (with that or another office of the Broker) which is designated by the Facility Agent as the Securities Account for the purposes of this Agreement.

"Securities Account Pledge"means an agreement between the Borrower and the Security Agent creating a first priority Security under the UCC in the Securities Account in favour of the Security Agent in the agreed form.

"Securities Act"means the U.S. Securities Act of 1933, as amended, or any successor statute.

"Security"means a mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having the effect of conferring security.

"Security Cover"means the ratio which is determined at any relevant time pursuant to Clause 20.1 (Minimum required security cover).

"Security Period"means the period starting on the date of this Agreement and ending on the date on which the Facility Agent is satisfied that there is no outstanding Commitment in force and that the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full.

"Security Property"means:

(a) the Transaction Security expressed to be granted in favour of the Security Agent as trustee for the Secured Parties and all proceeds of that Transaction Security;

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(b) all obligations expressed to be undertaken by a Transaction Obligor to pay amounts in relation to the Secured Liabilities to the Security Agent as trustee for the Secured Parties and secured by the Transaction Security together with all representations and warranties expressed to be given by a Transaction Obligor or any other person in favour of the Security Agent as trustee for the Secured Parties pursuant to the applicable Finance Documents;

(c) the Security Agent's interest in any turnover trust created under the Finance Documents;

(d) any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Secured Parties,

except:

(i) rights intended for the sole benefit of the Security Agent; and

(ii) any moneys or other assets which the Security Agent has transferred to the Facility Agent or (being entitled to do so) has retained in accordance with the provisions of this Agreement.

"Selection Notice"means a notice substantially in the form set out in Part B of Schedule 3 (Requests) given in accordance with Clause 9 (Interest Periods).

"Servicing Party"means the Facility Agent or the Security Agent.

"Specified Time"means a time determined in accordance with Schedule 6 (Timetables).

"Subordinated Creditor"means Ocean Rig and/or any person who becomes a Subordinated Creditor in accordance with this Agreement.

"Subordinated Liabilities"means all indebtedness owed or expressed to be owed by the Borrower to Ocean Rig under the Ocean Rig Facility Agreement.

"Subsidiary"means a company (S) is a subsidiary of another company (P) if:

(a) a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

(b) P has direct or indirect control over a majority of the voting rights attaching to the issued shares of 5; or

(c) P has the direct or indirect power to appoint or remove a majority of the directors of 5; or

(d) P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P,

and any company of which S is a subsidiary is a parent company of S.

"Tax"means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

"Tax Credit"has the meaning given to it in Clause 12.1 (Definitions).

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"Tax Deduction"has the meaning given to it in Clause 12.1 (Definitions).

"Tax Payment"has the meaning given to it in Clause 12.1 (Definitions).

"Third Parties Act"has the meaning given to it in Clause 1.4 (Third party rights).

"Total Commitments"means the aggregate of the Commitments, being $200,000,000 at the date of this Agreement.

"Trading Day"means a day on which:

(a) trading in Common Stock generally occurs; and

(b) a closing sale price for Common Stock is provided on the principal U.S. national or regional securities exchange on which Common Stock is then listed or, if Common Stock is not listed, on a U.S. national or regional securities exchange, on the principal other market on which Common Stock is then traded,

Provided that if Common Stock is not so listed or traded, "Trading Day"means a Business Day.

"Transaction Document"means:

(a) a Finance Document; or

(b) any other document designated as such by the Facility Agent and the Borrower.

"Transaction Obligor"means the Borrower, Ocean Rig, the Counterparty or any other person, except a Finance Party who executes a Finance Document.

"Transaction Security"means the Security created or intended to be created in favour of the Security Agent pursuant to the Finance Documents.

"Transfer Certificate"means a certificate in the form set out in Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Facility Agent and the Borrower.

"Transfer Date"means, in relation to an assignment or a transfer, the later of:

(a) the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and

(b) the date on which the Facility Agent executes the relevant Assignment Agreement or Transfer Certificate.

"UCC" means Uniform Commercial Code as in effect, from time to time, in the State of New York, U.S.A.

"UK Establishment"means a UK establishment as defined in the Overseas Regulations.

"Unpaid Sum"means any sum due and payable but unpaid by a Transaction Obligor under the Finance Documents.

"US"means the United States of America.

"US Tax Obligor"means:

(a) the Borrower if it is a "United States person" within the meaning of Section 7701(a)(30) of the United States Internal Revenue Code of 1986, as amended; or

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(b) a Transaction Obligor some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.

"Utilisation"means the utilisation of the Facility.

"Utilisation Date"means the date of the Utilisation, being the date on which the Loan is advanced.

"Utilisation Request"means a notice substantially in the form set out in Part A of Schedule 3 (Requests).

"VAT"means:

(a) any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

(b) any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.

"VWAP"means the volume weighted average price (the aggregate sales price of all trades of Common Stock during each Trading Day divided by the total number of shares of Common Stock traded during such Trading Day) of the Common Stock during any Trading Day as reported by Bloomberg, L.P. using the AQR function.

1.2 Construction

(a) Unless a contrary indication appears, a reference in this Agreement to:

(i) the "Arranger", the "Facility Agent", any "Finance Party", any "Lender", any "Party", any "Secured Party", the "Security Agent", any "Transaction Obligor"or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents;(ii)"assets"includes present and future properties, revenues and rights of every description;

(iii) a liability which is "contingent"means a liability which is not certain to arise and/or the amount of which remains unascertained;

(iv) "document"includes a deed and also a letter, fax or telex;

(v) "expense"means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Tax including VAT;

(vi) a "Finance Document"or "Transaction Document"or any other agreement or instrument is a reference to that Finance Document or Transaction Document or other agreement or instrument as amended or novated;

(vii) "indebtedness"includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

(viii) "law"includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;

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(ix) "proceedings"means, in relation to any enforcement provision of a Finance Document, proceedings of any kind, including an application for a provisional or protective measure;

(x) a "person"includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);

(xi) a "regulation"includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

(xii) a provision of law is a reference to that provision as amended or re-enacted;

(xiii) a time of day is a reference to Rotterdam time;

(xiv) any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of a jurisdiction other than England, be deemed to include that which most nearly approximates in that jurisdiction to the English legal term;

(xv) words denoting the singular number shall include the plural and vice versa;

(xvi) "including"and "in particular"(and other similar expressions) shall be construed as not limiting any general words or expressions in connection with which they are used.

(b) Section, Clause and Schedule headings are for ease of reference only and are not to be used for the purposes of construction or interpretation of the Finance Documents.

(c) Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under, or in connection with, any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

(d) A Potential Event of Default is "continuing" if it has not been remedied or waived and an Event of Default is "continuing" if it has not been waived.

1.3 Construction of terms

In this Agreement:

References in Clause 1.1 (Definitions) to any Finance Document being in "agreed form" are to that Finance Document:

(a) in a form attached to a certificate dated the same date as this Agreement (and signed by the Borrower and the Facility Agent); or

(b) in any other form agreed in writing between the Borrower and the Facility Agent acting with the authorisation of the Majority Lenders or, where Clause 36.2 (All Lender matters) applies, all the Lenders.

1.4 Third party rights

(a) Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the "Third Parties Act") to enforce or to enjoy the benefit of any term of this Agreement.

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(b) Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.

(c) Any Receiver, Delegate or any other person described in paragraph (c) of Clause 14.2 (Other indemnities), paragraph (b) of Clause 24.10 (Exclusion of liability) or Clause 25.15 (No proceedings) may, subject to this Clause 1.4 (Third party rights) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.

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SECTION 2

THE FACILITY

2. THE FACILITY

2.1 The Facility

Subject to the terms of this Agreement, the Lenders shall make available to the Borrower a dollar term loan facility in an aggregate amount not exceeding the Total Commitments.

2.2 Finance Parties' rights and obligations

(a) The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

(b) The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from a Transaction Obligor shall be a separate and independent debt.

(c) A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

(d) Notwithstanding any other provision of the Finance Documents, a Finance Party (other than the Security Agent) may separately sue for any Unpaid Sum due to it without the consent of any other Finance Party or joining any other Finance Party to the relevant proceedings and the courts of England shall have exclusive jurisdiction to settle any disputes arising out of or brought pursuant to or in connection with this Clause 2.2 (Finance Parties' rights and obligations).

3. PURPOSE

3.1 Purpose

The Lenders have agreed to make available to the Borrower, in a single advance, a senior secured term loan facility in an amount of up to $200,000,000 for the purpose of re­financing part of the Existing Indebtedness.

3.2 Monitoring

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

4. CONDITIONS OF UTILISATION

4.1 Initial conditions precedent

The Borrower may not deliver the Utilisation Request unless the Facility Agent has received all of the documents and other evidence listed in Part A, of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Facility Agent.

4.2 Further conditions precedent

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The Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation) if on the date of the Utilisation Request and on the proposed Utilisation Date and before the Loan is advanced:

(a) no Default is continuing or would result from the making of the proposed Utilisation;

(b) the Repeating Representations to be made by each Transaction Obligor are true in all material respects;

(c) the provisions of paragraph (c) of Clause 10.3 (Alternative basis of interest or funding, suspension) do not apply;

(d) there has been no Material Adverse Effect; and

(e) the Facility Agent has received, or is satisfied it will receive when the Loan is advanced, all of the documents and other evidence listed in Part A and Part B of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Facility Agent;

4.3 Notification of satisfaction of conditions precedent

(a) The Facility Agent shall notify the Borrower and the Lenders promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent) and Clause 4.2 (Further conditions precedent).

(b) Other than to the extent that the Majority Lenders notify the Facility Agent in writing to the contrary before the Facility Agent gives the notification described in paragraph (a) above, the Lenders authorise (but do not require) the Facility Agent to give that notification. The Facility Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

4.4 Waiver of conditions precedent

If the Majority Lenders, at their discretion, permit the Loan to be borrowed before any of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent) or Clause 4.2 (Further conditions precedent) has been satisfied, the Borrower shall ensure that that condition is satisfied within five Business Days after the Utilisation Date or such later date as the Facility Agent, acting with the authorisation of the Majority Lenders, may agree in writing with the Borrower.

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SECTION 3

UTILISATION

5. UTILISATION

5.1 Delivery of the Utilisation Request

(a) The Borrower may utilise the Facility by delivery to the Facility Agent of a duly completed Utilisation Request not later than the Specified Time.

(b) The Borrower may not deliver more than one Utilisation Request.

5.2 Completion of the Utilisation Request

The Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

(a) the proposed Utilisation Date is a Business Day within the Availability Period;

(b) the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and

(c) the proposed Interest Period complies with Clause 9 (Interest Periods).

5.3 Currency and amount

(a) The currency specified in the Utilisation Request must be dollars.

(b) The amount of the proposed Loan must be an amount which is not more than $200,000,000:

(c) The amount of the proposed Loan must be an amount which would not oblige the Borrower to provide additional security or prepay part of the Loan if the ratio set out in Clause 20 (Security Cover) were applied and notice was given by the Facility Agent under Clause 20.1 (Minimum required security cover) or Clause 20.6 (Top-up or prepayment based on Closing Share Price) immediately after the Loan was advanced.

5.4 Lenders' participation

(a) If the conditions set out in this Agreement have been met, each Lender shall make its participation in the Loan available by the Utilisation Date through its Facility Office.

(b) The amount of each Lender's participation in the Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately before making the Loan.

(c) The Facility Agent shall notify each Lender of the amount of the Loan and the amount of its participation in the Loan by the Specified Time.

5.5 Cancellation of Commitments

The Commitments which are unutilised at the end of the Availability Period shall then be cancelled.

5.6 Payment to third parties

The Facility Agent shall, on the Utilisation Date, pay to, or for the account of, the Borrower the amount which the Facility Agent receives from the Lenders in respect of the Loan. That

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payment shall be made in like funds as the Facility Agent received from the Lenders in respect of the Loan to the account which the Borrower specifies in the Utilisation Request.

5.7 Disbursement of the Loan to third party

A payment by the Facility Agent under Clause 5.6 (Payment to third parties) to a person other than the Borrower (as specified by the Borrower) shall constitute the making of the Loan and the Borrower shall at that time become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender's participation in the Loan.

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SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION

6. REPAYMENT

6.1 Repayment of Loan

The Borrower shall repay the Loan through a single bullet repayment instalment on the applicable Maturity Date.

6.2 Maturity Date

On the applicable Maturity Date, the Borrower shall additionally pay to the Facility Agent for the account of the Finance Parties all other sums then accrued and owing under the Finance Documents.

6.3 Reborrowing

The Borrower may not reborrow any part of the Facility which is repaid.

6.4 Extension of facility

The Borrower may, by notifying the Facility Agent in writing at least 45 Business Days before the applicable Maturity Date request (on no more than two occasions), in each case, that the tenor of the Loan be extended by a period of 6 months (the "Extended Tenor"). The Facility Agent, acting upon the instructions of all the Lenders (which they shall be entitled to withhold in their sole and absolute discretion), shall advise the Borrower in writing no later than 30 Business Days before the applicable Maturity Date if its request has been accepted and such acceptance shall be subject to:

(a) the negotiation in good faith between the Facility Agent (acting on the instructions of all the Lenders) and the Borrower of the Margin which will apply during the Extended Tenor; and

(b) there being no Event of Default or Potential Event of Default at the time of the Borrower's request, the Facility Agent's response to the request and on the first day of the Extended Tenor.

If not all the Lenders agree to the Borrower's request, the Margin which is to apply during the Extended Tenor is not agreed by the date falling 15 Business Days prior to the applicable Maturity Date or an Event of Default or Potential Event of Default has occurred and is continuing at any time on or after the date of the Borrower's request and up to and including the Extension Date, the Loan shall terminate on the relevant Maturity Date.

7. REPAYMENT, PREPAYMENT AND CANCELLATION

7.1 Illegality

If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in the Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:

(a) that Lender shall promptly notify the Facility Agent upon becoming aware of that event;

(b) upon the Facility Agent notifying the Borrower, the Commitment of that Lender will be immediately cancelled; and

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(c) the Borrower shall repay that Lender's participation in the Loan on the last day of the Interest Period for the Loan occurring after the Facility Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law).

7.2 Voluntary cancellation

(a) The Borrower may, if it gives the Facility Agent not less than 15 days (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (but if in part, being a minimum amount of $1,000,000 or a multiple of that amount). Any cancellation under this Clause 7.2 (Voluntary cancellation) shall reduce the Commitments of the Lenders and the amount of the Loan then unutilised rateably.

(b) The unutilised Commitment (if any) of each Lender shall be automatically cancelled at close of business on the date on which the Loan is made available.

7.3 Voluntary prepayment of Loan

(a) The Borrower may, if it gives the Facility Agent not less than 5 Business Days (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of $1,000,000 or a multiple of that amount).

(b) The Loan may only be prepaid after the last day of the Availability Period (or, if earlier, the day on which the Available Facility is zero).

7.4 Mandatory prepayment on events

If any of the following events (each an "Event") occur, the Borrower shall, within 5 Business Days of the occurrence of such Event, apply all monies received by it in or towards prepayment of an amount equal to the Loan:

(a) any incurrence by the Borrower of any Non-Permitted Financial Indebtedness; or

(b) the Borrower issuing any additional equity for any consideration; or

(c) the sale, transfer or disposal of any of the Common Stock held by the Borrower which were not subject to any Security Interest as at the Utilisation Date.

7.5 Right of repayment and cancellation in relation to a single Lender

(a) If:

(i) any sum payable to any Lender by a Transaction Obligor is required to be increased under paragraph (c) of Clause 12.2 (Tax gross-up); or

(ii) any Lender claims indemnification from the Borrower under Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased costs); or

(iii) the Facility Agent receives notification from an Affected Lender under sub-paragraph (iii) of paragraph (b) of Clause 10.2 (Market disruption),

the Borrower may:

(A) whilst in the case of sub-paragraphs (i) and (ii) above the circumstance giving rise to the requirement for that increase or indemnification continues; Or

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(B) whilst in the case of sub-paragraph (iii) above the Market Disruption Event in relation to the Affected Lender continues,

give the Facility Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender's participation in the Loan.

(b) On receipt of a notice of cancellation referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.

(c) On the last day of each Interest Period which ends after the Borrower has given notice of cancellation under paragraph (a) above in relation to a Lender (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender's participation in the Loan.

7.6 Restrictions

(a) Any notice of cancellation or prepayment given by any Party under this Clause 7 (Repayment, Prepayment and Cancellation) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

(b) Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and any Break Costs, without premium or penalty.

(c) The Borrower may not re-borrow any part of the Facility which is prepaid.

(d) The Borrower shall not repay or prepay all or any part of the Loan or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

(e) No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

(f) If the Facility Agent receives a notice under this Clause 7 (Repayment, Prepayment and Cancellation) it shall promptly forward a copy of that notice to either the Borrower or the Affected Lenders', as appropriate.

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SECTION 5

COSTS OF UTILISATION

8. INTEREST

8.1 Calculation of interest

The rate of interest on the Loan or any part of the Loan for each Interest Period is the percentage rate per annum which is the aggregate of:

(a) the applicable Margin;

(b) LIBOR; and

(c) the Mandatory Cost, if any.

8.2 Payment of interest

(a) The Borrower shall pay accrued interest on the Loan on the last day of each Interest Period.

(b) If an Interest Period is longer than three Months, the Borrower shall also pay interest then accrued on the Loan on the dates falling at three Monthly intervals after the first day of the Interest Period.

8.3 Default interest

(a) If the Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (a) below, is 2 per cent. higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of a Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Facility Agent. Any interest accruing under this Clause 8.3 (Default interest) shall be immediately payable by the Borrower on demand by the Facility Agent.

(b) If any Unpaid Sum remains outstanding after the applicable Maturity Date, Interest on that Unpaid Sum, shall, as from the applicable Maturity Date, accrue at the rate of (i) 2 per cent. plus OD 8.75 per cent. per annum (unless an adjustment of the Margin has been agreed between the parties pursuant to Clause 8.5 (Re-adjustment of Margin), in which case that rate will apply in substitution of the rate of 8.75 per cent. per annum).

(c) If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan:

(i) the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan; and

(ii) the rate of interest applying to that Unpaid Sum during that first Interest Period shall be 2 per cent. higher than the rate which would have applied if that Unpaid Sum had not become due.

(d) Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.

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8.4 Notification of rates of interest

The Facility Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.

8.5 Readjustment of Margin

The Borrower shall, in the circumstances referred to in Clause 6.4 (Extension of facility), negotiate in good faith with the Facility Agent (acting on behalf of all the Lenders) an adjustment to the Margin which is to apply during each three-monthly period falling in the Extended Tenor (each a "Margin Readjustment Date"). If an adjustment is agreed between the parties, the Facility Agent will send to the Borrower and the Finance Parties a notice in writing by no later than the date falling 10 days before the Margin Readjustment Date specifying the new Margin which will apply as from the Margin Readjustment Date and the term "Margin" shall be read and construed to mean such amount.

9. INTEREST PERIODS

9.1 Selection of Interest Periods

(a) The Borrower may select the first Interest Period for the Loan in the Utilisation Request and each subsequent Interest Period in respect of the Loan in a Selection Notice.

(b) Each Selection Notice is irrevocable and must be delivered to the Facility Agent by the Borrower not later than the Specified Time.

(c) If the Borrower fails to select an Interest Period in the Utilisation Request or fails to deliver a Selection Notice to the Facility Agent in accordance with paragraphs (a) and (b) above, the relevant Interest Period will, subject to Clause 9.2 (Changes to Interest Periods), be 3 Months.

(d) Subject to this Clause 9 (Interest Periods), the Borrower may select an Interest Period of 3, 6, 9 or 12 Months or any other period agreed between the Borrower and the Facility Agent (acting on the instructions of all the Lenders).

(e) An Interest Period in respect of the Loan shall not extend beyond the applicable Maturity Date.

(f) The first Interest Period for the Loan shall start on the Utilisation Date and each subsequent Interest Period shall start on the last day of the preceding Interest Period.

(g) The Loan shall have one Interest Period only at any time.

9.2 Changes to Interest Periods

(a) If after the Borrower has selected and the Lenders have agreed an Interest Period longer than 3 months, any Lender notifies the Facility Agent after the Specified Time relating to the Utilisation Request or Selection Notice that it is not satisfied that deposits in dollars for a period equal to the Interest Period will be available to it in the Relevant Interbank Market when the Interest Period commences, the Facility Agent shall shorten the Interest Period to 3 months.

(b) If the Facility Agent makes any change to an Interest Period referred to in this Clause 9.2 (Changes to Interest Periods), it shall promptly notify the Borrower and the Lenders.

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9.3 Non-Business Days

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

10. CHANGES TO THE CALCULATION OF INTEREST

10.1 Absence of quotations

Subject to Clause 10.2 (Market disruption), if LIBOR is to be determined by reference to the Reference Banks (or a Reference Bank) but at least two Reference Banks (or in the case where there is one Reference Bank, that Reference Bank) do not supply a quotation by the Specified Time on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

10.2 Market disruption

(a) If a Market Disruption Event occurs in relation to the Loan or any part of the Loan for any Interest Period, then the rate of interest on each Lender's share of the Loan or the relevant part of the Loan for the Interest Period shall be the rate per annum which is the sum of:

(i) the applicable Margin;

(ii) the rate notified to the Facility Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan or the relevant part of the Loan from whatever source it may reasonably select; and

(iii) the Mandatory Cost, if any, applicable to that Lender's participation in the Loan.

(b) In this Agreement "Market Disruption Event"means:

(i) at or about noon on the Quotation Day for the relevant Interest Period, LIBOR is to be determined by reference to the Reference Banks (or a Reference Bank) and at least two of the Reference Banks (or in the case where there is one Reference Bank, that Reference Bank) do not supply a rate to the Facility Agent to determine LIBOR for dollars for the relevant Interest Period; or

(ii) before close of business in London on the Quotation Day for the relevant Interest Period, the Facility Agent receives notifications from a Lender or Lenders (whose participations in the Loan exceed 50 per cent. of the Loan) that the cost to it or them of obtaining matching deposits in the Relevant Interbank Market would be in excess of LIBOR; or

(iii) at least one Business Day before the start of an Interest Period, the Facility Agent receives notification from a Lender (the "Affected Lender") that for any reason it is unable to obtain dollars in the Relevant Interbank Market in order to fund its participation in the Loan.

10.3 Alternative basis of interest or funding, suspension

(a) If a Market Disruption Event occurs and the Facility Agent or the Borrower so requires, the Facility Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.

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(b) Any substitute or alternative basis agreed pursuant to paragraph (a) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties to the Finance Documents.

(c) If a Market Disruption Event occurs before the Loan is made:

(i) in circumstances falling within sub-paragraph (i) or (ii) of paragraph (b) of Clause 10.2 (Market disruption), the Lenders' obligation to advance the Loan; or

(ii) in circumstances falling within sub-paragraph (iii) of paragraph (b) of Clause 10.2 (Market disruption), the Affected Lender's obligation to participate in the Loan,

shall be suspended while the circumstances giving rise to the Market Disruption Event continue.

10.4 Break Costs

(a) The Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for the Loan or Unpaid Sum.

(b) Each Lender shall, as soon as reasonably practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

11. FEES

11.1 Facility fees

The Borrower shall pay to the Facility Agent fees referred to in the Fee Letter in the amounts and at the times referred to in the Fee Letter.

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SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS

12. TAX GROSS UP, INDEMNITIES AND FATCA

12.1 Definitions

(a) In this Agreement:

"Protected Party"means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.

"Tax Credit"means a credit against, relief or remission for, or repayment of any Tax.

"Tax Deduction"means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.

"Tax Payment"means either the increase in a payment made by the Borrower to a Finance Party under Clause 12.2 (Tax gross-up) or a payment under Clause 12.3 (Tax indemnity).

(b) Unless a contrary indication appears, in this Clause 12 (Tax Gross Up, Indemnities and FATCA) reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.

12.2 Tax gross-up

(a) The Borrower shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

(b) The Borrower shall promptly upon becoming aware that it must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Borrower.

(c) If a Tax Deduction is required by law to be made by the Borrower, the amount of the payment due from the Borrower shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

(d) If the Borrower is required to make a Tax Deduction, it shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

(e) Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower shall deliver to the Facility Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

12.3 Tax indemnity

(a) The Borrower shall (within three Business Days of demand by the Facility Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party

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determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.

(b) Paragraph (a) above shall not apply:

(i) with respect to any Tax assessed on a Finance Party:

(A) under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or

(B) under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party;

(ii) to the extent a loss, liability or cost is compensated for by an increased payment under Clause 12.2 (Tax gross-up); or

(iii) with respect to any Tax that relates to a FATCA Deduction required to be made by a Party.

(c) A Protected Party making, or intending to make, a claim under paragraph (a) above shall promptly notify the Facility Agent of the event which will give, or has given, rise to the claim, following which the Facility Agent shall notify the Borrower.

(d) A Protected Party shall, on receiving a payment from the Borrower under this Clause 12.3 (Tax indemnity), notify the Facility Agent.

12.4 Tax Credit

If a Finance Party shall become aware that it is entitled to claim a refund from a governmental authority in respect of Taxes as to which it has been indemnified by the Borrower, or with respect to which the Borrower has paid additional amounts pursuant to Clause 12.2, it shall promptly notify the Borrower Party of the availability of such refund claim and shall use commercially reasonable efforts to make the appropriate claim to such governmental authority for such refund. If a Finance Party receives a refund (including pursuant to a claim for refund made pursuant to the preceding sentence) in respect of any Tax as to which it has been indemnified by the Borrower or the Borrower has paid additional amounts pursuant to Clause 12.2, it shall within 30 days from the date of such receipt pay over such refund to the Borrower, net of all out-of-pocket third party expenses of such Finance Party.

12.5 Stamp taxes

The Borrower shall pay and, within three Business Days of demand, indemnify each Secured Party against any cost, loss or liability which that Secured Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

12.6 VAT

(a) All amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is

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required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party).

(b) If VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance Document, and any Party other than the Recipient (the "Relevant Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):

(i) (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this sub-paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

(ii) (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

(c) Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part of it as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.

(d) Any reference in this Clause 12.6 (VAT) to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994).

(e) In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party's VAT registration and such other information as is reasonably requested in connection with such Finance Party's VAT reporting requirements in relation to such supply.

12.7 ATCA Information

(a) Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:

(i) confirm to that other Party whether it is:

(A) a FATCA Exempt Party; or

(B) not a FATCA Exempt Party;

(ii) supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and

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(iii) supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime.

(b) If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

(c) Paragraph (a) above shall not oblige any Finance Party to do anything, and paragraph (a)(iii) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:

(i) any law or regulation;

(ii) any fiduciary duty; or

(iii) any duty of confidentiality.

(d) If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a)(i) or (ii) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.

(e) If the Borrower is a US Tax Obligor or the Facility Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within ten Business Days of:

(i) where the Borrower is a US Tax Obligor on the date of this Agreement and the relevant Lender is an Original Lender, the date of this Agreement;

(ii) where the Borrower is a US Tax Obligor on a Transfer Date and the relevant Lender is a New Lender, the relevant Transfer Date; or

(iii) where the Borrower is not a US Tax Obligor, the date of a request from the Facility Agent,

supply to the Facility Agent:

(i) a withholding certificate on Form W-8 or Form W-9 or any other relevant form); or

(ii) any withholding statement or other document, authorisation or waiver as the Facility Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation.

(f) The Facility Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (e) above to the Borrower.

(g) If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Facility Agent by a Lender pursuant to paragraph (e) above is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Facility Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Facility Agent) in writing of its legal inability to do so. The Facility

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Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the Borrower.

(h) The Facility Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (e) or (g) above without further verification. The Facility Agent shall not be liable for any action taken by it under or in connection with paragraph (e), (f) or (g) above.

12.8 FATCA Deduction

(a) Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

(b) Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrower and the Facility Agent and the Facility Agent shall notify the other Finance Parties.

13. INCREASED COSTS

13.1 Increased costs

(a) Subject to Clause 13.3 (Exceptions), the Borrower shall, within three Business Days of a demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of:

(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or

(ii) compliance with any law or regulation made; or

(iii) the implementation or application of or compliance with:

(A) the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004, in the form existing on the date of this Agreement ("Basel II") or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates); or

(B) Basel III, CRD IV or CRR or any law or regulation which implements or applies Basel Ill, CRD IV or CRR (regardless of the date on which it is enacted, adopted or issued and regardless of whether any such implementation, application or compliance is by a government, regulator, the Finance Party or any of its Affiliates),

after the date of this Agreement.

(b) In this Agreement, "Increased Costs"means:

(i) a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital;

(ii) an additional or increased cost; or

(iii) a reduction of any amount due and payable under any Finance Document,

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which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.

13.2 Increased cost claims

(a) A Finance Party intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Borrower.

(b) Each Finance Party shall, as soon as practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Increased Costs which shall contain reasonable details of the calculations thereof.

13.3 Exceptions

Clause 13.1 (Increased costs) does not apply to the extent any Increased Cost is:

(a) attributable to a Tax Deduction required by law to be made by a Transaction Obligor;

(b) attributable to a FATCA Deduction required to be made by a Party;

(c) compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 12.3 (Tax indemnity) applied);

(d) compensated for by any payment made pursuant to Clause 14.3 (Mandatory Cost); or

(e) attributable to the wilful breach or gross negligence of the relevant Finance Party or its Affiliates of any law or regulation.

14. OTHER INDEMNITIES

14.1 Currency indemnity

(a) If any sum due from the Borrower under the Finance Documents (a "Sum"), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the "First Currency") in which that Sum is payable into another currency (the "Second Currency") for the purpose of:

(i) making or filing a claim or proof against the Borrower; or

(ii) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

the Borrower shall, as an independent obligation, on demand, indemnify each Secured Party to which that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

(b) The Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

14.2 Other indemnities

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(a) The Borrower shall, within 3 Business Days of demand, indemnify each Secured Party against any cost, loss or liability incurred by it as a result of:

(i) the occurrence of any Event of Default;

(ii) a failure by the Borrower to pay any amount due under a Finance Document on its due date (after the expiration of any applicable grace period), including without limitation, any cost, loss or liability arising as a result of Clause 27 (Sharing among the Finance Parties);

(iii) funding, or making arrangements to fund, its participation in the Loan requested by the Borrower in the Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or

(iv) the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.

(b) The Borrower shall, within 3 Business Days of demand, indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate (each such person for the purposes of this Clause 14.2 (Other indemnities) an "Indemnified Person"), against any cost, loss or liability incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents, having the benefit of any Security constituted by the Finance Documents unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person.

14.3 Mandatory Cost

The Borrower shall, within 3 Business Days of demand by the Facility Agent, pay to the Facility Agent for the account of the relevant Lender, such amount which any Lender certifies in a notice to the Facility Agent to be its good faith determination of the amount necessary to compensate it for complying with:

(a) in the case of a Lender lending from a Facility Office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions) in respect of loans made from that Facility Office; and

(b) in the case of any Lender lending from a Facility Office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions),

which, in each case, is referable to that Lender's participation in the Loan.

14.4 Indemnity to the Servicing Parties

The Borrower shall, within 3 Business Days of demand, indemnify each Servicing Party against any cost, loss or liability incurred by that Servicing Party (acting reasonably) as a result of:

(a) investigating any event which it reasonably believes is a Default; or

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(b) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; and

(c) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents.

14.5 Indemnity to the Facility Agent

The Borrower shall, within 3 Business Days of demand, indemnify the Facility Agent against any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent's gross negligence or wilful misconduct) or, in the case of any cost, loss or liability pursuant to Clause 28.11 (Disruption to Payment Systems etc.) notwithstanding the Facility Agent's negligence but not including any claim based on the gross negligence or fraud of the Facility Agent in acting as Facility Agent under the Finance Documents.

14.6 Indemnity to the Security Agent

(a) The Borrower shall, within 3 Business Days of demand, indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them (otherwise, in each case, than by reason of the gross negligence, wilful misconduct or fraud of the relevant Receiver or Delegate of the Security Agent):

(i) in relation to or as a result of:

(A) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;

(B) the taking, holding, protection or enforcement of the Finance Documents and the Transaction Security;

(C) the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law;

(D) any default by any Transaction Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;

(E) any action by any Transaction Obligor which vitiates, reduces the value of, or is otherwise prejudicial to, the Transaction Security; and

(F) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents.

(ii) acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Security Property or the performance of the terms of this Agreement or the other Finance Documents (otherwise, in each case, than by reason of the relevant Security Agent's, Receiver's or Delegate's gross negligence, wilful misconduct or fraud).

(b) The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Charged Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.6 (Indemnity to the Security Agent) and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it.

15. MITIGATION BY THE FINANCE PARTIES

15.1 Mitigation

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(a) Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 12 (Tax Gross Up, Indemnities and FATCA), Clause 13 (Increased Costs) or paragraph (a) of Clause 14.3 (Mandatory Cost) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

(b) Paragraph (a) above does not in any way limit the obligations of any Transaction Obligor under the Finance Documents.

15.2 Limitation of liability

(a) The Borrower shall, on demand, indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation).

(b) A Finance Party is not obliged to take any steps under Clause 15.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

16. COSTS AND EXPENSES

16.1 Transaction expenses

The Borrower shall, on demand, pay the Facility Agent, the Security Agent and the Arranger the amount of all (reasonably documented) costs and expenses (including legal fees) reasonably incurred by any Secured Party in connection with the negotiation, preparation, printing, execution, syndication and perfection of:

(a) this Agreement and any other documents referred to in this Agreement;

(b) the Transaction Security; and

(c) any other Finance Documents executed after the date of this Agreement.

16.2 Amendment costs

If:

(a) the Borrower requests an amendment, waiver or consent; or

(b) an amendment is required pursuant to Clause 28.9 (Change of currency); or

(c) the Borrower requests, and the Security Agent agrees to, the release of all or any part of the Charged Property from the Transaction Security,

the Borrower shall, on demand, reimburse each of the Facility Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by each Secured Party in responding to, evaluating, negotiating or complying with that request or requirement.

16.3 Enforcement and preservation costs

The Borrower shall, on demand, pay to each Secured Party the amount of all costs and expenses (including legal fees) incurred by that Secured Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document and the Transaction Security and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Transaction Security or enforcing those rights.

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SECTION 7

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

17. REPRESENTATIONS

17.1 General

The Borrower makes the representations and warranties set out in this Clause 17 (Representations) to each Finance Party on the date of this Agreement.

17.2 Status

(a) It is a corporation, duly incorporated and validly existing in good standing under the laws of the Republic of the Marshall Islands.

(b) It has the power to own its assets and carry on its business as it is being conducted.

17.3 Share capital and ownership

The Borrower's authorised share capital is divided into 1,000,000,000 registered shares and 500,000,000 registered preferred shares with a par value of $0.01 each. 685,064,321 registered shares of the Borrower have been issued and are outstanding at the date hereof and 21,000,000 shares are issued and held in treasury.

17.4 Validity, effectiveness and ranking of Security

(a) Each Finance Document to which it is a party does now or, as the case may be, will upon execution and delivery and, where applicable, registration or recording as provided for in that Finance Document create, the Security it purports to create over any assets to which such Security, by its terms, relates, and such Security will, when created or intended to be created, be valid and effective.

(b) Each Finance Document to which the Borrower is a party does now or, as the case may be, will upon execution and delivery, constitute the Borrower's legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms.

(c) No third party has or will have any Security over any assets that are the subject of any Transaction Security granted by the Borrower.

(d) The Transaction Security granted by it to the Security Agent or any other Secured Party has or will when created or intended to be created have first ranking priority or such other priority it is expressed to have in the Finance Documents and is not subject to any prior ranking or pari passu ranking security.

(e) No concurrence, consent or authorisation of any person is required for the creation of or otherwise in connection with any Transaction Security.

17.5 Non-conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by, each Transaction Document to which it is a party (including but not limited to, the ownership by the Borrower of the Ocean Rig Shares, the execution by the Borrower of each Finance Document to which it is a party, the borrowing of the Loan and the Borrower's compliance with each Finance Document to which it is a party) do not and will not conflict with:

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(a) to the Borrower's knowledge (having made due and careful enquiry), any law or regulation applicable to it;

(b) the constitutional documents of any Transaction Obligor; or

(c) any agreement or instrument binding upon it or any Transaction Obligor or any Transaction Obligor's assets or constitute a default or termination event (however described) under any such agreement or instrument; or

(d) any contractual or other obligation or restriction which is binding on the Borrower or any of its assets.

17.6 Power and authority

(a) It has the power to (i) enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, each Transaction Document to which it is or will be a party and the transactions contemplated by those Transaction Documents and (ii) own the Ocean Rig Shares.

(b) No limit on its powers will be exceeded as a result of the borrowing, granting of security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party.

17.7 Validity and admissibility in evidence

To the Borrower's knowledge (having made due and careful enquiry) all Authorisations required or desirable:

(a) to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party;

(b) to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions; and

(c) for the Borrower to own the Ocean Rig Shares,

have been obtained or effected and are in full force and effect.

17.8 Governing law and enforcement

(a) The choice of governing law of each Transaction Document to which it is a party will be recognised and enforced in its Relevant Jurisdictions.

(b) Any judgment obtained in relation to a Transaction Document to which it is a party in the jurisdiction of the governing law of that Transaction Document will be recognised and enforced in its Relevant Jurisdictions.

17.9 Insolvency

No:

(a) corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 21.8 (Insolvency proceedings); or

(b) creditors' process described in Clause 21.9 (Creditors' process),

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has been taken or, to the Borrower's knowledge, threatened in relation to the Borrower or Ocean Rig; and none of the circumstances described in Clause 21.7 (Insolvency) applies to the Borrower or Ocean Rig.

17.10 No filing or stamp taxes

Under the laws of its Relevant Jurisdictions it is not necessary that the Finance Documents to which it is a party be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar taxes or fees be paid on or in relation to the Finance Documents to which it is a party or the transactions contemplated by those Finance Documents.

17.11 Deduction of Tax

It is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document to which it is a party.

17.12 No default

(a) No Event of Default has occurred and, on the date of this Agreement and on the Utilisation Date, no Default is continuing or might reasonably be expected to result from the making of the Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.

(b) No other event or circumstance is outstanding which constitutes a default or a termination event (however described) under any other agreement or instrument which is binding on it or to which its assets are subject which might have a Material Adverse Effect.

17.13 No misleading information

(a) Any factual information provided by the Borrower for the purposes of this Agreement was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.

(b) The financial projections contained in any such information have been prepared on the basis of recent historical information and on the basis of reasonable assumptions.

(c) Nothing has occurred or been omitted from any such information and no information has been given or withheld that results in any such information being untrue or misleading in any material respect.

17.14 Financial Statements

(a) The most recent financial statements delivered pursuant to Clause 18.2 (Provision of financial statements):

have been prepared in accordance with Clause 18.3 (Requirements as to financial statements); and

(i) give a true and fair view of (if audited) or fairly represent (if unaudited) its financial condition and operations during the relevant financial year.

(b) Since the date of the most recent financial statements delivered pursuant to Clause 18.2 (Provision of financial statements) there has been no material adverse change in the business, assets or financial condition of the Borrower, the Group or, as the case may be, Ocean Rig.

17.15 Pari passu ranking

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Its payment obligations under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

17.16 No proceedings pending or threatened

No litigation, arbitration or administrative proceedings or investigations of or before any court, arbitral body or agency have (to the best of its knowledge and belief) been started or threatened against it which, if adversely determined, might reasonably be expected to have a Material Adverse Effect.

17.17 No breach of laws

It has not breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.

17.18 Taxes paid

(a) It is not materially overdue in the filing of any Tax returns and it is not overdue in the payment of any amount in respect of Tax.

(b) No claims or investigations are being, or are reasonably likely to be, made or conducted against it with respect to Taxes.

17.19 Overseas companies

It has not delivered particulars, whether in its name stated in the Finance Documents or any other name, of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or, if it has so registered, it has provided to the Facility Agent sufficient details to enable an accurate search against it to be undertaken by the Lenders at the Companies Registry.

17.20 Good title to assets

It has good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted.

17.21 Ownership

The Ocean Rig Shares are owned by the Borrower free of any security except the Transaction Security created under the Finance Documents.

17.22 Place of business

It does not have a place of business in the Marshall Islands and it maintains a shipping office at 109 Kifissias Avenue and Sina Street, Maroussi, Greece.

17.23 No employee or pension arrangements

It has complied with its obligations under the applicable current governmental pension scheme and it has no liabilities under any other pension scheme.

17.24 Sanctions

It is in all respects in compliance with all Sanctions.

17.25 No money laundering

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Without prejudice to the generality of Clause 2.3, in relation to the borrowing by the Borrower, the performance and discharge of its obligations and liabilities under the Finance Documents, and the transactions and other arrangements affected or contemplated by the Finance Documents to which the Borrower is a party, the Borrower confirms (i) it is acting for its own account; (ii) it will use the proceeds of the Loan for its own benefit, under its full responsibility and exclusively for the purposes specified in this Agreement; and (iii) that the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of Directive (2005/60/EC) of the European Parliament and of the Council).

17.26 Repetition

The Repeating Representations are deemed to be made by the Borrower by reference to the facts and circumstances then existing on the date of the Utilisation Request and the first day of each Interest Period.

18. INFORMATION UNDERTAKINGS

18.1 General

The undertakings in this Clause 18 (Information Undertakings) remain in force throughout the Security Period unless the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders), may otherwise permit.

18.2 Provision of financial statements

The Borrower will send or procure that there are sent to the Facility Agent:

(a) as soon as possible, but in no event later than 180 days after the end of its financial year, the consolidated annual audited accounts of the Group for that financial year prepared by a firm of accountants acceptable to the Facility Agent (commencing with the audited accounts in respect of the financial year which ended on 31 December 2013);

(b) as soon as possible, but in no event later than 90 days after the end of each 3-month period in each financial year of the Borrower ending on 31 March, 30 June, 30 September and 31 December, respectively, the consolidated three-month unaudited management accounts of the Group, duly certified as to their correctness by an officer of the Borrower (commencing with the unaudited accounts in respect of the 3-month period which ended on 30 September 2014);

(c) as soon as possible, but in no event later than 180 days after the end of the financial year of Ocean Rig, the consolidated annual audited accounts of Ocean Rig for that financial year prepared by a firm of accountants acceptable to the Facility Agent (commencing with the audited accounts in respect of the financial year which ended on 31 December 2013); and

(d) as soon as possible, but in no event later than 90 days after the end of each 3-month period in each financial year of Ocean Rig ending on 31 March, 30 June, 30 September and 31 December, respectively, the consolidated 3-monthly unaudited management accounts of Ocean Rig, duly certified as to their correctness by an officer of Ocean Rig (commencing with the unaudited accounts in respect of the 3-month period which ended on 30 September 2014).

18.3 Requirements as to financial statements

(a) Each set of financial statements delivered by the Borrower pursuant to Clause 18.2 (Provision of financial statements) shall be certified by a director or officer of the relevant company as giving a true and fair view (if audited) or fairly representing (if unaudited) its

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financial condition and operations as at the date as at which those financial statements were drawn up.

(b) The Borrower shall procure that each set of financial statements delivered pursuant to Clause 18.2 (Provision of financial statements) is prepared using GAAP.

18.4 Information: miscellaneous

The Borrower shall supply to the Facility Agent (in sufficient copies for all the Lenders, if the Facility Agent so requests):

(a) all documents dispatched by it to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched;

(b) promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against the Borrower and/or any Transaction Obligor (save for the Counterparty), and which might, if adversely determined, have a Material Adverse Effect;

(c) promptly, such further information and/or documents regarding:

(i) the Borrower, the Group, each Transaction Obligor, the Securities Account, the Ocean Rig Shares or the Earnings;

(ii) the Charged Property;

(iii) compliance of the Borrower and each other Transaction Obligor with the terms of the Finance Documents; and

(iv) the financial condition, business and operations of the Borrower and each other Transaction Obligor;

as any Finance Party (through the Facility Agent) may reasonably request; and

(d) promptly, such further information and/or documents as any Finance Party (through the Facility Agent) may reasonably request so as to enable such Finance Party to comply with any laws applicable to it (including, without limitation, compliance with FATCA).

18.5 Notification of default

(a) The Borrower shall, and shall procure that Ocean Rig shall, notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

(b) Promptly upon a request by the Facility Agent, the Borrower shall supply to the Facility Agent a certificate signed by one director or senior officer on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).

18.6 Use of websites

(a) The Borrower may satisfy its obligation under the Finance Documents to which it is a party to deliver any information in relation to those Lenders (the "Website Lenders") which accept this method of communication by posting this information onto an electronic website designated by the Borrower and the Facility Agent (the "Designated Website") if:

(i) the Facility Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method;

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(ii) both the Borrower and the Facility Agent are aware of the address of and any relevant password specifications for the Designated Website; and

(iii) the information is in a format previously agreed between the relevant Transaction Obligor and the Facility Agent.

If any Lender (a "Paper Form Lender") does not agree to the delivery of information electronically then the Facility Agent shall notify the Borrower accordingly and the Borrower shall supply the information to the Facility Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Borrower shall supply the Facility Agent with at least one copy in paper form of any information required to be provided by it.

(b) The Facility Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Borrower or any of them and the Facility Agent.

(c) The Borrower shall promptly upon becoming aware of its occurrence notify the Facility Agent if:

(i) the Designated Website cannot be accessed due to technical failure;

(ii) the password specifications for the Designated Website change;

(iii) any new information which is required to be provided under this Agreement is posted onto the Designated Website;

(iv) any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or

(v) if the Borrower becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.

If the Borrower notifies the Facility Agent under sub-paragraph (i) or (v) of paragraph (c) above, all information to be provided by the Borrower under this Agreement after the date of that notice shall be supplied in paper form unless and until the Facility Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing.

(d) Any Website Lender may request, through the Facility Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Borrower shall comply with any such request within 10 Business Days.

18.7 "Know your customer" checks

(a) If:

(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

(ii) any change in the status of the Borrower after the date of this Agreement; or

(iii) a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

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obliges a Finance Party (or, in the case of sub-paragraph (iii) above, any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of any Finance Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by a Servicing Party (for itself or on behalf of any other Finance Party) or any Lender (for itself or, in the case of the event described in sub-paragraph (iii) above, on behalf of any prospective new Lender) in order for such Finance Party or, in the case of the event described in sub-paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

(b) Each Lender shall promptly upon the request of a Servicing Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Servicing Party (for itself) in order for that Servicing Party to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

19. GENERAL UNDERTAKINGS

19.1 General

The undertakings in this Clause 19 (General Undertakings) remain in force throughout the Security Period except as the Facility Agent, acting with the authorisation of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit.

19.2 Authorisations

The Borrower shall, and shall procure that each other Transaction Obligor (save for the Counterparty) shall promptly:

(a) obtain, comply with and do all that is necessary to maintain in full force and effect any Authorisation; and

(b) supply certified copies to the Facility Agent of any Authorisation required under any law or regulation of a Relevant Jurisdiction to enable it to:

(i) perform its obligations under the Transaction Documents to which it is a party; and

(ii) ensure the legality, validity, enforceability or admissibility in evidence in any Relevant Jurisdiction of any Transaction Document to which it is a party.

19.3 Compliance with laws

The Borrower shall, and shall procure that each other Transaction Obligor will, comply in all respects with all laws and regulations to which it may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect.

19.4 Taxation

(a) The Borrower shall, and shall procure that each other Transaction Obligor will pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

(i) such payment is being contested in good faith;

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(ii) adequate reserves are maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Facility Agent under Clause 18.2 (Provision of financial statements); and

(iii) such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.

(b) Except as approved by the Majority Lenders, each Transaction Obligor shall ensure that it is and it remains in compliance with its Tax obligations in the jurisdiction in which it is incorporated.

19.5 Overseas companies

The Borrower shall promptly inform the Facility Agent if it delivers to the Registrar particulars required under the Overseas Regulations of any UK Establishment and it shall comply with any directions given to it by the Facility Agent regarding the recording of any Transaction Security on the register which it is required to maintain under The Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009.

19.6 Pari passu ranking

The Borrower shall, and shall procure that each other Transaction Obligor (save for the Counterparty), ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.

19.7 Ownership

(a) At all times during the Security Period the Ocean Rig Shares will be owned by the Borrower free of any Security other than any Transaction Security created pursuant to the Finance Documents.

(b) With effect on and from its creation or intended creation, the Borrower shall hold the legal title to, and own the entire beneficial interest in any other assets the subject of any Transaction Security created or intended to be created by it.

19.8 Disposals

The Borrower will not transfer, lease or otherwise dispose of:

(a) any interest in the Ocean Rig Shares or the Earnings; or

(b) all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not unless following the completion of such transfer, lease or disposal it continues to be in compliance with all financial covenants to which it is subject (including, but not limited, to any facility agreements, guarantee or indenture to which it is, or will become, a party).

19.9 Merger

The Borrower shall not enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction.

19.10 Change of business

The Borrower shall not make any substantial change to the nature of its business from that existing on the date of this Agreement.

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19.11 Non-Permitted Financial Indebtedness and terms of refinancing of Existing Indebtedness

The Borrower will:

(a) not incur any Non-Permitted Financial Indebtedness except where all the proceeds of such Non-Permitted Financial Indebtedness are applied towards prepayment of the Loan in accordance with the provisions of this Agreement; and

(b) ensure that any Financial Indebtedness to be incurred by it to refinance the Existing Indebtedness shall have a tenor expiring no earlier than the date falling on the second anniversary (or, in the case of the Ocean Rig Facility Agreement, 18 months) of the Utilisation Date, be subject to such other terms and conditions in all respects acceptable to the Facility Agent and that the Financial Indebtedness to be incurred by it pursuant to the Ocean Rig Facility Agreement shall not exceed at any relevant time the amount of $120,000,000.

19.12 Dividends

The Borrower shall not make or pay any dividend or other distribution (in cash or in kind) in respect of its share capital.

19.13 Other transactions

The Borrower shall not:

(a) grant any Security over the Ocean Rig Shares or the Earnings other than as permitted under this Agreement; or

(b) enter into any transaction on terms which are, in any respect, less favourable to the Borrower than those which it could obtain in a bargain made at arms' length; or

(c) acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks other than in the ordinary course of its business of acquiring shares in any special purpose companies or corporations which become the direct or indirect owners of ships or drill ships and which are to become wholly or partially-owned Subsidiaries of the Borrower; or

(d) change its constitutional documents.

19.14 Unlawfulness, invalidity and ranking; Security imperilled

The Borrower shall not do (or fail to do) or cause or permit another person to do (or omit to do) anything which is likely to:

(a) make it unlawful for the Borrower to perform any of its obligations under the Transaction Documents;

(b) cause any obligation of the Borrower under the Transaction Documents to cease to be legal, valid, binding or enforceable;

(c) cause any Transaction Document to cease to be in full force and effect;

(d) cause any Transaction Security to rank after, or lose its priority to, any other Security; and

(e) imperil or jeopardise the Transaction Security.

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19.15 Further assurance

(a) The Borrower shall promptly, and in any event within the time period specified by the Security Agent do all such acts (including procuring or arranging any registration, notarisation or authentication or the giving of any notice) or execute or procure execution of all such documents (including assignments, transfers, mortgages, charges, notices, instructions, acknowledgments, proxies and powers of attorney), as the Security Agent may specify (and in such form as the Security Agent may require in favour of the Security Agent or its nominee(s)):

(i) to create, perfect, vest in favour of the Security Agent or protect the priority of the Security or any right of any kind created or intended to be created under or evidenced by the Finance Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Security Agent, any Receiver or the Secured Parties provided by or pursuant to the Finance Documents or by law;

(ii) in addition and without limitation to any obligation under Clause 20 (Security Cover), to confer, upon the occurrence of an Event of Default that is continuing, on the Security Agent or on the Secured Parties Security over any property or assets of the Borrower located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Finance Documents;

(iii) to facilitate or expedite the realisation and/or sale of, the transfer of title to or the grant of, any interest in or right relating to the assets which are, or are intended to be, the subject of the Transaction Security or to exercise any power specified in any Finance Document in respect of which the Security has become enforceable; and/or

(iv) to enable or assist the Security Agent to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Security Property.

(b) The Borrower shall, take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Security Agent or the Secured Parties by or pursuant to the Finance Documents.

(c) At the same time as the Borrower delivers to the Security Agent any document executed under this Clause 19.15 (Further assurance), the Borrower shall deliver to the Security Agent a certificate signed by an officer which shall:

(i) set out the text of a resolution of the Borrower's directors specifically authorising the execution of the document specified by the Security Agent; and

(ii) state that either the resolution was duly passed at a meeting of the directors validly convened and held, throughout which a quorum of directors entitled to vote on the resolution was present, or that the resolution has been signed by all the directors of officers and is valid under the Borrower's articles of association or other constitutional documents.

19.16 Sanctions and compliance with laws

(a) Compliance with laws

The Borrower shall, and shall procure that each other Obligor and each other member of the Group and each Affiliate of any of them shall, comply in all respect with all Sanctions.

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(b) Sanctions

(i) The Borrower undertakes that it, and shall procure that each other Obligor and any other member of the Group or any of their Affiliates, or, to the Borrower's knowledge (having made due and careful enquiry), any director, officer, agent, employee or person acting on behalf of the foregoing, is not a Restricted Person and does not act directly or indirectly on behalf of a Restricted Person.

(ii) The Borrower shall, and shall procure that each other Obligor and any other member of the Group or any of their Affiliates shall, not use any revenue or benefit derived from any activity or dealing with a Restricted Person in discharging any obligation due or owing to the Finance Parties.

(iii) The Borrower shall, and shall procure that each other Obligor and any other member of the Group or any of their Affiliates shall, procure that no proceeds from any activity or dealing with a Restricted Person are credited to any bank account held with any Finance Party in its name or in the name of any other Obligor or any other member of the Group or any Affiliate of any of them.

(iv) The Borrower undertakes that it, and shall procure that each other Obligor and any other member of the Group or any of their Affiliates, has taken reasonable measures to comply with Sanctions.

(v) The Borrower shall, and shall procure that each other Obligor and any other member of the Group or any of their Affiliates shall, to the extent permitted by law promptly upon becoming aware of them supply to the Facility Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions by any Sanctions Authority.

(vi) The Borrower shall not accept, and shall procure that no other Obligor and no member of the Group or any of their Affiliates shall, obtain or receive any goods or services from any Restricted Person, except (without limiting paragraph (a) of Clause 19.16 (Sanctions and compliance with laws)), to the extent relating to any warranties and/or guarantees given and/or liabilities incurred in respect of an activity or dealing with a Restricted Person by any Obligor in accordance with this Agreement.

(c) Use of proceeds

The Borrower shall not, and shall procure that no other Obligor or member of the Group or any of their Affiliates shall not, permit or authorise any other person to, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of the Loan or other transactions contemplated by this Agreement to fund or facilitate trade, business or other activities:

(i) involving or for the benefit of any Restricted Person; or

(ii) in any other manner that could result in any other Obligor or a Finance Party being in breach of any Sanctions or becoming a Restricted Person.

19.17 Subordination of loans

The Borrower undertakes:

(a) to cause all loans made to it by a Subordinated Creditor (including, but not limited to, the loan made or to be made available to the Borrower under the Ocean Rig Facility Agreement)

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and all sums and other obligations (financial or otherwise) owed by it to that Subordinated Creditor to be fully subordinated to the Secured Liabilities on terms in all respects acceptable to the Facility Agent; and

(b) that in connection the Ocean Rig Facility Agreement, it shall not:

(i) make any principal prepayment during the Security Period;

(ii) allow the discharge of any of the Subordinated Liabilities by set-off or any similar right (except where such set-off or similar right is mandatorily required by law);

(iii) amend, vary or waive any term of the Ocean Rig Facility Agreement which may result in:

(A) the subordination of the Subordinated Liabilities to the Secured Liabilities being impaired and/or the tenor of the Ocean Rig Facility Agreement expiring in less than 18 months; and

(B) (B)an increase to the total amount payable by the Borrower under the Ocean Rig Facility Agreement (other than arising as a result of an increase in LIBOR);

(iv) create any Security in favour of Ocean Rig securing any of the Subordinated Liabilities; or

(v) do or omit to do anything as a result of which the subordination of the Subordinated Liabilities to the Secured Liabilities may be impaired.

19.18 German Resident Finance party

(a) To the extent a Finance Party is resident in Germany ("Inlander") within the meaning of Section 2 Paragraph 15 of the German foreign trade and payment act (AWG AuRenwirtschaftsgesetz) and therefore subject to Section 7 of the (AWV AuRenwirtschaftsverordnung) would not be permitted to accept a representation or an undertaking that is made or is to be made or is granted or is to be granted by the Borrower and/or a Transaction Obligor with respect to Sanctions under this Agreement, such Finance Party shall not, in the event of a breach by the Borrower and/or a Transaction Obligor of any such representation or undertaking be entitled to invoke or declare an Event of Default or vote for a cancellation of the Total Commitments and immediate repayment of the Loan in accordance with Clause 21.23 (Acceleration).

(b) In relation to a Lender that notifies the Facility Agent to such effect the representations in Clause 17.25 (Sanctions) given by, and the undertakings in Clause 19.17 (Sanctions and Compliance with Laws) of, any Transaction Obligor to any Finance Party resident in Germany ("Inlander") within the meaning of Section 2 Para. 15 of the AWV are granted only to the extent that such Secured Party itself would be permitted to receive such representations or undertakings pursuant to Section 7 of the AWV.

(c) On any matter referred to in paragraph (a) above in respect of which the Lenders are to vote but in respect of which a German-resident Lender to whom paragraph (a) above applies shall not vote in accordance with such paragraph:

(i) for the purposes of determining whether approval of the Majority Lenders is obtained the references in the definition of "Majority Lenders" to 66% per cent. of the Total Commitments and to 66% per cent. of the Loan shall for this purpose be construed to refer to 66% per cent. of the Total Commitments or, as the case may be, the Loan only taking account of the other Commitments of, or as the case may be, the participation in the Loan of, the Lenders and ignoring the Commitment of

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or, as the case may be, the participation in the Loan of, the German-resident Lender; and an action taken by the Majority Lenders as such definition is modified by this paragraph (c) shall be valid in the applicable circumstances and binding all Parties; and

(ii) for the purposes of determining whether the approval of all Lenders is obtained, all Lenders shall be construed to mean the other Lenders ignoring the German-resident Lender and an action taken by all Lenders as modified by this paragraph (c) shall be valid in the applicable circumstances and binding on all Parties.

19.19 Additional security; Ocean Rig Shares

The Borrower undertakes to procure that Ocean Rig:

(a) maintains the effectiveness of a Registration Statement at all times during the Security Period, including, without limitation, if (i) the Borrower and/or Ocean Rig loses its status as a "well-known seasoned issuer" (as defined in Rule 405 of the Securities Act), (ii) the form used to register the Ocean Rig Shares expires, (iii) Ocean Rig is no longer eligible to use such form or (iv) additional shares of Common Stock are credited to the Securities Account; and

(b) before filing with the SEC a Registration Statement or any amendments or supplements thereto, furnishes to the Security Agent, copies of all such documents proposed to be filed, including documents incorporated by reference in such Registration Statement and, if requested by the Security Agent, the exhibits incorporated by reference (in each case only to the extent such documents or exhibits are not available on the SEC's EDGAR site); and

(c) makes all corrections reasonably requested by the Security Agent with respect to information relating to the Security Agent or this Agreement or any other Finance Document prior to filing any Registration Statement or amendment thereto or any supplement thereto, provided that the Security Agent shall provide any comments on such Registration Statement no later than 5 Business Days after receipt (not counting the day of receipt) and that Ocean Rig shall be entitled to assume that the Security Agent has no comments if none are received within such 5 Business Day period; and

(d) notifies the Security Agent by facsimile or e-mail as promptly as practicable, and in any event within 2 Business Days, after any Registration Statement or any post-effective amendment or supplement is filed and declared effective and simultaneously provides the Security Agent with copies of any related Prospectus to be used in connection with the sale or other disposition of the Ocean Rig Shares covered thereby; and

(e) notifies the Security Agent of the receipt of any comments from the SEC with respect to any Registration Statement and responds to such comments and prepares and files with the SEC, if necessary, such amendments and supplements to such Registration Statement and the Prospectus used in connection with such Registration Statement or any document incorporated therein by reference or file any other required document as may be necessary to comply with the provisions of the Securities Act and rules thereunder, including if required the filing of a supplemental Prospectus pursuant to Securities Act Rule 424 or any free-writing Prospectus pursuant to Rule 433, with respect to the disposition of all Ocean Rig Shares covered by such Registration Statement and the instructions applicable to the registration form used by Ocean Rig; and

(f) furnishes to the Security Agent, without charge, such numbers of copies of each Registration Statement, each amendment thereto, each Prospectus, including each preliminary

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Prospectus and each amendment or supplement thereto, in each case in conformity with the requirements of the Securities Act and the rules thereunder, and such other related documents as the Security Agent may reasonably request in order to facilitate the disposition of Ocean Rig Shares; and

(g) registers and qualifies the Ocean Rig Shares covered by each Registration Statement under securities or blue sky laws of such states or jurisdictions in the United States as shall be reasonably requested by the Security Agent and to keep such qualification effective during the period such Registration Statement is effective; and

(h) notifies the Security Agent of the receipt by Ocean Rig of any notification with respect to the suspension of the qualification of any Ocean Rig Shares for sale under applicable securities or blue sky laws of any state or jurisdiction in the United States; and obtains the withdrawal of any order suspending the effectiveness of any Registration Statement, and obtains the lifting of any suspension of the qualification (or exemption from qualification) of the offer and transfer of any of the Ocean Rig Shares in any jurisdiction, at the earliest possible moment Provided that Ocean Rig shall not be required in connection therewith or as a condition thereto to (i) qualify to do business or register as a broker or dealer in any such jurisdiction where it would not otherwise be required to qualify or register but for this subsection, (ii) subject itself to taxation in any such jurisdiction, or (iii) file a general consent to service of process in any such state or jurisdiction; and

(i) in connection with an offer and sale of Ocean Rig Shares by or on behalf of the Security Agent, enters into and performs customary agreements and take such other commercially reasonable actions as are required to expedite or facilitate each disposition of the Ocean Rig Shares including, in the event of any underwritten or agented offering, enters into and performs Ocean Rig's obligations under an underwriting or agency agreement (including indemnification and contribution obligations of underwriters or agents and representations and warranties by Ocean Rig to the underwriters), in usual and customary form, with the managing underwriter or underwriters of or agents for such offering and use its best efforts to obtain executed lock-up agreements from the officers and directors of Ocean Rig, if requested by the underwriters, and take all such other actions as the Security Agent reasonably requests in order to expedite or facilitate the disposition of such Ocean Rig Shares; and

(j) reasonably cooperates and causes its Affiliates and its accountants and attorneys to cooperate, including relating to the preparation of a Registration Statement and participation in drafting sessions and due diligence sessions, including making available the officers, accountants, counsel, premises, books and records of Ocean Rig and its Affiliates for such purpose, and shall cause the appropriate officers of Ocean Rig and its Affiliates to attend and participate in any "road shows" or informational meetings; and

(k) notifies the Security Agent of any stop order suspending the effectiveness of a Registration Statement issued or for the issuance of which proceedings have been instituted, or, to the extent Ocean Rig has actual knowledge thereof, threatened to be issued by the SEC in connection therewith, and takes all commercially reasonable actions required to prevent the entry of such stop order or to remove it if entered it being understood that this paragraph (k) of Clause 19.19 (Additional security; Ocean Rig Shares) is not a limitation on the requirements of pa ragraph(a) of Clause 19.19 (Additional security; Ocean Rig Shares); and

(l) promptly notifies the Security Agent of the happening of any transaction or event during the period a Registration Statement is effective as a result of which the Registration Statement

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or the related Prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of any Prospectus), not misleading; and thereafter, Ocean Rig uses its best efforts to promptly prepare (and, when completed, gives notice and provides a copy thereof to the Security Agent) a supplement or amendment to such Prospectus so that such Prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading; and

(m) makes generally available to Ocean Rig's security holders copies of an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and Rule 158, following the end of the twelve (12) month period beginning with the first month of Ocean Rig's first fiscal quarter commencing after the effective date of a Registration Statement filed pursuant to the Finance Documents; and

(n) in connection with an offer and sale of Ocean Rig Shares by or on behalf of the Security Agent, makes available for inspection by the Security Agent, any underwriter participating in such offering and the representatives of the Security Agent, all financial, corporate and other information as shall be reasonably requested by them, and provides the Security Agent, any underwriter participating in such offering and the representatives of the Security Agent and underwriters the reasonable opportunity to discuss the business affairs of Ocean Rig with its principal executives and independent public accountants who have certified the audited financial statements included in such Registration Statement, in each case all as reasonably necessary to enable them to exercise their due diligence responsibility under the Securities Act Provided however that the information which Ocean Rig determines, in good faith, to be confidential and which Ocean Rig advises such person in writing is confidential shall not be disclosed unless such person signs a confidentiality agreement reasonably satisfactory to Ocean Rig, or the Security Agent or underwriter agrees to be responsible for such person's breach of confidentiality on terms reasonably satisfactory to Ocean Rig; and

(o) in the event of any underwritten or agented offering, obtains a so-called "comfort letter" from Ocean Rig's independent public accountants, and legal opinions of counsel to Ocean Rig addressed to the underwriter participating in such offering, in customary form and covering such matters of the type customarily covered by such letters and opinions, and in a form that shall be reasonably satisfactory to the underwriters; and

(p) provides and causes to be maintained a transfer agent and registrar for all Ocean Rig Shares covered by any Registration Statement from and after a date not later than the effective date of such Registration Statement; and

(q) makes all required filings with NASDAQ; and

(r) as expeditiously as possible and within the deadlines specified by the Securities Act, makes all required filing fee payments in respect of each Registration Statement and Prospectus (and each offering covered thereby); and

(s) promptly notifies the Security Agent of any pending proceeding against Ocean Rig under Section 8A of the Securities Act in connection with the offering of the Ocean Rig Shares; and

(t) after an Event of Default has occurred and is continuing, take such other actions as are reasonably required in order to expedite or facilitate the disposition of Ocean Rig Shares; and

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(u) ensures that each Registration Statement (including any amendments or supplements thereto and Prospectuses contained therein) does not contain any untrue statement of a material fact or omits to state a material fact required to be stated therein, or necessary to make the statements therein not misleading (except, with respect to the Security Agent, for an untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact made in reliance on and in conformity with written information furnished to Ocean Rig by or on behalf of the Security Agent specifically for use therein); and

(v) makes available to the Security Agent promptly after the same is prepared and publicly distributed, or received by Ocean Rig, one copy of each Registration Statement and each amendment thereto, each preliminary Prospectus and Prospectus and each amendment or supplement thereto, each letter written by or on behalf of Ocean Rig to the SEC or the staff of the SEC (or other governmental agency or self-regulatory body or other body having jurisdiction, including any domestic or foreign securities exchange), and each item of correspondence from the SEC or the staff of the SEC (or other governmental agency or self-regulatory body or other body having jurisdiction, including any domestic or foreign securities exchange), in each case relating to such Registration Statement (other than any portion thereof which contains information for which Ocean Rig has sought confidential treatment), except to the extent that such Registration Statement, amendment thereto, preliminary Prospectus and Prospectus and amendment or supplement thereto, and correspondence is available on the SEC's EDGAR site; and

(w) files with the SEC a Form 6-K (or equivalent) if at any time the Security Agent takes control of any of the Ocean Rig Shares, and ensures that such form includes an express statement that the information contained within the same shall be incorporated by way of reference into the Registration Statement; and

(x) files or, as the case may be, furnishes to the SEC all documents or forms required to be filed or furnished by foreign private issuers whose securities trade on NASDAQ; and

(y) promptly following the request of the Security Agent, files a supplement updating (i) the number of shares in Ocean Rig beneficially held by the Borrower, (ii) the use of brokers or underwriters in connection with the offer and sale of Ocean Rig Shares, (iii) the exercise by the Security Agent of the Securities Account Pledge and (iv) any other reasonable change requested by the Security Agent to facilitate the sale of any of the Ocean Rig Shares; and

(z) if Ocean Rig loses its well-known seasoned issuer status, to file prior to the date on which such status will be lost (i) a registration statement covering the resale by the Security Agent of all shares of Common Stock then owned by the Borrower and (ii) update all financial statements contained in such registration statement pursuant to section 10(a)(3) of the Securities Act; and

(aa) after an Event of Default occurs which is continuing and within 5 Business Days from the Security Agent's request, files with the SEC a Form 6-K (or the equivalent) (which will include an express statement that the information in the form is incorporated by reference into the Registration Statement) disclosing any material non-public information known to the Security Agent;

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20. SECURITY COVER

20.1 Minimum required security cover

The Borrower undertakes with each Finance Party that if the Facility Agent notifies the Borrower that:

(a) the Market Value of the Ocean Rig Shares; plus

(b) the net realisable value of any additional security previously provided under this Clause 20 (Security Cover),

is below 205 per cent. of the Loan, the Borrower shall within 5 Business Days of the Facility Agent's written notice provide or procure that a third party provides additional security which in the opinion of the Facility Agent (acting with the authorisation of the Majority Lenders) has a market value (which shall be determined in accordance with Clause 20.3 (Value of security)), which when aggregated with the Market Value of the Ocean Rig Shares, is at least equal to 250 per cent. of the Loan (as reduced, on nominal basis, if the circumstances referred to in the last paragraph of this Clause 20.1 (Minimum required security cover) apply at any time) and which consists of:

(i) cash (in Dollars) unconditionally and irrevocably credited to the Securities Account; or

(ii) additional shares of Common Stock unconditionally and irrevocably credited to the Securities Account, all of which shares of Common Stock must be registered with the SEC pursuant to an effective Registration Statement at the time of credit and throughout the Security Period; or

(iii) any other form of additional security in all respects acceptable to the Facility Agent (acting with the authorisation of the Majority Lenders).

If at any time additional security is taken over cash pursuant to this Clause 20.1 (Minimum required security cover), such cash shall, only in the context of determining whether the Borrower is in compliance with this Clause 20.1 (Minimum required security cover), be applied (on a nominal basis) in reduction of the Loan.

20.2 Requirement for additional documents

The Borrower shall not be deemed to have complied with Clause 20.1 (Minimum required security cover) until the Facility Agent has received in connection with the additional security certified copies of documents of the kinds referred to in paragraphs 1.2 and 1.3 of Schedule 2 (Conditions Precedent), Part A and, if required, legal opinions in terms acceptable to the Majority Lenders from such lawyers as they may select.

20.3 Value of security

The market value of any security which is provided under Clause 20.1 (Minimum required security cover) shall be determined as follows:

(a) if it consists of shares of Common Stock, by reference to the trading value of such shares in the NASDAQ by calculating the average VWAP of the Common Stock during the 30 Trading Days preceding the date of the Facility Agent's determination;

(b) if it consists of cash, the Dollar amount thereof; and

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(c) if its consist of additional security over any other asset (other than those referred to in paragraphs (a) and (b) above), the net realisable value of that additional security which shall be determined by the Facility Agent (acting with the authorisation of the Majority Lenders).

20.4 Valuations binding

Any valuation under Clause 20.3 (Value of security) shall be binding and conclusive as regards the Borrower.

20.5 Release of security

(a) If the Security Cover shall at any time exceed 325 per cent. of the Loan (the "Maximum Required Security Cover"), the Facility Agent, after receiving notice from the Borrower together with evidence satisfactory to the Lenders that the Security Cover has exceeded the Maximum Required Security Cover shall, subject to being indemnified to the Facility Agent's satisfaction against any costs arising out of such release, cause the Security Agent to release any security, the form of which the Facility Agent decides (acting with the authorization of all Lenders), to the extent that the Maximum Required Security Cover is maintained following such release and subject to no Event of Default being in existence at that time or resulting from such release.

(b) All dividends, distributions, interest or other income payable in respect of the Ocean Rig Shares or any other property credited to the Securities Account from time to time shall be retained in the Securities Account except that, unless and until an Event of Default shall have occurred and be continuing:

(i) promptly after receipt from the Borrower of a request in writing to invest or reinvest any cash credited to the Securities Account in a manner permitted under the Control Agreement, the Security Agent shall direct the Broker to make such investment or reinvestment; and

(ii) promptly after receipt from the Borrower of a request in writing to release to the Borrower or its order any dividends, distributions, interest or other income then credited to the Securities Account in respect of the Ocean Rig Shares or any other property, the Security Agent shall direct the Broker to debit such dividends, distributions, interest or other income from the Securities Account and to transfer same in accordance with the Borrower's request.

20.6 Top-up or prepayment based on Closing Share Price

If at any time the product of (1) the Closing Share Price and (2) number of shares of Common Stock comprising the Ocean Rig Shares is below 150 per cent. of the Loan, the Borrower undertakes, following the receipt of a notice from the Facility Agent, to use its reasonable endeavours to (i) prepay such part of the Loan so that, following such prepayment, the product of (1) and (2) above is at least equal to 200 per cent. of the Loan or (ii) to provide or ensure that a third party provides additional security which in the opinion of the Facility Agent (acting with the authorisation of the Majority Lenders) has a market value which, when aggregated with the product of (1) and (2) above, is at least equal to 200 per cent. of the Loan. If at any time additional security is taken over cash pursuant to this Clause 20.6 such cash shall, in the context of determining the level of Security Cover for the purpose of this Clause 20.6 (Top-up or prepayment based on Closing Share Price) be applied (on a nominal basis) in reduction of the Loan.

It is hereby agreed and acknowledged by the parties hereto that:

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(a) the Facility Agent shall be entitled to serve a notice under Clause 20.1 (Minimum required security cover) or Clause 20.6 (Top-up or prepayment based on Closing Share Price) (but not pursuant to both Clauses) at any time; and

(b) a failure by the Borrower to procure a prepayment of the Loan or the provision of any additional security pursuant to this Clause 20.6 shall not constitute an Event of Default.

21. EVENTS OF DEFAULT

21.1 General

Each of the events or circumstances set out in this Clause 21 (Events of Default) is an Event of Default except for Clause 21.23 (Acceleration) and Clause 21.24 (Enforcement of security).

21.2 Non-payment

The Borrower does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:

(a) its failure to pay is caused by:

(i) administrative or technical error; or

(ii) a Disruption Event; and

(b) payment is made within 3 Business Days of its due date.

21.3 Specific obligations

A breach occurs of Clause 4.4 (Waiver of conditions precedent), Clause 19.6 (Pad passu ranking), Clause 19.7 (Ownership), Clause 19.11 (No Financial Indebtedness and terms of refinancing of Existing Indebtedness), Clause 19.12 (Dividends), Clause 19.13 (Other transactions), Clause 19.14 (Unlawfulness, invalidity and ranking; Security imperilled), Clause 19.16 (Sanctions and compliance with laws), Clause 19.17 (Subordination of Loans), Clause 19.20 (Additional security; Ocean Rig Shares) or Clause 20 (Security Cover).

21.4 Other obligations

(a) Neither the Borrower nor Ocean Rig complies with any provision of the Finance Documents (other than those referred to in Clause 21.2 (Non-payment) and Clause 21.3 (Specific obligations)).

(b) No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 15 Business Days of the Facility Agent giving notice to the Borrower or (if earlier) the Borrower becoming aware of its failure to comply.

21.5 Misrepresentation

Any representation or statement made or deemed to be made by the Borrower or Ocean Rig in the Finance Documents or any other document delivered by or on behalf of the Borrower or Ocean Rig under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.

21.6 Cross default

(a) Any Financial Indebtedness of the Borrower or Ocean Rig is not paid when due nor within any originally applicable grace period.

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(b) Any Financial Indebtedness of the Borrower or Ocean Rig is declared to be due and payable prior to its specified maturity as a result of an event of default (however described).

(c) Any creditor of the Borrower or Ocean Rig declares any Financial Indebtedness of the Borrower or Ocean Rig to be due and payable prior to its specified maturity as a result of an event of default (however described).

(d) No Event of Default will occur under this Clause 21.6 (Cross default) if the aggregate amount of Financial Indebtedness falling within paragraphs (a) to (c) above is less than $5,000,000 (or its equivalent in any other currency) in aggregate in respect of Ocean Rig and the Borrower at any relevant time.

21.7 Insolvency

(a) The Borrower and/or Ocean Rig:

(i) is unable or admits inability to pay its debts as they fall due;

(ii) is deemed to, or is declared to, be unable to pay its debts under applicable law;

(iii) suspends or threatens to suspend making payments on any of its debts; or

(iv) by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding any Finance Party in its capacity as such) with a view to rescheduling any of its indebtedness.

(b) The value of the assets of the Borrower and/or Ocean Rig is less than its liabilities (taking into account contingent and prospective liabilities).

(c) A moratorium is declared in respect of any indebtedness of the Borrower and/or Ocean Rig. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.

21.8 Insolvency proceedings

(a) Any corporate action, legal proceedings or other procedure or step is taken in relation to:

(i) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Borrower and/or Ocean Rig;

(ii) a composition, compromise, assignment or arrangement with any creditor of the Borrower and/or Ocean Rig;

(iii) the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of the Borrower and/or Ocean Rig or any of its assets; or

(iv) enforcement of any Security over any assets of the Borrower and/or Ocean Rig, or any analogous procedure or step is taken in any jurisdiction.

(b) Paragraph (a) above shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 30 days of commencement.

21.9 Creditors' process

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Any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets having an aggregate value in excess of $5,000,000 (or its equivalent in any other currency) of either the Borrower or Ocean Rig.

21.10 Ownership

Without the prior consent of the Majority Lenders, the Counterparty (either directly and/or through companies beneficially owned by members of the Counterparty and/or trusts or foundations of which the Counterparty is a beneficiary) owns and controls less than 10 per cent. of the issued voting share capital of the Borrower.

21.11 Unlawfulness, invalidity and ranking

(a) It is or becomes unlawful for the Borrower and/or Ocean Rig to perform any of its obligations under the Finance Documents.

(b) Any obligation of the Borrower and/or Ocean Rig under the Finance Documents is not or ceases to be legal, valid, binding or enforceable.

(c) Any Finance Document ceases to be in full force and effect or to be continuing or is or purports to be determined or any Transaction Security is alleged by a party to it (other than a Finance Party) to be ineffective.

(d) Any Transaction Security proves to have ranked after, or loses its priority to, any other Security.

21.12 Security imperilled

Any Security created or intended to be created by a Finance Document is in any way imperilled or in jeopardy.

21.13 Cessation of business

The Borrower and/or Ocean Rig suspends or ceases to carry on (or threatens to suspend or ceases to carry on) all or a material part of its business, such cessation is reasonably likely to have a Material Adverse Effect.

21.14 Expropriation

The authority or ability of the Borrower and/or Ocean Rig to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to the Borrower and/or Ocean Rig or any of their assets.

21.15 Repudiation and rescission of agreements

A Transaction Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Transaction Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Transaction Document or any Transaction Security.

21.16 Litigation

Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to any of the Transaction Documents or the transactions contemplated in any of the Transaction Documents or

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against the Borrower and/or Ocean Rig or their assets which has or is reasonably likely to have a Material Adverse Effect.

21.17 Material adverse change

Any event or circumstance occurs which, in the opinion of the Majority Lenders, has or is reasonably likely to have a Material Adverse Effect.

21.18 Refinancing

The Borrower fails to present to the Facility Agent by no later than the date falling 2 months prior to the Initial Maturity Date (or, in circumstances where the tenor of the Loan is extended pursuant to Clause 6.4 (Extension of facility) a well-defined, documented and feasible plan satisfactory to the Facility Agent (acting with the authorisation of all Lenders) regarding the manner in which the Loan will be fully re-financed on the applicable Maturity Date.

21.19 Registration Statement

A Registration Statement is not effective or ceases to be effective at any time during the Security Period.

21.20 Ocean Rig Shares

(a) The Ocean Rig Shares cannot be freely sold by the Security Agent (in circumstances where the Security Agent becomes entitled to sell the Ocean Rig Shares) at any time during the Security Period (subject to the grace period referred to in paragraph (aa) of Clause 19.9 (Additional security; Ocean Rig Shares)).

(b) The Borrower ceases to wholly own any of the Ocean Rig Shares.

(c) It appears to the Majority Lenders, having made reasonable enquiry in relation thereto, that without their prior consent a change has occurred or probably has occurred after the date of this Agreement in the direct or ultimate, legal or beneficial ownership of any of the Ocean Rig Shares, or in the direct or ultimate, legal or beneficial control of the voting rights attaching to any of those shares.

(d) Any official consent necessary to enable the Borrower to own the Ocean Rig Shares or to enable the Borrower expires without renewed, is revoked or becomes liable to revocation or any condition of such consent is not fulfilled.

21.21 NASDAQ

The shares of the Borrower and/or Ocean Rig cease to be listed on NASDAQ.

21.22 Acceleration

On and at any time after the occurrence of an Event of Default that has occurred and is continuing the Facility Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrower:

(a) cancel the Total Commitments, whereupon they shall immediately be cancelled;

(b) declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon it shall become immediately due and payable; and/or

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(c) declare that all or part of the Loan be payable on demand, whereupon it shall immediately become payable on demand by the Facility Agent acting on the instructions of the Majority Lenders,

and the Facility Agent may serve notices under paragraphs (a), (b) and (c) above simultaneously or on different dates and the Security Agent may take any action referred to in Clause 21.24 (Enforcement of security) if no such notice is served or simultaneously with or at any time after the service of any of such notice.

21.23 Enforcement of security

On and at any time after the occurrence of an Event of Default that has occurred and is continuing the Security Agent may, and shall if so directed by the Majority Lenders, take any action which, as a result of the Event of Default or any notice served under Clause 21.23 (Acceleration).

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SECTION 8

CHANGES TO PARTIES

22. CHANGES TO THE LENDERS

22.1 Assignments and transfers by the Lenders

Subject to this Clause 22 (Changes to the Lenders), a Lender (the "Existing Lender") may:

(a) assign any of its rights; or

(b) transfer by novation any of its rights and obligations,

under the Finance Documents to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the "New Lender").

22.2 Conditions of assignment or transfer

(a) The consent of the Borrower is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is:

(i) to another Lender or an Affiliate of a Lender; or

(ii) made at a time when an Event of Default is continuing.

(b) The consent of the Borrower to an assignment or transfer must not be unreasonably withheld or delayed. The Borrower will be deemed to have given its consent five Business Days after the Existing Lender has requested it in writing unless such consent is expressly refused by the Borrower within that time.

(c) An assignment will only be effective on:

(i) receipt by the Facility Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to the Facility Agent) that the New Lender will assume the same obligations to the other Secured Parties as it would have been under if it were an Original Lender; and

(ii) performance by the Facility Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Facility Agent shall promptly notify to the Existing Lender and the New Lender.

(d) A transfer will only be effective if the procedure set out in Clause 22.5 (Procedure for transfer) is complied with.

(e) If:

(i) a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and

(ii) as a result of circumstances existing at the date the assignment, transfer or change occurs, the Borrower would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 (Tax Gross Up, Indemnities and FATCA) or Clause 13 (Increased Costs),

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then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred. This paragraph (e) shall not apply in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Facility.

(f) Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.

22.3 Assignment or transfer fee

The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Facility Agent (for its own account) a fee of US$5,000.

22.4 Limitation of responsibility of Existing Lenders

(a) Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

(i) the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents, the Transaction Security or any other documents;

(ii) the financial condition of any Transaction Obligor;

(iii) the performance and observance by any Transaction Obligor of its obligations under the Finance Documents or any other documents; or

(iv) the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

and any representations or warranties implied by law are excluded.

(b) Each New Lender confirms to the Existing Lender and the other Finance Parties and the Secured Parties that it:

(i) has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Transaction Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender or any other Finance Party in connection with any Finance Document or the Transaction Security; and

(ii) will continue to make its own independent appraisal of the creditworthiness of each Transaction Obligor and its related entities throughout the Security Period.

(c) Nothing in any Finance Document obliges an Existing Lender to:

(i) accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 22 (Changes to the Lenders); or

(ii) support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Transaction Obligor of its obligations under the Finance Documents or otherwise.

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22.5 Procedure for transfer

(a) Subject to the conditions set out in Clause 22.2 (Conditions of assignment or transfer), a transfer is effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, subject to paragraph (b) below as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with this Agreement and delivered in accordance with this Agreement, execute that Transfer Certificate.

(b) The Facility Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.

(c) Subject to Clause 22.9 (Pro rata interest settlement), on the Transfer Date:

(i) to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents and in respect of the Transaction Security, each of the Transaction Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and in respect of the Transaction Security and their respective rights against one another under the Finance Documents and in respect of the Transaction Security shall be cancelled (being the "Discharged Rights and Obligations");

(ii) each of the Transaction Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Transaction Obligor and the New Lender have assumed and/or acquired the same in place of that Transaction Obligor and the Existing Lender;

(iii) the Facility Agent, the Security Agent, the Arranger, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves and in respect of the Transaction Security as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Facility Agent, the Security Agent, the Arranger and the Existing Lenders shall each be released from further obligations to each other under the Finance Documents; and

(iv) the New Lender shall become a Party as a "Lender".

22.6 Procedure for assignment

(a) Subject to the conditions set out in Clause 22.2 (Conditions of assignment or transfer) an assignment may be effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.

(b) The Facility Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.

(c) Subject to Clause 22.9 (Pro rata interest settlement), on the Transfer Date:

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(i) the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of the Transaction Security expressed to be the subject of the assignment in the Assignment Agreement;

(ii) the Existing Lender will be released from the obligations (the "Relevant Obligations") expressed to be the subject of the release in the Assignment Agreement (and any corresponding obligations by which it is bound in respect of the Transaction Security); and

(iii) the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations.

(d) Lenders may utilise procedures other than those set out in this Clause 22.6 (Procedure for assignment) to assign their rights under the Finance Documents (but not, without the consent of the Borrower or unless in accordance with Clause 22.5 (Procedure for transfer), to obtain a release by the Borrower from the obligations owed to the Borrower by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 22.2 (Conditions of assignment or transfer).

22.7 Copy of Transfer Certificate or Assignment Agreement to Borrower

The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrower a copy of that Transfer Certificate or Assignment Agreement.

22.8 Security over Lenders' rights

In addition to the other rights provided to Lenders under this Clause 22 (Changes to the Lenders), each Lender may without consulting with or obtaining consent from the Borrower, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

(a) any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and

(b) in the case of any Lender which is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,

except that no such charge, assignment or Security shall:

(i) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or

(ii) require any payments to be made by the Borrower other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

22.9 Pro rata interest settlement

If the Facility Agent has notified the Lenders that it is able to distribute interest payments on a "pro rata basis" to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 22.5 (Procedure for transfer) or any assignment pursuant to Clause 22.6 (Procedure for assignment) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):

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(a) any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date ("Accrued Amounts") and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at six Monthly intervals after the first day of that Interest Period); and

(b) The rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:

(i) when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

(ii) the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 22.9 (Pro rata interest settlement), have been payable to it on that date, but after deduction of the Accrued Amounts.

23. CHANGES TO THE BORROWER

The Borrower may not assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

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SECTION 9

THE FINANCE PARTIES

24. THE FACILITY AGENT AND THE ARRANGER

24.1 Appointment of the Facility Agent

(a) Each other Finance Party appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.

(b) Each other Finance Party authorises the Facility Agent to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions.

24.2 Duties of the Facility Agent

(a) Subject to paragraph (b) below, the Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party.

(b) Without prejudice to Clause 22.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), paragraph (a) above shall not apply to any Transfer Certificate or to any Assignment Agreement.

(c) Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

(d) If the Facility Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties.

(e) If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Facility Agent or the Arranger or the Security Agent) under this Agreement it shall promptly notify the other Finance Parties.

(f) The Facility Agent's duties under the Finance Documents are solely mechanical and administrative in nature.

24.3 Role of the Arranger

Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under, or in connection with, any Finance Document.

24.4 No fiduciary duties

(a) The Facility Agent shall not have any duties or obligations to any person under the Finance Documents except to the extent that they are expressly set out in the Finance Documents.

(b) The provisions of paragraph (a) above shall apply even if, notwithstanding and contrary to paragraph (a) above, any provision of this Agreement or any other Finance Document by operation of law has the effect of constituting the Facility Agent as a fiduciary.

(c) Nothing in the Finance Documents constitutes the Facility Agent or the Arranger a trustee of any other person.

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(d) None of the Facility Agent, the Security Agent nor the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

24.5 Application of receipts

Except as expressly stated to the contrary in any Finance Document, any moneys which the Facility Agent receives or recovers in its capacity as Facility Agent shall be applied by the Facility Agent in accordance with Clause 28.5 (Application of receipts; partial payments).

24.6 Business with the Transaction Obligors

The Facility Agent and the Arranger may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any Transaction Obligor.

24.7 Rights and discretions of the Facility Agent

(a) The Facility Agent may rely on:

(i) any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and

(ii) any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.

(b) The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:

(i) no Default has occurred (unless it has actual knowledge of a Default arising under Clause 21.2 (Non-payment));

(ii) any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and

(iii) any notice or request made by the Borrower (other than the Utilisation Request or a Selection Notice) is made on behalf of and with the consent and knowledge of all the Transaction Obligors.

(c) The Facility Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

(d) The Facility Agent may act in relation to the Finance Documents through its personnel and agents.

(e) The Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

(f) Notwithstanding any other provision of any Finance Document to the contrary, the Facility Agent is not obliged to do or omit to do anything if it would or might, in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

24.8 Majority Lenders' instructions

(a) Unless a contrary indication appears in a Finance Document, the Facility Agent shall:

(i) exercise any right, power, authority or discretion vested in it as Servicing Party in accordance with any instructions given to it by the Majority Lenders (or, if so

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instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as a Servicing Party); and

(ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders.

(b) Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties.

(c) The Facility Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.

(d) In the absence of instructions from the Majority Lenders (or, if appropriate, the Lenders), the Facility Agent shall not be obliged to take any action (or refrain from taking action) (even if it considers acting or not acting to be in the best interests of the Lenders). The Facility Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders.

(e) The Facility Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (e) shall not apply to any legal or arbitration proceedings relating to the perfection, preservation or protection of rights under the Transaction Security or Finance Documents creating Transaction Security.

24.9 Responsibility for documentation

Neither the Facility Agent nor the Arranger:

(a) is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Facility Agent, a Transaction Obligor or any other person given in, or in connection with, any Transaction Document; or

(b) is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or the Transaction Security or any other agreement, arrangement or document entered into or made or executed in anticipation of, or in connection with, any Transaction Document or the Transaction Security; or

(c) is responsible for any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

24.10 Exclusion of liability

(a) Without limiting paragraph (b) below (and without prejudice to the provisions of paragraph (e) of Clause 28.11 (Disruption to Payment Systems etc.), the Facility Agent will not be liable for any action taken by it under or in connection with any Finance Document or the Transaction Security, unless directly caused by its gross negligence or wilful misconduct.

(b) No Party other than the Facility Agent may take any proceedings against any officer, employee or agent of the Facility Agent in respect of any claim it might have against the Facility Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and each officer, employee or agent of the Facility Agent may rely on this Clause subject to Clause 1.4 (Third party rights) and the provisions of the Third Parties Act.

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(c) The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by it if it has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by it for that purpose.

(d) Nothing in this Agreement shall oblige the Facility Agent or the Arranger to carry out any "know your customer" or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Facility Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Facility Agent or the Arranger.

24.11 Lenders' indemnity to the Facility Agent

Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Facility Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of its gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 28.11 (Disruption to Payment Systems etc.) notwithstanding the Facility Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) in acting as Facility Agent under the Finance Documents (unless the Facility Agent has been reimbursed by a Transaction Obligor pursuant to a Finance Document).

24.12 Resignation of the Facility Agent

(a) The Facility Agent may resign and appoint one of its Affiliates acting through an office as successor by giving notice to the other Finance Parties and the Borrower.

(b) Alternatively, the Facility Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrower, in which case the Majority Lenders may appoint a successor Facility Agent.

(c) If the Majority Lenders have not appointed a successor Facility Agent in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Facility Agent may appoint a successor Facility Agent.

(d) The retiring Facility Agent shall, at its own cost, make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions Facility Agent under the Finance Documents.

(e) The Facility Agent's resignation notice shall only take effect upon the appointment of a successor.

(f) Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 24 (The Facility Agent and the Arranger) and any other provisions of a Finance Document which are expressed to limit or exclude its liability in acting as Facility Agent. Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

(g) The Majority Lenders may, by notice to the Facility Agent, require it to resign in accordance with paragraph (b) above. In this event, the Facility Agent shall resign in accordance with paragraph (b) above.

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(h) The consent of the Borrower (or any other Transaction Obligor) is not required for an assignment or transfer of rights and/or obligations by the Facility Agent.

(i) The Facility Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Facility Agent pursuant to paragraph (c) above) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Facility Agent under the Finance Documents, either:

(i) the Facility Agent fails to respond to a request under Clause 12.7 (FATCA Information) and a Lender reasonably believes that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

(ii) the information supplied by the Facility Agent pursuant to Clause 12.7 (FATCA Information) indicates that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

(iii) the Facility Agent notifies the Borrower and the Lenders that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

and (in each case) a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Facility Agent were a FATCA Exempt Party, and that Lender, by notice to the Facility Agent, requires it to resign.

24.13 Confidentiality

(a) In acting as Facility Agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.

(b) If information is received by a division or department of the Facility Agent other than that division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Facility Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.

24.14 Relationship with the Lenders

(a) Subject to Clause 22.9 (Pro rata interest settlement), the Facility Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Facility Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:

(i) entitled to or liable for any payment due under any Finance Document on that day; and

(ii) entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,

unless it has received not less than five Business Days' prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

(b) Each Lender shall supply the Facility Agent with any information that the Security Agent may reasonably specify (through the Facility Agent) as being necessary or desirable to enable the Security Agent to perform its functions as Security Agent. Each Lender shall deal with the

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Security Agent exclusively through the Facility Agent and shall not deal directly with the Security Agent.

(c) Any Lender may by notice to the Facility Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 30.5 (Electronic communication)) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of Clause 30.2 (Addresses) and sub-paragraph (ii) of paragraph (a) of Clause 30.5 (Electronic communication) and the Facility Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.

24.15 Credit appraisal by the Lenders

Without affecting the responsibility of any Transaction Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Facility Agent and the Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under, or in connection with, any Finance Document including but not limited to:

(a) the financial condition, status and nature of each Transaction Obligor;

(b) the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and the Transaction Security and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Transaction Security;

(c) whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under, or in connection with, any Finance Document or the Transaction Security, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

(d) the adequacy, accuracy and/or completeness of any information provided by the Facility Agent, any Party or by any other person under, or in connection with, any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

(e) the right or title of any person in or to or the value or sufficiency of any part of the Charged Property, the priority of any of the Transaction Security or the existence of any Security affecting the Charged Property.

24.16 Reference Banks

If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Facility Agent shall (in consultation with the Borrower) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank.

24.17 Facility Agent's management time

Upon the occurrence of an Event of Default, any amount payable to the Facility Agent under Clause 14.4 (Indemnity to the Servicing Parties), Clause 16 (Costs and Expenses) and Clause

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24.11 (Lenders' indemnity to the Facility Agent) shall include the cost of utilising the Facility Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Facility Agent may notify to the Borrower and the Lenders, and is in addition to any fee paid or payable to the Facility Agent under Clause 11 (Fees).

24.18 Deduction from amounts payable by the Facility Agent

If any Party owes an amount to the Facility Agent under the Finance Documents, the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

24.19 Full freedom to enter into transactions

Notwithstanding any rule of law or equity to the contrary, the Facility Agent shall be absolutely entitled:

(a) to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Transaction Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Transaction Obligor or any person who is party to, or referred to in, a Finance Document);

(b) to deal in and enter into and arrange transactions relating to:

(i) any securities issued or to be issued by any Transaction Obligor or any other person; or

(ii) any options or other derivatives in connection with such securities; and

(c) to provide advice or other services to any Borrower or any person who is a party to, or referred to in, a Finance Document,

and, in particular, the Facility Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.

25. THE SECURITY AGENT

25.1 Trust

(a) The Security Agent declares that it shall hold the Security Property on trust for the Secured Parties on the terms contained in this Agreement and shall deal with the Security Property in accordance with this Clause 25 (The Security Agent) and the other provisions of the Finance Documents.

(b) Each of the parties to this Agreement agrees that the Security Agent shall have only those duties, obligations and responsibilities expressly specified in this Agreement or in the Finance Documents (and no others shall be implied).

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(c) The Security Agent shall not have any liability to any person in respect of its duties, obligations and responsibilities under this Agreement or the other Finance Documents except as expressly set out in paragraph (a) of Clause 25.1 (Trust) and as excluded or limited by this Clause 25 (The Security Agent) including in particular Clause 25.8 (Instructions to Security Agent and exercise of discretion), Clause 25.13 (Responsibility for documentation), Clause 25.14 (Exclusion of liability). Clause 25.16 (Lenders' indemnity to the Security Agent), Clause 25.23 (Business with the Transaction Obligors) and Clause 25.28 (Full freedom to enter into transactions).

25.2 Parallel Debt (Covenant to pay the Security Agent)

(a) Each Transaction Obligor irrevocably and unconditionally undertakes to pay to the Security Agent its Parallel Debt which shall be amounts equal to, and in the currency or currencies of, its Corresponding Debt.

(b) The Parallel Debt of a Transaction Obligor:

(i) shall become due and payable at the same time as its Corresponding Debt;

(ii) is independent and separate from, and without prejudice to, its Corresponding Debt.

(c) For purposes of this Clause 25.2 (Parallel Debt (Covenant to pay the Security Agent)), the Security Agent:

(i) is the independent and separate creditor of each Parallel Debt;

(ii) acts in its own name and not as agent, representative or trustee of the Finance Parties and its claims in respect of each Parallel Debt shall not be held on trust; and

(iii) shall have the independent and separate right to demand payment of each Parallel Debt in its own name (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding).

(d) The Parallel Debt of a Transaction Obligor shall be:

(i) decreased and/or discharged to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged; and

(ii) increased to the extent that its Corresponding Debt has increased, and the Corresponding Debt of a Transaction Obligor shall be:

(A) decreased to the extent that its Parallel Debt has been irrevocably and unconditionally paid or discharged; and

(B) increased to the extent that its Parallel Debt has increased,

in each case provided that the Parallel Debt of a Transaction Obligor shall never exceed its Corresponding Debt.

(e) All amounts received or recovered by the Security Agent in connection with this Clause 25.2 (Parallel Debt (Covenant to pay the Security Agent)) to the extent permitted by applicable law, shall be applied in accordance with Clause 28.5 (Application of receipts; partial payments).

(f) This Clause 25.2 (Parallel Debt (Covenant to pay the Security Agent)) shall apply, with any necessary modifications, to each Finance Document.

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25.3 No independent power

The Secured Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any rights or powers arising under the Finance Documents creating the Transaction Security except through the Security Agent.

25.4 Application of receipts

(a) Except as expressly stated to the contrary in any Finance Document, any moneys which the Security Agent receives or recovers and which are, or are attributable to, Security Property (for the purposes of this Clause 25 (The Security Agent), the "Recoveries") shall be transferred to the Facility Agent for application in accordance with Clause 28.5 (Application of receipts; partial payments).

(b) Paragraph (a) above is without prejudice to the rights of the Security Agent, each Receiver and each Delegate:

(i) under Clause 14.6 (Indemnity to the Security Agent) to be indemnified out of the Charged Property; and

(ii) under any Finance Document to credit any moneys received or recovered by it to any suspense account.

(c) Any transfer by the Security Agent to the Facility Agent in accordance with paragraph (a) above shall be a good discharge, to the extent of that payment, by the Security Agent.

(d) The Security Agent is under no obligation to make the payments to the Facility Agent under paragraph (a) of this Clause 25.4 (Application of receipts) in the same currency as that in which the obligations and liabilities owing to the relevant Finance Party are denominated.

25.5 Deductions from receipts

(a) Before transferring any moneys to the Facility Agent under Clause 25.4 (Application of receipts), the Security Agent may, in its discretion:

(i) deduct any sum then due and payable under this Agreement or any other Finance Documents to the Security Agent or any Receiver or Delegate and retain that sum for itself or, as the case may require, pay it to another person to whom it is then due and payable;

(ii) set aside by way of reserve amounts required to meet, and to make and pay, any deductions and withholdings (on account of Taxes or otherwise) which it is required by any applicable law to make from any distribution or payment made by it under this Agreement; and

(iii) pay all Taxes which may be assessed against it in respect of any of the Security Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Agent under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).

(b) For the purposes of sub-paragraph (i) of paragraph (a) above, if the Security Agent has become entitled to require a sum to be paid to it on demand, that sum shall be treated as due and payable, even if no demand has yet been served.

25.6 Prospective liabilities

Following acceleration of any of the Transaction Security, the Security Agent may, in its discretion, or at the request of the Facility Agent, hold any Recoveries in an interest bearing

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suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) for later payment to the Facility Agent for application in accordance with Clause 28.5 (Application of receipts; partial payments) in respect of:

(a) any sum to the Security Agent, any Receiver or any Delegate; and

(b) any part of the Secured Liabilities,

that the Security Agent or, in the case of paragraph (b) only, the Facility Agent, reasonably considers, in each case, might become due or owing at any time in the future.

25.7 Investment of proceeds

Prior to the payment of the proceeds of the Recoveries to the Facility Agent for application in accordance with Clause 28.5 (Application of receipts; partial payments) the Security Agent may, in its discretion, hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) pending the payment from time to time of those moneys in the Security Agent's discretion in accordance with the provisions of this Clause 25.7 (Investment of proceeds).

25.8 Instructions to Security Agent and exercise of discretion

(a) Subject to paragraph (d) below, the Security Agent shall act in accordance with any instructions given to it by the Facility Agent (acting on the instructions of the Majority Lenders or all the Lenders (as appropriate)) or, if so instructed by the Facility Agent (acting on the instructions of the Majority Lenders or all the Lenders (as appropriate)), refrain from exercising any right, power, authority or discretion vested in it as Security Agent and shall be entitled to assume that:

(i) any instructions received by it from the Facility Agent (acting on the instructions of the Majority Lenders or all the Lenders (as appropriate)) are duly given in accordance with the terms of the Finance Documents; and

(ii) unless it has received actual notice of revocation, that those instructions or directions have not been revoked.

(b) The Security Agent shall be entitled to request instructions, or clarification of any direction, from the Facility Agent (acting on the instructions of the Majority Lenders or all the Lenders (as appropriate)) as to whether, and in what manner, it should exercise or refrain from exercising any rights, powers, authorities and discretions and the Security Agent may refrain from acting unless and until those instructions or clarification are received by it.

(c) Any instructions given to the Security Agent by the Facility Agent (acting on the instructions of the Majority Lenders or all the Lenders (as appropriate)) shall override any conflicting instructions given by any other Party.

(d) Paragraph (a) above shall not apply:

(i) where a contrary indication appears in this Agreement;

(ii) where this Agreement requires the Security Agent to act in a specified manner or to take a specified action;

(iii) in respect of any provision which protects the Security Agent's own position in its personal capacity as opposed to its role of Security Agent for the Secured Parties

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including, without limitation, the provisions set out in Clauses 25.10 (Security Agent's discretions) to Clause 25.28 (Full freedom to enter into transactions); and

(iv) in respect of the exercise of the Security Agent's discretion to exercise a right, power or authority under any of Clause 25.5 (Deductions from receipts) and Clause 25.6 (Prospective liabilities).

25.9 Security Agent's Actions

Without prejudice to the provisions of Clause 25.4 (Application of receipts), the Security Agent may (but shall not be obliged to), in the absence of any instructions to the contrary, take such action in the exercise of any of its powers and duties under the Finance Documents as it considers in its discretion to be appropriate.

25.10 Security Agent's discretions

(a) The Security Agent may:

(i) assume (unless it has received actual notice to the contrary from the Facility Agent) that (i) no Default has occurred and no Transaction Obligor is in breach of or default under its obligations under any of the Finance Documents and (ii) any right, power, authority or discretion vested by any Finance Document in any person has not been exercised;

(ii) any notice or request made by the Borrower (other than the Utilisation Request or a Selection Notice) is made on behalf of and with the consent and knowledge of all the Transaction Obligors;

(iii) if it receives any instructions or directions to take any action in relation to the Transaction Security, assume that all applicable conditions under the Finance Documents for taking that action have been satisfied;

(iv) engage, pay for and rely on the advice or services of any legal advisers, accountants, tax advisers, surveyors or other experts (whether obtained by the Security Agent or by any other Secured Party) whose advice or services may at any time seem necessary, expedient or desirable;

(v) act in relation to the Finance Documents through its personnel and agents;

(vi) disclose to any other Party any information it reasonably believes it has received as security agent under this Agreement;

(vii) rely upon any communication or document believed by it to be genuine and, as to any matters of fact which might reasonably be expected to be within the knowledge of a Secured Party or a Transaction Obligor, upon a certificate signed by or on behalf of that person; and

(viii) refrain from acting in accordance with the instructions of any Party (including bringing any legal action or proceeding arising out of or in connection with the Finance Documents) until it has received any indemnification and/or security that it may in its discretion require (whether by way of payment in advance or otherwise) for all costs, losses and liabilities which it may incur in so acting.

(b) Notwithstanding any other provision of any Finance Document to the contrary, the Security Agent is not obliged to do or omit to do anything if it would or might, in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

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25.11 Security Agent's obligations

The Security Agent shall promptly:

(a) copy to the Facility Agent the contents of any notice or document received by it from any Transaction Obligor under any Finance Document;

(b) forward to a Party the original or a copy of any document which is delivered to the Security Agent for that Party by any other Party provided that, except where a Finance Document expressly provides otherwise, the Security Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party; and

(c) inform the Facility Agent of the occurrence of any Default or any default by a Debtor in the due performance of or compliance with its obligations under any Finance Document of which the Security Agent has received notice from any other party to this Agreement.

25.12 Excluded obligations

Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Security Agent shall not:

(a) be bound to enquire as to (i) whether or not any Default has occurred or (H) the performance, default or any breach by a Transaction Obligor of its obligations under any of the Finance Documents;

(b) be bound to account to any other Party for any sum or the profit element of any sum received by it for its own account;

(c) be bound to disclose to any other person (including but not limited to any Secured Party) (i) any confidential information or (ii) any other information if disclosure would, or might in its reasonable opinion, constitute a breach of any law or be a breach of fiduciary duty;

(d) have or be deemed to have any relationship of trust or agency with, any Transaction Obligor.

25.13 Responsibility for documentation

None of the Security Agent, any Receiver nor any Delegate shall accept responsibility or be liable for:

(a) the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Security Agent or any other person in or in connection with any Finance Document or the transactions contemplated in the Finance Documents, or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

(b) the legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Security Property;

(c) any losses to any person or any liability arising as a result of taking or refraining from taking any action in relation to any of the Finance Documents, the Security Property or otherwise, whether in accordance with an instruction from the Facility Agent or otherwise unless directly caused by its gross negligence or wilful misconduct;

(d) the exercise of, or the failure to exercise, any judgment, discretion or power given to it by or in connection with any of the Finance Documents, the Security Property or any other

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agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, the Finance Documents or the Security Property; or

(e) any shortfall which arises on the enforcement or realisation of the Security Property.

25.14 Exclusion of liability

(a) Without limiting Clause 25.15 (No proceedings), none of the Security Agent, any Receiver or any Delegate will be liable for any action taken by it or not taken by it under or in connection with any Finance Document or the Transaction Security, unless directly caused by its gross negligence or wilful misconduct.

(b) The Security Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by it if it has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by it for that purpose.

(c) Nothing in this Agreement shall oblige the Security Agent to carry out any "know your customer" or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Security Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Security Agent.

25.15 No proceedings

No Party (other than the Security Agent, that Receiver or that Delegate) may take any proceedings against any officer, employee or agent of the Security Agent, a Receiver or a Delegate in respect of any claim it might have against the Security Agent, a Receiver or a Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document or any Security Property and any officer, employee or agent of the Security Agent, a Receiver or a Delegate may rely on this Clause subject to Clause 1.4 (Third party rights) and the provisions of the Third Parties Rights Act.

25.16 Lenders' indemnity to the Security Agent

Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Security Agent and every Receiver and every Delegate, within three Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise than by reason of the relevant Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct) in acting as Security Agent, Receiver or Delegate under the Finance Documents (unless the relevant Security Agent, Receiver or Delegate has been reimbursed by a Transaction Obligor pursuant to a Finance Document).

25.17 Own responsibility

Without affecting the responsibility of any Transaction Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Secured Party confirms to the Security Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

(a) the financial condition, status and nature of each Transaction Obligor;

(b) the legality, validity, effectiveness, adequacy and enforceability of any Finance Document, the Security Property and any other agreement, arrangement or document entered into,

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made or executed in anticipation of, under or in connection with any Finance Document or the Security Property;

(c) whether that Secured Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the Security Property, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Security Property;

(d) the adequacy, accuracy and/or completeness of any information provided by the Security Agent or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

(e) the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any of the Transaction Security or the existence of any Security affecting the Charged Property,

and each Secured Party warrants to the Security Agent that it has not relied on and will not at any time rely on the Security Agent in respect of any of these matters.

25.18 No responsibility to perfect Transaction Security

The Security Agent shall not be liable for any failure to:

(a) require the deposit with it of any deed or document certifying, representing or constituting the title of any Transaction Obligor to any of the Charged Property;

(b) obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any of the Finance Documents or the Transaction Security;

(c) register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any applicable laws in any jurisdiction or to give notice to any person of the execution of any of the Finance Documents or of the Transaction Security;

(d) take, or to require any of the Transaction Obligors to take, any steps to perfect its title to any of the Charged Property or to render the Transaction Security effective or to secure the creation of any ancillary Security under the laws of any jurisdiction; or

(e) require any further assurances in relation to any of the Finance Documents creating the Transaction Security.

25.19 Insurance by Security Agent

(a) The Security Agent shall not be under any obligation to insure any of the Charged Property, to require any other person to maintain any insurance or to verify any obligation to arrange or maintain insurance contained in the Finance Documents. The Security Agent shall not be responsible for any loss which may be suffered by any person as a result of the lack of or inadequacy of any such insurance.

(b) Where the Security Agent is named on any insurance policy as an insured party, it shall not be responsible for any loss which may be suffered by reason of, directly or indirectly, its failure to notify the insurers of any material fact relating to the risk assumed by such insurers or any other information of any kind, unless the Facility Agent shall have requested

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it to do so in writing and the Security Agent shall have failed to do so within 14 days after receipt of that request.

25.20 Custodians and nominees

The Security Agent may appoint and pay any person to act as a custodian or nominee on any terms in relation to any assets of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the proceedings or acts of any person.

25.21 Acceptance of title

The Security Agent shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any of the Transaction Obligors may have to any of the Charged Property and shall not be liable for or bound to require any Transaction Obligor to remedy any defect in its right or title.

25.22 Refrain from illegality

Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Security Agent may refrain from doing anything which in its opinion will or may be contrary to any relevant law, directive or regulation of any jurisdiction and the Security Agent may do anything which is, in its opinion, necessary to comply with any such law, directive or regulation.

25.23 Business with the Transaction Obligors

The Security Agent may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any Transaction Obligor.

25.24 Winding up of trust

If the Security Agent, with the approval of the Facility Agent determines that (a) all of the Secured liabilities and all other obligations secured by the Finance Documents creating the Transaction Security have been fully and finally discharged and (b) none of the Secured Parties is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Transaction Obligor pursuant to the Finance Documents:

(a) the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Finance Documents creating the Transaction Security; and

(b) any Retiring Security Agent shall release, without recourse or warranty, all of its rights under each of the Finance Documents creating the Transaction Security.

25.25 Powers supplemental

The rights, powers and discretions conferred upon the Security Agent by this Agreement shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Agent by general law or otherwise.

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25.26 Trustee division separate

(a) In acting as trustee for the Secured Parties, the Security Agent shall be regarded as acting through its trustee division which shall be treated as a separate entity from any of its other divisions or departments.

(b) If information is received by another division or department of the Security Agent, it may be treated as confidential to that division or department and the Security Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.

25.27 Disapplication

In addition to its rights under or by virtue of this Agreement and the other Finance Documents, the Security Agent shall have all the rights conferred on a trustee by the Trustee Act 1925, the Trustee Delegation Act 1999, the Trustee Act 2000 and by general law or otherwise, provided that:

(a) section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement and the other Finance Documents; and

(b) where there are any inconsistencies between (i) the Trustee Acts 1925 and 2000 and (H) the provisions of this Agreement and any other Finance Document, the provisions of this Agreement and any other Finance Document shall, to the extent allowed by law, prevail and, in the case of any inconsistency with the Trustee Act 2000, such provisions shall constitute a restriction or exclusion for the purposes of the Trustee Act 2000.

25.28 Full freedom to enter into transactions

Notwithstanding any rule of law or equity to the contrary, the Security Agent shall be absolutely entitled:

(a) to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Transaction Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Transaction Obligor or any person who is party to, or referred to in, a Finance Document);

(b) to deal in and enter into and arrange transactions relating to:

(i) any securities issued or to be issued by any Transaction Obligor or any other person; Or

(ii) any options or other derivatives in connection with such securities; and

(c) to provide advice or other services to the Borrower or any person who is a party to, or referred to in, a Finance Document,

and, in particular, each Servicing Party shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.

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25.29 Resignation of the Security Agent

(a) The Security Agent may resign and appoint one of its affiliates as successor by giving notice to the Borrower and each Finance Party.

(b) Alternatively the Security Agent may resign by giving notice to the other Parties in which case the Majority Lenders may appoint a successor Security Agent.

(c) If the Majority Lenders have not appointed a successor Security Agent in accordance with paragraph (b) above within 30 days after the notice of resignation was given, the Security Agent (after consultation with the Facility Agent) may appoint a successor Security Agent.

(d) The retiring Security Agent (the "Retiring Security Agent") shall, at its own cost, make available to the successor Security Agent such documents and records and provide such assistance as the successor Security Agent may reasonably request for the purposes of performing its functions as Security Agent under the Finance Documents.

(e) The Security Agent's resignation notice shall only take effect upon (i) the appointment of a successor and (ii) the transfer, by way of a document expressed as a deed, of all of the Security Property to that successor.

(f) Upon the appointment of a successor, the Retiring Security Agent shall be discharged, by way of a document executed as a deed, from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) of Clause 25.24 (Winding up of trust) and under paragraph (d) above) but shall, in respect of any act or omission by it whilst it was the Security Agent, remain entitled to the benefit of Clause 25 (The Security Agent), Clause 14.6 (Indemnity to the Security Agent), Clause 25.16 (Lenders' indemnity to the Security Agent) and any other provisions of a Finance Document which are expressed to limit or exclude its liability in acting as Security Agent. Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if that successor had been an original Party.

(g) The Majority Lenders may, by notice to the Security Agent, require it to resign in accordance with paragraph (b) above. In this event, the Security Agent shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (d) above shall be for the account of the Borrower.

(h) The consent of the Borrower (or any other Transaction Obligor) is not required for an assignment or transfer of rights and/or obligations by the Security Agent.

25.30 Delegation

(a) Each of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any of the rights, powers and discretions vested in it by any of the Finance Documents.

(b) That delegation may be made upon any terms and conditions (including the power to sub delegate) and subject to any restrictions that the Security Agent, that Receiver or that Delegate (as the case may be) may, in its discretion, think fit in the interests of the Secured Parties and it shall not be bound to supervise, or be in any way responsible for any loss incurred by reason of any misconduct or default on the part of any such delegate or sub delegate.

25.31 Additional Security Agents

(a) The Security Agent may at any time appoint (and subsequently remove) any person to act as a separate trustee or as a co-trustee jointly with it:

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(i) if it considers that appointment to be in the interests of the Secured Parties; or

(ii) for the purposes of conforming to any legal requirements, restrictions or conditions which the Security Agent deems to be relevant; or

(iii) for obtaining or enforcing any judgment in any jurisdiction,

and the Security Agent shall give prior notice to the Borrower and the Facility Agent of that appointment.

(b) Any person so appointed shall have the rights, powers and discretions (not exceeding those conferred on the Security Agent by this Agreement) and the duties and obligations that are conferred or imposed by the instrument of appointment.

(c) The remuneration that the Security Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Security Agent.

26. CONDUCT OF BUSINESS BY THE FINANCE PARTIES

No provision of this Agreement will:

(a) interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

(b) oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

(c) oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

27. SHARING AMONG THE FINANCE PARTIES

27.1 Payments to Finance Parties

If a Finance Party (a "Recovering Finance Party") receives or recovers any amount from a Transaction Obligor other than in accordance with Clause 28 (Payment Mechanics) (a "Recovered Amount") and applies that amount to a payment due to it under the Finance Documents then:

(a) the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Facility Agent;

(b) the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with Clause 28 (Payment Mechanics), without taking account of any Tax which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and

(c) the Recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 28.5 (Application of receipts; partial payments).

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27.2 Redistribution of payments

The Facility Agent shall treat the Sharing Payment as if it had been paid by the Borrower and distribute it among the Finance Parties (other than the Recovering Finance Party) (the "Sharing Finance Parties") in accordance with Clause 28.5 (Application of receipts; partial payments) towards the obligations of the Borrower to the Sharing Finance Parties.

27.3 Recovering Finance Party 's rights

On a distribution by the Facility Agent under Clause 27.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from a Transaction Obligor, as between the relevant Transaction Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Transaction Obligor.

27.4 Reversal of redistribution

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

(a) each Sharing Finance Party shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the "Redistributed Amount"); and

(b) as between the relevant Transaction Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Transaction Obligor.

27.5 Exceptions

(a) This Clause 27 (Sharing among the Finance Parties) shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Transaction Obligor.

(b) A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:

(i) it notified that other Finance Party of the legal or arbitration proceedings; and

(ii) that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

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SECTION 10

ADMINISTRATION

28. PAYMENT MECHANICS

28.1 Payments to the Facility Agent

(a) On each date on which the Borrower or a Lender is required to make a payment under a Finance Document, the Borrower or Lender shall make an amount equal to such payment available to the Facility Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Facility Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

(b) Payment shall be made to such account in the principal financial centre of the country of that currency and with such bank as the Facility Agent, in each case, specifies.

28.2 Distributions by the Facility Agent

Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to Clause 28.3 (Distributions to) and Clause 28.4 (Clawback) be made available by the Facility Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Facility Agent by not less than five Business Days' notice with a bank specified by that Party in the principal financial centre of the country of that currency or, in the case of the Loan, to such account of such person as may be specified by the Borrower in the Utilisation Request.

28.3 Distributions to the Borrower

The Facility Agent may (with the consent of the Transaction Obligor or in accordance with Clause 29 (Set-Off)) apply any amount received by it for that Transaction Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Transaction Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

28.4 Clawback

(a) Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

(b) If the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.

28.5 Application of receipts; partial payments

(a) Subject to paragraph (b) below and except as any Finance Document may otherwise provide, any payment that is received or recovered by any Finance Party under, in connection with, or pursuant to any Finance Document shall be paid to the Facility Agent which shall apply the same in the following order:

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(i) first, in or towards payment of any amounts then due and payable under any of the Finance Documents;

(ii) secondly, after the occurrence of a Default that has not be remedied or is not capable of being remedied, in retention by the Security Agent of an amount equal to any amount not then payable under any Finance Document but which the Facility Agent, by notice to the Borrower and the other Finance Parties, states in its opinion will or may become payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them. If at any time the Loan, any accrued interest and all other amounts due and payable pursuant to this Agreement and the other Finance Documents have been duly paid and the Security Agent has previously retained any amounts pursuant to this sub-paragraph (a)(ii) of Clause 28.5 (Application of receipts; partial payments), the said amounts shall be released to the Borrower; and

(iii) thirdly, any surplus shall be paid to the Borrower,

(b) If the Facility Agent receives a payment that is insufficient to discharge all the amounts then due and payable by the Borrower under the Finance Documents, the Facility Agent shall apply that payment towards the obligations of the Borrower under the Finance Documents in the following order:

(i) first, in or towards payment pro rata of any unpaid fees, costs and expenses of, and any other amounts owing to, the Facility Agent, the Security Agent, any Receiver and any Delegate under the Finance Documents;

(ii) secondly, in or towards payment any accrued interest and fees due but unpaid to the Lenders under this Agreement; and

(iii) thirdly, in or towards payment pro rata of any principal due but unpaid to the Lenders under this Agreement; and

(iv) fourthly, in or towards payment pro rata of any other sum due to any Finance Party but unpaid under the Finance Documents.

(c) The Facility Agent shall, if so directed by the Majority Lenders, vary the order set out in sub­paragraphs (ii) to (iv) of paragraph (b) above.

(d) Paragraphs (a), (b) and (c) above will override any appropriation made by the Borrower.

28.6 28.6 No set-off by Borrower

All payments to be made by the Borrower under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

28.7 Business Days

(a) Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

(b) During any extension of the due date for payment of any principal or an Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

28.8 Currency of account

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(a) Subject to paragraphs (b) and (c) below, dollars is the currency of account and payment for any sum due from a Transaction Obligor under any Finance Document.

(b) Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

(c) Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.

28.9 Change of currency

(a) Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

(i) any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Facility Agent (after consultation with the Borrower); and

(ii) any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Facility Agent (acting reasonably).

(b) If a change in any currency of a country occurs, this Agreement will, to the extent the Facility Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.

28.10 Currency Conversion

(a) For the purpose of, or pending any payment to be made by any Servicing Party under any Finance Document, such Servicing Party may convert any moneys received or recovered by it from one currency to another, at a market rate of exchange.

(b) The obligations of any Transaction Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.

28.11 Disruption to Payment Systems etc.

If either the Facility Agent determines (in its discretion) that a Disruption Event has occurred or the Facility Agent is notified by the Borrower that a Disruption Event has occurred:

(a) the Facility Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Facility as the Facility Agent may deem necessary in the circumstances;

(b) the Facility Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;

(c) the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;

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(d) any such changes agreed upon by the Facility Agent and the Borrower shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 36 (Amendments and Waivers);

(e) the Facility Agent shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 28.11 (Disruption to Payment Systems etc.); and

(f) the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.

29. SET-OFF

A Finance Party may set off any matured obligation due from the Borrower under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to the Borrower, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

30. NOTICES

30.1 Communications in writing

Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.

30.2 Addresses

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents are:

(a) in the case of the Borrower, that specified in Schedule 1 (The Parties);

(b) in the case of each Lender or the Borrower, that specified in Schedule 1 (The Parties) or, if it becomes a Party after the date of this Agreement, that notified in writing to the Facility Agent on or before the date on which it becomes a Party;

(c) in the case of the Facility Agent, that specified in Schedule 1 (The Parties); and

(d) in the case of the Security Agent, that specified in Schedule 1 (The Parties),

or any substitute address, fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days' notice.

30.3 Delivery

(a) Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

(i) if by way of fax, when received in legible form; or

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(ii) if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,

and, if a particular department or officer is specified as part of its address details provided under Clause 30.2 (Addresses), if addressed to that department or officer.

(b) Any communication or document to be made or delivered to a Servicing Party will be effective only when actually received by that Servicing Party and then only if it is expressly marked for the attention of the department or officer of that Servicing Party specified in Schedule 1 (The Parties) (or any substitute department or officer as that Servicing Party shall specify for this purpose).

(c) All notices from or the Borrower shall be sent through the Facility Agent unless otherwise specified in any Finance Document.

(d) Any communication or document made or delivered to the Borrower in accordance with this Clause will be deemed to have been made or delivered to each of the Transaction Obligors.

(e) Any communication or document which becomes effective, in accordance with paragraphs (a) to (d) above, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.

30.4 Notification of address and fax number

Promptly upon receipt of notification of an address and fax number or change of address or fax number pursuant to Clause 30.2 (Addresses) or changing its own address or fax number, the Facility Agent shall notify the other Parties.

30.5 Electronic communication

(a) Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means, to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication and if those two Parties:

(i) notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

(ii) notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice.

(b) Any electronic communication made between those two Parties will be effective only when actually received in readable form and in the case of any electronic communication made by a Party to the Facility Agent only if it is addressed in such a manner as the Facility Agent shall specify for this purpose.

(c) Any electronic communication which becomes effective, in accordance with paragraph (b) above, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.

30.6 English language

(a) Any notice given under or in connection with any Finance Document must be in English.

(b) All other documents provided under or in connection with any Finance Document must be:

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(i) in English; or

(ii) if not in English, and if so required by the Facility Agent, accompanied by a certified English translation prepared by a translator approved by the Facility Agent and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

31. CALCULATIONS AND CERTIFICATES

31.1 Accounts

In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima fade evidence of the matters to which they relate.

31.2 Certificates and determinations

Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

31.3 Day count convention

Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.

32. PARTIAL INVALIDITY

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

33. REMEDIES AND WAIVERS

No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right or remedy under the Finance Documents shall operate as a waiver of any such right or remedy or constitute an election to affirm any of the Finance Documents. No election to affirm any of the Finance Documents on the part of a Secured Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

34. SETTLEMENT OR DISCHARGE CONDITIONAL

Any settlement or discharge under any Finance Document between any Finance Party and the Borrower shall be conditional upon no security or payment to any Finance Party by the Borrower or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

35. IRREVOCABLE PAYMENT

If the Facility Agent considers that an amount paid or discharged by, or on behalf of, the Borrower or by any other person in purported payment or discharge of an obligation of the

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Borrower to a Finance Party under the Finance Documents is capable of being avoided or otherwise set aside on the liquidation or administration of the Borrower or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Finance Documents.

36. AMENDMENTS AND WAIVERS

36.1 Required consents

(a) Subject to Clause 36.2 (All Lender matters) and Clause 36.3 (Other exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and, in the case of an amendment, the Borrower and any such amendment or waiver will be binding on all Parties.

(b) The Facility Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 36 (Amendments and Waivers).

(c) Without prejudice to the generality of Clause 24.7 (Rights and discretions of the Facility Agent) and Clause 25.10 (Security Agent's discretions), the Facility Agent may engage, pay for and rely on the services of lawyers in determining the consent level required for and effecting any amendment, waiver or consent under this Agreement.

36.2 All Lender matters

(a) An amendment of or waiver or consent in relation to any term of any Finance Document that has the effect of changing or which relates to:

(i) the definition of "Majority Lenders" in Clause 1.1 (Definitions);

(ii) a postponement to or extension of the date of payment of any amount under the Finance Documents (other than in relation to Clause 7.3 (Voluntary prepayment of Loan) in respect of a prepayment made pursuant to Clause 20.2 (Requirement for additional documents);

(iii) a reduction in the Margin or the amount of any payment of principal, interest, fees or commission payable;

(iv) a change in currency of payment of any amount under the Finance Documents;

(v) an increase in any Commitment or the Total Commitments, an extension of any Availability Period or any requirement that a cancellation of Commitments reduces the Commitments rateably under the Facility;

(vi) a change to the Borrower;

(vii) any provision which expressly requires the consent of all the Lenders;

(viii) this Clause 36 (Amendments and Waivers);

(ix) any change to Clause 3.1 (Purpose), Clause 2 (The Facility), Clause 3 (Purpose), Clause 5 (Utilisation), Clause 8 (Interest), Clause 19.17 (Sanctions and compliance with laws), Clause 19.19 (German Resident Finance Party), Clause 22 (Changes to the Lenders), Clause 39 (Governing Law) or Clause 40 (Enforcement);

(x) any release of, or material variation to, any Transaction Security, guarantee, indemnity or subordination arrangement set out in a Finance Document (except in the case of a release of Transaction Security as it relates to the disposal of an asset

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which is the subject of the Transaction Security and where such disposal is expressly permitted by the Majority Lenders or otherwise under a Finance Document);

(xi) (other than as expressly permitted by the provisions of any Finance Document), the nature or scope of:

(A) the Charged Property; or

(B) the manner in which the proceeds of enforcement of the Transaction Security are distributed,

(except, insofar as it relates to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document); or

(xii) the release of any Transaction Security unless permitted under this Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document,

shall not be made, or given, without the prior consent of all the Lenders Provided that in the case of sub-paragraph (ix) of paragraph (a) of Clause 36.2 (All Lender matters) in connection with any amendment, waiver, determination or direction relating to Clause 17.25 (Sanctions) and Clause 19.17 (Sanctions and Compliance with Laws) of which a Lender does not have a benefit in accordance with Clause 19.19 (German Resident Finance Party), the participation in any Contribution or Commitment of that Lender will be excluded for the purpose of determining whether the consent of all Lenders has been obtained or whether the determination or direction by all Lenders has been made.

36.3 Other exceptions

(a) An amendment or waiver which relates to the rights or obligations of a Servicing Party or the Arranger (each in their capacity as such) may not be effected without the consent of that Servicing Party or, as the case may be, the Arranger.

(b) The Borrower and the Facility Agent, the Arranger or the Security Agent, as applicable, may amend or waive a term of a Fee Letter to which they are party.

37. CONFIDENTIALITY

37.1 Confidential Information

Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 37.2 (Disclosure of Confidential Information) and Clause 37.3 (Disclosure to numbering service providers) and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

37.2 Disclosure of Confidential Information

Any Finance Party may disclose:

(a) to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the

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recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

(b) to any person:

(i) to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Facility Agent or Security Agent and, in each case, to any of that person's Affiliates, Related Funds, Representatives and professional advisers;

(ii) with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Transaction Obligors and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;

(iii) appointed by any Finance Party or by a person to whom sub-paragraphs (i) or (ii) of paragraph (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph (b) of Clause 24.14 (Relationship with the Lenders));

(iv) who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (i) or (ii) of paragraph (b) above;

(v) to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

(vi) to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitrations, administrative or other investigations, proceedings or disputes;

(vii) to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 22.8 (Security over Lenders' rights);

(viii) who is a Party, a Transaction Obligor or any related entity of the Borrower;

(ix) as a result of the registration of any Finance Document as contemplated by any Finance Document or any legal opinion obtained in connection with any Finance Document; or

(x) with the consent of the Borrower;

in each case, such Confidential Information as that Finance Party shall consider appropriate if:

(A) in relation to sub-paragraphs (i), (ii) and (iii) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

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(B) in relation to sub-paragraph (iv) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;

(C) in relation to sub-paragraphs (v), (vi) and (vii) of paragraph (b) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;

(c) to any person appointed by that Finance Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered in to a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrower and the relevant Finance Party;

(d) to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Transaction Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information.

37.3 Disclosure to numbering service providers

(a) Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Transaction Obligors the following information:

(i) names of Transaction Obligors;

(ii) country of domicile of Transaction Obligors;

(iii) place of incorporation of Transaction Obligors;

(iv) date of this Agreement;

(v) the names of the Facility Agent and the Arranger;

(vi) date of each amendment and restatement of this Agreement;

(vii) amount of Total Commitments;

(viii) currency of the Facility;

(ix) type of Facility;

(x) ranking of Facility;

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(xi) Maturity Date for Facility;

(xii) changes to any of the information previously supplied pursuant to sub-paragraphs (i) to (xi) above; and

(xiii) such other information agreed between such Finance Party and the Borrower,

to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

(b) The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Transaction Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

(c) The Borrower represents that none of the information set out in sub-paragraphs (i) to (xiii) of paragraph (a) above is, nor will at any time be, unpublished price-sensitive information.

(d) The Facility Agent shall notify the relevant Transaction Obligor and the other Finance Parties of:

(i) the name of any numbering service provider appointed by the Facility Agent in respect of this Agreement, the Facility and/or one or more Transaction Obligors; and

(ii) the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Transaction Obligors by such numbering service provider.

37.4 Entire agreement

This Clause 37 (Confidentiality) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

37.5 Inside information

Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.

37.6 Notification of disclosure

Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:

(a) of the circumstances of any disclosure of Confidential Information made pursuant to sub­paragraph (v) of paragraph (b) of Clause 37.2 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and

(b) upon becoming aware that Confidential Information has been disclosed in breach of this Clause 37 (Confidentiality).

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37.7 Continuing obligations

The obligations in this 37 (Confidentiality) are continuing and, in particular, shall survive and remain binding on each Finance Party for period of 12 months from the earlier of:

(a) the date on which all amounts payable by the Borrower under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and

(b) the date on which such Finance Party otherwise ceases to be a Finance Party.

38. COUNTERPARTS

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

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SECTION 11

GOVERNING LAW AND ENFORCEMENT

39. GOVERNING LAW

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

40. ENFORCEMENT

40.1 Jurisdiction

(a) The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a "Dispute").

(b) The Borrower accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly the Borrower will not argue to the contrary.

(c) This Clause 40.1 (Jurisdiction) is for the benefit of the Secured Parties only. As a result, no Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction (other than in the case of the proceedings referred to in sub­paragraph (d) of Clause 2.2 (Finance Parties' rights and obligations)). To the extent allowed by law, the Secured Parties may take concurrent proceedings in any number of jurisdictions.

40.2 Service of process

(a) Without prejudice to any other mode of service allowed under any relevant law, the Borrower:

(i) irrevocably appoints Ince Process Agents Ltd as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

(ii) agrees that failure by a process agent to notify the Borrower of the process will not invalidate the proceedings concerned.

(b) If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Borrower must immediately (and in any event within 5 days of such event taking place) appoint another agent on terms acceptable to the Facility Agent. Failing this, the Facility Agent may appoint another agent for this purpose.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

99

SCHEDULE 1
THE PARTIES

Part A

THE BORROWER

Name of Borrower	Place of Incorporation	Address for Communication
Dryships Inc.	Trust Company Complex Ajeltake Road Ajeltake Island MH96960 Majuro Marshall Islands	Athens Shipping Office 109 Kifisias Avenue and Sina Street 151 24 Marousi Athens Greece

100

Part B

THE ORIGINAL LENDERS

Name of Original Lender Commitment	Address for Communication
ABN AMRO Bank	PAC GL 1610Coolsingel 933012 AE Rotterdam The Netherlands

101

Part C

THE SERVICING PARTIES

Name of Facility Agent	Address for Communication
ABN AMRO Bank N.V.	ABN AMRO Bank N.V. PAC HQ 8042 Gustav Mahlerlaan 101082 PP Amsterdam The Netherlands
Name of Security Agent	Address for Communication
ABN AMRO Bank N.V.	ABN AMRO Bank N.V. PAC HQ 8042 Gustav Mahlerlaan 101082 PP Amsterdam The Netherlands

102

SCHEDULE 2

CONDITIONS PRECEDENT

Part A

CONDITIONS PRECEDENT TO EXECUTION OF THE FACILITY AGREEMENT

1. Transaction Obligors

1.1 A copy of the constitutional documents of each Transaction Obligor (save for the Counterparty).

1.2 A copy of a resolution of the board of directors of each Transaction Obligor (save for the Counterparty):

(a) approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party;

(b) authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and

(c) authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, the Utilisation Request and each Selection Notice) to be signed and/or despatched by it under, or in connection with, the Finance Documents to which it is a party.

1.3 An original of the power of attorney of any Transaction Obligor (save for the Counterparty) authorising a specified person or persons to execute the Finance Documents to which it is a party.

1.4 A specimen of the signature of each person executing a Finance Document (and, if required by the Facility Agent, each person authorised by the resolution referred to in paragraph 1.2 above.)

1.5 A certificate of the Borrower (signed by a director) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on the Borrower to be exceeded.

1.6 A certificate of each Transaction Obligor (save for the Counterparty) that is incorporated outside the UK (signed by a director) certifying either that (i) it has not delivered particulars of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or (ii) it has a UK Establishment and specifying the name and registered number under which it is registered with the Registrar of Companies.

1.7 A certificate of an authorised signatory of the relevant Transaction Obligor certifying that each copy document relating to it specified in this Part A of Schedule 2 (Conditions Precedent) is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

2. Other documents and evidence

2.1 Evidence that any process agent referred to in Clause 40.2 (Service of process), has accepted its appointment.

2.2 A copy of any other Authorisation or other document, opinion or assurance which the Facility Agent considers to be necessary or desirable (if it has notified the Borrower

103

accordingly) in connection with the entry into and performance of the transactions contemplated by any Transaction Document, or for the validity and enforceability of any Transaction Document.

2.3 Evidence acceptable to the Agent that the Broker has received the originals of any mandates or other documents required by it in connection with the opening or operation of the Securities Account and that the Securities Account has been opened.

2.4 Such evidence as the Facility Agent may require for the Finance Parties to be able to satisfy each of their "know your customer" or "client acceptance" or similar identification procedures (including, but not limited to specimen signatures of all directors and other officers of each Transaction Obligor) in relation to the transactions contemplated by the Finance Documents.

104

Part B

CONDITIONS PRECEDENT TO UTILISATION

1. Borrower

A certificate of an authorised signatory of the Borrower certifying that each copy document which it is required to provide under this Part B of Schedule 2 (Conditions Precedent) is correct, complete and in full force and effect as at the Utilisation Date.

2. Other security

2.1 A duly executed original of each of the Securities Account Pledge, the Control Agreement, the Counterparty Undertaking, Ocean Rig Facility Agreement, the Ocean Rig Undertaking (and each document to be delivered by each of them).

2.2 Documentary evidence acceptable to the Facility Agent that:

(a) the Initial Ocean Rig Shares have been irrevocably credited to the Securities Account free of any Security other than in favour of the Security Agent;

(b) the offer and sale by the Security Agent of the Initial Ocean Rig Shares have been registered with SEC, and the relevant Registration Statement relating thereto remains effective;

(c) a UCC financing statement in respect of the Securities Account Pledge has been duly filed; and

(d) such documentary evidence as the Facility Agent and its legal advisors may require in relation to the authorisation and execution of the Control Agreement by the Broker.

Each of the copy documents delivered under this Schedule 2 (Conditions Precedent) shall be certified as a true and up to date copy by a director or the secretary (or equivalent officer) or legal counsel of the Borrower.

3. Other documents and evidence

3.1 Evidence that the fees, costs and expenses then due from the Borrower pursuant to Clause 11 (Fees) and Clause 16 (Costs and Expenses) have been paid or will be paid by the Utilisation Date.

3.2 Evidence satisfactory to the Lenders that (a) all amounts outstanding under the Convertible Bond have been, or will within 2 Business Days following the Utilisation Date (but in any event no later than 1 December 2014) be repaid in full in a manner, form and substance in all respects acceptable to the sole discretion of the Facility Agent (always acting on the instructions of the Lenders), (b) the proceeds which will be used to fully refinance the Convertible Bond shall satisfy the requirements set out in paragraph (b) of Clause 19.11 (Non-Permitted Financial Indebtedness and terms of refinancing of Existing Indebtedness) of this Agreement and (c) the Borrower is or, as the case may be, shall on or before the date on which all amounts outstanding under the Convertible Bond are repaid (being a date falling no later than 1 December 2014) be released from all its obligations and liabilities under the Convertible Bond.

3.3 Evidence that the fees, costs and expenses then due from the Borrower pursuant to Clause 11 (Fees) and Clause 16 (Costs and Expenses) have been paid or will be paid by the Utilisation Date.

105

3.4 Evidence satisfactory to the Facility Agent showing that all fees payable to the Broker in respect of the Securities Account until the first anniversary from the date of this Agreement have been paid.

4. Legal opinions

4.1 A legal opinion of Watson, Farley & Williams, legal advisers to the Arranger, the Facility Agent and the Security Agent in England, substantially in the form distributed to the Original Lenders before signing this Agreement.

4.2 A legal opinion of Watson, Farley & Williams, legal advisers to the Arranger, the Facility Agent and the Security Agent in New York, substantially in the form distributed to the Original Lenders before signing this Agreement.

4.3 If a Transaction Obligor is incorporated in a jurisdiction other than England and Wales or New York, a legal opinion of the legal advisers to the Arranger, the Facility Agent and the Security Agent in the relevant jurisdiction, substantially in the form distributed to the Original Lenders before signing this Agreement.

106

SCHEDULE 3

REQUESTS

Part A

UTILISATION REQUEST

From:	Dryships Inc.
To:	ABN AMRO Bank N.V. Agency Syndicated Loans PAC HQ 8042 Gustav Mahlerlaan 101082 PP Amsterdam The Netherlands

Dated: [·] 2014

Dear Sirs

Dryships Inc. — Facility Agreement dated 14 November 2014 (the "Agreement")

1 We refer to the Agreement. This is the Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.

2 We wish to borrow the Loan on the following terms:

Proposed Utilisation Date:	[·] (or, if that is not a Business Day, the next Business Day)
Amount:	[·] or, if less, the Available Facility
Interest Period:	[·]

3 We confirm that each condition specified in Clause 4.1 (Initial conditions precedent) and Clause 4.2 (Further conditions precedent) is satisfied on the date of this Utilisation Request.

4 The proceeds of the Loan should be credited to [account].

5 This Utilisation Request is irrevocable.

Yours faithfully

[·]

authorised signatory for

Dryships Inc.

107

Part B

SELECTION NOTICE

From:	Dryships Inc.
To:	ABN AMRO Bank N.V. Agency Syndicated Loans PAC HQ 8042 Gustav Mahlerlaan 101082 PP Amsterdam The Netherlands

Dated: [·] 2014

Dear Sirs

Dryships Inc. - Facility Agreement dated 14 November 2014 (the "Agreement")

1 We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.

2 We request that, subject to paragraph (f) of Clause 9.1 (Selection of Interest Periods) of the Agreement, the next Interest Period for the Loan be [•].

3 This Selection Notice is irrevocable.

Yours faithfully

[·]

authorised signatory for

Dryships Inc.

108

SCHEDULE 4

FORM OF TRANSFER CERTIFICATE

To:	ABN AMRO Bank N.V. as Facility Agent
From:	[The Existing Lender] (the "Existing Lender") and [The New Lender] (the "New Lender")

Dated: [·] 20[·]

Dear Sirs

Dryships Inc. — [IN Facility Agreement dated 14 November 2014 (the "Agreement")

1 We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

2 We refer to Clause 22.5 (Procedure for transfer) of the Agreement:

(a) The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all of the Existing Lender's rights and obligations under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitment and participation in the Loan under the Agreement as specified in the Schedule in accordance with Clause 22.5 (Procedure for transfer) of the Agreement.

(b) The proposed Transfer Date is [0].

(c) The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 30.2 (Addresses) of the Agreement are set out in the Schedule.

3 The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of Clause 22.4 (Limitation of responsibility of Existing Lenders) of the Agreement.

4 This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.

5 This Transfer Certificate [and any non-contractual obligations arising out of or in connection with it] [is/are] is governed by English law.

6 This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.

Note: The execution of this Transfer Certificate may not transfer a proportionate share of the Existing Lender's interest in the Transaction Security in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender's Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

109

THE SCHEDULE

Commitment/rights and obligations to be transferred

[insert relevant details]

[Facility Office address, fax number and attention details

for notices and account details for payments.]

[Existing Lender]	[New Lender]
By: [·]	By: [·]

This Transfer Certificate is accepted by the Facility Agent and the Transfer Date is confirmed as [·].

[Facility Agent]

By: [·]

110

SCHEDULE 5

FORM OF ASSIGNMENT AGREEMENT

To:	ABN AMRO Bank N.V. as Facility Agent and Dryships Inc. as Borrower
From:	[The Existing Lender] (the "Existing Lender") and [The New Lender] (the "New Lender")

Dated: [·] 2014

Dear Sirs

Dryships Inc. - [·] Facility Agreement dated [·] November 2014 (the "Agreement")

1 We refer to the Agreement. This is an Assignment Agreement. Terms defined in the Agreement have the same meaning in this Assignment Agreement unless given a different meaning in this Assignment Agreement.

2 We refer to Clause 22.6 (Procedure for assignment):

(a) The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Agreement, the other Finance Documents and in respect of the Transaction Security which correspond to that portion of the Existing Lender's Commitment and participations in the Loan under the Agreement as specified in the Schedule.

(b) The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender's Commitments and participations in the Loan under the Agreement specified in the Schedule.

(c) The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b) above.

3 The proposed Transfer Date is [·].

4 On the Transfer Date the New Lender becomes Party to the Finance Documents as a Lender.

5 The Facility Office and address, fax, number and attention details for notices of the New Lender for the purposes of Clause 30.2 (Addresses) are set out in the Schedule.

6 The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of Clause 22.4 (Limitation of responsibility of Existing Lenders).

7 This Assignment Agreement acts as notice to the Facility Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 22.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), to the Borrower of the assignment referred to in this Assignment Agreement.

8 This Assignment Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Assignment Agreement.

9 This Assignment Agreement [and any non-contractual obligations arising out of or in connection with it] [is/are] governed by English law.

111

10 This Assignment Agreement has been entered into on the date stated at the beginning of this Assignment Agreement.

Note: The execution of this Assignment Agreement may not transfer a proportionate share of the Existing Lender's interest in the Transaction Security in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender's Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

112

THE SCHEDULE

Commitment rights and obligations to be transferred by assignment, release and accession

[Insert relevant details]

[Facility office address, fax number and attention details for notices and account details for payments]

[Existing Lender]	[New Lender]
By: [·]	By: [·]

This Assignment Agreement is accepted by the Facility Agent and the Transfer Date is confirmed as [·].

Signature of this Assignment Agreement by the Facility Agent constitutes confirmation by the Facility Agent of receipt of notice of the assignment referred to herein, which notice the Facility Agent receives on behalf of each Finance Party.

[Facility Agent]

By:

113

SCHEDULE 6

TIMETABLES

Delivery of a duly completed Utilisation Request (Clause 5.1 (Delivery of the Utilisation Request)) or a Selection Notice (Clause 9.1 (Selection of Interest Periods))	Four Business Days before the intended Utilisation Date (Clause 5.1 (Delivery of the Utilisation Request)) or the expiry of the preceding Interest Period (Clause 9.1 (Selection of Interest Periods))
Facility Agent notifies the Lenders of the Loan in accordance with Clause 5.4 (Lenders' participation)	Four Business Days before the Utilisation Date.
LIBOR is fixed	Quotation Day as of 11:00 am London time

114

EXECUTION PAGES

BORROWER
SIGNED by Dimitrios Glynos		)
duly authorised		)
for and on behalf of		)	/s/ Dimitrios Glynos
DRYSHIPS INC.		)
in the presence of:		)
Witness' signature:  /s/ Eugenia Th. Voulika		)
Witnesss' name:  Eugenia Th. Voulika		)
Witness' address:	Attorney-at-Law 52, Ag Konstantinou Street – 151 24 Marousi Athens Greence Tel.: +30 210 6140580 – Fax +30 210 6140267	)

ORIGINAL LENDERS
SIGNED by Vassiliki Georgopoulos		)
duly authorised		)	/s/ Vassiliki Georgopoulos
for and on behalf of		)
ABN AMRO BANK N.V.		)
in the presence of:		)
Witness' signature:  /s/ Marinos Papadoupoulos		)
Witnesss' name:  Marinos Papadoupoulos		)
Witness' address:	Attorney-at-Law Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens, Greece	)

ARRANGER
SIGNED by Vassiliki Georgopoulos		)
duly authorised		)	/s/ Vassiliki Georgopoulos
for and on behalf of		)
ABN AMRO BANK N.V.		)
in the presence of:		)
Witness' signature:  /s/ Marinos Papadoupoulos		)
Witnesss' name:  Marinos Papadoupoulos		)
Witness' address:	Attorney-at-Law Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens, Greece	)

115

FACILITY AGENT
SIGNED by Vassiliki Georgopoulos		)
duly authorised		)	/s/ Vassiliki Georgopoulos
for and on behalf of		)
ABN AMRO BANK N.V.		)
in the presence of:		)
Witness' signature:  /s/ Marinos Papadoupoulos		)
Witnesss' name:  Marinos Papadoupoulos		)
Witness' address:	Attorney-at-Law Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens, Greece	)

SECURITY AGENT

SIGNED by Vassiliki Georgopoulos		)
duly authorised		)	/s/ Vassiliki Georgopoulos
for and on behalf of		)
ABN AMRO BANK N.V.		)
in the presence of:		)
Witness' signature:  /s/ Marinos Papadoupoulos		)
Witnesss' name:  Marinos Papadoupoulos		)
Witness' address:	Attorney-at-Law Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens, Greece	)

116

EX-4.186

Exhibit 4.186

Dated 23 December 2014

IALYSOS OWNING COMPANY LIMITED as Borrower

and

DRYSHIPS INC. as Corporate Guarantor

and

PIRAEUS BANK S.A.(also known as PIRAEUS BANK A.E.) as Lender

FIFTH AMENDING AND RESTATING AGREEMENT

in relation to a loan facility of (originally) up to US$130,000,000 of which the current outstanding aggregate is US$28,903,720

WATSON FARLEY

&

WILLIAMS

Index

Clause		Page
1	Interpretation	2
2	Agreement of all parties to the amendment of the Loan Agreement, The Corporate Guarantee and other Finance Documents	3
3	Conditions precedent	3
4	Representations and Warranties	3
5	Amendment of Loan Agreement, Corporate Guarantee and other Finance Documents	4
6	Further Assurances	4
7	Fees and Expenses	5
8	Notices	5
9	Supplemental	5
10	Law and Jurisdiction	6
Schedule 1 Conditions Precedent Documents		7
Execution Page		8
Appendix 1 Form of Amended and Restated Loan Agreement marked to indicate Amendments to the Loan Agreement		10
Appendix 2 Form of Amended and Restated Corporate Guarantee marked to indicate Amendments to the Corporate Guarantee		11

THIS AGREEMENT is made on 23 December 2014

BETWEEN

(1) IALYSOS OWNING COMPANY LIMITED, a corporation incorporated and existing in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, The Marshall Islands (the "Borrower");

(2) DRYSHIPS INC., a corporation incorporated and existing in the Marshall registered office is at Trust Company Complex, Ajeltake Road, Ajeltake MH96960, The Marshall Islands (the "Corporate Guarantor"); and

(3) PIRAEUS BANK S.A. (also known as PIRAEUS BANK A.E.) acting through its branch at 4 Amerikis Street, 105 64, Athens, Greece (as "Lender").

BACKGROUND

(A) By a loan agreement dated 13 March 2008 (as amended and restated by two amending and restating agreements dated 25 January 2010 and 25 August 2010, respectively, as amended and supplemented by a supplemental letter dated 16 September 2011, the "Original Loan Agreement", as novated, amended and restated pursuant to a deed of novation, amendment and restatement (the "Deed") dated 29 November 2010 and as further amended and restated by an amending and restating agreement (the "Fourth Amending and Restating Agreement") dated 1 August 2013 (the "Loan Agreement") made between (i) Annapolis Shipping Company Limited, Atlas Owning Company Limited, Farat Shipping Company Limited and Lansat Shipping Company Limited as joint and several borrowers (together, the "Original Borrowers") and (ii) the Lender as lender, the Lender made available to the Original Borrowers, whose rights, obligations and liabilities under the Original Loan Agreement were novated to the Borrower pursuant to the Deed, a loan facility of (originally) up to $130,000,000 of which the current principal amount outstanding is $28,903,720 (the "Loan").

(B) By a guarantee dated 13 March 2008 (as amended and restated on 1 August 2013, the "CorporateGuarantee") the Corporate Guarantor has guaranteed the obligations of the Borrower under the Fourth Amending and Restating Agreement (inter alia) the Loan Agreement.

(C) Pursuant to the Fourth Amending and Restating Agreement the Lender agreed to waive the application of the security cover provisions in Clause 13.1 and certain other covenants from 31 December 2008 until 31 December 2013 (the "Waiver Period").

(D) The Borrower and the Corporate Guarantor have requested that the Lender agrees to (inter alia):

(i) extend further the Waiver Period from 1 January 2014 up to and including 31 December 2014 (the "First Amendment");

(ii) extend further the Covenants Waiver Period (as defined in the Corporate Guarantee) in respect of the relaxation of the financial covenants set out in paragraphs (a) and (b) of clause 11.15 of the Corporate Guarantee from 31 December 2013 up to and including 13 March 2015 (the "Corporate Guarantee Amendment");

(iii) the consequential amendments (the "Consequential Amendments") to the Loan Agreement, the Corporate Guarantee and the other Finance Documents in connection with those matters; and

(iv) the amendment and/or variation of certain other provisions of the Loan Agreement (together, the "Additional Amendments" and, together with the First Amendment,

the Corporate Guarantee Amendment and the Consequential Amendments, the "Amendments" and each an "Amendment").

(E) The Lender's consent to the request of the Borrower referred to in Recital (D) is subject to, inter alla, the following conditions:

(i) the Corporate Guarantor executing and delivering to the Lender the additional security referred to in clause 9.19 of the Loan Agreement in respect of 2,356,705 Required Shares (as defined below) and ensuring that it remains in full force and effect up to and including 31 December 2014;

(ii) the Margin increasing at 4.85 per cent. per annum during the Margin Applicable Period (as defined below);

(iii) the Consequential Amendments of the Loan Agreement, the Corporate Guarantee and the Finance Documents pursuant to the terms of this Agreement; and

(iv) all other terms and conditions contained herein

(F) This Agreement sets out the terms and conditions on which the Lender agrees to the Amendments.

IT IS AGREED as follows:

1. INTERPRETATION

1.1 Defined expressions

Words and expressions defined in the Loan Agreement and the Amended and Restated Loan Agreement shall have the same meanings when used in this Agreement unless the context otherwise requires.

1.2 Definitions

In this Agreement, unless the contrary intention appears:

"Amended and Restated Corporate Guarantee"means the Corporate Guarantee as amended and restated by this Agreement in the form set out in Appendix 2;

"Amended and Restated Loan Agreement"means the Loan Agreement as amended and restated by this Agreement in the form set out in Appendix 1;

"Corporate Guarantee"means the guarantee (as amended and supplemented from time to time) as referred to in Recital (B);

"Effective Date"means the date on which the Lender notifies the Borrower that the conditions precedent in Clause 3 have been fulfilled;

"Loan Agreement"means the loan agreement (as amended and supplemented from time to time) as referred to in Recital (A);

"Margin Applicable Period"means, in respect of the period commencing on 19 March 2014 (inclusive) and ending on 31 December 2014 (inclusive); and

"Required Shares"has the meaning given in Clause 9.19 of the Amended and Restated Loan Agreement.

1.3 Application of construction and interpretation provisions of Loan Agreement

Clauses 1.1 and 1.5 of the Loan Agreement and the Amended and Restated Loan Agreement apply, with any necessary modifications, to this Agreement.

2. AGREEMENT OF ALL PARTIES TO THE AMENDMENT OF THE LOAN AGREEMENT, THE CORPORATE GUARANTEE AND OTHER FINANCE DOCUMENTS

2.1 Agreement of the parties to this Agreement

The parties to this Agreement agree, subject to and upon the terms and conditions of this Agreement, to:

(a) the Amendments; and

(b) the amendment of the Loan Agreement, the Corporate Guarantee and the other Finance Documents to be made pursuant to Clauses 5.1, 5.2 and 5.3.

The agreement of the parties to this Agreement contained in Clause 2.1 shall have effect on and from the Effective Date.

3. CONDITIONS PRECEDENT

3.1 General

The agreement of the parties to this Agreement contained in Clause 2.1 is subject to the fulfilment of the conditions precedent in Clause 3.2.

3.2 Conditions precedent

The conditions referred to in Clause 2.1 are that the Lender shall have received the documents and evidence referred to in Schedule 1 in all respects in form and substance satisfactory to the Lender and its lawyers on or before the date of this Agreement or such later date as the Lender may agree with the Borrower.

4. REPRESENTATIONS AND WARRANTIES

4.1 Repetition of Loan Agreement representations and warranties

The Borrower represents and warrants to the Lender that the representations and warranties in clause 8 of the Loan Agreement, as amended and restated by this Agreement and updated with appropriate modifications to refer to this Agreement and, where appropriate, each other Finance Document which is being amended by this Agreement, remain true and not misleading if repeated on the date of this Agreement with reference to the circumstances now existing.

4.2 Repetition of Corporate Guarantee representations and warranties

The Corporate Guarantor represents and warrants to the Lender that the representations and warranties in clause 10 of the Corporate Guarantee, as amended and restated by this Agreement and updated with appropriate modifications to refer to this Agreement and, where appropriate, each other Finance Document which is being amended by this Agreement, remain true and not misleading if repeated on the date of this Agreement with reference to the circumstances now existing.

5. AMENDMENT OF LOAN AGREEMENT, CORPORATE GUARANTEE AND OTHER FINANCE DOCUMENTS

5.1 Amendments to Loan Agreement

With effect on and from the Effective Date:

(a) the Loan Agreement shall be, and shall be deemed by this Agreement to be, amended and restated in the form of the Amended and Restated Loan Agreement; and

(b) as so amended and restated pursuant to (a) above, the Loan Agreement shall continue to be binding on each of the parties to it in accordance with its terms as so amended and restated.

5.2 Amendments to Corporate Guarantee With effect on and from the Effective Date:

(a) the Corporate Guarantee shall be, and shall be deemed by this Agreement to be, amended and restated in the form of the Amended and Restated Corporate Guarantee; and

(b) as so amended and restated pursuant to (a) above, the Corporate Guarantee shall continue to be binding on each of the parties to it in accordance with its terms as so amended and restated.

5.3 Amendments to Finance Documents

With effect on and from the Effective Date each of the Finance Documents (other than the Loan Agreement and the Corporate Guarantee), shall be, and shall be deemed by this Agreement to be, amended as follows:

(i) the definition of, and references throughout each of the Finance Documents to, the Loan Agreement, the Corporate Guarantee and any of the other Finance Documents shall be construed as if the same referred to the Loan Agreement, the Corporate Guarantee and those Finance Documents as amended and restated or supplemented by this Agreement; and

(ii) by construing references throughout each of the Finance Documents to "this Agreement", "this Deed", "hereunder" and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this Agreement.

5.4 The Finance Documents to remain in full force and effect

The Finance Documents shall remain in full force and effect, as amended by:

(i) the amendments contained or referred to in Clause 5.3; and

(ii) such further or consequential modifications as may be necessary to give full effect to the terms of this Agreement.

6. FURTHER ASSURANCES

6.1 Borrower's and Corporate Guarantor's obligations to execute further documents etc.

Each of the Borrower and the Corporate Guarantor shall:

(i) execute and deliver to the Lender (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Lender may, in any particular case, specify; and

(ii) effect any registration or notarisation, give any notice or take any other step,

which the Lender may, by notice to the Borrower or the Corporate Guarantor, specify for any of the purposes described in Clause 6.2 or for any similar or related purpose.

6.2 Purposes of further assurances

Those purposes are:

(i)validly and effectively to create any Security Interest or right of any kind which the Lender intended should be created by or pursuant to the Loan Agreement, the Corporate Guarantee or any other Finance Document, each as amended and restated or supplemented by this Agreement; and

(ii)implementing the terms and provisions of this Agreement.

6.3 Terms of further assurances

The Lender may specify the terms of any document to be executed by the Borrower or, as the case may be, the Corporate Guarantor under Clause 6.1, and those terms may include any covenants, powers and provisions which the Lender considers appropriate to protect its interests.

6.4 Obligation to comply with notice

The Borrower and the Corporate Guarantor shall comply with a notice under Clause 6.1 by the date specified in the notice.

7. FEES AND EXPENSES

7.1 Reimbursement of expenses

The Borrower shall reimburse to the Lender on demand all costs, fees and expenses (including, but not limited to, legal fees and expenses) and taxes thereon incurred by the Lender in connection with the negotiation, preparation and execution of this Agreement, the Amended and Restated Loan Agreement, the Amended and Restated Corporate Guarantee and any other Finance Document to be executed thereunder.

8. NOTICES

8.1 General

The provisions of clause 26 (Notices) of the Loan Agreement, as amended and restated by this Agreement, shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary modifications.

9. SUPPLEMENTAL

9.1 Counterparts

This Agreement may be executed in any number of counterparts.

9.2. THIRD PARTY RIGHTS

No person who is not a party to this Agreement has any right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

10. LAW AND JURISDICTION

10.1 Governing law

This Agreement, and any non-contractual obligations arising out of, or in connection with, it shall be governed by and construed in accordance with English law.

10.2 Incorporation of the Loan Agreement provisions

The provisions of clause 28 (Law and Jurisdiction) of the Loan Agreement, as amended and restated by this Agreement, shall apply to this Agreement as if they were expressly incorporated in this Agreement with any necessary modifications.

THIS AGREEMENT has been duly executed as a Deed on the date stated at the beginning of this Agreement.

SCHEDULE 1

CONDITIONS PRECEDENT DOCUMENTS

The following are the documents referred to in Clause 3.2:

1 a duly executed original of this Agreement (duly acknowledged by the Approved Manager and any other Security Party confirming their agreement to the terms and conditions of the same), the Pledge and Security Agreement and the Control Agreement;

2 copies of resolutions passed at a meeting of the board of directors and, other than in the case of the Corporate Guarantor, shareholders of:

(a) the Borrower and the Corporate Guarantor evidencing approval of this Agreement, the Pledge and Security Agreement and the Control Agreement and authorising appropriate officers or attorneys to execute the same;

(b) the Additional Owners evidencing approval of this Agreement and authorising appropriate officers or attorneys to execute the acknowledgement of the same.

3 the original of any power of attorney issued by the Borrower, the Corporate Guarantor and each Additional Owner pursuant to such resolutions aforesaid;

4 evidence that the relevant UCC statement in respect of the Pledge and Security Agreement has been filed;

5 such documentary evidence as the Lender and its legal advisors may require in relation to the authorisation and execution, in the case of Ocean Rig and acknowledgement, in the case of ASTT, of the Control Agreement;

6 copies of all governmental and other consents, licences, approvals and authorisations as may be necessary to authorise the performance by each of the Borrower , the Corporate Guarantor and any other Security Party of its obligations under this Agreement, the Amended and Restated Loan Agreement, the Pledge and Security Agreement and the Control Agreement and the execution, validity and/or enforceability of the same;

7 favourable legal opinions from lawyers appointed by the Lender on such matters concerning the laws of the Republic of Malta, Republic of Marshall Islands, New York and such other relevant jurisdictions as the Lender may require;

8 written confirmation (in a form acceptable to the Lender) that each Borrower has complied at all times and in all respects with all relevant legislation and regulations applicable to it for the protection of the rights of its employees; and

9 any other document or evidence as the Lender may request in writing from the Borrower.

Every copy document delivered under this Schedule shall be certified as a true and up to date copy by a director or the secretary (or equivalent officer) of the Borrower or the lawyers of the Borrower.

EXECUTION PAGE

BORROWER
SIGNED by	)
Dimitrios Glynos	)
for and on behalf of	)	/s/ Dimitrios Glynos
IALYSOS OWNING COMPANY LIMITED	)
in the presence of:	)
/s/ Vassiliki Georgopoulos	)
Vassiliki Georgopoulos	)
Solicitor Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens, Greece	)

CORPORATE GUARANTOR
SIGNED by	)
Dimitrios Glynos	)
for and on behalf of	)	/s/ Dimitrios Glynos
DRYSHIPS INC.	)
in the presence of:	)
/s/ Vassiliki Georgopoulos	)
Vassiliki Georgopoulos	)
Solicitor Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens, Greece	)

LENDER
SIGNED by	)
Jason Dallas	)	/s/ Jason Dallas
Katarina Plesia	)	/s/ Katarina Plesia
for and on behalf of	)
PIRAEUS BANK S.A.	)
in the presence of:	)
/s/ Nadine Akleh	)
Nadine Akleh	)
Solicitor Watson, Farley & Williams 348 Syngrou Avenue 176 74 Kallithea Athens, Greece	)

COUNTERSIGNED this 23^rd day of December 2014 by each of Boone Star Owners Inc., Iokasti Owning Company Limited and TMS Bulkers Ltd. which, by its execution hereof confirms and acknowledges that it has read and understood the terms and conditions of the above Agreement, that it agrees in all respects to the same and that the Finance Documents to which each is a party shall remain in full force and effect and shall continue to stand as security for the obligations of the Borrower under the Loan Agreement and any other Finance Document.

/s/ Dimitrios Glynos

Dimitrios Glynos

for and on behalf of

BOON STAR OWNERS INC.

/s/ Dimitrios Glynos

Dimitrios Glynos

for and on behalf of

IOKASTI OWNING COMPANY LIMITED

_______________________________

for and on behalf of

TMS BULKERS LTD.

Dated 23 December 2014

COUNTERSIGNED this 23rd day of December 2014 by each of Boone Star Owners Inc., Iokasti Owning Company Limited and TMS Bulkers Ltd. which, by its execution hereof confirms and acknowledges that it has read and understood the terms and conditions of the above Agreement, that it agrees in all respects to the same and that the Finance Documents to which each is a party shall remain in full force and effect and shall continue to stand as security for the obligations of the Borrower under the Loan Agreement and any other Finance Document. for and on behalf of

_______________________________

for and on behalf of

BOON STAR OWNERS INC.

_______________________________

for and on behalf of

IOKASTI OWNING COMPANY LIMITED

/s/ Dr. Adriano Cefai

Dr. Adriano Cefai

Director

Mare Services Ltd.

5/1 Merchants Street

Valletta 1171

for and on behalf of

TMS BULKERS LTD.

Dated 23 December 2014

Date 13 March 2008 as amended and restatedon 25 January 2010, 25 August 2010 respectively,as amended and supplemented on 16 September 2011,as novated, amended and restated on 29 November 2010,as amended and restated on 1 August 2013and as further amended and restated on 1 August 2013December 2014

IALYSOS OWNING COMPANY LIMITED

as Borrower

and

PIRAEUS BANK S.A. (also known as PIRAEUS BANK, A.E.)

as Lender

LOAN AGREEMENT

relating to a loan facility of (originally) up to US$130,000,000

WATSON FARLEY

&

WILLIAMS

Index

Clause		Page
1	Interpretation	1
2	Facility	1718
3	Interest	18
4	Interest Periods	20
5	Default Interest	20
6	Repayment and Prepayment	21
7	Conditions Precedent	24
8	Representations and Warranties	24
9	General Undertakings	27
10	Corporate Undertakings	31
11	Insurance	31
12	Ship Covenants	36
13	Security Cover	3940
14	Payments and Calculations	42
15	Application of Receipts	4243
16	Application of Earnings	4344
17	Events of Default	45
18	Expenses	49
19	Indemnities	50
20	No Set-off or Tax Deduction	51
21	Illegality, etc.	52
22	Increased Costs	53
23	Set-off	5354
24	Transfers and Changes in Lending Office	55
25	Variations and Waivers	55
26	Notices	5556
27	Supplemental	57
28	Law and Jurisdiction	5758
Schedule 1 Condition Precedent Documents		60
Execution Page		61

THIS AGREEMENT is made on 13 March 2008 as amended and restated by the First Amending and Restating Agreement, the Second Amending and Restating Agreement, as amended and supplemented by the Supplemental Letter, as novated, amended and restated by the Deed of Novation, Amendment and Restatement and further, as amended and restated by the Fourth Amending and Restating Agreement and as further amended and restated by the Fifth Amending and Restating Agreement (each as defined below)

BETWEEN

(1) IALYSOS OWNING COMPANY LIMITED, a corporation incorporated and existing in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, The Marshall Islands (the "Borrower"); and

(2) PIRAEUS BANK A.ES.A. (also known as PIRAEUS BANK A.E.), acting through its branch at 47 49 Akti Miaouli4 Amerikis Street, 185 36 Piraeus 105 64, Athens, Greece (as "Lender").

BACKGROUND

The Lender has made available to the Original Borrowers (whose rights, obligations and liabilities hereunder have been novated to the Borrower pursuant to the Deed of Novation, Amendment and Restatement), on a joint and several basis, a loan facility of (originally) US$130,000,000 for the purpose (originally) of providing liquidity to the Original Borrowers and their parent company Dryships Inc., for their general corporate purposes.

IT IS AGREED as follows:

1INTERPRETATION

1.1Definitions

Subject to Clause 1.5, in this Agreement:

"Accounts" means, together, the Earnings Accounts and the Deposit Account and, in the singular, means any of them;

"Accounting Information" means the annual audited consolidated accounts to be provided by the Borrower to the Lender in accordance with Clause 9.6(a) of this Agreement or the semi-annual unaudited accounts to be provided by the Borrower to the Lender in accordance with Clause 9.6(b) of this Agreement;

"Additional Charter Assignment" means, in relation to any Approved Charter applicable to an Additional Ship, a second priority specific assignment of that Approved Charter executed or to be executed by the Additional Owner owning that Additional Ship in favour of the Lender in such form as the Lender may approve or require and, in the plural, means both of them;

"Additional Finance Documents" means, together, the Additional Guarantees, the Additional Mortgages and the Additional Charter Assignments and, in the singular, means any of them;

"Additional Guarantee" means, in relation to each Additional Owner, the guarantee of the obligations of the Borrower under this Agreement executed or to be executed by that

Additional Owner in favour of the Lender in such form as the Lender may approve or require and, in the plural, means both of them;

"Additional Mortgage" means, in relation to each Additional Ship, the second priority Maltese statutory mortgage over that Additional Ship executed or to be executed by the Additional Owner owning that Additional Ship (as amended and supplemented by the Mortgage Addendum relative to that Additional Ship) in favour of the Lender in such form as the Lender may approve or require and, in the plural, means both of them;

"Additional Owner" means each of Boone and Iokasti and, in the plural, means both them;

"Additional Owners Loan" means the principal amount for the time being outstanding under the Additional Owners Loan Agreement;

"Additional Owners Loan Agreement"means the loan agreement dated 5 October 2007 as amended and supplemented from time to time entered into between (i) the Additional Owners as joint and several borrowers and (ii) the Lender as lender pursuant to which the Lender made available to the Additional Owners a loan facility of (originally) $90,000,000;

"Additional Security Period"means he period commencing on the date of the Fifth Amending and Restating Agreement and ending on 31 December 2014 at 23:59 New York time (inclusive);

"Additional Ship"means each of "SAMATAN" and "GALVESTON" and, in the plural, means both of them;

"Annapolis"means Annapolis Shipping Company Limited, a company incorporated in Malta, whose registered office is at 5/2 Merchants Street, Valletta, Malta;

"Applicable LIBORPeriod"means the period commencing on 17 September 20121 January 2014 (inclusive) and ending on 31 December 20132014 (inclusive);

"Approved Charter"means:

(a) in relation to the Collateral Ship:

(i) during the Charter Period, the Charter; and

(ii) at all times thereafter, any other time charter party of that Ship to be entered by the Borrower and a charterer in all respects acceptable to the Lender, exceeding or which, by virtue of any optional extensions is capable of exceeding, 12 months in duration as the same may be amended or supplemented from time to time in favour and substance in all respects acceptable to the Lender; and

(b) in relation to an Additional Ship, any time charter party in respect of that Ship to be entered by the Additional Owner owning that Ship and a charterer in all respects acceptable to the Lender, exceeding or which, by virtue of any optional extensions is capable of exceeding, 12 months in duration as the same may be amended or supplemented from time to time in favour and substance in all respects acceptable to the Lender,

and, in the plural, means all of them;

"Approved Manager"means in relation to each Ship:

(a) Cardiff Marine Inc. a corporation incorporated under the laws of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia maintaining a ship

management office at Omega Building, 80 Kifissias Avenue, 151 25 Maroussi, Greece; or

(b) subject to Clause 12.15, TMS Bulkers Ltd. a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Republic of the Marshall Islands maintaining, a ship management office at 8 Ag. Konstantinou street & Kifisias Avenue, 151 24 Marousi, Greece,

or any other company which the Lender may reasonably approve as the commercial, technical and/or operational manager of that Ship;

"Approved Manager's Undertaking" means, in relation to each Ship, a letter of undertaking executed or to be executed by the Approved Manager in favour of the Lender in such form as the Lender may approve or require agreeing certain matters in relation to the management of that Ship and subordinating the rights of the Approved Manager against the Ship and the relevant Borrower or, as the case may be, Owner thereof to the rights of the Lender under the Finance Documents and, in the plural, means any of them;

"Approved Stock Exchange" means NASDAQ or any other stock exchange acceptable to the Lender;

"ASTT" means American Stock Transfer & Trust Company a company whose address is American Stock Transfer & Trust Company, LLC Attn: Relationship Management, 6201 15th Avenue Brooklyn, NY 11219

"Balloon Instalment" has the meaning given to it in Clause 6.1;

"Boone" means Boone Star Owners Inc., a corporation incorporated in the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Borrower" means Ialysos Owning Company Limited, a corporation incorporated in the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Business Day" means a day on which banks are open in London, Athens and Piraeus and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City;

"Charter" means, in respect of the Collateral Ship, the time charter dated 6 March 2008 entered into between Arleta Navigation Company Limited, a member of the Group, as owner of m.v. "XANADU, a Fleet Vessel which has been substituted by the Collateral Ship pursuant to clause 106 thereof, and SK Shipping Co., Ltd. of Seoul, Korea as charterer (as amended and supplemented by addenda nos. 1, 2 and 3 dated 31 July 2008, 29 July 2008 and 27 April 2009 respectively);

"Charter Assignment" means:

(a) in relation to the Collateral Ship, a specific assignment of the rights of the Borrower under an Approved Charter relating to that Ship, pursuant to Clause 9.16 and any guarantee of such charter, to be executed by the Borrower in favour of the Lender in such form as the Lender may approve or require and, in the plural, means all of them; and

(b) in relation to an Additional Ship, any Additional Charter Assignment relative to that Additional Ship,

and, in the plural, means all of them;

"Charter Period" means the period during which the Collateral Ship shall be subject to the Charter;

"Collateral Ship" means the 2009-built Panamax bulk carrier of 75,206 metric tons deadweight registered in the ownership of the Borrower under the Maltese flag with the name "AMALFI";

"Compliance Date" means 30 June and 31 December in each calendar year (or such other dates as of which the Corporate Guarantor prepares its consolidated financial statements which the Borrower is required to deliver to the Lender pursuant to Clause 9.6);

"Commitment" means $130,000,000 as that amount may be reduced, cancelled or terminated in accordance with this Agreement;

"Confirmation" and "Early Termination Date" in relation to any continuing Transaction, have the meanings given in the Master Agreement;

"Contractual Currency" has the meaning given in Clause 19.4;

"Control Agreement" means, in respect of the Pledge and Security Agreement, a control agreement in respect of the control and ownership of the Required Shares executed between the Corporate Guarantor, Ocean Rig as issuer and the Lender in such form as the Lender may approve or require;

"Corporate Guarantee" means a guarantee executed or to be executed by the Corporate Guarantor in favour of the Lender in such form as the Lender may approve or require;

"Corporate Guarantor" means Dryships Inc., a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960;

"Deed of Covenant" means in relation to a Ship, a deed of covenant collateral to the relevant Mortgage in such form as the Lender may approve or require and, in the plural, means all of them;

Deed of Novation, Amendment and Restatement" means the deed of novation, amendment and restatement dated 29 November 2010 and made between (inter alias) (i) the Original Borrowers as substituted borrowers, (H) the Borrower as substituting borrower and (iii) the Lender as lender setting out the terms and conditions on which this Agreement was novated, amended and restated;

"Deposit Account" means a deposit account in the name of the Borrower with the Lender designated "Ialysos Owning Company Limited - Deposit Account";

"Deposit Account Pledge" means the deed of pledge in respect of Deposit Account to be executed by the Borrower in favour of the Lender in such form as the Lender may approve or require;

"Dollars" and "$" means the lawful currency for the time being of the United States of America;

"Drawdown Date" means 14 March 2008, being the date on which the Loan was actually advanced to the Original Borrowers;

"Drawdown Notice" means a notice in the form set out in Schedule 1 (or in any other form which the Lender approves or reasonably requires);

"Earnings" means, in relation to each Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower which is the owner of such Ship and which arise out of the use or operation of such Ship, including (but not limited to):

(a) all freight, hire and passage moneys, compensation payable to the relevant Borrower or, as the case may be, Owner in the event of requisition of its Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of such Ship;

(b) all moneys which are at any time payable under Insurances in respect of loss of earnings; and

(c) if and whenever such Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to such Ship;

"Earnings Account" means:

(a) in the case of the Collateral Ship, an earnings account in the name of the Borrower with the Lender in Piraeus designated "Ialysos Owning Company Limited — Earnings Account";

(b) in the case of "GALVESTON", an earnings account in the name of Iokasti with the Lender in Piraeus designated "Iokasti Shipping Company Limited - Earnings Account"; and

(c) in the case of "SAMATAN", an earnings account in the name of Boone with the Lender in Piraeus designated "Boone Star Owners Inc. - Earnings Account",

or, in any case, any other account (with that or another office of the Lender or with a bank or financial institution other than the Lender) which is designated by the Lender as the Earnings Account for the relevant Ship for the purposes of this Agreement and, in the plural, means all of them;

"Earnings Account Pledge" means, in relation to each Earnings Account, the deed of pledge in respect of that Earnings Account to be executed by the relevant Owner in favour of the Lender in such form as the Lender may approve or require and, in the plural, means all of them;

"Effective Date" has the meaning given to it in clause 1.2 of the FourthFifth Amending and Restating Agreement;

"Environmental Claim" means:

(a) any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or

(b) any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,

and "claim" means a claim for damages, compensation, fines, penalties or any other payment of any kind, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;

"Environmental Incident"means:

(a) any release of Environmentally Sensitive Material from a Ship; or

(b) any incident in which Environmentally Sensitive Material is released from a vessel other than a Ship and which involves a collision between a Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Ship and/or an Owner and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

(c) any other incident in which Environmentally Sensitive Material is released otherwise than from a Ship and in connection with which a Ship is actually or potentially liable to be arrested and/or where an Owner and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;

"Environmental Law" means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;

"Environmentally Sensitive Material"means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous;

"Event of Default"means any of the events or circumstances described in Clause 17.1;

"Excess Earnings Period"means the period commencing on 30 June 2013 (inclusive) and ending on 31 December 2014 (inclusive);

"Farat"means Farat Shipping Company Limited, a company incorporated in Malta, whose registered office is at 5/2 Merchants Street, Valletta, Malta;

"Fifth Amending andRestating Agreement" means the amending and restating agreement dated __ December 2014 and made between (inter alia the Borrower and the Lender setting out the terms and conditions upon which  this Agreement was amended and restated

"Finance Documents"means:

(a) this Agreement;

(b) the Deed of Novation, Amendment and Restatement;

(c) the First Amending and Restating Agreement;

(d) the Second Amending and Restating Agreement;

(e) the Fourth Amending and Restating Agreement;

(f) the Fifth Amending and  Restating Agreement;

(g) (f)the Supplemental Letter;

(h) (g)the Master Agreement;

(i) (h)the Master Agreement Assignment;

(j) (i)the Corporate Guarantee;

(k) (j)the General Assignments;

(l) (k)the Mortgages;

(m) (l)the Deeds of Covenants;

(n) (m)the Earnings Account Pledges;

(o) (n)the Deposit Account Pledge;

(p) (o)the Approved Manager's Undertaking;

(q) (p)any Charter Assignment;

(r) (q)the Additional Finance Documents;

(s) (r)the Pledge and Security Agreement;

(t) (s)the Control Agreement; and

(u) (t)any other document (whether creating a Securityor not) which is Interest executed at any time by the Borrower or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lender under this Agreement or any of the other documents referred to in this definition;

"Financial Indebtedness"means, in relation to a person (the "debtor"), a liability of the debtor:

(a) for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

(b) under any loan stock, bond, note or other security issued by the debtor;

(c) under any acceptance credit, guarantee or letter of credit facility made available to the debtor;

(d) under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;

(e) under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or

(f) under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within (a) to (e) if the references to the debtor referred to the other person;

"First Amending and Restating Agreement"means the amending and restating agreement dated 25 January 2010 and made between (inter alia) the Original Borrowers and the Lender setting out the terms and conditions upon which this Agreement was amended and restated;

"Fleet Vessels" means, together, all of the vessels (including, but not limited to, the Ships) owned from time to time by members of the Group;

"Fourth Amending and Restating Agreement" means the amending and restating agreement dated 1 August 2013 and made between (inter alia) the Original Borrower and the Lender setting out the terms and conditions upon which this Agreement was amended and restated;

"General Assignment" means a general assignment of the Earnings, the Insurances and the Requisition Compensation of the Collateral Ship to be executed by the Borrower in favour of the Lender in such form as the Lender may approve or require;

"Group" means the Corporate Guarantor and its subsidiaries (whether direct or indirect and including, but not limited to, the Borrower and each Additional Owner) from time to time during the Security Period and "member of the Group" shall be construed accordingly;

"Insurances" means, in relation to each Ship:

(a) all policies and contracts of insurance, including entries of such Ship in any protection and indemnity or war risks association, which are effected in respect of such Ship, its Earnings or otherwise in relation to it; and

(b) all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;

"Interest Period" means, in relation to the Loan, a period determined in accordance with Clause 4;

"Iokasti" means Iokasti Owning Company Limited, a corporation incorporated under the laws of Republic of Marshall Islands with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"ISM Code" means, in relation to its application to the Owners, the Ships and their operation:

(a) The International Management Code for the Safe Operation of Ships and for Pollution Prevention, currently known or referred to as the "ISM Code", adopted by the Assembly of the International Maritime Organisation by Resolution A.741(18) on 4th November, 1993 and incorporated on 19th May, 1994 into chapter IX of the International Convention for the Safety of Life at Sea 1974 (SOLAS 1974); and

(b) all further resolutions, circulars, codes, guidelines, regulations and recommendations which are now or in the future issued by or on behalf of the International Maritime Organisation or any other entity with responsibility for implementing the ISM Code, including without limitation, the 'Guidelines on implementation or administering of the International Safety Management (ISM) Code by Administrations' produced by the International Maritime Organisation pursuant to Resolution A.788(19) adopted on 25th November, 1995,

as the same may be amended, supplemented or replaced from time to time;

"ISM Code Documentation" includes, in relation to a Ship:

(a) the document of compliance (DOC) and safety management certificate (SMC) issued pursuant to the ISM Code in relation to such Ship within the periods specified by the ISM Code;

(b) all other documents and data which are relevant to the ISM SMS and its implementation and verification which the Lender may require; and

(a) any other documents which are prepared or which are otherwise relevant to establish and maintain such Ship's compliance or the compliance by the Borrower owning such Ship with the ISM Code which the Lender may require;

"ISM SMS" means, in relation to a Ship, the safety management system for such Ship which is required to be developed, implemented and maintained under the ISM Code;

"ISPS Code" means the International Ship and Port Facility Security Code constituted pursuant to resolution A.924(22) of the International Maritime Organisation ("IMO") now set out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as amended) and the mandatory ISPS Code as adopted by a Diplomatic Conference of the IMO on Maritime Security in December 2002 and includes any amendments or extensions to it and any regulation issued pursuant to it but shall only apply insofar as it is applicable law in Malta and any jurisdiction on which such Ship is operated;

"ISPS Code Documentation" includes:

(a) the International Ship Security Certificate issued pursuant to the ISPS Code in relation to each Ship within the period specified in the ISPS Code; and

(a) all other documents and data which are relevant to the ISPS Code and its implementation and verification which the Lender may require;

"Lansat" means Lansat Shipping Company Limited, a company incorporated in Malta, whose registered office is at 5/2 Merchants Street, Valletta, Malta;

"Lender" means Piraeus Bank A.E S.A. (also known as Piraeus Bank A.E.), acting through its branch at 47 49 Akti Miaouli4 Amerikis Street, 185 36 Piraeus 105 64, Athens, Greece;

"Leverage Ratio" means, any relevant time, the ratio (expressed as a percentage) of:

(a) the Total Liabilities; and

(b) the Market Value Adjusted Total Assets (including, without limitation, the Ships);

"LIBOR" means for an Interest Period:

(a) during the Applicable Period, 2,30 per cent. per annum;

(b) at all other times:

(a) (i) the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on Reuters BBA Page LIBOR 01 at or about 11:00 a.m. (London time) on the second Business Day prior to the commencement of that Interest Period (and, for the purposes of this Agreement, "Reuters BBA Page LIBOR 01" means the display designated as "Reuters BBA Page LIBOR 01" on the Reuters Money News Service or such other page as may replace BBA Page LIBOR 01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers' Association as the information vendor for the purpose of displaying British Bankers' Association Interest Settlement Rates for Dollars) the Screen Rate; or

(b) if no rate is quoted on the Screen Rate:

(i) during the Applicable LIBOR Period the rate per annum determined by the Lender in accordance with Clauses 3.5, 3.6 and 3.7 of this Agreement and

(i) (ii)if no rate is quoted on ReutersBBA Page LIBOR 01at all other times thereafter, the rate per annum determined by the Lender to be the rate per annum which leading banks in the London Interbank Market offer for deposits in Dollars in the London Interbank Market at or about 11.00 a.m. (London time) on the second Business Day prior to the commencement of that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it;

"Loan"means the principal amount for the time being outstanding under this Agreement;

"Major Casualty"means any casualty to a Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $500,000 or the equivalent in any other currency;

"Margin"means:

(a) during the Margin Applicable Period, 1.75  4.85   per cent. per annum; and

(b) at all other times thereafter:

(i) 2.60 per cent. per annum at any time when the Security Cover Ratio is equal to or-less than 125 per cent.; and

(ii) (ii).75 per cent. per annum at any time when the Security Cover Ratio is equal to or more than 125 per cent. Provided that (A) the Corporate Guarantor has been released from all its obligations under the Pledge and Security Agreement and (B) no Event of Default or Potential Event of Default has occurred and is continuing at the an relevant time;

"Margin Applicable Period"means, in respect of the period commencing on 19 March 2014 (inclusive) and ending on 31 December 2014 (inclusive).

"Market Value"means, in relation to the Collateral Ship and each Fleet Vessel, the market value of that Ship or Fleet Vessel determined in accordance with Clause 13.3;

"Market Value Adjusted Total Assets"means, at any time, Total Assets adjusted to reflect the Market Value of all Fleet Vessels;

"Master Agreement"means the master agreement (on the 1992 ISDA (Multicurrency-Crossborder) form) made or to be between the Borrower and the Lender and includes all Transactions from time to time entered into and Confirmations from time to time exchanged thereunder;

"Master Agreement Assignment"means the assignment of the Master Agreement executed or to be executed by the Borrower in favour of the Lender in such form as the Lender may approve or require;

"Minimum Deposit"means at any relevant date during the Waiver Period, an amount in aggregate equal to the repayment instalments payable during the consecutive 12-month period immediately following such date pursuant to this Agreement;

"Mortgage"means:

(a) in the case of the Collateral Ship, the first priority Maltese mortgage over that Ship executed by the Borrower in favour of the Lender (as amended and supplemented by the relevant Mortgage Addendum); and

(b) in the case of each Additional Ship, the relevant Additional Mortgage (as amended and supplemented by the relevant Mortgage Addenda), each in such form as the Lender may approve or require and in the plural means all of them;

"Mortgage Addendum" means:

(a) elation to the Collateral Ship, the first addendum to the Mortgage on that Ship, executed or, as the context may require, to be executed by the Borrower;

(b) elation to each Additional Ship, each of the first addendum and the second addendum to the Mortgage on that Additional Ship, executed or, as the context may require, to be executed by the relevant Additional Owner,

in favour of the Lender in such form as the Lender may approve or require and, in the plural, means all of them;

"Mortgaged Ship" means any Ship which, at the relevant time, is subject to a Mortgage; "Negotiation Period" has the meaning given in Clause 3.7;

"Net Income" means, in relation to each financial year of the Corporate Guarantor, the aggregate income of the Group appearing in the Accounting Information for that financial year less the aggregate of:

(a) the amounts incurred by the Group during that financial year as expenses of its business;

(b) depreciation, amortisation and all interest in respect of all Financial Indebtedness of the Group paid by all members of the Group during that financial year;

(c) Net Interest Expenses;

(d) taxes; and

(e) other items charged to the Corporate Guarantor's consolidated profit and loss account for the relevant financial year;

"Net Interest Expenses" means, as of any date of determination, the aggregate of all interest, commitment and other fees, commissions, discounts and other costs, charges or expenses accruing due from all the members the Group during that accounting period less interest income received, determined on a consolidated basis in accordance with generally accepted accounting principles and as shown in the consolidated statements of income for the Group in the applicable Accounting Information;

"Ocean Rig" means Ocean Rig UDW Inc. a corporation incorporated in The Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Marshall Islands;

"Original Borrower" means each of Annapolis, Farat and Lansat and, in the plural, means all of them;

"Owners" means, together, the Borrower and the Additional Owners and, in the singular, means any of them;

"GALVESTON"means the 2002-built bulk carrier vessel of 30,928 gross registered tons and 16,341 net registered tons having IMO Number 9257060 and registered in the ownership of Iokasti under Maltese flag with the name "GALVESTON";

"Payment Currency"has the meaning given in Clause 19.4;

"Permitted Security Interests"means:

(a) Security Interests created by the Finance Documents;

(b) liens for unpaid master's and crew's wages in accordance with usual maritime practice;

(c) liens for salvage;

(d) liens arising by operation of law for not more than 2 months' prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;

(e) liens for master's disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Owner owning such Ship in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 12.12(g);

(f) any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where the Borrower is actively prosecuting or defending such proceedings or arbitration in good faith; and

(g) Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;

"Pertinent Document"means:

(a) any Finance Document;

(b) any policy or contract of insurance contemplated by or referred to in Clause 11 or any other provision of this Agreement or another Finance Document;

(c) any other document contemplated by or referred to in any Finance Document; and

(d) any document which has been or is at any time sent by or to the Lender in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);

"Pertinent Jurisdiction", in relation to a company, means:

(a) England and Wales;

(b) the country under the laws of which the company is incorporated or formed;

(c) a country in which the company's central management and control is or has recently been exercised;

(d) a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;

(e) a country in which assets (including, without limitation, the Ships) of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and

(f) a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c);

"Pertinent Matter"means:

(a) any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or

(b) any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a),

and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or on or at any time after that signing;

"Pledge and Security Agreement"means, in respect of the Required Shares, a pledge and security agreement executed by the Corporate Guarantor in favour of the Lender pursuant to Clause 9.19 in such form as the Lender may approve or require;

"Potential Event of Default"means an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Lender and/or the satisfaction of any other condition, would constitute an Event of Default;

"Quotation Date"means, in relation to any Interest Period (or any other period for which an interest rate is to be determined under any provision of a Finance Document), the day on which quotations would ordinarily be given by leading banks in the London Interbank Market for deposits in the currency in relation to which such rate is to be determined for delivery on the first day of that Interest Period;

"Relevant Charter"has the meaning given to it in Clause 13.3;

"Repayment Date"means a date on which a repayment is required to be made under Clause 6;

"Required Shares"has the meaning given to it in Clause 9.19;

"Requisition Compensation"includes, in relation to a Ship, all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of "Total Loss";

"SAMATAN"means the 2001-built bulk carrier vessel of 40,437 gross registered tons and 25,855 net registered tons, having IMO Number 9236171 registered in the ownership of Boone under Maltese flag with the name "SAMATAN";

"Screen Rate"means the London interbank offered rate administered by the ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for Dollars for the relevant period displayed on pa. eg s LIBOR01 LIBOR02 or LIBOR= of the Reuters screen (or any replacement Reuters  page which displays that rate) or on the  appropriate pie of such other information service which  publishes that rate from time to  time in place of Reuters. If such page or service ceases to be available, the Lender may

specify another page or service displaying the relevant rate after consultation with the Borrowers;

"Second Amending and Restating Agreement" means the amending and restating agreement dated 25 August 2010 and made between (inter alia) the Original Borrowers and the Lender setting out the terms and conditions upon which this Agreement has been further amended and restated;

"Secured Liabilities" means all liabilities which the Borrower, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or any judgment relating to any Finance Document; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;

"Security Cover Ratio" means the ratio which is determined at any time by the aggregate of the amounts referred to in paragraphs (a) and (b) of Clause 13.1 over the Loan and the Swap Exposure at the relevant time;

"Security Interest" means:

(a) a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;

(b) the security rights of a plaintiff under an action in rem; and

(c) any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;

"Security Party" means the Corporate Guarantor, the Additional Owners, the Approved Manager and any other person (except the Lender) who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the last paragraph of the definition of "Finance Documents";

"Security Period" means the period commencing on the date of this Agreement and ending on the date on which the Lender notifies the Borrower and the Security Parties that:

(a) all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents have been paid;

(b) no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;

(c) neither the Borrower nor any Security Party does has any future or contingent liability under Clause 18, 19 or 20 or any other provision of this Agreement or another Finance Document; and

(d) the Lender does not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document;

"Ships" means, together, the Additional Ships and the Collateral Ship and, in the singular, means any of them;

"Shortfall" means any shortfall in the Security Cover Ratio required to be maintained pursuant to Clause 13.1;

"Supplemental Letter" means the supplemental letter dated 16 September 2011 and made between (inter alia) the Borrower and the Lender setting out the terms and conditions upon which this Agreement was amended and supplemented;

"Swap Exposure" means, as at any relevant date, the amount certified by the Lender to be the aggregate net amount in Dollars which would be payable by the Borrower to the Lender under (and calculated in accordance with) section 6(e) (Payments on Early Termination) of the Master Agreement if an Early Termination Date had occurred on the relevant date in relation to all continuing Transactions entered into between the Borrower and the Lender;

"Total Assets" means, the total assets of the Group as stated in the most recent Accounting Information;

"Total Liabilities" means, as at the date of calculation, the aggregate Financial Indebtedness of the Group;

"Total Loss" means, in relation to a Ship:

(a) actual, constructive, compromised, agreed or arranged total loss of such Ship;

(b) any expropriation, confiscation, requisition or acquisition of such Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless it is within 1 month redelivered to the full control of the owner owning such Ship;

(c) any arrest, capture, seizure or detention of such Ship (including any hijacking or theft) unless it is within 1 month redelivered to the full control of the owner owning such Ship;

"Total Loss Date" means, in relation to a Ship:

(a) in the case of an actual loss of such Ship, the date on which it occurred or, if that is unknown, the date when such Ship was last heard of;

(b) in the case of a constructive, compromised, agreed or arranged total loss of such Ship, the earliest of:

(i) the date on which a notice of abandonment is given to the insurers; and

(ii) the date of any compromise, arrangement or agreement made by or on behalf of the Borrower or, as the case may be, Owner owning such Ship, with such Ship's insurers in which the insurers agree to treat such Ship as a total loss; and

(c) in the case of any other type of total loss, on the date (or the most likely date) on which the relevant underwriters consider that the event constituting the total loss occurred;

"Transaction" has the meaning given in the Master Agreement; and

"Waiver Period" means the period which originally commenced on 31 December 2008 and ended on 31 March 2012 December 2013 (inclusive) and pursuant to the Fourth Fifth Amending and Restating Agreement the new period commencing on 27 December 2012 1 January 2014 (inclusive) and ending on 31 December 2013 2014  (inclusive). 

1.2Construction of certain terms

In this Agreement:

"approved"means, for the purposes of Clause 12, approved in writing by the Lender;

"asset"includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;

"company"includes any partnership, joint venture and unincorporated association;

"consent"includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;

"contingent liability"means a liability which is not certain to arise and/or the amount of which remains unascertained;

"document"includes a deed; also a letter, fax or telex;

"excess risks"means, in relation to a Ship the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of that Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims;

"expense"means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;

"law"includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;

"legal or administrative action"means any legal proceeding or arbitration and any administrative or regulatory action or investigation;

"liability"includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;

"months"shall be construed in accordance with Clause 1.3;

"obligatory insurances"means, in relation to a Ship, all insurances effected, or which the Borrower or, as the case may be, Owner owning the Ship, is obliged to effect, under Clause 12 or any other provision of this Agreement or another Finance Document;

"parent company"has the meaning given in Clause 1.4;

"person"includes any company; any state, political sub-division of a state and local or municipal authority; and any international organisation;

"policy", in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

"protection and indemnity risks"means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if

any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 1 of the Institute Time Clauses (Hulls) (¹/₁0/83) or clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;

"regulation"includes any regulation, rule, official directive, request or guideline whether or not having the force of law of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

"subsidiary"has the meaning given in Clause 1.4;

"tax"includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and

"war risks"includes the risk of mines and all risks excluded by clause 23 of the Institute Time Clauses (Hulls) (1/10/83) or clause 24 of the Institute Time Clauses (Hulls) (1/11/1995).

1.3Meaning of "month"

A period of one or more "months"ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started ("the numerically corresponding day"), but:

(a) on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

(b) on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day; and "month"and "monthly"shall be construed accordingly.

1.4Meaning of "subsidiary"

A company (S) is a subsidiary of another company (P) if:

(a) a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

(b) P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or

(c) P has the direct or indirect power to appoint or remove a majority of the directors of S; or

(d) P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P; and any company of which S is a subsidiary is a parent company of S.

1.5General Interpretation

In this Agreement:

(a) references in Clause 1.1 to a Finance Document or any other document being in the form of a particular appendix include references to that form with any modifications to that form which the Lender approves or reasonably requires;

(b) references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;

(c) references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;

(d) words denoting the singular number shall include the plural and vice versa; and

(e) Clauses 1.1 to 1.5 apply unless the contrary intention appears.

1.6Headings

In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.

2.FACILITY

2.1Amount of facility

The Lender has made available to the Original Borrowers (whose rights, obligations and liabilities hereunder have been novated to the Borrower pursuant to the Deed of Novation, Amendment and Restatement) a loan facility of (originally) $130,000,000, drawn in a single advance of which the current principal outstandings aggregate, on the date of the Deed of Novation, Amendment and Restatement, $32,915,200.

2.22.1Purpose of the Loan

The Borrower represents and warrants to Lender that the Loan has been used only for the purpose stated in the preamble to this Agreement.

3.INTEREST

3.1Payment of normal interest

Subject to the provisions of this Agreement, interest on the Loan in respect of each Interest Period shall be paid by the Borrower on the last day of that Interest Period.

3.2Normal rate of interest

Subject to the provisions of this Agreement, the rate of interest applicable to the Loan (or any part thereof) in respect of an Interest Period shall be the aggregate of the applicable Margin and LIBOR for that Interest Period.

3.3Payment of accrued interest

In the case of an Interest Period longer than 3 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.

3.4Notification of market disruption

The Lender shall promptly notify the Borrower if:(a)no rate is quoted on Reuters BBA Page LIBOR 01the Screen Rate or if (other than during the Applicable LIBOR Period); or (b)for any

reason the Lender is unable to obtain Dollars in the London Interbank Market in order to fund or continue to fund the Loan (or any part thereof)an Advance during any Interest Period; or, stating the circumstances which have caused such notice to be given.

3.5Application of alternative rate of interest

Following the service of a notice by the Lender pursuant to Clause 3.4, but before the commencement of the Interest Period to which that notice relates, the Lender shall have the right to:

(a) reduce (in its sole discretion) the duration of the Interest Period selected by the Borrower, unless a shorter period is not available in which case the Lender shall have the right to amend (in its sole discretion) the duration of the Interest Period selected by the Borrower; and/or

(b) determine (in its sole discretion) the relevant rate of interest which shall apply to the Loan during that Interest Period and which shall be the aggregate of (i) the applicable Margin and (ii) either:

(i) the arithmetic mean of the rates per annum offered, on the relevant Quotation Date, for deposits in Dollars for a period equal to, or as near as possible to, the relevant Interest Period which appear on the electronic pages (together, the "Applicable Screen Rates") of (aa) KLIEMM (Carl Kliem GmbH), (bb) USDDEPO=ICAP (°cap Plc) and (cc) USDDEPO=TTLK (Tullet Prebon Plc) on the Reuters Money News Services or

(ii) if:

(a) for any reason, there are no Applicable Screen Rates available on the relevant Quotation Date; or

(b) the Applicable Screen Rates (or any of them) do not reflect the rates given in the interbank market on that Quotation Date, the rate per annum, expressed as a percentage, which reflects the cost to the Lender of funding the Loan (or any part thereof) during that Interest Period from whichever alternative sources are available to the Lender (and as it may select in its sole discretion) in Dollars or in any available currency,

(the "Alternative Rate").

The Lender shall promptly notify the Borrower in writing of any Alternative Rate and any change to the Interest Period selected initially by the Borrower arising through the operation of this Clause 3.5.

3.6Negotiation of alternative basis for funding

If the Borrower does not agree with the Alternative Rate it shall notify the Lender in writing not later than 2 days after the date on which the Borrower serves its notice pursuant to Clause 3.5. The Borrower and the Lender shall use reasonable endeavours to agree, within 10 days after the date on which the Borrower serves their notice of objection to the Alternative Rate (the "Negotiation Period"), an alternative basis (including, but not limited to, an alternative interest period, funding in an alternative currency or currencies and an alternative margin which, for the avoidance of doubt, shall reflect the Lender's cost of funding) for the Lender to continue to fund the Loan during the Interest Period concerned.

3.7Application of alternative rate of interest Any

Alternative Rate or an alternative basis for the Lender to continue to fund the Loan shall take effect in accordance with the terms notified by the Lender pursuant to Clause 3.5 or, as the case may be, upon the terms agreed pursuant to Clause 3.6. The alternative basis shall continue to apply if the relevant circumstances are continuing at the end of the applicable Interest Period (in the case of the Alternative Rate) or interest period so set by the Lender (in each other case) and for so long as the Lender and the Borrower is in agreement as to the alternative basis for funding.

3.8Prepayment

If the Borrower does not agree with the Interest Period and/or Alternative Rate set by the Lender pursuant to Clause 3.5 and an alternative basis for funding the Loan (or any part thereof) is not agreed pursuant to Clause 3.6 within the Negotiation Period, the Borrower shall prepay the Loan upon demand by the Lender together with all accrued interest thereon at the applicable rate plus the applicable Margin.

4.INTEREST PERIODS

4.1Duration of normal Interest Periods

Subject to Clauses 4.2 and 4.3, each Interest Period shall be:

(a) 3, 6 or 9 months as notified by the Borrower to the Lender not later than 11.00 a.m. (Athens time) 2 Business Days before the commencement of the Interest Period; or

(b) 3 months, if the Borrower fails to notify the Lender by the time specified in paragraph (a); or

(c) such other period as the Lender may agree with the Borrower.

4.2Duration of Interest Periods for repayment instalments

In respect of an amount due to be repaid under Clause 6 on a particular Repayment Date, an Interest Period shall end on that Repayment Date.

4.3Non-availability of matching deposits for Interest Period selected

If, after the Borrower has selected and the Lender has agreed an Interest Period longer than 6 months, the Lender notifies the Borrower by 11.00 a.m. (Athens time) on the third Business Day before the commencement of the Interest Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the London Interbank Market when the Interest Period commences, the Interest Period shall be of 6 months.

5.DEFAULT INTEREST

5.1Payment of default interest on overdue amounts

The Borrower shall pay interest in accordance with the following provisions of this Clause 5 on any amount payable by the Borrower under any Finance Document which the Lender does not receive on or before the relevant date, that is:

(a) the date on which the Finance Documents provide that such amount is due for payment; or

(b) if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or

(c) if such amount has become immediately due and payable under Clause 17.4, the date on which it became immediately due and payable.

5.2Default rate of interest

Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Lender to be 2 per cent. above:

(a) in the case of an overdue amount of principal, the higher of the rates set out at Clauses 5.3(a) and (b); or

(b) in the case of any other overdue amount, the rate set out at Clause 5.3(b).

5.3Calculation of default rate of interest

The rates referred to in Clause 5.2 are:

(a) the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period);

(b) the applicable Margin plus, in respect of successive periods of any duration (including at call) up to 3 months which the Lender may select from time to time:

(i) LIBOR; or

(ii) if the Lender determines that Dollar deposits for any such period are not being made available to it by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Lender by reference to the cost of funds to it from such other sources as the Lender may from time to time determine.

5.4Notification of interest periods and default rates

The Lender shall promptly notify the Borrower of each interest rate determined by it under Clause 5.3 and of each period selected by it for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrower is liable to pay such interest only with effect from the date of the Lender's notification.

5.5Payment of accrued default interest

Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined.

5.6Compounding of default interest

Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.

5.7Application to Master Agreement

For the avoidance of doubt, this Clause 5 does not apply to any amount payable under the Master Agreement in respect of any continuing Transaction as to which section 2(e) (Default Interest; Other Amounts) of the Master Agreement shall apply.

6.REPAYMENT AND PREPAYMENT

6.1Repayment instalments

Save as previously repaid or prepaid, the Borrower shall repay the Loan by (i) 4 equal instalments in the amount of $1,337,160 each and (ii) a balloon payment of $27,566,560 (the "Balloon Instalment") on the Repayment Dates referred to in Clause 6.2.

6.2Repayment Dates

The Repayment Dates referred to in Clause 6.1 are as follows:

(a) 19 March 2013, in the case of the first repayment instalment;

(b) 17 June 2013, in the case of the second repayment instalment;

(c) 17 December 2014, in the case of the third repayment instalment; and

(d) 13 March 2015, in the case of the fourth repayment instalment and the Balloon Instalment.

6.3Final Repayment Date

On the final Repayment Date, the Borrower shall additionally pay to the Lender all other sums then accrued or owing under any Finance Document.

6.4Voluntary prepayment

Subject to the following conditions, the Borrower may prepay the whole or any part of it at any time.

6.5Conditions for voluntary prepayment

The conditions referred to in Clause 6.4 are that:

(a) a partial prepayment shall be $500,000 or a multiple of $500,000;

(b) the Lender has received from the Borrower at least 1 Business Day's prior written notice specifying the amount to be prepaid, the date on which the prepayment is to be made and, as the case may be, the details of the Borrower's account to be debited with the amount to be prepaid; and

(c) the Borrower has provided evidence satisfactory to the Lender that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any regulation relevant to this Agreement which affect the Borrower or any Security Party has been complied with.

6.6Effect of notice of prepayment

A prepayment notice shall be irrevocable and may not be withdrawn or amended without the consent of the Lender and the amount specified in the prepayment notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.

6.7Mandatory prepayment

The Borrower shall be obliged to prepay the Loan if the Collateral Ship is sold or becomes a Total loss:

(a) if that Ship is sold, on or before the date on which the sale is completed by delivery of such Ship to the buyer; or

(b) if that Ship becomes a Total Loss, on the earlier of the date falling 180 days after the Total Loss Date and the date of receipt by the Lender of the proceeds of insurance relating to such Total Loss.

6.8Amounts payable on prepayment

A prepayment shall be made together with accrued interest (and any other amount payable under Clause 19 or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest Period, together with any sums payable under Clauses 19.1(b) and 19.2 but without premium or penalty.

6.9Application of partial prepayment

Each partial prepayment made pursuant to Clauses 6.4 or 6.7 shall be applied pro rata against the repayment instalments specified in Clause 6.1 outstanding at the time of the partial prepayment (including, without limitation, the Balloon Instalment).

6.10No reborrowing

No amount prepaid may be reborrowed.

6.11Prepayment out of Excess Earnings

If in respect of any 6-month period during the Excess Earnings Period (each an "Excess Cash Calculation Date) the Lender determines (on the basis of the semi-annual unaudited accounts and the annual audited accounts of the Borrower to be provided pursuant to Clause 9.6) that the aggregate of the daily Earnings of the Collateral Ship for such 6-month period (each, a "Relevant Period" and, together, the "Relevant Periods") exceeds the aggregate of:

(a) the expenditure necessarily incurred during such Relevant Period by the Borrower in operating, insuring, maintaining, repairing and generally trading the Collateral Ship (including, but not limited to, any expenses in respect of drydocking, special survey or maintenance of the Collateral Ship and management fees paid in respect of the Collateral Ship); and

(b) sums incurred by the Borrower in respect of the payment of principal on, and interest for, the Loan pursuant to this Agreement and any sums paid by the Borrower pursuant to the Master Agreement during such 6-month period,

then the Borrower shall, as soon as possible but in no event later than 90 days after the relevant Excess Cash Calculation Date, pay to the Lender the amount equal to such excess (each an "Excess Amount" and, together, the "Excess Amounts" with such Excess Amounts not exceeding in aggregate the total amount of $6,685,800), which shall be applied by the Lender in prepayment of the Loan in inverse order of maturity first against the Balloon Instalment and then against the repayment instalments then outstanding (and the Borrower hereby irrevocably authorises the Lender to make such application).

6.12Adjustment of Excess Amount

If the Lender determines (in its sole and absolute discretion) upon review of the semi-annual unaudited accounts of the Borrower and/or the annual audited consolidated financial statements of the Corporate Guarantor in respect of any financial year which will be delivered to the Lender pursuant to Clauses 9.6(a) and 9.6(c) respectively that the aggregate of the Excess Amounts for that financial year determined by reference to the unaudited semi-annual individual financial statements of the Borrower is less than the aggregate of the Excess Amounts for the whole of the financial year as determined by reference to the Borrower's individual financial statements for that financial year (the "Adjusted Excess

Amount") the Borrower shall, following the Lender's determination as aforesaid, prepay on the date falling 10 days after the date on which the Lender notifies the Borrower of such insufficiency the amount by which the Adjusted Excess Amount exceeds the aggregate of the Excess Amounts. If the aggregate Excess Amount for any financial year determined by the Lender by reference to the Borrower's individual management financial statements for that financial year is less than the aggregate Excess Amount determined by reference to the semi-annual unaudited accounts of the Borrower and/or the annual audited consolidated financial statements of the Corporate Guarantor for the same financial year, the difference between such two amounts shall be deducted from the amount determined by the Lender to be the Excess Amount for the first Relevant Period to occur after the Lender's determination.

7.CONDITIONS PRECEDENT

7.1Documents, fees and no default

The effectiveness of the Fourth Fifth Amending and Restating Agreement is subject to the following conditions precedent:

(a) that, on or before the Effective Date the Lender receives the documents described in Schedule 1 in form and substance satisfactory to it and its lawyers;

(b) that at the Effective Date:

(i) no Event of Default or Potential Event of Default has occurred and is continuing on the Effective Date;

(ii) the representations and warranties in Clause 8 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on the Effective Date with reference to the circumstances then existing;

(iii) none of the circumstances contemplated by Clause 3.4 has occurred and is continuing; and

(iv) there has been no material adverse change in the financial position, state of affairs or prospects of the Borrower, the Corporate Guarantor, the Group any other Security Party in the light of which the Lender considers that there is a significant risk that the Borrower, the Corporate Guarantor, the Group or any other Security Party will later become unable to discharge its liabilities under the Finance Documents to which it is a party as they fall due; and

(v) that the Lender has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Lender may reasonably request by notice to the Borrower prior to the Effective Date.

7.2Waivers of conditions precedent

If the Lender, at its discretion, agrees to the effectiveness of the FourthFifth Amending and Restating Agreement before certain of the conditions referred to in Clause 7.1 are satisfied, the Borrower shall ensure that those conditions are satisfied within 10 Business Days after the Effective Date (or such longer period as the Lender may specify).

8.REPRESENTATIONS AND WARRANTIES

8.1General

The Borrower represents and warrants to the Lender as follows.

8.2Status

The Borrower is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands.

8.3Share capital and ownership

The Borrower has an authorised share capital which is divided into 500 registered shares with a par value of $20.00 each and the legal title and beneficial ownership of the Borrower's shares is held, free of any Security Interest or other claim, by the Corporate Guarantor.

8.4Corporate power

The Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:

(a) to own its Ship and maintain it in its ownership under the Maltese flag;

(b) to execute the Finance Documents and any Approved Charter to which it is a party; and

(c) to borrow under this Agreement, to enter into Transactions under the Master Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents including, without limitation, the Master Agreement.

8.5Consents in force

All the consents referred to in Clause 8.4 remain in force and nothing has occurred which makes any of them liable to revocation.

8.6Legal validity; effective Security Interests

The Finance Documents to which the Borrower is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):

(a) constitute the legal, valid and binding obligations of the Borrower enforceable against it in accordance with their respective terms; and

(b) create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate; subject to any relevant insolvency laws affecting creditors' rights generally.

8.7No third party Security Interests

Without limiting the generality of Clause 8.6, at the time of the execution and delivery of each Finance Document:

(a) the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and

(b) no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.

8.8No conflicts

The execution by the Borrower of each Finance Document to which it is a party, and the borrowing by the Borrower of the Loan, and their compliance with each Finance Document will not involve or lead to a contravention of:

(a) any law or regulation; or

(b) its constitutional documents; or

(c) any contractual or other obligation or restriction which is binding on the Borrower or any of its assets.

8.9No withholding taxes

All payments which the Borrower is liable to make under the Finance Documents may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.

8.10No default

No Event of Default or Potential Event of Default has occurred and is continuing.

8.11Information

All information which has been provided in writing by or on behalf of the Borrower or any Security Party to the Lender in connection with any Finance Document satisfied the requirements of Clause 9.5; all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 9.7; and there has been no material adverse change in the financial position or state of affairs of the Borrower from that disclosed in the latest of those accounts.

8.12No litigation

No legal or administrative action involving the Borrower (including any action relating to any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken or, to the Borrower's knowledge, is likely to be commenced or taken which, in either case, would be likely to have a material adverse effect on the Borrower's financial position or profitability.

8.13Compliance with certain undertakings

 At the date of this Agreement, the Borrower is in compliance with Clauses 9.2, 9.4, 9.9 and 9.13.

8.14Taxes paid

The Borrower has paid all taxes applicable to, or imposed on or in relation to it, its business or the Ship owned by it.

8.15ISM Code and ISPS Code compliance

All requirements of the ISM Code and the ISPS Code as they relate to each Owner, the Approved Manager and the Ships have been complied with.

8.16No money laundering

Without prejudice to the generality of Clause 2.2, in relation to the borrowing by the Original Borrowers of the Loan (whose rights, obligations and liabilities hereunder have been novated to, and assumed by, the Borrower pursuant to the Deed of Novation, Amendment and Restatement), the performance and discharge of the Borrower's obligations and liabilities under the Finance Documents, and the transactions and other arrangements effected or contemplated by the Finance Documents, the Borrower confirms that it is acting for its own account and that the foregoing will not involve or lead to contravention of any law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European Communities).

8.17ISO 9002

The Borrower will, once it is required to do so by law, obtain ISO 9002 certification.

9.GENERAL UNDERTAKINGS

9.1General

The Borrower undertakes with the Lender to comply with the following provisions of this Clause 9 at all times during the Security Period except as the Lender may otherwise permit.

9.2Title; negative pledge

The Borrower will:

(a) hold the legal title to, and own the entire beneficial interest in its Ship, her Insurances and her Earnings, free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents (and the effect of assignments contained in the Finance Documents) and except for Permitted Security Interests; and

(b) not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future.

9.3No disposal of assets

The Borrower will not transfer, lease or otherwise dispose of:

(a) all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not; or

(b) any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation.

9.4No other liabilities or obligations to be incurred

The Borrower will not incur any Financial Indebtedness except that incurred under the Finance Documents and that reasonably incurred in the ordinary course of operating and chartering its Ship.

9.5Information provided to be accurate

All financial and other information which is provided in writing by or on behalf of the Borrower under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.

9.6Provision of financial statements

The Borrower will send or procure there are sent to the Lender:

(a) as soon as possible, but in no event later than 180 days after the end of each financial year of the Borrower (commencing with the financial year ending on 31 December 2012), the management accounts (comprising of a balance sheet, a statement of profit and loss and a statement of cashflows) of the Borrower for that financial year;

(b) as soon as possible, but in no event later than 30 days after the end of each 3-month period in each financial year of the Borrower ending on 31 March, 30 June, 30 September and 31 December (commencing with the 3-month period ending on 31 December 2012), the interim management accounts (comprising of a balance sheet, a statement of profit and loss and a statement of cashflows) of the Borrower for that 3-month period;

(c) as soon as possible, but in no event later than 180 days after the end of each financial year of the Corporate Guarantor (commencing with the financial year ending on 31 December 2012), the audited consolidated financial statements of the Corporate Guarantor for that financial year; and

(d) as soon as possible, but in no event later than 60 days after the end of each 6-month period in each financial year of the Corporate Guarantor ending on 30 June and 31 December (commencing with the 6-month period ending on 31 December 2012), the interim unaudited consolidated financial statements of the Borrower and the Corporate Guarantor for that 6-month period.

9.7Form of financial statements

All accounts (audited and unaudited) delivered under Clause 9.6 will:

(a) be prepared in accordance with all applicable laws and generally accepted accounting principles consistently applied;

(b) give a true and fair view of the state of affairs of the Borrower, the Corporate Guarantor and the Group at the date of those accounts and of profit for the period to which those accounts relate; and

(c) fully disclose or provide for all significant liabilities of the Borrower, the Corporate Guarantor and the Group.

9.8Shareholders and creditor notices

The Borrower will send the Lender, at the same time as they are despatched, copies of all communications which are despatched to the Borrower's shareholders or creditors or any class of them.

9.9Consents

The Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Lender of, all consents required:

(a) for the Borrower to perform its obligations under any Finance Document;

(b) for the validity or enforceability of any Finance Document; and

(c) for the Borrower to continue to own and operate its Ship, and the Borrower will comply with the terms of all such consents.

9.10Maintenance of Security Interests

The Borrower will:

(a) at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and

(b) without limiting the generality of paragraph (a) above, authorise and hereby authorises the Lender at the cost of the Borrower to promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which may be or become necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

9.11Notification of litigation

The Borrower will provide the Lender with details of any legal or administrative action involving the Borrower, any Security Party, the Approved Manager, any Ship, the Earnings or the Insurances as soon as such action is instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance Document.

9.12Principal place of business

The Borrower will maintain its place of business, and keep its corporate documents and records, at the address stated in Clause 26.2(a) and the Borrower will not establish, or do anything as a result of which it would be deemed to have, a place of business in the United Kingdom or the United States of America.

9.13Confirmation of no default

The Borrower will, within 2 Business Days after service by the Lender of a written request, serve on the Lender a notice which is signed by a director of the Borrower and which:

(a) states that no Event of Default or Potential Event of Default has occurred; or

(b) states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.

9.14Notification of default

The Borrower will notify the Lender as soon as the Borrower becomes aware of:

(a) the occurrence of an Event of Default or a Potential Event of Default; or

(b) any matter which indicates that an Event of Default or a Potential Event of Default may have occurred, and will keep the Lender fully up-to-date with all developments.

9.15Provision of further information

The Borrower will, as soon as practicable after receiving the request, provide the Lender with:

(a) any additional financial or other information relating to the Borrower, the Ships, the Earnings, the Insurances, the Approved Manager, the Security Parties, the Group or the Corporate Guarantor; or

(b) any additional financial or other information relating to any other matter relevant to, or to any provision of, a Finance Document, which may be requested by the Lender at any time.

9.16Time Charter Assignment

If the Borrower or an Owner enters into any bareboat charter or any Approved Charter (other than the Charter for as long as such charter is not assignable) in respect of its Ship, the Borrower shall or, as the case may be, the Borrower shall procure that such Owner shall, at the request of the Lender, execute in favour of the Lender a Charter Assignment in respect of such bareboat charter or Approved Charter and deliver to the Lender any documents in relation thereto which the Lender may require.

9.17Information on Relevant Charter

The Borrower shall, and shall procure that each Owner shall, immediately inform the Lender if the charterer which has entered into a Relevant Charter with the Borrower or, as the case may be, that Owner is in breach of its obligations under that Relevant Charter.

9.18No amendment to Relevant Charter etc.

The Borrower will not, and shall procure that each Owner will not, agree to any amendment or supplement to, or waive or fail to enforce the Relevant Charter to which it is or will become a party or any of its provisions.

9.19Additional Security

The Borrower undertakes with the Lender to procure that the Corporate Guarantor:

(a)(a) executes and delivers on or prior to the Effective Datedate of the Fifth Amending and Restating Agreement, the Pledge and Security Agreement and, to cause Ocean Rig as issuer, to execute, and ASTT as broker to acknowledge and deliver together with the Corporate Guarantor, the Control Agreement referred to therein in respect of the Required Shares; and

(b)(b) deliver to the Lender such other documents equivalent to those referred to in paragraphs 2, 3, 4 and 5 of Schedule 1 of this Agreement as the Lender may require in connection with the execution of the Pledge and Security Agreement  and the Control Agreement; and

(c)(c) to ensure that any additional security given pursuant to this Clause 9.19 shall remain in full force and effect until the last date day of the Applicable Additional Security Period and at the end of such period, the Corporate Guarantor shall be automatically released from all its obligations under the Pledge and Security Agreement (subject to the proviso in Clauses 24.2 and 24.4 of this Agreement).

In this Clause 9.19:

"Required Shares"means 1,800,098-2,356,705 issued and outstanding shares of common stock in Ocean Rig (including all other or additional stock or other securities or property paid or distributed in respect of the Required Shares by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar arrangements) currently in the legal and beneficial ownership of the Corporate Guarantor to be pledged in favour of the Lender pursuant to this Clause 9.19 in order to rectify cover 125 per cent. of the Shortfall.

9.20Listing of Ocean Rig

The Borrower shall procure that the share capital of Ocean Rig is listed and continues to be listed in an Approved Stock Exchange up to and including 31 December 2013.

10.CORPORATE UNDERTAKINGS

10.1General

The Borrower also undertakes with the Lender to comply with the following provisions of this Clause 10 at all times during the Security Period except as the Lender may otherwise permit.

10.2Maintenance of status

The Borrower will maintain its separate corporate existence and remain in good standing under the laws of the Marshall Islands.

10.3Negative undertakings

The Borrower will not:

(a) carry on any business other than the ownership, chartering and operation of the Ship owned by it; or

(b) provide any form of credit or financial assistance to:

(i) a person who is directly or indirectly interested in the Borrower's share or loan capital; or

(ii) any company in or with which such a person is directly or indirectly interested or connected,

or enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to the Borrower than those which it could obtain in a bargain made at arms' length;

(c) open or maintain any account with any bank or financial institution except accounts with the Lender for the purposes of the Finance Documents;

(d) issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital;

(e) acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative (other than a Transaction under the Master Agreement); and

(f) enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation.

11.INSURANCE

11.1General

The Borrower undertakes to procure that each Owner of a Mortgaged Ship shall comply with the following provisions of this Clause 11 at all times during the Security Period except as the Lender may otherwise permit.

11.2Maintenance of obligatory insurances

The Borrower shall procure that each Owner of a Mortgaged Ship shall keep the Ship owned by it insured at its expense against:

(a) fire and usual marine risks (including hull and machinery and excess risks);

(b) war risks;

(c) protection and indemnity risks; and

(d) any other risks against which the Lender considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Lender be reasonable for such Owner to insure and which are specified by the Lender by notice to such Owner.

11.3Terms of obligatory insurances

The Borrower shall procure that each Owner of a Mortgaged Ship shall effect such insurances:

(a) in Dollars;

(b) in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of (i) an amount equal to 125 per cent. of the aggregate of (A) the Loan and (B) any Swap Exposure and (ii) the Market Value of such Ship;

(c) in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market;

(d) in relation to protection and indemnity risks, in respect of the relevant Ship's full tonnage;

(e) on approved terms; and

(f) through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.

11.4Further protections for the Lender

In addition to the terms set out in Clause 11.3, the Borrower shall procure that the obligatory insurances shall:

(a) whenever the Lender requires, name (or be amended to name) the Lender as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Lender, but without the Lender thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;

(b) name the Lender as loss payee with such directions for payment as the Lender may specify;

(c) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Lender shall be made without set-off, counterclaim or deductions or condition whatsoever;

(d) provide that the insurers shall waive, to the fullest extent permitted by English law, their entitlement (if any) (whether by statute, common law, equity, or otherwise) to be subrogated to the rights and remedies of the Lender in respect of any rights or interests (secured or not) held by or available to the Lender in respect of the Secured Liabilities, until

the Secured Liabilities shall have been fully repaid and discharged, except that the insurers shall not be restricted by the terms of this paragraph (d) from making personal claims against persons (other than the relevant Owner or the Lender) in circumstances where the insurers have fully discharged their liabilities and obligations under the relevant obligatory insurances;

(e) provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Lender;

(f) provide that the Lender may make proof of loss if the relevant Owner fails to do so; and

(g) provide that if any obligatory insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Lender, or if any obligatory insurance is allowed to lapse for non-payment of premium, such cancellation, charge or lapse shall not be effective with respect to the Lender for 30 days (or 7 days in the case of war risks) after receipt by the Lender of prior written notice from the insurers of such cancellation, change or lapse.

11.5Renewal of obligatory insurances

The Borrower shall procure that each Owner of a Mortgaged Ship shall:

(a) at least 14 days before the expiry of any obligatory insurance:

(i) notify the Lender of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the relevant Owner proposes to renew that obligatory insurance and of the proposed terms of renewal; and

(ii) obtain the Lender's approval to the matters referred to in paragraph (i) above;

(b) at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Lender's approval pursuant to paragraph (a) above; and

(c) procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Lender in writing of the terms and conditions of the renewal.

11.6Copies of policies; letters of undertaking

The Borrower shall ensure that all approved brokers provide the Lender with pro forma copies of all policies relating to the obligatory insurances which they are to effect or renew and of a letter or letters or undertaking in a form required by the Lender and including undertakings by the approved brokers that:

(a) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 11.4;

(b) they will hold such policies, and the benefit of such insurances, to the order of the Lender in accordance with the said loss payable clause;

(c) they will advise the Lender immediately of any material change to the terms of the obligatory insurances;

(d) they will notify the Lender, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the relevant Owner or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Lender of the terms of the instructions; and

(e) they will not set off against any sum recoverable in respect of a claim relating to the relevant Ship under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of the relevant Ship or otherwise, they waive any lien on the policies (including, without limitation, any fleet lien), or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of the relevant Ship forthwith upon being so requested by the Lender.

11.7Copies of certificates of entry

The Borrower shall procure that each Owner of a Mortgaged Ship shall ensure that any protection and indemnity and/or war risks associations in which that Ship is entered provides the Lender with:

(a) a certified copy of the certificate of entry for such Ship;

(b) a letter or letters of undertaking in such form as may be required by the Lender;

(c) where required to be issued under the terms of insurance/indemnity provided by the Owner's protection and indemnity association, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by that Owner in accordance with the requirements of such protection and indemnity association; and

(d) a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to such Ship.

11.8Deposit of original policies

The Borrower shall procure that each Owner of a Mortgaged Ship shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.

11.9Payment of premiums

The Borrower shall procure that each Owner of a Mortgaged Ship shall punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Lender.

11.10Guarantees

The Borrower shall procure that each Owner of a Mortgaged Ship shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.

11.11Restrictions on employment

The Borrower shall procure that no Owner of a Mortgaged Ship will employ its Ship, nor permit her to be employed, outside the cover provided by any obligatory insurances.

11.12Compliance with terms of insurances

The Borrower shall procure that each Owner of a Mortgaged Ship shall neither do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:

(a) the relevant Owner shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 11.7(c)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Lender has not given its prior approval;

(b) the relevant Owner shall not make any changes relating to the classification or classification society or manager or operator of the Ship owned by it unless approved by the underwriters of the obligatory insurances;

(c) the relevant Owner shall not make (and promptly supply copies to the Lender of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship owned by it is entered to maintain cover for trading (if permitted by the Lender) to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and

(d) the relevant Owner shall not employ its Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

11.13Alteration to terms of insurances

The Borrower shall procure that each Owner of a Mortgaged Ship shall not make or agree to any alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance.

11.14Settlement of claims

The Borrower shall procure that each Owner of a Mortgaged Ship shall not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Lender to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

11.15Provision of copies of communications

The Borrower shall procure that each Owner of a Mortgaged Ship shall provide the Lender, at the time of each such communication, copies of all written communications between the relevant Owner and:

(a) the approved brokers; and

(b) the approved protection and indemnity and/or war risks associations; and

(c) the approved insurance companies and/or underwriters, which relate directly or indirectly to:

(i) that Owner's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

(ii) any credit arrangements made between that Owner and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.

11.16Provision of information

In addition, the Borrower shall procure that each Owner of a Mortgaged Ship shall promptly provide the Lender (or any persons which it may designate) with any information which the Lender (or any such designated person) requests for the purpose of:

(a) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or

(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 11.17 below or dealing with or considering any matters relating to any such insurances, and the Borrower shall, forthwith upon written demand, indemnify the Lender in respect of all fees and other expenses incurred by or for the account of the Lender in connection with any such report as is referred to in paragraph (a) above.

11.17Mortgagee's interest and additional perils insurances

The Lender shall be entitled from time to time to effect, maintain and renew a mortgagee's interest additional perils insurance and a mortgagee's interest marine insurance in respect of a Mortgaged Ship on such terms, in such amounts, through such insurers and generally in such manner as the Lender may from time to time consider appropriate and the Borrower shall upon demand fully indemnify the Lender in respect of alt premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.

11.18Review of insurance requirements

The Lender shall be entitled to review the requirements of this Clause 11 from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the opinion of the Lender, significant and capable of affecting a Mortgaged Ship or its Owner and their insurance (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which the relevant Owner may be subject), and may appoint insurance consultants in relation to this review at the cost of the Borrower.

11.19Modification of insurance requirements

The Lender shall notify the Borrower of any proposed modification under Clause 11.18 to the requirements of this Clause 11 which the Lender considers appropriate in the circumstances, and such modification shall take effect on and from the date it is notified in writing to the Borrower as an amendment to this Clause 11 and shall bind the Borrower accordingly.

11.20Compliance with mortgagee's instructions

The Lender shall be entitled (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to require a Mortgaged Ship to remain at any safe port or to proceed to and remain at any safe port designated by the Lender until the Owner of that Ship implements any amendments to the terms of the obligatory insurances and any operational changes required as a result of a notice served under Clause 11.19.

12.SHIP COVENANTS

12.1General

The Borrower shall procure that each Owner of a Mortgaged Ship shall comply with the following provisions of this Clause 12 at all times during the Security Period except as the Lender may otherwise permit.

12.2Ship's name and registration

The Borrower shall procure that each Owner of a Mortgaged Ship shall keep the Ship owned by it registered in its ownership in Malta; shall not do or allow to be done anything as a result of which such registration might be cancelled or imperilled; and shall not change the name or port of registry of that Ship.

12.3Repair and classification

The Borrower shall procure that each Owner of a Mortgaged Ship shall keep the Ship owned by it in a good and safe condition and state of repair:

(a) consistent with first-class ship ownership and management practice;

(b) so as to maintain the highest classification available for vessels of the same age, type and specification as such Ship with an approved classification society which is a member of IACS (or such other first class classification society as may be approved by the Lender), free of overdue recommendations and requirements affecting such Ship's class; and

(c) so as to comply with all laws and regulations applicable to vessels registered at ports in Malta or to vessels trading to any jurisdiction to which such Ship may trade from time to time, including but not limited to the ISM Code, the ISM Code Documentation and the ISPS Code Documentation.

12.4Modification

The Borrower shall procure that each Owner of a Mortgaged Ship shall not make any modification or repairs to, or replacement of, the Ship owned by it or equipment installed on such Ship which would or might materially alter the structure, type or performance characteristics of such Ship or materially reduce its value.

12.5Removal of parts

The Borrower shall procure that each Owner of a Mortgaged Ship shall not, remove any material part of the Ship owned by it, or any item of equipment installed on such Ship, unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Lender and becomes on installation on such Ship the property of the relevant Borrower and subject to the security constituted by the Mortgage and if applicable, the Deed of Covenant relative to that Ship Provided that the relevant Owner may install equipment owned by a third party if the equipment can be removed without any risk of damage to its Ship.

12.6Surveys

The Borrower shall procure that each Owner of a Mortgaged Ship shall, submit the Ship owned by it regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Lender, provide the Lender at the expense of the Borrower, with copies of all survey reports.

12.7Inspection

The Borrower shall procure that each Owner of a Mortgaged Ship shall permit the Lender (by surveyors or other persons appointed by it for that purpose) to board the Ship owned by it

at all reasonable times to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.

12.8Prevention of and release from arrest

The Borrower shall procure that each Owner of a Mortgaged Ship shall promptly discharge:

(a) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship owned by it, her Earnings or her Insurances;

(b) all taxes, dues and other amounts charged in respect of that Ship, her Earnings or her Insurances; and

(c) all other outgoings whatsoever in respect of that Ship, the Earnings or the Insurances,

and, forthwith upon receiving notice of the arrest of that Ship, or of its detention in exercise or purported exercise of any lien or claim, the relevant Owner shall procure its release by providing bail or otherwise as the circumstances may require.

12.9Compliance with laws etc.

The Borrower shall procure that each Owner of a Mortgaged Ship shall:

(a) comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship owned by it, its ownership, operation and management or to the business of the relevant Owner;

(b) not employ its Ship nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and

(c) in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit it to enter or trade to any zone which is declared a war zone by any government or by such Ship's war risks insurers unless the prior written consent of the Lender has been given and the Ship owned by it has (at its expense) effected any special, additional or modified insurance cover which the Lender may require.

12.10Provision of information

The Borrower shall procure that each Owner of a Mortgaged Ship shall promptly provide the Lender with any information which it requests regarding:

(a) the Ship owned by it, its employment, position and engagements;

(b) the Earnings and payments and amounts due to such Ship's master and crew;

(c) any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of such Ship and any payments made in respect of such Ship;

(d) any towages and salvages; and

(e) the relevant Owner's, the Approved Manager's or such Ship's compliance with the ISM Code and the ISPS Code,

and, upon the Lender's request, provide copies of any current charter and any charter guarantee in relation thereto relating to such Ship, of any current charter guarantee and of the ISM Code Documentation and ISPS Code Documentation.

12.11Notification of certain events

The Borrower shall procure that each Owner of a Mortgaged Ship shall immediately notify the Lender by fax, confirmed forthwith by letter, of:

(a) any casualty which is or is likely to be or to become a Major Casualty;

(b) any occurrence as a result of which the Ship owned by it has become or is, by the passing of time or otherwise, likely to become a Total Loss;

(c) any requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with;

(d) any arrest or detention of that Ship, any exercise or purported exercise of any lien on that Ship or its Earnings or any requisition thereof for hire;

(e) any intended dry docking of that Ship;

(f) any Environmental Claim made against the relevant Owner of its Ship, or any Environmental Incident;

(g) any claim for breach of the ISM Code or the ISPS Code being made against the relevant Owner, the Approved Manager or otherwise in connection with the Ship owned by it; or

(h) any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with,

and the Borrower shall keep the Lender advised in writing on a regular basis and in such detail as the Lender shall require of the relevant Owner's, the Approved Manager's or any other person's response to any of those events or matters.

12.12Restrictions on chartering, appointment of managers etc.

The Borrower shall procure that each Owner of a Mortgaged Ship will not:

(a) let its Ship on a demise charter for any period;

(b) enter into any time or consecutive voyage charter in respect of that Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months;

(c) enter into any charter in relation to that Ship under which more than 2 months' hire (or the equivalent) is payable in advance;

(d) charter that Ship otherwise than on bona fide arm's length terms at the time when such Ship is fixed;

(e) (other than under Clause 12.15) appoint a manager of that Ship other than the Approved Manager or agree to any alteration to the terms of the Approved Manager's appointment;

(f) de-activate or lay-up that Ship; or

(g) put that Ship into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed $500,000 (or the equivalent in any other currency) unless that person has first given to the Lender and in terms satisfactory to it a written undertaking not to exercise any lien on such Ship or her Earnings for the cost of such work or for any other reason.

12.13Notice of Mortgage

The Borrower shall procure that each Owner of a Mortgaged Ship shall keep the Mortgage relative to its Ship registered against that Ship as a valid first or, in the case of the Additional Owners, second, priority mortgage, carry on board such Ship a certified copy of the Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of such Ship a framed printed notice stating that such Ship is mortgaged by the relevant Owner to the Lender.

12.14Sharing of Earnings

The Borrower shall procure that each Owner of a Mortgaged Ship shall not enter into any agreement or arrangement for the sharing of any Earnings of its Ship.

12.15Change of Approved Manager

If at any time during the Security Period the commercial and/or technical management of a Ship is transferred to TMS Bulkers Ltd. or any other company which the Lender may reasonably approve as the commercial, technical and/or operational manager of that Ship the Borrower shall, or, as the case may be, shall procure that the relevant Additional Owner shall, provide the Lender, on or prior to the date on which such transfer shall be effected, with:

(a) documents acceptable to the Lender (in its sole discretion) establishing that such Ship is managed by the relevant Approved Manager on terms acceptable to the Lender;

(b) the Approved Manager's Undertaking in respect of that Ship; and

(c) copies of the document of compliance (DOC), the safety management certificate (SMC) and the ISSC referred to in paragraph (a) of the definition of the ISM Code Documentation in respect of that Ship certified as true and in effect by the relevant Owner's or (as the case may be) the Approved Manager's (duly certified) legal counsel.

13.SECURITY COVER

13.1Minimum required security cover

Clause 13.2 applies if the Lender notifies the Borrower at any time (other than during the Waiver Period, subject to no Event of Default being in existence a an relevant time) that:

(a) the Market Value of the Collateral Ship; plus

(b) the net realisable value of any additional security previously provided under this Clause 13, is below 125 per cent. of the aggregate of (i) Loan and (ii) the Swap Exposure.

13.2Provision of additional security; prepayment

If the Lender serves a notice on the Borrower under Clause 13.1, the Borrower shall, within 1 month after the date on which the Lender's notice is served, either:

(a) provide, or ensure that a third party provides, additional security which, in the opinion of the Lender, has a net realisable value at least equal to the shortfall and is documented in such terms as the Lender may approve or require; or

(b) prepay such part (at least) of the Loan as will eliminate the shortfall.

13.3Valuation of the Collateral Ship

The Market Value of the Collateral Ship or, as the case may be, a Fleet Vessel at any date is that shown by a valuation prepared:

(a) as at a date not more than 14 days previously;

(b) by an independent sale and purchase shipbroker which the Lender has appointed and the Borrower has approved (such approval not to be unreasonably withheld) for the purpose;

(c) with or without physical inspection of that Ship (as the Lender may require);

(d) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer;

(e) free of any existing charter or other contract of employment other than:

(i) in the case of the Collateral Ship, any Relevant Charter to which that Ship may be subject and which has an unexpired duration of at least 11 months; and

(ii) in the case of a Fleet Vessel, any charterparty to which that Fleet Vessel may be subject, which is made between the owner of that Fleet Vessel and a charterer acceptable to the Lender and has an unexpired duration of at least 11 months,

in which case such Relevant Charter or, as the case may be, charterparty, shall be taken into account in determining the Market Value of that Ship or, as the case may be, Fleet Vessel Provided that in the case of a Relevant Charter, the Lender is satisfied that the parties to such Relevant Charter are in full compliance with the terms thereof; and

(f) after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.

In this Clause 13.3 "Relevant Charter"means, in relation to the Collateral Ship, any time charter party (including, but not limited to, any Approved Charter (other than the Charter for as long as such charter is not assigned in favour of the Lender)) in respect of that Ship entered into by the Borrower and a charterer in all respects acceptable to the Lender, exceeding or which, by virtue of any optional extensions is capable of exceeding, 11 months in duration (as the same may be amended or supplemented from time to time) on terms and substance in all respects acceptable to the Lender.

13.4Value of additional vessel security

The net realisable value of any additional security which is provided under Clause 13.2 and which consists of a Security Interest over a vessel shall be that shown either by way of a valuation complying with the requirements of Clause 13.3 or by a valuation from an independent sale and purchase shipbroker appointed by the Borrower and approved by the Lender (and on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and willing buyer, free of charter or other contract of employment).

13.5Valuations binding

Any valuation under Clause 13.2, 13.3 or 13.4 shall be binding and conclusive as regards the Borrower, as shall be any valuation which the Lender makes of any additional security which does not consist of or include a Security Interest.

13.6Frequency of valuation

The Borrower acknowledges and agrees that the Lender may commission a valuation of the Collateral Ship:

(a) at the end of each 3-month period ending on 31 March, 30 June, 30 September and 31 December in each year;

(b) if the Lender provides its consent pursuant to Clause 9.18 in respect of any amendment and/or variation of a Relevant Charter, immediately after such amendment and/or variation has been effected, and

(c) at any other time as the Lender may determine (including, but not limited to, at any time when, in the opinion of the Lender, any charterer in respect of a Relevant Charter is not in compliance with the terms of that Relevant Charter) in its absolute discretion.

13.7Provision of information

The Borrower shall promptly provide the Lender and any ship broker or expert acting under Clause 13.3 with any information which the Lender or any independent ship broker or expert may request for the purposes of the valuation; and, if the Borrower fails to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which that ship broker or the Lender (or the expert appointed by it) considers prudent.

13.8Payment of valuation expenses

Without prejudice to the generality of the Borrower's obligations under Clauses 18.2, 18.3 and 19.3, the Borrower shall, on demand, pay the Lender the amount of the fees and expenses of any shipbroker or expert instructed by the Lender under this Clause and all legal and other expenses incurred by the Lender in connection with any matter arising out of this Clause.

13.9Application of prepayment

Clause 6 shall apply in relation to any prepayment pursuant to Clause 13.2(b).

14.PAYMENTS AND CALCULATIONS

14.1Currency and method of payments

All payments to be made by the Borrower to the Lender under a Finance Document shall be made to the Lender:

(a) by not later than 11.00 a.m. (Athens time) on the due date;

(b) in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Lender shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement); and

(c) to the account of the Lender at Bank of New York of New York, USA for credit to the account of the Lender (Account No. 8033138548), or to such other account with such other bank as the Lender may from time to time notify to the Borrower.

14.2Payment on non-Business Day

If any payment by the Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:

(a) the due date shall be extended to the next succeeding Business Day; or

(b) if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day, and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.

14.3Basis for calculation of periodic payments

All interest and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.

14.4Lender accounts

The Lender shall maintain an account showing the amounts advanced by the Lender and all other sums owing to the Lender from the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.

14.5Accounts prima facie evidence

If the account maintained under Clause 14.4 shows an amount to be owing by the Borrower or a Security Party to the Lender, that account shall be prima facie evidence, save in the case of manifest error, that amount is owing to the Lender.

15.APPLICATION OF RECEIPTS

15.1Normal order of application

Except as any Finance Document may otherwise provide, any sums which are received or recovered by the Lender under or by virtue of any Finance Document shall be applied:

(a) FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents (other than under the Master Agreement) in the following order and proportions:

(i) first, in or towards satisfaction pro rata of all amounts then due and payable to the Lender under the Finance Documents and the Master Agreement other than those amounts referred to at paragraphs (ii) and (iii) (including, but without limitation, all amounts payable by the Borrower under Clauses 18, 19 and 20 of this Agreement or by the Borrower or any Security Party under any corresponding or similar provision in any other Finance Document or in the Master Agreement;

(ii) secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Lender under the Finance Documents and the Master Agreement (and, for this purpose, the expression "interest" shall include any net amount which the Borrower shall have become liable to pay or deliver under section 2(e) (Obligations) of the Master Agreement but shall have failed to pay or deliver to the Lender at the time of application or distribution under this Clause 16); and

(iii) thirdly, in or towards satisfaction pro rata of the Loan and the Swap Exposure calculated as at the actual Early Termination Date applying to each particular Transaction, or if no such Early Termination Date shall have occurred, calculated as if an Early Termination Date occurred on the date of application or distribution hereunder);

SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document or the Master Agreement but which the Lender, by notice to the

Borrower and the Security Parties states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the foregoing provisions of this Clause;

THIRDLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.

15.2Variation of order of application

The lender may, by notice to the Borrower and the Security Parties, provide for a different manner of application from that set out in Clause 15.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.

15.3Notice of variation of order of application

The Lender may give notices under Clause 15.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.

15.4Appropriation rights overridden

This Clause 15 and any notice which the Lender gives under Clause 15.3 shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any other Security Party.

16.APPLICATION OF EARNINGS

16.1Payment of Earnings

The Borrower undertakes with the Lender to ensure that, throughout the Security Period (and subject only to the provisions of the General Assignments), all the Earnings in relation to each Ship are paid to the Earnings Account in respect of that Ship.

16.2Application of Earnings

Until an Event of Default or a Potential Event of Default occurs, the Lender shall on each Repayment Date and on each due date for the payment of interest under this Agreement apply (and the Borrower hereby irrevocably authorises the Lender to apply) so much of the balance on the Earnings Accounts as equals:

(a) the repayment instalment due on that Repayment Date; or

(b) the amount of interest payable on that interest payment date,

in each case in discharge of the Borrower's liability for that repayment instalment or that interest.

16.3Interest accrued on the Accounts

Any credit balance on each Account shall bear interest at the rate from time to time offered by the Lender to its customers for Dollar deposits of similar amounts and for periods similar to those for which such balances appear to the Lender likely to remain on that Account.

16.4Release of accrued interest

Interest accruing under Clause 16.3 shall be freely available to the Borrower.

16.5Location of accounts

The Borrower shall promptly:

(a) comply with any requirement of the Lender as to the location or re-location of the Accounts (or any of them); and

(b) execute any documents which the Lender specifies to create or maintain in favour of the Lender a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Accounts.

16.6Debits for expenses etc.

The Lender shall be entitled (but not obliged) from time to time to debit the Accounts (or any of them) with prior notice in order to discharge any amount due and payable (which remains unpaid) to it under Clauses 18 or 19 or payment of which it has become entitled to demand under Clauses 18 or 19.

16.7Borrower's obligations unaffected

The provisions of this Clause 16 (as distinct from a distribution effected under Clause 16.2) do not affect:

(a) the liability of the Borrower to make payments of principal and interest on the due dates; or

(b) any other liability or obligation of the Borrower or any Security Party under any Finance Document.

17.EVENTS OF DEFAULT

17.1Events of Default An Event of Default occurs if:

(a) the Borrower, any Owner or the Corporate Guarantor fails to pay when due or (if so payable) on demand any sum payable under a Finance Document or under any document relating to a Finance Document; or

(b) any breach occurs of Clauses 7.2, 9.2, 9.3, 9.16, 9.19, 10.2, 10.3, 10.4, 11.2, 11.3, 11.4(b), 11.5, 12.2, 13.2 or 16.1; or

(c) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraph (a) or (b) above) if, in the opinion of the Lender, such default is capable of remedy and such default continues unremedied 14 days after written notice from the Lender requesting action to remedy the same; or

(d) (subject to any applicable grace period specified in any Finance Document) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraph (a), (b) or (c) above); or

(e) any representation, warranty or statement made by, or by an officer of, the Borrower or a Security Party in a Finance Document or in the Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made; or

(f) any of the following occurs in relation to any Financial Indebtedness of a Relevant Person exceeding (in the case of the Corporate Guarantor) $1,000,000 (or the equivalent in any other currency) in aggregate:

(i) any Financial Indebtedness of a Relevant Person is not paid when due or, if so payable, on demand; or

(ii) any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or

(iii) a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event; or

(iv) any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default; or

(v) any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or

(g) any of the following occurs in relation to a Relevant Person:

(i) a Relevant Person becomes, in the opinion of the Lender, unable to pay its debts as they fall due; or

(ii) any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $500,000 or more or the equivalent in another currency; or

(iii) any administrative or other receiver is appointed over any asset of a Relevant Person; or

(iv) a Relevant Person makes any formal declaration of bankruptcy or any formal statement to the effect that it is insolvent or likely to become insolvent, or a winding up or administration order is made in relation to a Security Party, or the members or directors of the Borrower or the Corporate Guarantor pass a resolution to the effect that it should be wound up, placed in administration or cease to carry on business, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower or the Corporate Guarantor which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Lender and effected not later than 3 months after the commencement of the winding up; or

(v) a petition is presented in any Pertinent Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of a Relevant Person unless the petition is being contested in good faith and on substantial grounds and is dismissed or withdrawn within 60 days of the presentation of the petition; or

(vi) a Relevant Person petitions a court, or presents any proposal for, any form of judicial or non judicial suspension or deferral of payments, reorganisation of its debt (or substantial part of its debt) or arrangement with all or a substantial proportion (by number or value) of its creditors or of any class of them (save for, in the case of the Corporate Guarantor, non judicial suspension or deferral of payments, reorganisation of its debt (or substantial part of its debt) or arrangement which occurs in its ordinary course of its business and not as a result of the Corporate Guarantor's inability to meet its obligations and/or liabilities) or any such suspension

or deferral of payments, reorganisation or arrangement is effected by court order, contract or otherwise; or

(vii) any meeting of the members or directors of a Relevant Person is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iii), (iv), (v) or (vi) above; or

(viii) in a Pertinent Jurisdiction other than England, any event occurs or any procedure is commenced which, in the opinion of the Lender, is similar to any of the foregoing; or

(h) the Borrower ceases or suspends carrying on its business or a part of its business which, in the opinion of the Lender, is material in the context of this Agreement; or

(i) it becomes unlawful in any Pertinent Jurisdiction or impossible:

(i) for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Lender considers material under a Finance Document; or

(ii) for the Lender to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or

(j) any consent necessary to enable the Borrower to own, operate or charter the Ship owned by it or to enable the Borrower or any Security Party to comply with any provision which the Lender considers material of a Finance Document is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or

(k) it appears to the Lender that, without its prior consent, a change has occurred after the date of this Agreement in the legal ownership of any of the shares in, the Borrower or any of the other Owners or in the ultimate control of the voting rights attaching to any of those shares; or

(l) the Charter is terminated or rescinded prior to its contractual termination date or for any other reason ceases to remain in full force and effect prior to its contractual termination date and the Borrower has not entered into any charterparty or contract of employment within sixty (60) days of such termination or rescission, on the same terms as the Charter or on such other terms and conditions acceptable to the Lender in its absolute discretion and having a duration at least equal to the remaining period of the Charter;

(m) any provision which the Lender considers material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or

(n) the security constituted by a Finance Document is in any way imperilled or in jeopardy; or

(o) an Event of Default (as defined in section 14 of the Master Agreement) occurs; or

(p) the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason except with the consent of the Lender; or

(q) any other event occurs or any other circumstances arise or develop including, without limitation:

(i) a change in the financial position, state of affairs or prospects of the Borrower, the Group, the Corporate Guarantor or any other Security Party; or

(ii) any accident or other event involving either of the Ships or another vessel, owned, chartered or operated by a Relevant Person,

in the light of which the Lender considers that there is a significant risk that the Borrower or any Security Party is, or will later become, unable to discharge its liabilities under the Finance Documents as they fall due.

17.2Actions following an Event of Default

On, or at any time after, the occurrence of an Event of Default the Lender may:

(a) serve on the Borrower a notice stating that all obligations of the Lender to the Borrower under this Agreement are terminated; and/or

(b) serve on the Borrower a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or

(c) take any other action which, as a result of the Event of Default or any notice served under paragraph (a) or (b) above, the Lender is entitled to take under any Finance Document or any applicable law.

17.3Termination of Commitment

On the service of a notice under Clause 17.2(a) the Commitment, and, all other obligations of the Lender to the Borrower under this Agreement shall terminate.

17.4Acceleration of Loan

On the service of a notice under Clause 17.2(b), the Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.

17.5Multiple notices; action without notice

The Lender may serve notices under Clauses 17.2(a) and (b) simultaneously or on different dates and it may take any action referred to in Clause 17.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.

17.6Exclusion of Lender liability

Neither the Lender nor any receiver or manager appointed by the Lender, shall have any liability to the Borrower or any other Security Party:

(a) for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or

(b) as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset,

except that this does not exempt the Lender or a receiver or manager from liability for losses shown to have been caused directly and mainly by the dishonesty, the gross negligence or

the willful misconduct of the Lender's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.

17.7Relevant Persons

In this Clause 17 a "Relevant Person" means the Borrower, the Corporate Guarantor, any other Security Party and any other member of the Group; but excluding any company which is dormant and the value of whose gross assets is $50,000 or less.

17.8Interpretation

In Clause 17.1(f) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in Clause 17.1(g) "petition" includes an application.

18.EXPENSES

18.1Costs of negotiation, preparation etc.

The Borrower shall pay to the Lender on its demand the amount of all reasonable expenses incurred by the Lender in connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.

18.2Costs of variation, amendments, enforcement etc.

The Borrower shall pay to the Lender, within 5 Business Days of the Lender's demand, the amount of all reasonable expenses incurred by the Lender in connection with:

(a) any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;

(b) any consent or waiver by the Lender concerned under or in connection with a Finance Document, or any request for such a consent or waiver;

(c) the valuation of any security provided or offered under Clause 13 or any other matter relating to such security; or

(d) any step taken by the Lender with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.

There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.

18.3Documentary taxes

The Borrower shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Lender's demand, fully indemnify the Lender against any claims, expenses, liabilities and losses resulting from any failure or delay by the Borrower to pay such a tax.

18.4Certification of amounts

A notice which is signed by 2 officers of the Lender, which states that a specified amount, or aggregate amount, is due to the Lender under this Clause 18 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or

aggregate amount, is due shall be prima facie evidence, save in the case of manifest error, that the amount, or aggregate amount, is due.

19.INDEMNITIES

19.1Indemnities regarding borrowing and repayment of Loan

The Borrower shall fully indemnify the Lender on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by the Lender, or which the Lender reasonably and with due diligence estimates that it will incur, as a result of or in connection with:

(a) the Loan not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender;

(b) the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;

(c) any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 5);

(d) the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 17, and in respect of any tax (other than tax on its overall net income) for which the Lender is liable in connection with any amount paid or payable to the Lender (whether for its own account or otherwise) under any Finance Document.

19.2Breakage costs

Without limiting its generality, Clause 19.1 covers any claim, expense, liability or loss, including a loss of a prospective profit, incurred by the Lender:

(a) in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of the Loan and/or any overdue amount (or an aggregate amount which includes the Loan or any overdue amount); and

(b) in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender) to hedge any exposure arising under this Agreement or a number of transactions of which this Agreement is one.

19.3Miscellaneous indemnities

The Borrower shall fully indemnify the Lender on its demand in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by the Lender, in any country, as a result of or in connection with:

(a) any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Lender or by any receiver appointed under a Finance Document;

(b) any other Pertinent Matter,

other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the dishonesty or wilful misconduct of the officers or employees of the Lender.

Without prejudice to its generality, this Clause 19.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.

19.4Currency indemnity

If any sum due from the Borrower or any Security Party to the Lender under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the "Contractual Currency") into another currency (the "Payment Currency") for the purpose of:

(a) making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or

(b) obtaining an order or judgment from any court or other tribunal; or

(c) enforcing any such order or judgment, the Borrower shall indemnify the Lender against the loss arising when the amount of the payment actually received by the Lender is converted at the available rate of exchange into the Contractual Currency.

In this Clause 19.4, the "available rate of exchange" means the rate at which the Lender is able at the opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

This Clause 19.4 creates a separate liability of the Borrower which is distinct from their other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.

19.5Application to Master Agreement

For the avoidance of doubt, Clause 19.4 does not apply in respect of sums due from the Borrower to the Lender under or in connection with the Master Agreement as to which sums the provisions of section 8 (Contractual Currency) of the Master Agreement shall apply.

19.6Certification of amounts

A notice which is signed by 2 officers of the Lender, which states that a specified amount, or aggregate amount, is due to the Lender under this Clause 19 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence, save in the case of manifest error, that the amount, or aggregate amount, is due.

20.NO SET-OFF OR TAX DEDUCTION

20.1No deductions

All amounts due from the Borrower under a Finance Document shall be paid:

(a) without any form of set-off, cross-claim or condition; and

(b) free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make.

20.2Grossing-up for taxes

If the Borrower is required by law to make a tax deduction from any payment:

(a) the Borrower shall notify the Lender as soon as it becomes aware of the requirement;

(b) the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;

(c) the amount due in respect of the payment shall be increased by the amount necessary to ensure that the Lender receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received.

20.3Evidence of payment of taxes

Within one month after making any tax deduction, the Borrower shall deliver to the Lender documentary evidence satisfactory to the Lender that the tax had been paid to the appropriate taxation authority.

20.4Exclusion of tax on overall net income

In this Clause 20 "tax deduction"means any deduction or withholding for or on account of any present or future tax except tax on the Lender's overall net income.

20.5Application to Master Agreement

For the avoidance of doubt, Clause 20 does not apply in respect of sums due from the Borrower under or in connection with the Master Agreement as to which sums the provisions of section 2(d) (Deduction or Withholding for Tax) of the Master Agreement shall apply.

21.ILLEGALITY, ETC

21.1Illegality

This Clause 21 applies if the Lender notifies the Borrower that it has become, or will with effect from a specified date, become:

(a) unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or

(b) contrary to, or inconsistent with, any regulation, for the Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.

21.2Notification and effect of illegality

On the Lender notifying the Borrower under Clause 21.1, the Commitment shall terminate; and thereupon or, if later, on the date specified in the Lender's notice under Clause 21.1 as the date on which the notified event would become effective the Borrower shall prepay the Loan in full in accordance with Clause 6.

21.3Mitigation

If circumstances arise which would result in a notification under Clause 21.1 then, without in any way limiting the rights of the Lender under Clause 22.2 the Lender shall use reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the

Finance Documents to another office or financial institution not affected by the circumstances but the Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:

(a) have an adverse effect on its business, operations or financial condition; or

(b) involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or

(c) involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.

22.INCREASED COSTS

22.1Increased costs

This Clause 22 applies if the Lender notifies the Borrower that it considers that as a result of:

(a) the introduction or alteration after the date of this Agreement of a law, or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a tax on the Lender's overall net income); or

(b) the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (the "Basel II Accord") or any other law or regulation implementing the Basel II Accord or any of the approaches provided for and allowed to be used by banks under or in connection with the Basel II Accord in each case as from time to time implemented by the Lender (whether such implementation, application or compliance is by a government, regulator, supervisory authority,

the Lender (or a parent company of it) has incurred or will incur an "increased cost".

22.2Meaning of "increased costs"

In this Clause 22, "increased costs" means:

(a) an additional or increased cost incurred as a result of, or in connection with, the Lender having entered into, or being a party to, this Agreement or having taken an assignment of rights under this Agreement, of funding or maintaining the Commitment or performing its obligations under this Agreement, or of having outstanding all or any part of the Loan or other unpaid sums; or

(b) a reduction in the amount of any payment to the Lender under this Agreement or in the effective return which such a payment represents to the Lender or on its capital;

(c) an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Loan or (as the case may require) the proportion of that cost attributable to the Loan; or

(d) a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Lender under this Agreement;

but not an item attributable to a change in the rate of tax on the overall net income of the Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause 19.1 or by Clause 20.

For the purposes of this Clause 22.2 the Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.

22.3Payment of increased costs

The Borrower shall pay to the Lender, on its demand, the amounts which the Lender from time to time notifies the Borrower that it has specified to be necessary to compensate it for the increased cost.

22.4Notice of prepayment

If the Borrower is not willing to continue to compensate the Lender for the increased cost under Clause 22.3, the Borrower may give the Lender not less than 14 days' notice of their intention to prepay the Loan at the end of an Interest Period.

22.5Prepayment

A notice under Clause 22.4 shall be irrevocable; and on the date specified in its notice of intended prepayment, the Commitment shall terminate and the Borrower shall prepay (without premium or penalty) the Loan, together with accrued interest thereon at the applicable rate plus the applicable Margin.

22.6Application of prepayment

Clause 6 shall apply in relation to the prepayment.

23.SET-OFF

23.1Application of credit balances The Lender may without prior notice:

(a) apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of the Lender in or towards satisfaction of any sum then due from the Borrower to the Lender under any of the Finance Documents; and

(b) for that purpose:

(i) break, or alter the maturity of, all or any part of a deposit of the Borrower;

(ii) convert or translate all or any part of a deposit or other credit balance into Dollars;

(iii) enter into any other transaction or make any entry with regard to the credit balance which the Lender considers appropriate.

23.2Existing rights unaffected

The Lender shall not be obliged to exercise any of its rights under Clause 23.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which the Lender is entitled (whether under the general law or any document).

23.3No Security Interest

This Clause 23 gives the Lender a contractual right of set-off only, and does not create any equitable charge or other Security Interest over any credit balance of the Borrower.

24.TRANSFERS AND CHANGES IN LENDING OFFICE

24.1Transfer by Borrower

The Borrower will not, without the consent of the Lender, transfer, novate or assign any of its rights, liabilities or obligations under any Finance Document.

24.2Assignment by Lender

The Lender may assign or transfer all or any of the rights and interests which it has under or by virtue of the Finance Documents without the consent of, but with notice to, the Borrower Provided that any assignment or transfer of any rights and interests under or by virtue of the Pledge and Security Agreement to a company or financial Institution shall be subject to the prior written consent of the Borrower.

24.3Rights of assignee

In respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document, or any misrepresentation made in or in connection with a Finance Document, a direct or indirect assignee or transferee of any of the Lender's rights or interests under or by virtue of the Finance Documents shall be entitled to recover damages by reference to the loss incurred by that assignee or transferee as a result of the breach or misrepresentation irrespective of whether the Lender would have incurred a loss of that kind or amount.

24.4Sub-participation; subrogation assignment

The Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, the Borrower; and the Lender may assign, in any manner and terms agreed by it, all or any part of those rights to an insurer or surety who has become subrogated to them Provided that any sub-participation or assignment of any rights and/or obligations under or in connection with the Pledge and Security Agreement to a company or financial institution shall be subject to the prior written consent of the Borrower.

24.5Disclosure of information

The Lender may disclose to a potential assignee or transferee or sub-participant any information which the Lender has received in relation to the Borrower, any Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature.

24.6Change of lending office

The Lender may change its lending office by giving notice to the Borrower and the change shall become effective on the later of:

(a) the date on which the Borrower receives the notice; and

(b) the date, if any, specified in the notice as the date on which the change will come into effect.

25.VARIATIONS AND WAIVERS

25.1Variations, waivers etc. by Lender

A document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or the Lender's rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax by the Borrower and the Lender

and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.

25.2Exclusion of other or implied variations

Except for a document which satisfies the requirements of Clause 25.1, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Lender (or any person acting on its behalf) shall result in the Lender (or any person acting on its behalf) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:

(a) a provision of this Agreement or another Finance Document; or

(b) an Event of Default; or

(c) a breach by the Borrower or any other Security Party of an obligation under a Finance Document or the general law; or

(d) any right or remedy conferred by any Finance Document or by the general law, and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.

26.NOTICES

26.1General

Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.

26.2Addresses for communications

A notice shall be sent:

(a)	to the Borrower:	c/o the Corporate Guarantor (Athens office) 109 Kifisias avenue & Sina street 74 76 V. Ipirou Street 151 25 Maroussi TK 151 24 Marousi, Athens Greece
		Fax No: (+30) 210 8090 575 Attn: Mr. Ziad Nakhleh
(b)	to the Lender:	Piraeus Bank A:ES.A. 4 Amerikis Street 47-49 Akti Miaouli Piraeus 185 36 105 64, Athens Greece
		Fax No. + 30 210 429 26013739783
		Attn: Account Officer

or to such other address as the relevant party may notify the other.

26.3Effective date of notices

Subject to Clauses 26.4 and 26.5:

(a) a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered; and

(b) a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.

26.4Service outside business hours

However, if under Clause 26.3 a notice would be deemed to be served:

(a) on a day which is not a Business Day in the place of receipt; or

(b) on such a Business Day, but after 5 p.m. local time, the notice shall (subject to Clause 26.5) be deemed to be served, and shall take effect, at 9 a.m, on the next day which is such a business day.

26.5Illegible notices

Clauses 26.3 and 26.4 do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.

26.6Valid notices

A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:

(a) the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or

(b) in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.

26.7Meaning of "notice"

In this Clause 26 "notice"includes any demand, consent, authorisation, approval, instruction, waiver or other communication.

27.SUPPLEMENTAL

27.1Rights cumulative, non-exclusive

The rights and remedies which the Finance Documents give to the Lender are:

(a) cumulative;

(b) may be exercised as often as appears expedient; and

(c) shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.

27.2Severability of provisions

If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.

27.3Counterparts

A Finance Document may be executed in any number of counterparts.

27.4Third party rights

A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

28.LAW AND JURISDICTION

28.1English law

This Agreement and any non-contractual obligations arising out of it or in connection with it shall be governed by, and construed in accordance with, English law.

28.2Exclusive English jurisdiction

Subject to Clause 28.3, the courts of England shall have exclusive jurisdiction to settle any Dispute.

28.3Choice of forum for the exclusive benefit of the Lender

Clause 28.2 is for the exclusive benefit of the Lender, which reserves the rights:

(a) to commence proceedings in relation to any matter which arises out of or in connection with this Agreement in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and

(b) to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Borrower shall not commence any proceedings in any country other than England in relation to a Dispute.

28.4Process agent

The Borrower irrevocably appoints Ince Process Agents Ltd. for the time being presently of 5th Floor, International House, 1 St. Katharine's Way, London E1W 1AY, England, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Agreement.

28.5Lender's rights unaffected

Nothing in this Clause 28 shall exclude or limit any right which the Lender may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

28.6Meaning of "proceedings" and "Dispute"

In this Clause 28, "proceedings" means proceedings of any kind, including an application for a provisional or protective measure and "Dispute" means any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement) or any non-contractual obligation arising out of or in connection with this Agreement.

THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.

SCHEDULE 1

CONDITION PRECEDENT DOCUMENTS

The following are the documents referred to in Clause 7.1(a).

1 copies of resolutions passed at a meeting of the board of directors and shareholders of the Borrower and the Corporate Guarantor evidencing approval of the FourthFifth Amending and Restating Agreement, the Pledge and Security Agreement and the Control Agreement and authorising appropriate officers or attorneys to execute the same;

2 the original of any power of attorney issued in favour of any person executing the Fourth Fifth Amending and Restating Agreement, the Pledge and Security Agreement and the Control Agreement on behalf of the Borrower, or as the case may be, the Corporate Guarantor; and

3 a duly executed original of the FourthFifth Amending and Restating LoanAgreement duly acknowledged by the Approved Manager and any other Security Party confirming their agreement to the terms and conditions of the same;

4 a duly executed original of the Pledge and Security Agreement and the Control Agreement;

5 evidence that the relevant UCC statement in respect of the Pledge and Security Agreement has been filed;

6 copies of all governmental and other consents, licences, approvals and authorisations as may be necessary to authorise the performance by the Borrower and the Corporate Guarantor of its obligations under the Security Trustee Amending and Restating Agreement, the Pledge and Security Agreement and the Control Agreement and the execution, validity and enforceability of the Fourth Fifth Amending and Restating Agreement; and

7 favourable legal opinions from lawyers appointed by the Lender on such matters concerning the laws of the Republic of Malta, Republic of Marshall Islands, New York and such other relevant jurisdictions as the Lender may require..

8 written confirmation (in a form acceptable to the Lender) that each Borrower has complied at all times and in all respects with all relevant legislation and regulations applicable to it for the protection of the rights of its employees; and

9 any other document or evidence as the Lender may request in writing from the Borrowers.

Every copy document delivered under this Schedule shall be certified as a true and up to date copy by a director or the secretary (or equivalent officer) of the Borrower or the lawyers of the Borrower.

EXECUTION PAGE

BORROWER
SIGNED by	)
	)
for and on behalf of	)	/
IALYSOS OWNING COMPANY LIMITED	)
in the presence of:	)

LENDER
SIGNED by	)
	)
for and on behalf of	)	/
PIRAEUS BANK A.ES.A.	)
in the presence of:	)

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APPENDIX 1

FORM OF AMENDED AND RESTATED LOAN AGREEMENT MARKED TO INDICATE AMENDMENTS TO THE LOAN AGREEMENT

Amendments are indicated as follows:

1additions are indicated by underlined text; and

2deletions are shown by the relevant text being struck out.

APPENDIX 2

FORM OF AMENDED AND RESTATED CORPORATE GUARANTEE MARKED TO INDICATE AMENDMENTS TO THE CORPORATE GUARANTEE

Amendments are indicated as follows:

1additions are indicated by underlined text; and

2deletions are shown by the relevant text being struck out.

Date 13 March 2008

as amended and restated on 1 August 2013

and as further amended and restated onDecember 2014

DRYSHIPS INC.

as Guarantor

and

PIRAEUS BANK S.A. (also known as PIRAEUS BANK  A.E.)

as Lender

GUARANTEE

relating to a Loan Agreementdated 13 March 2008 as amended and restatedon 25 January 2010 and 25 August 2010 respectively,as amended and supplemented on 16 September 2011,as novated, amended and restated on 29 November 2010and as further,as  amended and restated on 1 August 2013 and as furtheramended and restated on       December 2014

WATSON FARLEY

&

WILLIAMS

Index

Clause		Page
1	Interpretation	1
2	Guarantee	3
3	Liability as Principal and Independent Debtor	4
4	Expenses	4
5	Adjustment of Transactions	4
6	Payments	5
7	Interest	5
8	Subordination	5
9	Enforcement	6
10	Representations and Warranties	6
11	Undertakings	8
12	Judgments and Currency Indemnity	12
13	Set-Off	12
14	Supplemental	12
15	Assignment	13
16	Notices	14
17	Invalidity of Loan Agreement	14
18	Governing Law and Jurisdiction	15
Schedule 1 Form of Compliance Certificate		17
Execution Page		19

THIS GUARANTEE is made on 13 March 2008 as amended and restated by the FourthFifth Amending and Restating Agreement (as defined below)

BETWEEN

(1) DRYSHIPS INC., a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960 Marshall Islands (the "Guarantor"); and

(2) PIRAEUS BANK A.E,S.A. (also known as PIRAEUS BANK A.E.), acting through its office at 47-49 Akti Miaoulia4 Amerikis Street, 185 35 Piraeus 105 64, Athens Greece (the "Lender", which expression includes its successors and assigns).

BACKGROUND

(A) By a loan agreement dated 13 March 2008 (as amended and restated by two amending and restating agreements dated 25 January 2010 and 25 August 2010, respectively, as amended and supplemented by a supplemental letter dated  16 September 2011, the "Original Loan Agreement", and as novated, amended and restated pursuant to a deed of novation, amendment and restatement (the "Deed") dated 29 November 2010 and as further , as amended and restated pursuant to by an amending and restating agreement (the "Fourth dated 1 August 2013 and as further amended and restated  pursuant to an amending and  restating agreement (the "Fifth Amending and Restating Agreement") dated         1 August 2013December 2014, the "Loan Agreement") and made between (i) Annapolis Shipping Company Limited, Atlas Owning Company Limited, Farat Shipping Company Limited and Lansat Shipping Company Limited as joint and several borrowers (together, the "Original Borrowers") and (ii) the Lender as lender, the Lender made available to the Original Borrowers, whose rights, obligations and liabilities under the Original Loan Agreement were novated to the Borrower pursuant to the Deed, a loan facility of (originally) up to US$130,000,000.

(B) By a master agreement (the "Master Agreement") on the 1992 ISDA Multicurrency Crossborder Form (as amended) dated 13 March 2008 and made between the Borrower and the Lender, the Lender agreed to enter into Transactions with the Borrower from time to time to hedge the Borrower's exposure under the Loan Agreement to interest rate fluctuations.

(C) The execution and delivery to the Lender of this Guarantee is one of the conditions precedent to the availability of the facility under the said Loan Agreement.

IT IS AGREED as follows:

1.INTERPRETATION

1.1Defined expressions

Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Guarantee unless the context otherwise requires or unless otherwise defined herein.

1.2Construction of certain terms

In this Guarantee:

"Adjusted Equity" means, as of any Compliance Date, the value of the stockholders' equity of the Group determined on a consolidated basis in accordance with GAAP and as shown in the Accounting Information for the Group adjusted by adding or subtracting (depending on whether the same is positive or negative) any difference between:

(a) the value of Total Assets determined on a consolidated basis in accordance with generally accepted accounting principles and as shown in such consolidated balance sheets; and

(b) the Market Value Adjusted Total Assets;

"bankruptcy"includes a liquidation, receivership or administration and any form of suspension of payments, arrangement with creditors or reorganisation under any corporate or insolvency law of any country;

"Covenants Waived Period"means the period commencing on 31 December 2012 2013 (inclusive) and ending on the earlier of (i) 30 April 2014 and (ii) the date on which the Guarantor publishes its annual financial statements in  respect of the financial year ending on 31 December 201313 March 2015 (inclusive);

"EBITDA"means, in relation to a Compliance Date or for any accounting period, the consolidated net income of the Group for that accounting period:

(a) plus, to the extent deducted in computing consolidated net income of the Group for that accounting period, the sum, without duplication, of:

(i) all federal, state, local and foreign taxes and tax distributions;

(ii) Net Interest Expenses; and

(iii) depreciation, depletion, amortisation of intangibles and other non-cash charges or non-cash losses (including non-cash transaction expenses and the amortisation of debt discounts) and any extraordinary losses not incurred in the ordinary course of business;

(B) minus, to the extent added in computing consolidated net income of the Group for that accounting period, any non-cash income or non-cash gains and any extraordinary gains not incurred in the ordinary course of business; all determined on a consolidated basis in accordance with generally accepted accounting principles and as shown in the Accounting Information.

"GAAP"means generally accepted accounting principles in the United States of America;

"Interest Coverage Ratio"means, in relation to a Compliance Date or an accounting period, the ratio of (a) EBITDA for the most recent financial period of the Group ending on the Compliance Date to (b) the Net Interest Expenses for that financial period (calculated on a trailing 12-months basis);

"Loan Agreement"means the loan agreement dated 13 March 2008 referred to in Recital (A) and includes any existing or future amendments, restatements or supplements, whether made with the Guarantor's consent or otherwise; and

"Market Adjusted Equity Ratio"means, in relation to a Compliance Date, the ratio of (a) the Adjusted Equity for the most recent financial period of the Group ending on the Compliance Date to (b) the aggregate of (i) Total Interest Bearing Liabilities and (ii) Adjusted Equity for that financial period;

"Market Value Adjusted Total Assets"means, at any time, Total Assets adjusted to reflect the Market Value of all Fleet Vessels;

"Master Agreement"means the master agreement dated 13 March 2008 referred to in Recital (B) (including all Transactions from time to time entered into and confirmations from

time to time exchanged thereunder) and includes any existing or future amendments or supplements;

"Market Value Adjusted Net Worth"means Paid-Up Capital plus General Reserves plus Retained Earnings adjusted to reflect the difference between the book values and the Market Values of all Fleet Vessels at any relevant time;

"Net Income"means in relation to each financial year of the Guarantor the aggregate income of the Group appearing in the Accounting Information less the aggregate of:

(a) the amounts incurred by the Group during the relevant financial year as expenses of their business (including, without limitation, vessel and voyage expenses, commissions, vessel running expenses (including, but not limited to voyage, operating, repair, insurance, victualling and other related expenses), management fees, Board of Directors fees and general and administration expenses);

(b) depreciation, amortisation and interest expense;

(c) taxes; and   other items charged to the Guarantor's consolidated profit and loss account for that financial year;

"Net Interest Expenses"means, as of any Compliance Date, the aggregate of all interest, commitment and other fees, commissions, discounts and other costs, charges or expenses accruing due from all the members of the Group during that accounting period less interest income received, determined on a consolidated basis in accordance with generally accepted accounting principles and as shown in the Accounting Information;

"Paid-Up Capital", "General Reserves"and "Retained Earnings"have the meanings ascribed to them in the Accounting Information; and

"Total Interest Bearing Liabilities"means, as to any Compliance Date, the consolidated total amount of the interest bearing Financial Indebtedness of the Group.

1.3Application of construction and interpretation provisions of Loan Agreement

Clause 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Guarantee.

2.GUARANTEE

2.1Guarantee and indemnity

The Guarantor unconditionally and irrevocably:

(a) guarantees the due payment of all amounts payable by the Borrower under or in connection with the Loan Agreement and every other Finance Document to which the Borrower is a party;

(b) undertakes to pay to the Lender, within 2 Business Days of the Lender's demand, any such amount which is not paid by the Borrower when payable; and

(c) fully indemnifies the Lender within 2 Business Days of the Lender's demand, in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by the Lender as a result of or in connection with any obligation or liability guaranteed by the Guarantor being or becoming unenforceable, invalid, void or illegal; and the amount

recoverable under this indemnity shall be equal to the amount which the Lender would otherwise have been entitled to recover.

2.2No limit on number of demands

The Lender may serve more than one demand under Clause 2.1.

3.LIABILITY AS PRINCIPAL AND INDEPENDENT DEBTOR

3.1Principal and independent debtor

The Guarantor shall be liable under this Guarantee as a principal and independent debtor and accordingly it shall not have, as regards this Guarantee, any of the rights or defences of a surety.

3.2Waiver of rights and defences

Without limiting the generality of Clause 3.1, the Guarantor shall neither be discharged by, nor have any claim against the Lender in respect of:

(a) any amendment or supplement being made to the Finance Documents (or any of them);

(b) any arrangement or concession (including a rescheduling or acceptance of partial payments) relating to, or affecting, the Finance Documents (or any of them);

(c) any release or loss (even though negligent) of any right or Security Interest created by the Finance Documents (or any of them);

(d) any failure (even though negligent) promptly or properly to exercise or enforce any such right or Security Interest, including a failure to realise for its full market value an asset covered by such a Security Interest; or

(e) any other Finance Document or any Security Interest now being or later becoming void, unenforceable, illegal or invalid or otherwise defective for any reason, including a neglect to register it.

4.EXPENSES

4.1Costs of preservation of rights, enforcement etc.

The Guarantor shall pay to the Lender within 2 Business Days of its demand the amount of all expenses incurred by the Lender in connection with any matter arising out of this Guarantee or any Security Interest connected with it, including any advice, claim or proceedings relating to this Guarantee or such a Security Interest.

4.2Fees and expenses payable under Loan Agreement

Clause 4.1 is without prejudice to the Guarantor's liabilities in respect of the Borrower's obligations under clause 19 of the Loan Agreement (fees and expenses) and under similar provisions of other Finance Documents.

5.ADJUSTMENT OF TRANSACTIONS

5.1Reinstatement of obligation to pay

The Guarantor shall pay to the Lender within 2 Business Days of its demand any amount which the Lender is required, or agrees, to pay pursuant to any claim by, or settlement with, a trustee in bankruptcy of the Borrower or of another Security Party (or similar person) on

the ground that the Loan Agreement or the Master Agreement, or a payment by the Borrower or of another Security Party, was invalid or on any similar ground.

6.PAYMENTS

6.1Method of payments

Any amount due under this Guarantee shall be paid:

(a) in immediately available funds;

(b) to such account as the Lender may from time to time notify to the Guarantor;

(c) without any form of set-off, cross-claim or condition; and

(d) free and clear of any tax deduction except a tax deduction which the Guarantor is required by law to make.

6.2Grossing-up for taxes

If the Guarantor is required by law to make a tax deduction, the amount due to the Lender shall be increased by the amount necessary to ensure that the Lender receives and retains a net amount which, after the tax deduction, is equal to the full amount that it would otherwise have received.

7.INTEREST

7.1Accrual of interest

Any amount due under this Guarantee shall carry interest after the date on which the Lender demands payment of it until it is actually paid, unless interest on that same amount also accrues under the Loan Agreement.

7.2Calculation of interest

Interest under this Guarantee shall be calculated and accrue in the same way as interest under clause 6 of the Loan Agreement.

7.3Guarantee extends to interest payable under Loan Agreement

For the avoidance of doubt, it is confirmed that this Guarantee covers all interest payable under the Loan Agreement, including that payable under clause 6 of the Loan Agreement.

8.SUBORDINATION

8.1Subordination of rights of Guarantor

All rights which the Guarantor at any time has (whether in respect of this Guarantee or any other transaction) against the Borrower, any other Security Party or their respective assets shall be fully subordinated to the rights of the Lender under the Finance Documents; and in particular, the Guarantor shall not:

(a) claim, or in a bankruptcy of the Borrower or any other Security Party prove for any amount payable to the Guarantor by the Borrower or any other Security Party, whether in respect of this Guarantee or any other transaction;

(b) take or enforce any Security Interest for any such amount;

(c) claim to set-off any such amount against any amount payable by the Guarantor to the Borrower or any other Security Party; or

(d) claim any subrogation or other right in respect of any Finance Document or any sum received or recovered by the Lender under a Finance Document.

9.ENFORCEMENT

9.1No requirement to commence proceedings against Borrower

The Lender will not need to commence any proceedings under, or enforce any Security Interest created by, the Loan Agreement or any other Finance Document before claiming or commencing proceedings under this Guarantee.

9.2Conclusive evidence of certain matters

However, as against the Guarantor:

(a) any judgment or order of a court in England or Marshall Islands or Greece or any other Pertinent Jurisdiction in connection with the Loan Agreement or any other Finance Document; and

(b) any statement or admission of the Borrower in connection with the Loan Agreement or any other Finance Document, shall be binding and conclusive as to all matters of fact and law to which it relates.

9.3Suspense account

The Lender may, for the purpose of claiming or proving in a bankruptcy of the Borrower or any other Security Party, place any sum received or recovered under or by virtue of this Guarantee or any Security Interest connected with it on a separate suspense or other nominal account without applying it in satisfaction of the Borrower's obligations under the Loan Agreement.

10.REPRESENTATIONS AND WARRANTIES

10.1General The Guarantor represents and warrants to the Lender as follows.

10.2Status

The Guarantor is duly incorporated and validly existing and in good standing under the laws of the Marshall Islands.

10.3Share capital and ownership

The Guarantor has an authorised share capital divided into 1,000,000,000 registered shares and 500,000,000 registered preferred shares with a par value of $0.01 each, 424,762,244 of which, 669 964 321 registered shares have been issued and are outstanding at the date hereof and 36,100,000 shares are issued and held in treasury.

10.4Corporate power

The Guarantor has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:

(a) to execute this Guarantee and any other Finance Document to which it is a party; and

(b) to make all the payments contemplated by, and to comply with, this Guarantee and any other Finance Document to which it is a party.

10.5Consents in force

All the consents referred to in Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.

10.6Legal validity

This Guarantee constitutes the Guarantor's legal, valid and binding obligations enforceable against the Guarantor in accordance with its terms subject to any relevant insolvency laws affecting creditors' rights generally.

10.7No conflicts

The execution by the Guarantor of this Guarantee and its compliance with this Guarantee will not involve or lead to a contravention of:

(a) any law or regulation; or

(b) the constitutional documents of the Guarantor; or

(c) any contractual or other obligation or restriction which is binding on the Guarantor or any of its assets.

10.8No withholding taxes

All payments which the Guarantor is liable to make under this Guarantee may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.

10.9No default

To the knowledge of the Guarantor, no Event of Default or Potential Event of Default has occurred and is continuing which would be likely to have a material adverse effect on the Guarantor's financial position and no such default or Event of Default or Potential Event of Default will result from the entry by the Guarantor into this Guarantee.

10.10Information

All information which has been provided in writing by or on behalf of the Guarantor to the Lender in connection with any Finance Document satisfied the requirements of Clause 11.2; all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.4; and there has been no material adverse change in the financial position or state of affairs of the Guarantor from that disclosed in the latest of those accounts.

10.11No litigation

No legal or administrative action involving the Guarantor (including action relating to any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken or, to the Guarantor's knowledge, is likely to be commenced or taken which, in either case, would be likely to have a material adverse effect on the Guarantor's financial position or profitability

10.12Provisions of Loan Agreement

The Guarantor is fully familiar with and agrees with all provisions of the Loan Agreement and the other Finance Documents.

10.13No Waiver

No oral or written statement has been made to the Guarantor by or on behalf of the Lender or any other person which could be construed as a waiver of any provisions of this Guarantee or a statement of intention not to enforce this Guarantee in accordance with its terms.

11.UNDERTAKINGS

11.1General

The Guarantor undertakes with the Lender to comply with the following provisions of this Clause 11 at all times during the Security Period, except as the Lender may otherwise permit.

11.2Information provided to be accurate

All financial and other information which is provided in writing by or on behalf of the Guarantor under or in connection with this Guarantee or any other Finance Document to which it is a party will be true and not misleading and will not omit any material fact or consideration.

11.3Provision of financial statements

The Guarantor will send to the Lender:

(a) as soon as possible, but in no event later than 180 days after the end of each financial year of the Borrower and the Guarantor (commencing with the financial year ending on 31 December 2012), the audited consolidated financial statements of each of the Borrower and the Guarantor for that financial year; and

(b) as soon as possible, but in no event later than 60 days after the end of each 6-month period in each financial year of the Borrower and the Guarantor ending on 30 June and 31 December (commencing with the 6-month period ending on 31 December 2012), the interim unaudited consolidated financial statements of the Borrower and the Guarantor for that 6-month period; and

(c) such other financial information (including information as to its financial condition, commitments and operations) in connection with the Guarantor as the Lender may reasonably require.

11.4Form of financial statements

All financial statements (audited and unaudited) delivered under Clause 11.3 will:

(a) be prepared in accordance with all applicable laws and generally accepted accounting principles, consistently applied;

(b) give a true and fair view of the state of affairs of the Guarantor and its subsidiaries at the date of those accounts and of their profit for the period to which those accounts relate; and

(c) fully disclose or provide for all significant liabilities of the Guarantor and the Group.

11.5Shareholder and creditor notices

The Guarantor will send the Lender, at the same time as they are despatched, copies of all communications which are despatched to the Guarantor's shareholders or creditors or any class of them.

11.6Consents

The Guarantor will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Lender of, all consents required:

(a) for the Guarantor to perform its obligations under this Guarantee or any other Finance Document to which it is a party;

(b) for the validity or enforceability of this Guarantee or any other Finance Document to which it is a party; and the Guarantor will comply with the terms of all such consents.

11.7Maintenance of Security Interests

The Guarantor will:

(a) at its own cost, do all that it reasonably can to ensure that any Finance Document to which it is a party validly creates the obligations and the Security Interests which it purports to create; and

(b) without limiting the generality of paragraph (a) above, at its own cost, promptly register, file, record or enrol any Finance Document to which it is a party with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document to which it is a party, give any notice or take any other step which may be or become necessary or desirable for any Finance Document to which it is a party to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

11.8Notification of litigation

The Guarantor will provide the Lender with details of any legal or administrative action involving the Guarantor as soon as such action is instituted or it becomes apparent to the Guarantor that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of this Guarantee.

11.9Notification of default

The Guarantor will notify the Lender as soon as the Guarantor becomes aware of:

(a) the occurrence of an Event of Default or a Potential Event of Default; or

(b) any matter which indicates that an Event of Default or a Potential Event of Default may have occurred; and will thereafter keep the Lender fully up-to-date with all developments.

11.10 Maintenance of status

The Guarantor will maintain its separate corporate existence and remain in good standing under the laws of the Marshall Islands and shall not, without the Lender's prior written consent, establish a place of business in the United Kingdom or the United States of America.

11.11Negative undertakings

The Guarantor will not:

(a) change the nature of its business; or

(b) pay any dividend or make any other form of distribution or effect any form of redemption or return of share capital Provided that the Guarantor may in any financial year pay a dividend or make any other form of distribution which does not exceed in aggregate 50 per cent. of the Net Income for such financial year subject to no Event of Default having occurred which is continuing at the relevant time or resulting from the payment of a dividend or the making of any other form of distribution; or

(c) provide any form of credit or financial assistance to:

(i) a person who is directly or indirectly interested in the Borrowers' share or loan capital; or

(ii) any company in or with which such a person is directly or indirectly interested or connected; or

(d) enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation of any kind.

11.12Negative pledge and pari passu ranking

The Guarantor shall:

(a) not, and shall procure that the Borrower will not, create or permit to arise any Security Interest over any asset present or future except (i) Security Interests created or permitted by the Finance Documents, (ii) Permitted Security Interests and (iii) in the case of the Guarantor, those arising in the normal course of its business of acquiring, financing and operating vessels and making investments within the shipping and oil and gas sector; and

(b) procure that its liabilities under this Guarantee do and will rank at least pad passu with all its other present and future liabilities, except for liabilities which are mandatorily preferred by law.

11.13No disposal of assets, change of business

The Guarantor:

(a) shall procure that the Borrower will not transfer, lease or otherwise dispose of all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not except in the usual course of its trading operations; or

(b) will not, and shall procure that no Borrower make any substantial change to the nature of its business from that existing at the date of this Guarantee.

11.14No merger etc.

The Guarantor shall not, and shall procure that none of its subsidiaries will, enter into any form of merger, sub-division, amalgamation or other reorganisation.

11.15 Financial covenants

The Guarantor shall ensure that:

(a) the Market Adjusted Equity Ratio shall not be less than:

(i) during the Covenants Waiver Period, 0.2:1; and

(ii) at all other times, 0.3:1;

(b) the Interest Coverage Ratio shall not be less than:

(i) during the Covenants Waiver Period, 1:1; and

(ii) at all other times, 3:1;

(c) the Market Value Adjusted Net Worth of the Group shall not be less than $225,000,000; and

(d) at all times there is available to the Guarantor and all the other members of the Group an aggregate amount of not less than $20,000,000 in immediately freely available and unencumbered bank or cash balances.

11.16 Compliance Check

Compliance with the undertakings contained in Clause 11.15 shall be determined in each financial year:

(a) at the time the Lender receives the consolidated combined accounts of the Borrower and the Group and the unaudited combined accounts of the Borrower and the Group for the first 6-month period of the Borrower and the Group in each financial year (pursuant to Clauses 11.3(a) and 11.3(b) respectively), by reference to the unaudited consolidated accounts in the case of the first 6-month period in each financial year of the Guarantor and the audited combined accounts in the case of the second 6-month period in each financial year of the Guarantor;

(b) at any other time as the Lender may reasonably request by reference to such evidence as the Lender may require to determine and calculate the financial covenants referred to in Clause 11.15.

At the same time as it delivers the consolidated accounts referred to in Clause 11.15, the Guarantor shall deliver to the Lender a certificate in the form set out in Schedule 1 demonstrating its compliance (or not, as the case may be) with the provisions of Clause 11.15 signed by the chief financial officer or an authorised signatory of the Guarantor.

11.17 Change in accounting expressions and policies

If, by reason of change in format or the relevant accounting policies, the expressions appearing in any accounts and financial statements referred to in Clause 11.3 alter from those in the accounts and financial statements for the Guarantor for the year ending 31 December 2012, the relevant definitions contained in clause 1.1 of the Loan Agreement and the provisions of Clause 11.15 shall be deemed modified in such manner as the Lender shall require to take account of such different expressions but otherwise to maintain in all respects the substance of those provisions.

12. JUDGMENTS AND CURRENCY INDEMNITY

12.1 Judgments relating to Loan Agreement

This Guarantee shall cover any amount payable by the Borrower under or in connection with any judgment relating to the Loan Agreement.

12.2 Currency indemnity

In addition, clause 20.4 (currency indemnity) of the Loan Agreement shall apply, with any necessary adaptations, in relation to this Guarantee.

13. SET-OFF

13.1 Application of credit balances

The Lender may without prior notice:

(a) apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Guarantor at any office in any country of the Lender in or towards satisfaction of any sum then due from the Guarantor to the Lender under this Guarantee; and

(b) for that purpose:

(i) break, or alter the maturity of, all or any part of a deposit of the Guarantor;

(ii) convert or translate all or any part of a deposit or other credit balance into Dollars;

(iii) enter into any other transaction or make any entry with regard to the credit balance which the Lender considers appropriate.

13.2 Existing rights unaffected

The Lender shall not be obliged to exercise any of its rights under Clause 13.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which the Lender is entitled (whether under the general law or any document).

14. SUPPLEMENTAL

14.1 Continuing guarantee

This Guarantee shall remain in force as a continuing security at all times during the Security Period.

14.2 Rights cumulative, non-exclusive

The Lender's rights under and in connection with this Guarantee are cumulative, may be exercised as often as appears expedient and shall not be taken to exclude or limit any right or remedy conferred by law.

14.3 No impairment of rights under Guarantee

If the Lender omits to exercise, delays in exercising or invalidly exercises any of its rights under this Guarantee, that shall not impair that or any other right of the Lender under this Guarantee.

14.4 Severability of provisions

If any provision of this Guarantee is or subsequently becomes void, illegal, unenforceable or otherwise invalid, that shall not affect the validity, legality or enforceability of its other provisions.

14.5 Guarantee not affected by other security

This Guarantee shall not impair, nor be impaired by, any other guarantee, any Security Interest or any right of set-off or netting or to combine accounts which the Lender may now or later hold in connection with the Loan Agreement.

14.6 Guarantor bound by Loan Agreement

The Guarantor agrees with the Lender to be bound by all provisions of the Loan Agreement which are applicable to the Security Parties in the same way as if those provisions had been set out (with any necessary modifications) in this Guarantee.

14.7 Applicability of provisions of Guarantee to other Security Interests

Any Security Interest which the Guarantor creates (whether at the time at which it signs this Guarantee or at any later time) to secure any liability under this Guarantee shall be a principal and independent security, and Clauses 3 and 17 shall, with any necessary modifications, apply to it, notwithstanding that the document creating the Security Interest neither describes it as a principal or independent security nor includes provisions similar to Clauses 3 and 17.

14.8 Applicability of provisions of Guarantee to other rights

Clauses 3 and 17 shall also apply to any right of set-off or netting or to combine accounts which the Guarantor creates by an agreement entered into at the time of this Guarantee or at any later time (notwithstanding that the agreement does not include provisions similar to Clauses 3 and 17), being an agreement referring to this Guarantee.

14.9 Guarantor's approval of Loan Agreement and Finance Documents

The Guarantor has read the Loan Agreement and each other Finance Document and understands and approves all the terms and conditions of the Loan Agreement and each other Finance Document.

14.10 Third party rights

A person who is not a party to this Guarantee has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Guarantee.

15. ASSIGNMENT

15.1 Assignment by Lender

The Lender may assign or transfer its rights under and in connection with this Guarantee to the same extent as it may assign or transfer its rights under the Loan Agreement.

16. NOTICES

16.1 Notices to Guarantor

Any notice or demand to the Guarantor under or in connection with this Guarantee shall be given by letter or fax at:

DryShips Inc.71 76 V. Ipirou Street109 Kifisias Avenue & Sina StreetMaroussi  Marousi 151 2524 Athens Greece

Fax No: + 30 210 809 0575

or to such other address which the Guarantor may notify to the Lender.

16.2 Application of certain provisions of Loan Agreement

Clauses 27.3, 27.4 and 27.5 of the Loan Agreement apply to any notice or demand under or in connection with this Guarantee.

16.3 Validity of demands

A demand under this Guarantee shall be valid notwithstanding that it is served:

(a) on the date on which the amount to which it relates is payable by the Borrower under the Loan Agreement;

(b) at the same time as the service of a notice under clause 18.2 (events of default) of the Loan Agreement; and a demand under this Guarantee may refer to all amounts payable under or in connection with the Loan Agreement without specifying a particular sum or aggregate sum.

16.4 Notices to Lender

Any notice to the Lender under or in connection with this Guarantee shall be sent to the same address and in the same manner as notices to the Lender under the Loan Agreement.

17. INVALIDITY OF LOAN AGREEMENT

17.1 Invalidity of Loan Agreement

In the event of:

(a) the Loan Agreement now being or later becoming, with immediate or retrospective effect, void, illegal, unenforceable or otherwise invalid for any other reason whatsoever, whether of a similar kind or not; or

(b) without limiting the scope of paragraph (a), a bankruptcy of the Borrower, the introduction of any law or any other matter resulting in the Borrower being discharged from liability under the Loan Agreement, or the Loan Agreement ceasing to operate (for example, by interest ceasing to accrue); this Guarantee shall cover any amount which would have been or become payable under or in connection with the Loan Agreement if the Loan Agreement had been and remained entirely valid, legal and enforceable, or the Borrower had not suffered bankruptcy, or any

combination of such events or circumstances, as the case may be, and the Borrower had remained fully liable under it for liabilities whether invalidly incurred or validly incurred but subsequently retrospectively invalidated; and references in this Guarantee to amounts payable by the Borrower under or in connection with the Loan Agreement shall include references to any amount which would have so been or become payable as aforesaid.

17.2 Invalidity of Finance Documents

Clause 17.1 also applies to each of the other Finance Documents to which the Borrower is a party.

18. GOVERNING LAW AND JURISDICTION

18.1 English law

This Guarantee shall be governed by, and construed in accordance with, English law.

18.2 Exclusive English jurisdiction

Subject to Clause 18.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Guarantee.

18.3 Choice of forum for the exclusive benefit of the Lender

Clause 18.2 is for the exclusive benefit of the Lender, which reserves the rights:

(a) to commence proceedings in relation to any matter which arises out of or in connection with this Guarantee in the courts of any country other than England and which have or claim jurisdiction to that matter; and

(b) to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Guarantor shall not commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with this Guarantee.

18.4 Process agent

The Guarantor irrevocably appoints Ince Process Agents Ltd. at their office for the time being, presently at 5th Floor, International House, 1 St. Katharine's Way, London, E1W 1AY, England, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Guarantee.

18.5 Lender' rights unaffected

Nothing in this Clause 18 shall exclude or limit any right which the Lender may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

18.6 Meaning of "proceedings"

In this Clause 18, "proceedings"means proceedings of any kind, including an application for a provisional or protective measure.

THIS GUARANTEE has been entered into on the date stated at the beginning of this Guarantee.

SCHEDULE 1

FORM OF COMPLIANCE CERTIFICATE

To: Piraeus Bank A.ES.A.4 Amerikis Street47 49 Akti MiaouliPiraeus 185 35105 64, AthensGreece[·] 20[·]

Dear Sirs,

We refer to:

(a) a loan agreement dated 13 March 2008 (as amended and restated by two amending and restating agreements dated 25 January 2010 and 25 August 2010, respectively, as amended and supplemented by a supplemental letter 16 September 2011, the "Original Loan Agreement", and as novated, amended and restated pursuant to a deed of novation, amendment and restatement (the "Deed") dated 29 November 2010,as amended and  restated by an amending  and restating agreement dated 1 August 2013 and as further amended and restated pursuant to an amending and restating agreement (the "FourthFifth Amending and Restating Agreement") dated 1 August 2013[·] December 2014, the "Loan Agreement") made between (i) Annapolis Shipping Company Limited, Atlas Owning Company Limited, Farat Shipping Company Limited and Lansat Shipping Company Limited as joint and several borrowers (together, the "Original Borrowers") and (ii) the Lender as lender, whereby the Lender made available to the Original Borrowers, whose rights, obligations and liabilities under the Original Loan Agreement were novated to the Borrower pursuant to the Deed, a loan facility of (originally) up to $130,000,000; and

(b) a guarantee dated 13 March 2008 (as amended and restated by the FourthFifth Amending and Restating Agreement) of the obligations of the Borrower under (inter alia) the Loan Agreement.

Words and expressions defined in the Loan Agreement shall have the same meaning when used in this compliance certificate.

We enclose with this certificate a copy of the [audited]/[unaudited] consolidated accounts for the Borrower and ourselves for the [financial year] [6-month period] ended [·]. The accounts (i) have been prepared in accordance with all applicable laws and generally accepted accounting information all consistently applied, (ii) give a true and fair view of the state of affairs of the Group at the date of the accounts and of its profit for the period to which the accounts relate and (iii) fully disclose or provide for all significant liabilities of the Group.

We also enclose copies of the valuations of all the Fleet Vessels which were used in calculating the Market Value Adjusted Total Assets of the Group as at [·].

We represent that no Event of Default or Potential Event of Default has occurred as at the date of this certificate [except for the following matter or event [set out all material details of matter or event]]. In addition as of [·], we confirm compliance with the financial covenants set out in Clause 11.15 of the Guarantee for the 6 months ending as of the date to which the enclosed accounts are prepared.

We now certify that, as at [·]:

(c) the Market Adjusted Equity Ratio is [·]:[·];

(d) the Interest Coverage Ratio of the Group is [·]:[·];

(e) the Market Value Adjusted Net Worth of the Group is $[·]; and

(f) the aggregate freely available and unencumbered bank or cash balances of the Group [maintained with the Lender] are $[·].

This certificate shall be governed by, and construed in accordance with, English law.

[·]Chief Financial Officer of DryShips Inc.

EXECUTION PAGE

GUARANTOR
SIGNED by	)
for and on behalf of	)
DRYSHIPS INC.	)
In the presence of:	)

LENDERS
SIGNED by NADINE AKLEH	)
for and on behalf of	)
PIRAEUS BANK A.ES.A.	)
In the presence of:	)

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EX-4.187

Exhibit 4.187

23 December 2014

BOONE STAR OWNERS INC. andIOKASTI OWNING COMPANY LIMITED as Borrowers

and

DRYSHIPS INC. as Corporate Guarantor

and

PIRAEUS BANK S.A. (also known as PIRAEUS BANK A.E.) as Lender

FOURTH SUPPLEMENTAL AGREEMENT
relating to a loan facility of (originally) US$90,000,000

WATSON FARLEY& WILLIAMS

Index

Clause		Page
1	Interpretation	2
2	Agreement of the Lender	3
3	Conditions Precedent	3
4	Representations and Warranties	4
5	Amendments to Loan Agreement, The Corporate Guarantee and other Finance Documents	4
6	Further Assurances	8
7	Fees and Expenses	8
8	Communications	8
9	Supplemental	9
10	Law and Jurisdiction	9
Execution Page		10

THIS FOURTH SUPPLEMENTAL AGREEMENT is made on 23 December 2014

BETWEEN

(1) BOONE STAR OWNERS INC. and IOKASTI OWNING COMPANY LIMITED as joint and several Borrowers;

(2) DRYSHIPS INC. as Corporate Guarantor;and

(3) PIRAEUS BANK S.A. (also known as PIRAEUS BANK A.E.), acting through its branch at 4 Amerikis Street, 105 64, Athens, Greece as Lender.

BACKGROUND

(A) By a loan agreement (the "Loan Agreement") dated 5 October 2007 (as amended and supplemented by a first supplemental agreement dated 30 July 2009 (the "First Supplemental Agreement"), a second supplemental agreement dated 25 August 2010 (the "Second Supplemental Agreement") and a third supplemental agreement dated 1 August 2013 (the "Third Supplemental Agreement" and, together, with the First Supplemental Agreement and the Second Supplemental Agreement, the "Supplemental Agreements" and, in the singular, means either of them)) and made between (i) the Borrowers as joint several borrowers and (ii) the Lender, the Lender has made available to the Borrowers a loan facility in an amount of (originally) up to US$90,000,000, of which an amount of US$53,700,000 is outstanding by way of principal on the date hereof.

(B) Pursuant to the Supplemental Agreements the Lender agreed to waive the application of the security cover provisions in Clause 14.1 and certain other covenants from 31 December 2008 until 31 December 2013 (the "Waiver Period").

(C) The Borrowers and the Corporate Guarantor have requested that the Lender agrees to (inter alia):

(i) extend (the "Extension") further the Waiver Period from 1 January 2014 up to and including 31 December 2014 (inclusive) subject to the terms and conditions set out in this Agreement;

(ii) extend further the Covenants Waiver Period (as defined in the Corporate Guarantee) in respect of the relaxation of the financial covenants set out in paragraphs (a) and (b) of clause 11.15 of the Corporate Guarantee from 31 December 2013 up to and including 26 November 2015 (inclusive) (the "Corporate Guarantee Amendment");

(iii) the consequential amendments (the "Consequential Amendments") to the Loan Agreement, the Corporate Guarantee and the other Finance Documents in connection with those matters; and

(iv) the amendment and/or variation of certain other provisions of the Loan Agreement (together, the "Additional Amendments" and, together with, the Corporate Guarantee Amendment and the Consequential Amendments, the "Amendments" and each an "Amendment").

(D) The Lender's consent to the request of the Borrowers referred to in Recital (C) is subject to, inter alia, the following conditions:

(i) the Corporate Guarantor executing and delivering to the Lender the Additional Security referred to in clause 10.21 of the Loan Agreement in respect of 6,418,350 Required Shares and ensuring that it remains in full force and effect up to and including 31 December 2014 (inclusive);

(ii) the Margin being increased at 4.85 per cent. per annum during the Margin Applicable Period (as defined below);

(iii) the consequential amendments of the Loan Agreement, the Corporate Guarantee and the Finance Documents pursuant to the terms of this Fourth Supplemental Agreement; and

(iv) all other terms and conditions contained herein.

(E) This Fourth Supplemental Agreement sets out the terms and conditions on which the Lender agrees, with effect on and from the Effective Date, to amend the Loan Agreement and the Corporate Guarantee.

IT IS AGREED as follows:

1 INTERPRETATION

1.1 Defined expressions

Words and expressions defined in the Loan Agreement and the other Finance Documents shall have the same meanings when used in this Fourth Supplemental Agreement unless the context otherwise requires.

1.2 Definitions

In this Fourth Supplemental Agreement, unless the contrary intention appears:

"ASTT" means American Stock Transfer & Trust Company, a company whose address is American Stock Transfer & Trust Company, LLC, Attn: Relationship Management, 6201 15th Avenue, Brooklyn, NY 11219;

"Applicable LIBOR Period" means the period commencing on 1 January 2014 (inclusive) and ending on 31 December 2014 (inclusive);

"Effective Date" means the date on which the conditions precedent in Clause 3 are satisfied;

"Loan Agreement" means the loan agreement dated 5 October 2007 (as amended and supplemented from time to time) referred to in Recital (A); and

"Margin Applicable Period" means, in respect of:

(i) the Boone Advance, the period commencing on 17 January 2014 (inclusive) and ending on 31 December 2014 (inclusive); and

(ii) the lokasti Advance, the period commencing on 28 February 2014 (inclusive) and ending on 31 December 2014 (inclusive).

1.3 Application of construction and interpretation provisions of Loan Agreement

Clauses 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Fourth Supplemental Agreement.

2 AGREEMENT OF THE LENDER

2.1 Agreement of the Lender

The Lender agrees, subject to and upon the terms and conditions of this Fourth Supplemental Agreement, to:

(a) the Extension;

(b) the Amendments;

(c) the consequential amendment of the Loan Agreement, the Corporate Guarantee and the other Finance Documents in connection with the matters referred to in paragraphs (a) to (b) above; and

(d) the other amendments to the Loan Agreement, the Corporate Guarantee and the other Finance Documents which have been set out in Clause 5.

2.2 Effective Date

The agreement of the Lender contained in Clauses 2.1 and 2.2 shall have effect on and from the Effective Date.

3 CONDITIONS PRECEDENT

3.1 General

The agreement of the Lender contained in Clause 2.1 is subject to the fulfilment of the conditions precedent in Clause 3.2.

3.2 Conditions precedent

The conditions referred to in Clause 3.1 are that the Lender shall have received the following documents and evidence in all respects in form and substance satisfactory to the Lender and its lawyers on or before the Effective Date:

(a) documents of the kind specified in paragraphs 3, 4 and 5 of Schedule 2, Part A to the Loan Agreement in relation to each Borrower and the Corporate Guarantor in connection with its respective execution of this Fourth Supplemental Agreement and, in the case of the Corporate Guarantor, the Pledge and Security Assignment and the Control Agreement, updated with appropriate modifications to refer to this Fourth Supplemental Agreement;

(b) an original of this Fourth Supplemental Agreement duly executed by the parties to it and duly acknowledged by the Approved Manager and any other Security Party confirming their agreement to the terms and conditions of the same;

(c) a duly executed original of each of the Pledge and Security Agreement and the Control Agreement;

(d) evidence that the relevant UCC statement in respect of the Pledge and Security Agreement has been filed;

(e) such documentary evidence as the Lender and its legal advisors may require in relation to the authorisation and execution, in the case of Ocean Rig and acknowledgement, in the case of ASTT, of the Control Agreement;

(f) such legal opinions as the Agent may require in respect of the matters contained in this Fourth Supplemental Agreement, the Pledge and Security Agreement and the Control Agreement;

(g) evidence that the agent referred to in clause 30.4 of the Loan Agreement has accepted its appointment as agent for service of process under this Fourth Supplemental Agreement; and

(h) copies of all governmental and other consents, licences, approvals and authorisations as may be necessary to authorise the performance by each of the Borrower, the Corporate Guarantor and any other Security Party of its obligations under this Agreement, the Pledge and Security Agreement and the Control Agreement and the execution, validity and/or enforceability of the same;

(i) written confirmation (in a form acceptable to the Lender) that each Borrower has complied at all times and in all respects with all relevant legislation and regulations applicable to it for the protection of the rights of its employees; and

(j) any other document or evidence as the Lender may request in writing from the Borrowers.

4 REPRESENTATIONS AND WARRANTIES

4.1 Repetition of Loan Agreement representations and warranties

Each Borrower represents and warrants to the Lender that the representations and warranties in clause 9 of the Loan Agreement remain true and not misleading if repeated on the date of this Fourth Supplemental Agreement.

4.2 Repetition of Finance Document representations and warranties

Each Borrower and each of the other Security Parties represents and warrants to the Lender that the representations and warranties in the Finance Documents (other than the Loan Agreement) to which it is a party remain true and not misleading if repeated on the date of this Fourth Supplemental Agreement.

5 AMENDMENTS TO LOAN AGREEMENT, THE CORPORATE GUARANTEE AND OTHER FINANCE DOCUMENTS

5.1 Specific amendments to Loan Agreement

With effect on and from the Effective Date the Loan Agreement shall be amended as follows:

(a) by adding the definitions of "ASTT", "Applicable LIBOR Period" and the "Margin Applicable Period" as they appear in Clause 1.2, in clause 1.1 thereof;

(b) by deleting in its entirety the definition of "Applicable Period" from clause 1.1 thereof;

(c) by adding the following new definitions in clause 1.1 thereof:

""Additional Security Period" means the period commencing on the date of the Fourth Supplemental Agreement and ending on 31 December 2014 at 23:59 New York time (inclusive);

"Fourth Supplemental Agreement" means the supplemental agreement dated November 2014 and made between (i) the Borrowers as joint and several borrowers, (ii) the Corporate Guarantor and (iii) the Lender setting out the terms and conditions upon which this Agreement is amended and supplemented;

"Screen Rate" means the London interbank offered rate administered by the ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for Dollars for the relevant period displayed on pages LIBOR01, LIBOR02 or LIBOR= of the Reuters screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters. If such page or service ceases to be available, the Lender may specify another page or service displaying the relevant rate after consultation with the Borrowers;";

(d) by replacing all references to "Reuters BBA Page LIBOR 01" throughout the Loan Agreement with "Screen Rate";

(e) by deleting the definition of "LIBOR" in clause 1.1 thereof in its entirety and substituting the same with the following new definition:

""LIBOR" means for an Interest Period:

(a) the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on the Screen Rate; or

(b) if no rate is quoted on the Screen Rate:

(i) during the Applicable LIBOR Period, the rate per annum determined by the Lender in accordance with Clauses 4.6, 4.7 and 4.8 of this Agreement; and

(ii) at all other times thereafter, the rate per annum determined by the Lender to be the rate per annum which leading banks in the London Interbank Market offer for deposits in Dollars in the London Interbank Market at or about 11.00 a.m. (London time) on the second Business Day prior to the commencement of that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it;

(f) by deleting the definition of "Margin" in clause 1.1 thereof in its entirety and substituting the same with the following new definition:

"Margin" means:

(a) during the Margin Applicable Period, 4.85 per cent. per annum; and

(b) at all other times thereafter:

(i) 2.60 per cent. per annum at any time when the Security Cover Ratio is less than 125 per cent.; and

(ii) 1.75 per cent. per annum at any time when the Security Cover Ratio is equal to or more than 125 per cent. Provided that (A) the Corporate Guarantor has been released from all its obligations under the Pledge and Security Agreement and (B) no Event of Default or Potential Event of Default has occurred and is continuing at any relevant time;";

(g) by deleting the definition of Waiver Period in clause 1.1 thereof in its entirety and substituting the same with the following new definition:

""Waiver Period" means the period which originally commenced on 31 December 2008 and ended on 31 December 2013 (inclusive) and pursuant to the Fourth Supplemental Agreement the new period commencing on 1 January 2014 (inclusive) and ending on 31 December 2014 (inclusive);";

(h) by deleting clause 4.4 in its entirety and replacing it with the following new clause:

"4.4 Notification of market disruption. The Lender shall promptly notify the Borrower if no rate is quoted on the Screen Rate or if (other than during the Applicable LIBOR Period) for any reason the Lender is unable to obtain Dollars in the London Interbank Market in order to fund an Advance during any Interest Period, stating the circumstances which have caused such notice to be given.";

(i) by deleting clauses 10.21 thereof in its entirety and replacing it with following new clauses:

"10.21 Additional Security

Each Borrower undertakes with the Lender to procure that the Corporate Guarantor:

(a) executes and delivers on or prior to date of the Fourth Supplemental Agreement, the Pledge and Security Agreement and, to cause Ocean Rig as issuer to execute, and ASTT as broker to acknowledge, and deliver together with the Corporate Guarantor, the Control Agreement referred to therein in respect of the Required Shares; and

(b) deliver to the Lender such other documents equivalent to those referred to in paragraphs 2 3 4 and 5 of Schedule 2, Part A of this Agreement as the Lender may require in connection with the execution of the Pledge and Security Agreement and the Control Agreement; and

(c) to ensure that any additional security given pursuant to this Clause 10.21 shall remain in full force and effect until the last day of the Additional Security Period and at the end of such period, the Corporate Guarantor shall be automatically released from all its obligations under the Pledge and Security Agreement (subject to the proviso in Clauses 25.2 and 25.4 of this Agreement).

In this Clause 10.21:

"Required Shares" means 6,418,350 issued and outstanding shares of common stock in Ocean Rig (including all other or additional stock or other securities or property paid or distributed in respect of the Required Shares by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar arrangements) currently in the legal and beneficial ownership of the Corporate Guarantor to be pledged in favour of the Lender pursuant to this Clause 10.21 in order to cover 125 per cent. of the Shortfall."

(j) by adding the words "subject to no Event of Default being in existence at any relevant time" after the words "other than during the Waiver Period" in the second line of clause 14.1 thereof;

(k) by deleting paragraph (b) of clause 27 thereof in its entirety and replacing it with the following new paragraph:

"(b) to the Lender:Piraeus Bank S.A.4 Amerikis Street105 64, AthensGreece Fax No: +30 210 3739783";

(l) the definition of, and references throughout to, each Finance Documents shall be construed as if the same referred to that Finance Document as amended and supplemented by this Fourth Supplemental Agreement; and

(m) by construing references throughout to "this Agreement", "hereunder" and other like expressions as if the same referred to the Loan Agreement as amended and supplemented by this Fourth Supplemental Agreement.

5.2 Specific amendments to Corporate Guarantee

With effect on and from the Effective Date the Corporate Guarantee shall be amended as follows:

(a) by deleting the definition of "Covenants Waiver Period" in clause 1.1 of the Corporate Guarantee its entirety and replacing it with the following new definition:

""Covenants Waived Period" means the period commencing on 31 December 2013 (inclusive) and ending on 26 November 2015 (inclusive);"; and

(b) by construing references throughout to "this Guarantee", "hereunder" and other like expressions as if the same referred to the Loan Agreement as amended and supplemented by this Fourth Supplemental Agreement.

5.3 Amendments to Finance Documents

With effect on and from the Effective Date each of the Finance Documents (other than the Loan Agreement and the Corporate Guarantee) shall be, and shall be deemed by this Fourth Supplemental Agreement to be amended as follows:

(a) the definition of, and references throughout each of the Finance Documents to, the Loan Agreement and any of the other Finance Documents shall be construed as if the same referred to the Loan Agreement and those Finance Documents as amended and supplemented by this Fourth Supplemental Agreement;

(b) the definition of, and references throughout each of the Finance Documents to, the Corporate Guarantee and any of the other Finance Documents shall be construed as if the same referred to the Corporate Guarantee and those Finance Documents as amended and supplemented by this Fourth Supplemental Agreement;

(c) by construing references throughout each of the Finance Documents to "this Agreement", "this Deed", hereunder and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this Fourth Supplemental Agreement.

5.4 Finance Documents to remain in full force and effect

The Finance Documents shall remain in full force and effect as amended and supplemented by:

(a) the amendments to the Finance Documents contained or referred to in Clauses 5.1, 5.2 and 5.3; and

(b) such further or consequential modifications as may be necessary to give full effect to the terms of this Fourth Supplemental Agreement.

6 FURTHER ASSURANCES

6.1 Borrowers' and each Security Party's obligation to execute further documents etc.

Each Borrower and each other Security Party shall:

(a) execute and deliver to the Lender (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Lender may, in any particular case, specify;

(b) effect any registration or notarisation, give any notice or take any other step, which the Lender may, by notice to the Borrowers, specify for any of the purposes described in Clause 6.2 or for any similar or related purpose.

6.2 Purposes of further assurances

Those purposes are:

(a) validly and effectively to create any Security Interest or right of any kind which the Lender intended should be created by or pursuant to the Loan Agreement or any other Finance Document, each as amended and supplemented by this Fourth Supplemental Agreement, and

(b) implementing the terms and provisions of this Fourth Supplemental Agreement.

6.3 Terms of further assurances

The Lender may specify the terms of any document to be executed by the Borrowers or any other Security Party under Clause 6.1, and those terms may include any covenants, powers and provisions which the Lender considers appropriate to protect its interests.

6.4 Obligation to comply with notice

The Borrowers or any other Security Party shall comply with a notice under Clause 6.1 by the date specified in the notice.

7 FEES AND EXPENSES

7.1 Fees and Expenses

The provisions of clause 19 (fees and expenses) of the Loan Agreement shall apply to this Fourth Supplemental Agreement as if they were expressly incorporated in this Fourth Supplemental Agreement with any necessary modifications.

8 COMMUNICATIONS

8.1 General

The provisions of clause 27 (notices) of the Loan Agreement, as amended and supplemented by this Fourth Supplemental Agreement, shall apply to this Fourth Supplemental Agreement as if they were expressly incorporated in this Fourth Supplemental Agreement with any necessary modifications.

9 SUPPLEMENTAL

9.1 Counterparts

This Fourth Supplemental Agreement may be executed in any number of counterparts.

9.2 Third Party rights

A person who is not a party to this Fourth Supplemental Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Fourth Supplemental Agreement.

10 LAW AND JURISDICTION

10.1 Governing law

This Fourth Supplemental Agreement shall be governed by and construed in accordance with English law.

10.2 Incorporation of the Loan Agreement provisions

The provisions of clause 30 (law and jurisdiction) of the Loan Agreement, as amended and supplemented by this Fourth Supplemental Agreement, shall apply to this Fourth Supplemental Agreement as if they were expressly incorporated herewith with any necessary modifications.

THIS FOURTH SUPPLEMENTAL AGREEMENT has been duly executed as a Deed on the date stated at the beginning of this Fourth Supplemental Agreement.

EXECUTION PAGE

THE BORROWERS
SIGNED by DIMITRIOS GLYNOS	)	/s/ Dimitrios Glynos
for and on behalf of	)
BOONE STAR OWNERS INC.	)	/s/ Vassiliki Georgopouos
		SOLICITORWATSON, FARLEY & WILLIAMS348 SYNGROU AVENUE176 74 KALLITHEAATHENS - GREECE

SIGNED by DIMITRIOS GLYNOS	)	/s/ Dimitrios Glynos
for and on behalf of	)
IOKASTI OWNING COMPANY LIMITED	)	/s/ Vassiliki Georgopouos
		SOLICITORWATSON, FARLEY & WILLIAMS348 SYNGROU AVENUE176 74 KALLITHEAATHENS - GREECE

THE CORPORATE GUARANNTOR
SIGNED by DIMITRIOS GLYNOS	)	/s/ Dimitrios Glynos
for and on behalf of	)
DRYSHIPS INC.	)	/s/ Vassiliki Georgopouos
		SOLICITORWATSON, FARLEY & WILLIAMS348 SYNGROU AVENUE176 74 KALLITHEAATHENS - GREECE

THE LENDER
SIGNED by Jason Dallas / Katerina Plesia	)	/s/ Jason Dallas
for and on behalf of	)
PIRAEUS BANK S. A.	)	/s/ Katerina Plesia

Witness to all the	)
above signatures	)	/s/ Nadine Akleh
Name:		NADINE AKLEH
Address:		SOLICITORWATSON, FARLEY & WILLIAMS348 SYNGROU AVENUE176 74 KALLITHEAATHENS - GREECE

COUNTERSIGNED on this 23rd day of December 2014 by the following parties, each of which, by its execution hereof confirms and acknowledges that it has read and understood the terms and conditions of the above Fourth Supplemental Agreement, that it agrees in all respects to the same and that the Finance Documents to which each is a party shall remain in full force and effect and shall continue to stand as security for the obligations of the Borrowers under the Loan Agreement.

 /s/ Dimitrios Glynos 

DIMITRIOS GLYNOSfor and on behalf ofFARAT SHIPPING COMPANY LIMITED

Dated 23 December 2014

 /s/ Dimitrios Glynos 

DIMITRIOS GLYNOSfor and on behalf ofLOTIS TRADERS INC.

Dated 23 December 2014

 /s/ Dimitrios Glynos 

DIMITRIOS GLYNOSfor and on behalf ofIALYSOS OWNING COMPANY LIMITED

Dated 23 December 2014

for and on behalf ofTMS BULKERS LTD.

Dated 23 December 2014

COUNTERSIGNED on this ____ day of December 2014 by the following parties, each of which, by its execution hereof confirms and acknowledges that it has read and understood the terms and conditions of the above Fourth Supplemental Agreement, that it agrees in all respects to the same and that the Finance Documents to which each is a party shall remain in full force and effect and shall continue to stand as security for the obligations of the Borrowers under the Loan Agreement.

for and on behalf ofFARAT SHIPPING COMPANY LIMITED

Dated __ December 2014

for and on behalf ofLOTIS TRADERS INC.

Dated __ December 2014

for and on behalf ofIALYSOS OWNING COMPANY LIMITED

Dated __ December 2014

/s/ Dr. Adriano Cefai
DR. ADRIANO CEFAIfor and on behalf ofTMS BULKERS LTD.	DR. ADRIANO CEFAIDirectorMare Services Ltd5/1 Merchant Street Valletta 1171

Dated __ December 2014

EX-8.1

Exhibit 8.1

LIST OF DRYSHIPS SUBSIDIARIES

Name of Subsidiary	Jurisdiction of Incorporation
Oceanview Owners Limited	Liberia
Oceansurf Owners Limited	Liberia
Oceancentury Owners Limited	Liberia
Hydrogen Shipholding Co. S.A.	Liberia
Earthly Shipholding Co. S.A.	Liberia
Helium Shipholding Co. S.A.	Liberia
Silicon Shipholding Co. S.A.	Liberia
Oxygen Shipholding Co. S.A.	Liberia
Skip Navigation Inc.	Liberia
Malvina Shipping Company Limited	Malta
Samsara Shipping Company Limited	Malta
Fabiana Navigation Company Limited	Malta
Karmen Shipping Company Limited	Malta
Thelma Shipping Company Limited	Malta
Celine Shipping Company Limited	Malta
Arleta Navigation Company Limited	Malta
Felicia Navigation Company Limited	Malta
Zatac Shipping Company Limited	Malta
Royerton Shipping Company Limited	Malta
Fago Shipping Company Limited	Malta
Lancat Shipping Company Limited	Malta
Hydrogen Shipping Company Limited	Malta
Helium Shipping Company Limited	Malta
Platan Shipping Company Limited	Malta
Madras Shipping Company Limited	Malta
Tolan Shipping Company Limited	Malta
Lansat Shipping Company Limited	Malta
Iguana Shipping Company Limited	Malta
Selma Shipping Company Limited	Malta
Farat Shipping Company Limited	Malta
Onil Shipping Company Limited	Malta
Borsari Shipping Company Limited	Malta
Silicon Shipping Company Limited	Malta
Oxygen Shipping Company Limited	Malta
Blueberry Shipping Company Limited	Malta
Annapolis Shipping Company Limited	Malta
Araldo Marine Ltd.	Marshall Islands
Welby Shipping Inc.	Marshall Islands
Ialysos Owning Company Limited	Marshall Islands
Azalea Shareholders Limited	Marshall Islands
Samsara Shipholding One Inc.	Marshall Islands
Samsara Shipholding Two Inc.	Marshall Islands
Lidman Maritime Co.	Marshall Islands
Armanno Marine Co.	Marshall Islands
Devine Navigation Inc.	Marshall Islands
Ariadne Marine S.A.	Marshall Islands
Mador Shipping Ltd.	Marshall Islands
Lothair Navigation Company	Marshall Islands
Verge Navigation Corp.	Marshall Islands
Joyce Shipping Corp.	Marshall Islands

Name of Subsidiary	Jurisdiction of Incorporation
Amara Shipping Company	Marshall Islands
Alma Shipholding Inc.	Marshall Islands
Tempo Marine Co.	Marshall Islands
Flamenco Management Corp.	Marshall Islands
Star Record Owning Company Limited	Marshall Islands
Star Record Shareholdings Limited	Marshall Islands
Argo Owning Company Limited	Marshall Islands
Paralos Owning Company Limited	Marshall Islands
Rea Owning Company Limited	Marshall Islands
Rea Shareholdings Limited	Marshall Islands
Dione Owning Company Limited	Marshall Islands
Dione Shareholdings Limited	Marshall Islands
Phoebe Owning Company Limited	Marshall Islands
Phoebe Shareholdings Limited	Marshall Islands
Uranus Owning Company Limited	Marshall Islands
Uranus Shareholdings Limited	Marshall Islands
Selene Owning Company Limited	Marshall Islands
Selene Shareholdings Limited	Marshall Islands
Tethys Owning Company Limited	Marshall Islands
Tethys Shareholdings Limited	Marshall Islands
Ioli Owning Company Limited	Marshall Islands
Ioli Shareholdings Limited	Marshall Islands
Iason Owning Company Limited	Marshall Islands
Iason Shareholdings Limited	Marshall Islands
Team-up Owning Company Limited	Marshall Islands
Team-up Shareholdings Limited	Marshall Islands
Iokasti Owning Company Limited	Marshall Islands
Iokasti Shareholdings Limited	Marshall Islands
Boone Star Owners Inc.	Marshall Islands
Boone Star Shareholders Inc.	Marshall Islands
Norwalk Star Owners Inc.	Marshall Islands
Norwalk Star Shareholdings Inc.	Marshall Islands
Dalian Star Owners Inc.	Marshall Islands
Dalian Star Shareholdings Inc.	Marshall Islands
Aegean Traders Inc.	Marshall Islands
Aegean Shareholders Inc.	Marshall Islands
Cretan Traders Inc.	Marshall Islands
Cretan Shareholders Inc.	Marshall Islands
Roscoe Marine Ltd.	Marshall Islands
Argo Shareholdings Limited	Marshall Islands
Pergamos Owning Company Limited	Marshall Islands
Pergamos Shareholders Limited	Marshall Islands
Amathus Owning Company Limited	Marshall Islands
Amathus Shareholders Limited	Marshall Islands
Echo Owning Company Limited	Marshall Islands
Echo Shareholdings Limited	Marshall Islands
Caerus Owning Company Limited	Marshall Islands
Caerus Shareholdings Limited	Marshall Islands
Symi Owners Inc.	Marshall Islands
Symi Shareholders Inc.	Marshall Islands
Kalymnos Owners Inc.	Marshall Islands
Kalymnos Shareholders Inc.	Marshall Islands

Name of Subsidiary	Jurisdiction of Incorporation
Litae Owning Company Limited	Marshall Islands
Litae Shareholdings Limited	Marshall Islands
Tyche Owning Company Limited	Marshall Islands
Tyche Shareholdings Limited	Marshall Islands
Anemone Marine Co.	Marshall Islands
Ariana Marine Ltd.	Marshall Islands
Neria Shipmanagement Inc.	Marshall Islands
Argante Navigation Corp.	Marshall Islands
Sunlight Shipholding One Inc.	Marshall Islands
Sunlight Shipholding Two Inc.	Marshall Islands
Atlas Owning Company Limited	Marshall Islands
Atlas Shareholdings Limited	Marshall Islands
Maternal Owning Company Limited	Marshall Islands
Maternal Shareholdings Limited	Marshall Islands
Xanadu Shipholding One Inc.	Marshall Islands
Xanadu Shipholding Two Inc.	Marshall Islands
Nouvelle Shipholding One Inc.	Marshall Islands
Nouvelle Shipholding Two Inc.	Marshall Islands
Paternal Owning Company Limited	Marshall Islands
Paternal Shareholdings Limited	Marshall Islands
Olivia Shipholding One Inc.	Marshall Islands
Olivia Shipholding Two Inc.	Marshall Islands
Taipan Shipholding One Inc.	Marshall Islands
Taipan Shipholding Two Inc.	Marshall Islands
Classical Owning Company Limited	Marshall Islands
Classical Shareholdings Limited	Marshall Islands
Human Owning Company Limited	Marshall Islands
Human Shareholdings Limited	Marshall Islands
Seaventure Shipping Limited	Marshall Islands
Seaventure Holdings Limited	Marshall Islands
Primera Shipholding One Inc.	Marshall Islands
Primera Shipholding Two Inc.	Marshall Islands
Scorpio Shipholding One Inc.	Marshall Islands
Scorpio Shipholding Two Inc.	Marshall Islands
Paragon Shipholding One Inc.	Marshall Islands
Paragon Shipholding Two Inc.	Marshall Islands
Iguana Shipholding One Inc.	Marshall Islands
Iguana Shipholding Two Inc.	Marshall Islands
Lotis Traders Inc.	Marshall Islands
Lotis Shareholders Inc.	Marshall Islands
Kronos Owning Company Limited	Marshall Islands
Kronos Shareholdings Limited	Marshall Islands
Lucio Shipholding Ltd.	Marshall Islands
Valente Navigation Co.	Marshall Islands
NT LLC Investors Ltd.	Marshall Islands
NT LLC Shareholders Ltd.	Marshall Islands
Toro Shipholding One Inc.	Marshall Islands
Toro Shipholding Two Inc.	Marshall Islands
Gaia Owning Company Limited	Marshall Islands
Gaia Shareholdings Limited	Marshall Islands
Trojan Maritime Co.	Marshall Islands
Koronis Navigation S.A.	Marshall Islands

Name of Subsidiary	Jurisdiction of Incorporation
Astarte Maritime S.A.	Marshall Islands
Ashby Shipmanagement Corp.	Marshall Islands
Orpheus Owning Company Limited	Marshall Islands
Orpheus Shareholdings Limited	Marshall Islands
Ionian Traders Inc.	Marshall Islands
Rhodian Traders Inc.	Marshall Islands
Monteagle Shipping SA	Marshall Islands
Paralos Shareholdings Limited	Marshall Islands
Kerkyra Traders Inc.	Marshall Islands
Kerkyra Shareholders Inc.	Marshall Islands
Wealth Management Inc.	Marshall Islands
Thrasymachus Challenge Inc.	Marshall Islands
Hippias Challenge Inc.	Marshall Islands
Prodicus Challenge Inc.	Marshall Islands
Gorgias Challenge Inc.	Marshall Islands
Callicles Challenge Inc.	Marshall Islands
Antiphon Challenge Inc.	Marshall Islands
Protagoras Challenge Inc.	Marshall Islands
Lycophron Challenge Inc.	Marshall Islands
Cratylus Challenge Inc.	Marshall Islands
Tinos Traders Inc.	Marshall Islands
Sifnos Traders Inc.	Marshall Islands
Milos Traders Inc.	Marshall Islands
Milos Shareholders Inc.	Marshall Islands
Thassos Traders Inc.	Marshall Islands
Thassos Shareholders Inc.	Marshall Islands
Pounta Traders Inc.	Marshall Islands
Pounta Shareholders Inc.	Marshall Islands
Faedon Shareholdings Limited	Marshall Islands
Ialysos Shareholders Limited	Marshall Islands
Mandarin Shareholdings Limited	Marshall Islands
Mensa Shareholdings Limited	Marshall Islands
Iktinos Owning Company Limited	Marshall Islands
Iktinos Shareholdings Limited	Marshall Islands
Kallikrates Owning Company Limited	Marshall Islands
Kallikrates Shareholdings Limited	Marshall Islands
Belulu Shareholders Limited	Marshall Islands
DryShips Partners LP	Marshall Islands
DRYS GP LLC	Marshall Islands
Oceanfreight Inc.	Marshall Islands
Oceanship Shareholdings Limited	Marshall Islands
Oceanship Owners Limited	Marshall Islands
Oceanwealth Shareholdings Limited	Marshall Islands
Oceanwealth Owners Limited	Marshall Islands
Oceanventure Shareholdings Limited	Marshall Islands
Oceanventure Owners Limited	Marshall Islands
Oceanresources Shareholdings Limited	Marshall Islands
Oceanresources Owners Limited	Marshall Islands
Oceanstrength Shareholdings Limited	Marshall Islands
Oceanstrength Owners Limited	Marshall Islands
Oceanenergy Shareholdings Limited	Marshall Islands

Name of Subsidiary	Jurisdiction of Incorporation
Oceanenergy Owners Limited	Marshall Islands
Oceantrade Shareholdings Limited	Marshall Islands
Oceantrade Owners Limited	Marshall Islands
Oceanprime Shareholdings Limited	Marshall Islands
Oceanprime Owners Limited	Marshall Islands
Oceanclarity Shareholdings Limited	Marshall Islands
Oceanclarity Owners Limited	Marshall Islands
Oceanfighter Shareholders Inc.	Marshall Islands
Oceanfighter Owners Inc.	Marshall Islands
Ocean Faith Shareholders Inc.	Marshall Islands
Ocean Faith Owners Inc.	Marshall Islands
Ocean Blue Spirit Shareholders Inc.	Marshall Islands
Ocean Blue Spirit Owners Inc.	Marshall Islands
Kifissia Star Shareholders Inc.	Marshall Islands
Kifissia Star Owners Inc.	Marshall Islands
Oceanpower Shareholders Inc.	Marshall Islands
Oceanpower Owners Inc.	Marshall Islands
Oceanwave Shareholders Limited	Marshall Islands
Oceanwave Owners Limited	Marshall Islands
Oceanrunner Shareholders Limited	Marshall Islands
Oceanrunner Owners Limited	Marshall Islands
Oceanfire Shareholders Inc.	Marshall Islands
Oceanfire Owners Inc.	Marshall Islands
Oceanview Shareholders Limited	Marshall Islands
Oceansurf Shareholders Limited	Marshall Islands
Oceancentury Shareholders Limited	Marshall Islands
Pacifai Shareholders Limited	Marshall Islands
Pacifai Owning Company Limited	Marshall Islands
Amazon Shareholders Limited	Marshall Islands
Amazon Owning Company Limited	Marshall Islands
Freightwise Investments Ltd	Marshall Islands
Olympian Heracles Holding Inc.	Marshall Islands
Tankships Corporation Limited	Marshall Islands
Olympian Hestia Holding Inc.	Marshall Islands
Olympian Zeus Shareholders Inc.	Marshall Islands
Olympian Zeus Owners Inc.	Marshall Islands
Olympian Apollo Shareholders Inc.	Marshall Islands
Olympian Apollo Owners Inc.	Marshall Islands
Olympian Hebe Holding Inc.	Marshall Islands
Olympian Hera Shareholders Inc.	Marshall Islands
Olympian Hera Owners Inc.	Marshall Islands
Olympian Rea Holding Inc.	Marshall Islands
Olympian Poseidon Shareholders Inc.	Marshall Islands
Olympian Poseidon Owners Inc.	Marshall Islands
Olympian Demeter Shareholders Inc.	Marshall Islands
Olympian Demeter Owners Inc.	Marshall Islands
Olympian Ares Shareholders Inc.	Marshall Islands
Olympian Ares Owners Inc.	Marshall Islands
Olympian Artemis Shareholders Inc.	Marshall Islands
Olympian Artemis Owners Inc.	Marshall Islands
Olympian Diana Holding Inc.	Marshall Islands
Olympian Athena Shareholders Inc.	Marshall Islands

Name of Subsidiary	Jurisdiction of Incorporation
Olympian Athena Owners Inc.	Marshall Islands
Olympian Dionysus Shareholders Inc.	Marshall Islands
Olympian Dionysus Owners Inc.	Marshall Islands
Olympian Aphrodite Shareholders Inc.	Marshall Islands
Olympian Aphrodite Owners Inc.	Marshall Islands
Olympian Pan Holding Inc.	Marshall Islands
Olympian Hephaestus Shareholders Inc.	Marshall Islands
Olympian Hephaestus Owners Inc.	Marshall Islands
Olympian Hermes Shareholders Inc.	Marshall Islands
Olympian Hermes Owners Inc.	Marshall Islands
Ocean Rig UDW Inc.	Marshall Islands
Drill Rigs Holdings Inc.	Marshall Islands
Ocean Rig 1 Shareholders Inc.	Marshall Islands
Ocean Rig 1 Inc.	Marshall Islands
Ocean Rig 1 Greenland Operations Inc.	Marshall Islands
Ocean Rig Falkland Operations Inc.	Marshall Islands
Ocean Rig West Africa Operations Inc.	Marshall Islands
Ocean Rig 2 Shareholders Inc.	Marshall Islands
Ocean Rig 2 Inc.	Marshall Islands
Drill Rigs Operations Inc.	Marshall Islands
Ocean Rig EG Operations Inc.	Marshall Islands
Ocean Rig Norway Operations Inc.	Marshall Islands
Ocean Rig Liberia Operations Inc.	Marshall Islands
Ocean Rig Ireland Operations Inc.	Marshall Islands
Drillships Holdings Inc.	Marshall Islands
Drillship Hydra Shareholders Inc.	Marshall Islands
Drillship Hydra Owners Inc.	Marshall Islands
Ocean Rig Corcovado Greenland Operations Inc.	Marshall Islands
Drillship Paros Shareholders Inc.	Marshall Islands
Drillship Paros Owners Inc.	Marshall Islands
Drillships Holdings Operations Inc.	Marshall Islands
Ocean Rig Angola Operations Inc.	Marshall Islands
Ocean Rig Gabon Operations Inc.	Marshall Islands
Drillships Investment Inc.	Marshall Islands
Kithira Shareholders Inc.	Marshall Islands
Drillship Kithira Owners Inc.	Marshall Islands
Ocean Rig Poseidon Operations Inc.	Marshall Islands
Skopelos Shareholders Inc.	Marshall Islands
Drillship Skopelos Owners Inc.	Marshall Islands
Drillships Investment Operations Inc.	Marshall Islands
Ocean Rig Namibia Operations Inc.	Marshall Islands
Ocean Rig Cuanza Operations Inc.	Marshall Islands
Drillships Ocean Ventures Inc.	Marshall Islands
Drillship Skiathos Shareholders Inc.	Marshall Islands
Drillship Skiathos Owners Inc.	Marshall Islands
Drillship Skyros Shareholders Inc.	Marshall Islands
Drillship Skyros Owners Inc.	Marshall Islands
Drillship Kythnos Shareholders Inc.	Marshall Islands
Drillship Kythnos Owners Inc.	Marshall Islands
Drillships Ocean Ventures Operations Inc.	Marshall Islands
Ocean Rig Cunene Operations Inc.	Marshall Islands
Ocean Rig Cubango Operations Inc.	Marshall Islands

Name of Subsidiary		Jurisdiction of Incorporation
Ocean Rig Operations Inc.		Marshall Islands
Ireland Drilling Crew Inc.		Marshall Islands
Drillships Financing Holding Inc.		Marshall Islands
Alley Finance Co.		Marshall Islands
Algarve Finance Ltd		Marshall Islands
Ocean Rig Global Chartering Inc.		Marshall Islands
Drillship Alonissos Shareholders Inc.		Marshall Islands
Drillship Alonissos Owners Inc.		Marshall Islands
Ocean Rig Management Inc.		Marshall Islands
Eastern Med Consultants Inc.		Marshall Islands
Ocean Rig Spares Inc.		Marshall Islands
Bluesky Shareholders Inc.	Marshall Islands
Bluesky Owners Inc.	Marshall Islands
Chloe Owning Company Limited	Marshall Islands
Chloe Shareholders Limited	Marshall Islands
Dryships Finance Corp.	Marshall Islands
Ocean Rig Holdings Inc.	Marshall Islands
Ocean Rig MLP Holdings Inc.	Marshall Islands
Ocean Rig Partners GP LLC	Marshall Islands
Ocean Rig Partners LP	Marshall Islands
Ocean Rig Operating Partners GP LLC	Marshall Islands
Ocean Rig Operating LP	Marshall Islands
Drillships Ocean Ventures II Inc.	Marshall Islands
Drillship Skiathos Shareholders II Inc.	Marshall Islands
Drillship Skiathos Owners II Inc.	Marshall Islands
Drillship Skyros Shareholders II Inc.	Marshall Islands
Drillship Skyros Owners II Inc.	Marshall Islands
Drillship Kythnos Shareholders II Inc.	Marshall Islands
Drillship Kythnos Owners II Inc.	Marshall Islands
OCR Falklands Drilling Inc.	Marshall Islands
South Africa Drilling Crew Inc.	Marshall Islands
Ocean Rig Congo Operations Inc.	Marshall Islands
OR Global Block Operators Inc.	Marshall Islands
Drillship Santorini Shareholders Inc.	Marshall Islands
Drillship Santorini Owners Inc.	Marshall Islands
Drillship Crete Shareholders Inc.	Marshall Islands
Drillship Crete Owners Inc.	Marshall Islands
Drillship Amorgos Shareholders Inc.	Marshall Islands
Drillship Amorgos Owners Inc.	Marshall Islands
Tankships Investment Holdings Inc.	Marshall Islands
Olympia Rig Angola Holding S.A.	Angola
Olympia Rig Angola Limitada	Angola
Ocean Rig do Brasil Servicos de Petroleo Ltda.	Brazil
Ocean Rig Drilling do Brasil Servicos de Petroleo Ltda.	Brazil
Ocean Rig Rio de Janeiro Servicos de Petroleo Ltda.	Brazil
Ocean Rig Canada Inc.	Canada
Primelead Limited	Cyprus
Ocean Rig Ghana Limited	Ghana
Ocean Rig Olympia Operations Ghana Limited	Ghana
Ocean Rig Offshore Management Limited	Jersey
OR Crewing Limited	Jersey

Name of Subsidiary		Jurisdiction of Incorporation
Ocean Rig Black Sea Cooperatief U.A.	Netherlands
Ocean Rig Black Sea Operations B.V.	Netherlands
Ocean Rig Drilling Operations Cooperatief U.A.	Netherlands
Ocean Rig Drilling Operations B.V.	Netherlands
Ocean Rig Block 33 Brasil Cooperatief U.A.	Netherlands
Ocean Rig Block 33 Brasil B.V.	Netherlands
Ocean Rig Deepwater Drilling Limited	Nigeria
Ocean Rig North Sea AS	Norway
Ocean Rig AS	Norway
Ocean Rig UK Limited	UK
Ocean Rig Limited	UK
Ocean Rig UDW LLC	United States
Drillships Projects Inc.	United States
Drillships Ventures Projects Inc.	United States

EX-12.1

Exhibit 12.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

I, George Economou, certify that:

1. I have reviewed this annual report on Form 20-F of DryShips Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: March 10, 2015

/s/ George Economou

George Economou

Chief Executive Officer (Principal Executive Officer)

EX-12.2

Exhibit 12.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Ziad Nakhleh, certify that:

1. I have reviewed this annual report on Form 20-F of DryShips Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: March 10, 2015

/s/ Ziad Nakhleh

Ziad Nakhleh

Chief Financial Officer (Principal Financial Officer)

EX-13.1

Exhibit 13.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of DryShips Inc. (the "Company") on Form 20-F for the year ended December 31, 2014 as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, George Economou, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: March 10, 2015

/s/ George Economou

George Economou

Chief Executive Officer (Principal Executive Officer)

EX-13.2

Exhibit 13.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of DryShips Inc. (the "Company") on Form 20-F for the year ended December 31, 2014 as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Ziad Nakhleh, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: March 10, 2015

/s/ Ziad Nakhleh

Ziad Nakhleh

Chief Financial Officer (Principal Financial Officer)

EX-15.1

EXHIBIT 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements (Form F-3/ASR No. 333-190951, as amended) of DryShips Inc. and in the related Prospectuses of our reports dated March 10, 2015, with respect to the consolidated financial statements and schedule of DryShips Inc., and the effectiveness of internal control over financial reporting of DryShips Inc. included in this Annual Report (Form 20-F) for the year ended December 31, 2014.

/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.

Athens, Greece

March 10, 2015

XML

Equity Incentive Plan (Tables)

12 Months Ended

Dec. 31, 2014

Dryships Inc.

Equity incentive plan

	Number of non vested shares		Weighted average grant date fair value per non vested shares
Balance December 31, 2011	8,510,150	$	5.60
Vested	(2,505,150)		5.83
Balance December 31, 2012	6,005,000	$	5.50
Granted	1,000,000		2.01
Vested	(1,338,334)		4.63
Balance December 31, 2013	5,666,666	$	5.09
Granted	3,300,000		1.87
Vested	(1,733,333)		4.31
Balance December 31, 2014	7,233,333	$	3.81
	Number of  vested shares		Weighted average grant date fair value per vested shares
As at December 31, 2011	6,092,871	$	17.23
Non vested shares granted in prior years and vested 2012	2,505,150		5.83
As at December 31, 2012	8,598,021	$	13.91
Granted and vested	333,334		2.01
Non vested shares granted in prior years and vested 2013	1,005,000		5.50
As at December 31, 2013	9,936,355	$	12.66
Granted and vested	400,000		3.26
Non vested shares granted in prior years and vested 2014	1,333,333		4.63
As at December 31, 2014	11,669,688	$	11.42

Ocean Rig UDW

Equity incentive plan

	Number of non vested shares		Weighted average grant date fair value per non vested shares
Balance December 31, 2012	73,500	$	16.40
Granted	342,400		17.19
Forfeited	(15,900)		16.90
Vested	(160,133)		16.92
Balance December 31, 2013	239,867	$	17.15
Granted	656,650		13.76
Forfeited	(78,576)		16.93
Vested	(205,143)		17.31
Balance December 31, 2014	612,798	$	13.49
	Number of  vested shares		Weighted average grant date fair value per vested shares
As at December 31, 2012	2,500		16.50
Granted and vested	117,133		17.18
Non vested shares granted in prior years and vested 2013	43,000		16.16
As at December 31, 2013	162,633		16.90
Granted and vested	111,585		17.39
Non vested shares granted in prior years and vested 2014	93,558		17.20
Granted and vested shares in prior years, but cancelled during 2014	(58,324)		16.63
As at December 31, 2014	309,452		17.22

XML

Transactions with Related Parties - Azara Services S.A. (Details) (USD $) In Thousands, except Share data, unless otherwise specified	8 Months Ended	24 Months Ended	8 Months Ended	12 Months Ended
	Aug. 20, 2013	Dec. 31, 2014	Aug. 19, 2014	Dec. 30, 2014	Aug. 20, 2015	Aug. 20, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017
Azara Services S.A.
Sign On Bonus Cost	$ 2,500
Annual Renumeration		2,500
Vesting period	2 years
Grant date fair value	$ 17.56
Vested number of shares on grant date	50,000
Vested in period					50,000	50,000
Shares Granted	150,000
Azara Services Bonus On 19 August 2014
Annual Renumeration			2,500
Vesting period			3 years
Grant date fair value			$ 18.37
Vested in period		50,000					50,000	50,000
Shares Granted			150,000
Azara Services Bonus On 30 December 2014
Annual Renumeration				$ 4,000
Vesting period				3 years
Grant date fair value				$ 9.46
Vested in period							100,000	100,000	100,000
Shares Granted				300,000

XML

Significant Accounting Policies - Additional Information (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Advances for vessels and drillships under construction and related costs	$ 623,984,000	$ 679,008,000
VIE, total assets	64,314,000	35,782,000
VIE, total liabilities	65,358,000	56,556,000
VIE, net assets	(1,044,000)	(20,774,000)
Capitalized interest	39,225,000	69,714,000	58,967,000
Estimated residual value of vessels per lightweight ton	250
Vessel impairment charge	38,148,000	43,490,000	0
Maintenance And Vessel Operating Expense Average Annual Inflation Rate Assumption	2.00%
Fleet Utilization Assumption	98.00%
Variances On Time Charter Rates Upper Limit	97.50%
Variances On Time Charter Rates Lower Limit	92.50%
Amortization and write off of Financing Costs	50,551,000	46,006,000	17,565,000
Number Of Pension Benefit Plans		10
Managed By Norwegian Life Insurance Companies
Number Of Pension Benefit Plans		5
Managed By International Life Insurance Companies
Number Of Pension Benefit Plans		5
Vessels
Useful life	25 years
Drilling Rigs And Drill Ships Bare Deck
Useful life	30 years
Drilling Rigs And Drillships Other Assets Parts
Useful life	5 to 15 years
One long lived asset
Vessel impairment charge	0	0	0
Drilling Rigs
Residual value per drillship/ drilling rig	35,000,000	35,000,000	35,000,000
Drillships
Residual value per drillship/ drilling rig	50,000,000	50,000,000	50,000,000
Cumulative installments payments to the yards
Advances for vessels and drillships under construction and related costs	$ 515,856,000

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Long-Term Debt - Senior Secured Credit Facilities (Details) (USD $) In Thousands, except Share data, unless otherwise specified	2 Months Ended	12 Months Ended			1 Months Ended	7 Months Ended	6 Months Ended	10 Months Ended
	Feb. 28, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Feb. 07, 2014	Jul. 25, 2014	Jul. 12, 2013	Oct. 29, 2014	Mar. 24, 2014	Jul. 26, 2011	Mar. 15, 2013	Nov. 18, 2013	Aug. 20, 2013	Jul. 07, 2014	Feb. 02, 2015	Jan. 20, 2015	Jan. 09, 2015	Nov. 18, 2014	Nov. 14, 2014	Oct. 31, 2014	Dec. 23, 2014
Debt Instrument, Unused Borrowing Capacity, Amount		$ 0	$ 450,000
Line Of Credit Facility Unused Capacity Commitment Fee Percentage Range			1.40%
Amortization and write off of Financing Costs		50,551	46,006	17,565
Loan Facilities		5,517,613	5,568,003
Payment of financing costs	22,400	48,913	84,066	35,431
Weighted Average Interest Rate		6.60%	6.63%	6.35%
Ocean Rig Mylos
Variable rate basis	LIBOR
Ocean Rig Skyros
Variable rate basis	LIBOR
Ocean Rig Athena
Variable rate basis	LIBOR
Debt Instrument, Face Amount									450,000
New Term Loan B
Debt Instrument, Face Amount						1,300,000
Maturity Date Of Loan					Q3 2020	25 July 2021
Release of restricted cash upon the repayment						75,000
Amortization and write off of Financing Costs						19,797
Secured Credit Facility
Debt Instrument, Face Amount		325,000
Fixed Rate
Line of credit facility amount outstanding		3,173,000
Ocean Rig | Loan Facilities Drilling Segment 1
Debt Instrument, Face Amount							495,000
Ocean Rig | Loan Facilities Drilling Segment 2
Debt Instrument, Face Amount							495,000
Ocean Rig | Tranche B1 Term Loans
Line Of Credit Facility Maximum Borrowing Capacity							975,000
Debt Instrument, Face Amount										100,000
Maturity Date Of Loan							Q3 2016
Ocean Rig | Tranche B2 Term Loans
Line Of Credit Facility Maximum Borrowing Capacity							825,000
Ocean Rig | Drillships Financing Holding Inc. ("DFHI") and Drillships Project Inc.
Maturity Date Of Loan							Q1 2021
Loan Facilities							1,800,000
Ocean Rig Mylos, Ocean Rig Skyros and Ocean Rig Athena
Debt Instrument, Face Amount	1,350,000
Credit Agreement With Far Eastern Shipyard
Number of shares pledged as additional security											1,602,500
Debt Instrument, Face Amount											12,500
Debt Instrument, Convertible, Effective Interest Rate											3.00%
Existing bank loans amount repaid
Release of restricted cash upon the repayment							131,600
Amortization and write off of Financing Costs							23,300
Loan Facilities							1,519,168
Commercial lenders, or the Commercial Facilities | Ocean Rig Mylos
Debt Instrument, Face Amount	150,000
Commercial lenders, or the Commercial Facilities | Ocean Rig Skyros
Debt Instrument, Face Amount	150,000
Commercial lenders, or the Commercial Facilities | Ocean Rig Athena
Debt Instrument, Face Amount	150,000
Eksportkreditt Norge AS, or the Eksportkreditt GIEK Facilities | Ocean Rig Mylos
Debt Instrument, Face Amount	150,000
Eksportkreditt Norge AS, or the Eksportkreditt GIEK Facilities | Ocean Rig Skyros
Debt Instrument, Face Amount	150,000
Eksportkreditt Norge AS, or the Eksportkreditt GIEK Facilities | Ocean Rig Athena
Debt Instrument, Face Amount	150,000
Export-Import Bank of Korea, or the Kexim Facilities | Ocean Rig Mylos
Debt Instrument, Face Amount	150,000
Export-Import Bank of Korea, or the Kexim Facilities | Ocean Rig Skyros
Debt Instrument, Face Amount	150,000
Export-Import Bank of Korea, or the Kexim Facilities | Ocean Rig Athena
Debt Instrument, Face Amount	150,000
628.8 million credit facility amendment | Two supplemental agreements
Number of shares pledged as additional security												7,800,000
Restricted Cash												55,000
Ocean Rig Mylos and Ocean Rig Skyros
Debt Instrument, Face Amount													900,000
Commerzbank Senior Secured Credit Facility
Line of credit facility amount outstanding														35,000
Cash prepayment														2,700
ABN AMRO Secured Bridge Loan Facility
Line of credit facility amount outstanding																			200,000
Number of shares pledged as additional security																	8,000,000
Ocean Rig shares registered																		78,301,755	45,129,069
Cash prepayment															5,000	10,000
Nordea Bank
Variable rate basis								LIBOR
Debt Instrument, Face Amount								170,000
Nordea Bank | Secured Credit Facility
Line of credit facility amount outstanding																				$ 50,010
Two Senior Secured Credit Facilities
Number of shares pledged as additional security																					8,775,055

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Transactions with Related Parties - Vivid,Cardiff Tankers,GSA, Basset (Details) In Thousands, except Share data, unless otherwise specified	24 Months Ended		3 Months Ended	12 Months Ended	16 Months Ended	28 Months Ended	12 Months Ended	8 Months Ended		12 Months Ended		31 Months Ended		12 Months Ended
	Dec. 31, 2012 Global Services Agreement between Company and Cardiff	Dec. 31, 2014 New Global Services Agreement between Ocean Rig and Cardiff Drilling	Apr. 17, 2012 Chairman, President and Chief Executive Officer	Dec. 31, 2014 Chairman, President and Chief Executive Officer	Dec. 31, 2011 Vivid	Dec. 31, 2012 Vivid	Dec. 31, 2014 Cardiff Tankers	Aug. 19, 2014 Basset Consultancy Agreement Effective 1 June 2012 USD ($)	Aug. 20, 2013 Basset Consultancy Agreement Effective 1 June 2012 USD ($)	Dec. 30, 2014 Basset Consultancy Agreement Effective 1 June 2012 USD ($)	Dec. 31, 2014 Basset Consultancy Agreement Effective 1 June 2012	Dec. 31, 2013 Basset Consultancy Agreement Effective 1 June 2012 USD ($)	Dec. 31, 2013 Basset Consultancy Agreement Effective 1 June 2012 EUR (€)	Dec. 31, 2015 Basset Consultancy Agreement Effective 1 January 2015 USD ($)	Dec. 31, 2015 Basset Consultancy Agreement Effective 1 January 2015 EUR (€)
Commissions in connection with employment arrangements	1.00%	1.00%
Commission on purchase or sale price of vessels and rigs	0.75%	0.75%
Percentage Of Shareholder				17.30%
Number of common shares of Ocean Rig previously owned by Dryships purchased by companies affiliated with Chairman and Chief Executive Officer			2,185,000
Chartering commission							1.25%
Commission in connection to financing related services		0.20%				0.20%
Consultancy agreement terms in year					5 years
Officers' Compensation								$ 4,000	$ 3,000	$ 3,000				$ 550	€ 450
Professional and Contract Services Expense												$ 1,100	€ 900
Ownership in Ocean Rig											114,286

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Common Stock and Additional Paid-in Capital - Additional Information (Details) (USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended	12 Months Ended			17 Months Ended	1 Months Ended	3 Months Ended	4 Months Ended	7 Months Ended	9 Months Ended
	Jan. 18, 2008	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Jan. 31, 2013	Feb. 14, 2013	Apr. 17, 2012	May 08, 2014	Jul. 21, 2014	Oct. 15, 2014
Treasury Stock, Shares, Acquired					21,000,000
Proceeds from Divestiture of Interest in Consolidated Subsidiaries		$ 0	$ 122,960	$ 180,485
Equity attributable to the controlling interest		2,992,821	2,613,636
Adjustments to additional paid in capital, reallocation of non-controlling interest		(1,267)	122,960	180,485
Stockholders Rights Agreement Description	The Company's Board of Directors declared a dividend payable of one preferred share purchase right, ("Right"), to purchase one one-thousandth of a share of the Company's Series A Participating Preferred Stock for each outstanding common share.
Offering of common stock		706,064,321	432,654,477
Par value of common shares		$ 0.01	$ 0.01
Net proceeds from common stock issuance		421,911	23,438	0
Dividends paid		30,563	0	0
Ocean Rig
Number of Ocean Rig common shares sold through a public offering						7,500,000	11,500,000
Assets, Net						2,950,992	3,003,954
Proceeds from Divestiture of Interest in Consolidated Subsidiaries						122,960	180,485
Equity attributable to the controlling interest						45,542	81,760
Date of dividend payment								May 29, 2014	Aug. 08, 2014	Nov. 10, 2014
Date of dividend record								May 20, 2014	Aug. 01, 2014	Oct. 31, 2014
Dividend per share								$ 0.19	$ 0.19	$ 0.19
Dividends paid		$ 30,563
Shares loaned and returned
Treasury Stock, Shares, Acquired		15,100,000

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Schedule I - Condensed Financial Information of Dryships Inc. - Principal Payments (Table) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Year ending December 31,
2015	$ 1,195,323
Total principal payments	5,636,323	5,728,049
Less: Financing fees and equity component of notes	(118,710)	(160,046)
Total debt	5,517,613	5,568,003
Dryships Inc.
Year ending December 31,
2015	494,406
Total principal payments	494,406
Less: Financing fees and equity component of notes	(6,961)
Total debt	$ 487,445

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Schedule I - Condensed Financial Information of Dryships Inc. (Parent Company Only) (Tables)

12 Months Ended

Dec. 31, 2014

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Balance Sheets

	December 31,
	2013		2014
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	81	$	119
Restricted cash		232		4,043
Due from related parties		21,223		23,223
Other current assets		664		116
Total current assets		22,200		27,501
NON-CURRENT ASSETS:
Investments in subsidiaries*		4,842,130		4,900,142
Total non-current assets		4,842,130		4,900,142
Total assets	$	4,864,330	$	4,927,643
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	820,820	$	487,445
Due to subsidiaries*		1,405,024		1,428,489
Financial instruments		10,289		8,725
Due to related parties		51		2,194
Other current liabilities		6,596		6,175
Total current liabilities		2,242,780		1,933,028
NON-CURRENT LIABILITIES
Financial instruments		8,417		1,794
Total non-current liabilities		8,417		1,794
STOCKHOLDER'S EQUITY:		1-		1-
Preferred stock, $0.01 par value; 500,000,000 shares authorized at December 31, 2013 and 2014; 100,000,000 shares designated as Series A Convertible preferred stock; 0 shares of Series A Convertible Preferred Stock issued and outstanding at December 31, 2013 and 2014, respectively		-		-
Common stock, $0.01 par value; 1,000,000,000 shares authorized at December 31, 2013 and 2014; 432,654,477 and 706,064,321 shares issued and outstanding at December 31, 2013 and 2014, respectively		4,326		7,060
Treasury stock; $0.01 par value; 21,000,000 and 36,100,000 shares at December 31, 2013 and 2014, respectively		(210)		(361)
Additional paid-in capital		2,824,702		3,249,376
Accumulated other comprehensive loss		(6,062)		(6,622)
Accumulated deficit		(209,623)		(256,632)
Total stockholders' equity		2,613,133		2,992,821
Total liabilities and stockholders' equity	$	4,864,330	$	4,927,643
* Eliminated in consolidation

Statements of Operations

	For the year ended December 31,
		2012	2013		2014
EXPENSES:
General and administrative expenses	$	(29,408)	$	(21,090)	$	(23,893)
Operating loss		(29,408)		(21,090)		(23,893)
OTHER INCOME / (EXPENSES):
Interest and finance costs		(85,692)		(89,124)		(88,753)
Interest income		3,065		226		989
Loss on interest rate swaps		(9,513)		(774)		(739)
Other, net		672		(430)		(220)
Total other (expenses), net		(91,468)		(90,102)		(88,723)
Equity in earnings/(loss) of subsidiaries*		(125,902)		(112,404)		65,104
Net loss	$	(246,778)	$	(223,596)	$	(47,512)
Loss per share, basic		(0.65)		(0.58)		(0.10)
Weighted average number of shares, basic		380,159,088		384,063,306		456,031,628
Loss per share, diluted		(0.65)		(0.58)		(0.10)
Weighted average number of shares, diluted		380,159,088		384,063,306		456,031,628
* Eliminated in consolidation

Statements of Comprehensive Income/ (loss)

	For the year ended December 31,
		2012		2013		2014
-Net loss	$	(246,788)	$	(223,596)	$	(47,512)
Other comprehensive income/ (loss):
-Unrealized gain/(loss) on senior notes		2,059		-		-
- Reclassification of gain associated with Senior Notes to Consolidated Statement of Operations, net		(709)		-		-
- Reclassification of losses on previously designated cash flow hedges to Consolidated Statement of Operations, net		15,261		-		-
- Reclassification of realized losses associated with capitalized interest to Consolidated Statement of Operations, net		371		331		327
- Actuarial gains/(losses)		(416)		2,087		(900)
Other comprehensive income/(loss)	$	16,566	$	2,418	$	(573)
Comprehensive loss	$	(230,212)	$	(221,178)	$	(48,085)

Statements of Cash Flows

	For the year ended December 31,
		2012	2013		2014
Net Cash Used in Operating activities	$	(86,475)	$	(85,042)	$	(68,370)
Cash Flows from Investing Activities
Investments in subsidiaries		(107,463)		8,515		(32,250)
Dividends received		-		-		44,631
Restricted cash		408		52,033		(3,811)
Net Cash (Used in) / Provided by Investing activities		(107,055)		60,548		8,570
Cash Flows from Financing Activities
Due to subsidiaries		131,516		(67,735)		23,465
Payments of convertible notes		(72,804)		(97,164)		(700,000)
Net proceeds from common stock issuance		-		23,438		421,911
Net proceeds from sale of shares in subsidiary		180,485		122,960		-
Proceeds from long-term loans and notes		-		-		320,000
Payment of financing cost		(439)		(2,543)		(5,538)	1
Net Cash Provided by / (Used in) Financing Activities		238,758		(21,044)		59,838
Net (decrease) / increase in cash and cash equivalents		45,228		(45,538)		38
Cash and cash equivalents at beginning of year		391		45,619		81
Cash and cash equivalents at end of year	$	45,619	$	81	$	119

Principal payment

Year ending December 31,		Amount
2015	$	494,406
Total principal payments		494,406
Less-Financing fees		(6,961)
Total debt	$	487,445

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Advances for Vessels and Drillships under Construction and Acquisitions (Tables)

12 Months Ended

Dec. 31, 2014

Advances for Vessels and Rigs under Construction and Acquisitions [Abstract]

Advances For Vessels And Rigs Under Construction And Acquisition

	December 31,
	2013		2014
Balance at beginning of year	$	1,201,807	$	679,008
Advances for drillships under construction and related costs		1,279,281		691,755
Cancellation of vessel acquisitions		-		(15,240)
Vessels' impairment charge		(43,490)		-
Vessels/drillships delivered		(1,758,590)		(731,539)
Balance at end of year	$	679,008	$	623,984

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Equity Incentive Plan - Non vested shares (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Number of non vested shares | Ocean Rig UDW
Number of non vested shares
Balance	239,867	73,500
Granted	656,650	342,400
Forfeited	(78,576)	(15,900)
Vested	(205,143)	(160,133)
Balance	612,798	239,867
Number of non vested shares | Dryships Inc.
Number of non vested shares
Balance	5,666,666	6,005,000	8,510,150
Granted	3,300,000	1,000,000
Vested	(1,733,333)	(1,338,334)	(2,505,150)
Balance	7,233,333	5,666,666	6,005,000
Weighted average grant date fair value per non vested shares | Ocean Rig UDW
Weighted average grant date fair value per non vested shares
Balance	17.15	16.40
Granted	13.76	17.19
Forfeited	16.93	16.90
Vested	17.31	16.92
Balance	13.49	17.15
Weighted average grant date fair value per non vested shares | Dryships Inc.
Weighted average grant date fair value per non vested shares
Balance	5.09	5.50	5.60
Granted	1.87	2.01
Vested	4.31	4.63	5.83
Balance	3.81	5.09	5.50

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Financial Instruments and Fair Value Measurements - Recurring Measurements (Table) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Recurring measurements:
Interest rate swaps - asset position	$ 11,086	$ 14,741
Interest rate swaps - liability position	(40,867)	(73,826)
Total	(29,781)	(59,085)
Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)
Recurring measurements:
Interest rate swaps - asset position	0	0
Interest rate swaps - liability position	0	0
Total	0	0
Significant Other Observable Inputs (Level 2)
Recurring measurements:
Interest rate swaps - asset position	11,086	14,741
Interest rate swaps - liability position	(40,867)	(73,826)
Total	(29,781)	(59,085)
Unobservable Inputs (Level 3)
Recurring measurements:
Interest rate swaps - asset position	0	0
Interest rate swaps - liability position	0	0
Total	$ 0	$ 0

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Segment Information (Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenues	$ 2,185,524	$ 1,492,014	$ 1,210,139
Vessel and rigs/drillships operating expenses	844,260	609,765	649,722
Depreciation and amortization	449,792	357,372	335,458
Loss on sale of assets, net	0	0	1,179
Impairment charge	38,148	43,490	0
General and administrative expenses	193,686	184,722	145,935
Gain/(Loss) on interest rate swaps	(15,528)	8,373	(54,073)
Gain/ (loss) on FFA's	0	0	0
Income taxes	(77,823)	(44,591)	(43,957)
Net income/(loss)	58,020	(198,028)	(288,593)
Net income/(loss) attributable to Dryships Inc.	(47,512)	(223,093)	(246,778)
Interest and finance cost	(411,021)	(332,129)	(210,128)
Interest income	12,146	12,498	4,203
Change in fair value of derivatives (gain)/loss	(29,304)	(88,859)	(54,506)
Total assets	10,371,603	10,123,692	8,878,491
Drybulk Segment
Revenues	205,630	191,024	227,141
Vessel and rigs/drillships operating expenses	90,376	78,594	69,640
Depreciation and amortization	99,631	96,624	94,716
Loss on sale of assets, net	0	0	1,046
Contract termination fees and other	0	32,283	0
Impairment charge	38,148	43,490	0
General and administrative expenses	48,441	44,819	52,576
Gain/(Loss) on interest rate swaps	(1,142)	(1,226)	(13,229)
Gain/ (loss) on FFA's	0	(31,362)	(13,934)
Income taxes	0	0	0
Net income/(loss)	(206,303)	(265,399)	(115,423)
Net income/(loss) attributable to Dryships Inc.	(206,303)	(265,399)	(115,423)
Interest and finance cost	(102,806)	(102,656)	(95,545)
Interest income	1,074	2,900	3,645
Change in fair value of derivatives (gain)/loss	(21,069)	(42,125)	(41,801)
Total assets	1,741,235	1,777,176	2,020,180
Drilling Segment
Revenues	1,817,077	1,180,250	941,903
Vessel and rigs/drillships operating expenses	727,832	504,957	563,583
Depreciation and amortization	325,744	236,689	225,650
Loss on sale of assets, net	0	0	133
Contract termination fees and other	0	0	0
Impairment charge	0	0	0
General and administrative expenses	131,745	126,868	83,647
Gain/(Loss) on interest rate swaps	(12,671)	8,616	(36,974)
Gain/ (loss) on FFA's	0	0	0
Income taxes	(77,823)	(44,591)	(43,957)
Net income/(loss)	259,654	64,287	(129,396)
Net income/(loss) attributable to Dryships Inc.	154,122	39,222	(87,581)
Interest and finance cost	(298,839)	(218,384)	(112,316)
Interest income	12,227	9,595	553
Change in fair value of derivatives (gain)/loss	(15,909)	(44,383)	(16,063)
Total assets	8,095,212	7,674,674	6,278,860
Tanker Segment
Revenues	162,817	120,740	41,095
Vessel and rigs/drillships operating expenses	26,052	26,214	16,499
Depreciation and amortization	24,417	24,059	15,092
Loss on sale of assets, net	0	0	0
Contract termination fees and other	0	1,010	41,339
Impairment charge	0	0	0
General and administrative expenses	13,500	13,035	9,712
Gain/(Loss) on interest rate swaps	(1,715)	983	(3,870)
Gain/ (loss) on FFA's	0	31,362	13,934
Income taxes	0	0	0
Net income/(loss)	4,669	3,084	(43,774)
Net income/(loss) attributable to Dryships Inc.	4,669	3,084	(43,774)
Interest and finance cost	(10,540)	(11,089)	(2,267)
Interest income	9	3	5
Change in fair value of derivatives (gain)/loss	7,674	(2,351)	3,358
Total assets	652,375	671,842	579,451
TOTAL
Revenues	2,185,524	1,492,014	1,210,139
Vessel and rigs/drillships operating expenses	844,260	609,765	649,722
Depreciation and amortization	449,792	357,372	335,458
Loss on sale of assets, net	0	0	1,179
Contract termination fees and other	0	33,293	41,339
Impairment charge	38,148	43,490	0
General and administrative expenses	193,686	184,722	145,935
Gain/(Loss) on interest rate swaps	(15,528)	8,373	(54,073)
Gain/ (loss) on FFA's	0	0	0
Income taxes	(77,823)	(44,591)	(43,957)
Net income/(loss)	58,020	(198,028)	(288,593)
Net income/(loss) attributable to Dryships Inc.	(47,512)	(223,093)	(246,778)
Interest and finance cost	(412,185)	(332,129)	(210,128)
Interest income	13,310	12,498	4,203
Change in fair value of derivatives (gain)/loss	(29,304)	(88,859)	(54,506)
Total assets	$ 10,488,822	$ 10,123,692	$ 8,878,491

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Other Current Assets (Tables) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Other Current Assets [Abstract]
Inventories	$ 20,304	$ 25,640
Deferred mobilization expenses	66,169	75,804
Prepayments and advances	28,071	14,425
Insurance claims (Note 13)	7,201	2,012
Other	3,719	15,994
Balance at end of year/period	$ 125,464	$ 133,875

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Common Stock and Additional Paid-in Capital - Net Loss Attributable to Dryships Inc. and Transfers from the Non-controlling Interest (Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Net Loss Attributable To Dryships Inc. And Transfers To Non-controlling Interest [Abstract]
Net loss attributable to DryShips	$ (47,512)	$ (223,093)	$ (246,778)
Transfers to the non-controlling interest:
Decrease in Dryships Inc. equity for reduction in subsidiary ownership	(4,758)	(45,542)	(81,760)
Net transfers to the non-controlling interest	(4,758)	(45,542)	(81,760)
Net loss attributable to Dryships Inc. and transfers to/from the non-controlling interest	$ (52,270)	$ (268,635)	$ (328,538)

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Commitments and contingencies - Additional information (Details)	12 Months Ended
	Dec. 31, 2014
Legal Matters [Abstract]
Legal matters of OCR under arbitraion proceedings	Ocean Rig Norway Operations Inc. ("OCR"), a subsidiary of Ocean Rig, was notified by a letter dated November 13, 2013, that arbitration proceedings were commenced against it by Westcon Yard AS of Norway ("Westcon"), in connection to an alleged outstanding unpaid amount of Norwegian Krone Seventy Seven Million Three Hundred Eighty Three Thousand Eight Hundred and Three and Fifty Eight Шre (NOK 77,383,803.58), $10.4 million (based on based on the NOK/U.S. Dollar exchange rate as of December 31, 2014) plus interest and costs related to upgrades performed in the drilling unit Leiv Eiriksson in late 2012 and early 2013. The counterparties reached an agreement during the year ended December 31, 2014.
Charter agreement description of options	Under seven of the Company’s charter agreements, the charterer has the option to (i) acquire the vessels at fair market value as determined by two independent brokers, at the date that the options are exercised, less $5,000 per vessel or, (ii) to require a cash payout of $5,000 per charter agreement in which case the charter agreement will automatically be terminated on the date of completion of the current voyage. These options are exercisable beginning late March 2015 and throughout the term of the charter agreements which expire through 2020. The option will be amortized over the term of the charter agreements or when exercised, if earlier.

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Equity Incentive Plan - Additional Information (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended			0 Months Ended	1 Months Ended	8 Months Ended		12 Months Ended	2 Months Ended	1 Months Ended	2 Months Ended	3 Months Ended	9 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Jan. 12, 2011	Jan. 25, 2010	Aug. 20, 2013	Aug. 19, 2014	Dec. 30, 2014	Mar. 05, 2010	Feb. 04, 2011	Mar. 05, 2008	Mar. 12, 2009	Oct. 02, 2008	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2011	Dec. 31, 2010	Aug. 20, 2015	Aug. 20, 2014	May 28, 2008	Mar. 01, 2011	Mar. 01, 2010
Common stock par value	$ 0.01	$ 0.01
Number of vested shares
Vested number of shares		15,000
Dryships Inc.
Unrecognized compensation cost related to non-vested share arrangements granted	$ 12,589	$ 13,947	$ 19,725
Weighted average period of recognition for unrecognised compensation cost		4 years
Allocated Share-based Compensation Expense	7,516	7,790	12,686
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value	$ 2,561	$ 5,394	$ 4,008
Equity Incentive Plan 2008
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized					21,834,055						1,834,055
Compensation Committee approval on 12 January 2011
Shares Granted				9,000,000
Vested number of shares on grant date				1,000,000
Vested in period	1,000,000	1,000,000	1,000,000											1,000,000	1,000,000	1,000,000	1,000,000	1,000,000
Vested number of shares	5,000,000
Grant date fair value weighted average per share				$ 5.5
Vesting period				8 years
Compensation Committee approval on 25 January 2010 | Fabiana
Vested number of shares on grant date					1,000,000
Vested in period			1,500,000															1,000,000	1,000,000
Vesting period					3 years
Grant date fair value			$ 6.05
Compensation Committee approval on 25 January 2010 | Fabiana | Number of non vested shares
Shares Granted					4,500,000
Compensation Committee approval on 20 August 2013
Common stock par value						$ 0.01
Compensation Committee approval on 20 August 2013 | Fabiana
Vested in period																				333,333	333,333
Vested number of shares						666,667
Grant date fair value weighted average per share						$ 2.01
Vesting period						2 years
Shares issued by the company for the sign on bonus						1,000,000
Compensation Committee approval on 20 August 2013 | Fabiana | Number of vested shares
Vested number of shares on grant date						333,334
Compensation Committee Approval On 19 August 2014 | Fabiana
Shares Granted							1,200,000
Vested in period	400,000															400,000	400,000
Grant date fair value weighted average per share							$ 3.26
Vesting period							3 years
Common stock par value							$ 0.01
Compensation Committee Approval On 30 December 2014 | Fabiana
Shares Granted								2,100,000
Vested in period															700,000	700,000	700,000
Grant date fair value weighted average per share								$ 1.07
Vesting period								3 years
Common stock par value								$ 0.01
Grant Date 1
Vested in period									1,000									1,000	1,000
Grant date fair value weighted average per share									$ 5.66
Grant Date 1 | Number of vested shares
Shares Granted									1,000
Grant Date 2
Shares Granted										15,000
Vested number of shares	15,000
Grant date fair value weighted average per share										$ 5.01
Vesting period										3 years
Grant Date 2 | Number of non vested shares
Shares Granted									2,000
Shares Granted to Fabiana
Shares Granted											1,000,000
Vested in period																						125,000
Grant date fair value											$ 75.09
Shares Granted to non executive directors
Shares Granted												70,621
Vested in period																							28,248	42,373
Vesting period													3 years
Grant date fair value												$ 3.54	$ 33.59
Shares Granted to non executive directors | Number of vested shares
Shares Granted													9,000
Shares Granted to non executive directors | Number of non vested shares
Shares Granted													9,000

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Accumulated other comprehensive loss (Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Total	$ (6,622)	$ (6,062)
Attributable to Dryships Inc.
Cash flows hedges realized loss	(8,570)	(8,915)
Actuarial pension gain	1,948	2,853
Total	(6,622)	(6,062)
Attributable to non controlling interest
Cash flows hedges realized loss	(5,878)	(6,083)
Actuarial pension gain	1,336	1,949
Total	(4,542)	(4,134)
Total
Cash flows hedges realized loss	(14,448)	(14,998)
Actuarial pension gain	3,284	4,802
Total	$ (11,164)	$ (10,196)

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Common Stock and Additional Paid-in Capital - Issuance of common shares (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended			10 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Oct. 29, 2014	Oct. 04, 2013
Net proceeds from common stock issuance	$ 421,911	$ 23,438	$ 0
Common stock shares issued	706,064,321	432,654,477
Par value of common shares	$ 0.01	$ 0.01
Repurchase indebtedness under 5.0% Convertible Senior Notes
Net proceeds from common stock issuance				332,852
At-the-market offering
Sale Of Subsidiarys Common Stock	22,209,844	6,892,233
Common stock shares issued				250,000,000
Proceeds From Sale Of Subsidiarys Common Stock	90,016	23,655
Par value of common shares				$ 0.01
At-the-market offering | Acquired by Mr. George Economou
Net proceeds from common stock issuance				80,000
Common stock shares issued				57,142,000
Price per common share				$ 1.4
Universal Shelf Registration Statement
Value of Common Share For Sale Under Universal Shelf Registration Payment					$ 200,000

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Financial Instruments and Fair Value Measurements - Consolidated Balance Sheets (Table) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Derivatives not designated as hedging instruments
Interest rate swaps, assets	$ 11,086	$ 14,741
Interest rate swaps, liabilities	40,867	73,826
Total derivatives assets	11,086	14,741
Total derivatives liabilities	40,867	73,826
Financial instruments - current assets
Derivatives not designated as hedging instruments
Interest rate swaps, assets	0	0
Financial instruments - non current assets
Derivatives not designated as hedging instruments
Interest rate swaps, assets	11,086	14,741
Financial instruments - current liabilities
Derivatives not designated as hedging instruments
Interest rate swaps, liabilities	30,447	47,740
Financial instruments - non current liabilities
Derivatives not designated as hedging instruments
Interest rate swaps, liabilities	$ 10,420	$ 26,086

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Earnigns per share

12 Months Ended

Dec. 31, 2014

Earnings per share [Abstract]

Earnings per share

17. Earnings per share:
The Company calculates basic and diluted earnings per share as follows:
	For the years ended December 31,
	2012			2013			2014
	Income (numerator)	Weighted-average number of outstanding shares (denominator)	Amount per share	Income (numerator)	Weighted-average number of outstanding share (denominator)	Amount per share	Income (numerator)	Weighted-average number of outstanding shares (denominator)	Amount per share
Net income/(loss) attributable to DryShips Inc.	$ (246,778)	$ -	$ -	$ (223,093)	$ -	$ -	$ (47,512)	$ -	$ -
-Less: Non vested common stock dividends declared and undistributed earnings	-	-	-	(56)	-	-	(697)	-	-
Basic EPS
Income/ (loss) available to common stockholders	$ (246,778)	380,159,088	$ (0.65)	$ (223,149)	384,063,306	$ (0.58)	$ (48,209)	456,031,628	$ (0.11)
Dilutive effect of securities
Diluted EPS
Income/ (loss) available to common stockholders	$ (246,778)	380,159,088	$ (0.65)	$ (223,149)	384,063,306	$ (0.58)	$ (48,209)	456,031,628	$ (0.11)

Non-vested share-based payment awards that contain rights to receive non forfeitable dividends or dividend equivalents (whether paid or unpaid) and participate equally in undistributed earnings are participating securities and, thus, are included in the two-class method of computing earnings per share. Non-vested, participating restricted common stock does not have a contractual obligation to share in the losses and was therefore, excluded from the basic loss per share calculation for the years ended December 31, 2012, 2013 and 2014, due to the losses in 2012, 2013 and 2014, respectively.

The warrants were not included in the computation of diluted earnings per share because the effect is anti-dilutive for the years ended December 31, 2012, 2013 and 2014, since they are out-of-the-money.

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Transactions with Related Parties - Balance Sheet (Table) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Due to related party	$ (12,717)	$ (611)
Due from related party	38,221	39,023
Advances for vessels and drillships under construction, for the year	623,984	679,008
Accounts payable and other current liabilities	97,608	102,528
Other current assets	125,464	133,875
Other non-current assets	107,892	118,426
Drilling rigs, drillships, machinery and equipment, net, for the year	6,259,747	5,828,231
Cardiff Marine Inc.
Due to related party	0	(3)
Tri-Ocean Heidmar
Due to related party	0	(43)
Cardiff Tankers
Due to related party	(266)	(181)
Sigma and Blue Fin pool
Due to related party	0	(336)
Trade Accounts Receivable - Accrued Receivables	0	386
Fabiana Services S.A.
Due to related party	(1,000)	0
Vivid Finance Limited
Due to related party	(164)	(48)
Cardiff Drilling
Due to related party	(4,287)	0
Azara Services S.A.
Due to related party	(4,000)	0
Basset Holding Inc.
Due to related party	(3,000)	0
TMS Bulkers
Due from related party	28,318	29,059
TMS Tankers
Due from related party	9,903	9,964
Cardiff Drilling/TMS Bulkers/TMS Tankers
Advances for vessels and drillships under construction, for the year	1,546	4,778
TMS Bulkers/ TMS Tankers
Vessels, net, for the year	530	6,815
Cardiff/Cardiff Drilling
Drilling rigs, drillships, machinery and equipment, net, for the year	$ 2,885	$ 5,692

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Interest and Finance Costs (Tables)

12 Months Ended

Dec. 31, 2014

Interest And Finance Costs [Abstract]

Interest And Finance Costs

	Year ended December 31,
	2012		2013		2014
Interest incurred on long-term debt	$	205,070	$	251,596	$	317,445
Amortization and write-off of financing fees		17,565		46,006		50,551
Amortization of convertible notes discount		38,855		43,769		45,261
Amortization of share lending agreement-note issuance costs		2,983		2,974		2,733
Commissions, commitment fees and other financial expenses		4,622		57,498		34,256
Capitalized interest		(58,967)		(69,714)		(39,225)
Total	$	210,128	$	332,129	$	411,021

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Financial Instruments and Fair Value Measurements - Additional information (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2010
Number of interest rate swaps agreements	24	27	43
Notional amount of derivative asset	$ 2,400,000	$ 2,900,000	$ 4,600,000
Gain/(Loss) on interest rate swaps	(15,528)	8,373	(54,073)
Number of foreign currency forward contracts held	0	0	0
Long lived assets held and used - carrying amount	48,648
Two loan agreements	5,636,323	5,728,049
Security deposits, non current	550	550
Security deposits, current			8,000
Restricted cash, current	92,694	94,170
Cash flow hedge unrealized
(Unrealized)/ realized losses on cash flow hedges accumulated in other comprehensive income / loss				(35,992)
Gain/(Loss) on interest rate swaps	29,304	88,859	54,506
Cash flow hedge realized
Losses on cash flow hedges transferred from other comprehensive loss to statement of operations	550	550
(Unrealized)/ realized losses on cash flow hedges accumulated in other comprehensive income / loss				(16,463)
Convertible Senior Notes
Debt Instrument, Fair Value Disclosure		700,000
Debt Instrument Carrying Amount Net Of Financing Fees		649,966
Ocean Rig UDW
Debt Instrument, Fair Value Disclosure	380,000	531,250
Debt Instrument Carrying Amount Net Of Financing Fees	492,214	493,915
Drill Rigs Notes
Debt Instrument, Fair Value Disclosure	666,000	863,504
Debt Instrument Carrying Amount Net Of Financing Fees	788,224	784,485
Tankers Saga and Vilamoura
Security deposits, non current		550
FFAs
Losses on cash flow hedges transferred from other comprehensive loss to statement of operations	(550)	(550)	(23,453)
Number of forward freight agreements held		0	0
Loans
Debt Instrument, Fair Value Disclosure		1,951,790
Debt Instrument Carrying Amount Net Of Financing Fees		1,839,170
Due to hedging termination
Cash Flow Hedge Gain Loss Reclassified To Consolidated Statement Operations			22,904
Due to early loan repayment
Cash Flow Hedge Gain Loss Reclassified To Consolidated Statement Operations			13,088
$1.3 Billion Term Loan B Facility - Drilling Segment
Debt Instrument Carrying Amount Net Of Financing Fees	1,266,341
$1.9 Billion Term Loan B Facility - Drilling Segment
Debt Instrument Carrying Amount Net Of Financing Fees	1,825,671
Ocean Rig Mylos and Ocean Rig Skyros
Restricted cash, current		$ 6,000

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Income Taxes - Additional Information (Details)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Tax Average Examination Period	3 to 6 years
Angola
Withholding Tax As A Percentage Of Current Tax Expense	64.00%
Angola, Tanzania, Sierra, Leone, Liberia, and Gabon
Withholding Tax As A Percentage Of Current Tax Expense		72.00%
Marshall Islands
Percentage Of Marshall Islands And Malta Subsidiaries Stock Treated As Owned By Individuals Resident In Marshall Islands		100.00%
Tax rate	0.00%	0.00%	0.00%
Angola, Equatorial Guinea, Ivory Coast, and Ghana
Withholding Tax As A Percentage Of Current Tax Expense			81.00%

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Financial Instruments and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

Financial Instruments and Fair Value Measurements [Abstract]

Fair Values of Derivative Instruments in the Statement of Financial Position

		Asset Derivatives					Liability Derivatives
Derivatives not designated as hedging instruments	Balance Sheet Location	December 31,		December 31,		Balance Sheet Location	December 31,		December 31,
			2013	2014			2013		2014
			Fair value	Fair value			Fair value		Fair value
Interest rate swaps	Financial instruments - current assets	$	-	$	-	Financial instruments-current liabilities	$	47,740	$	30,447
Interest rate swaps	Financial instruments-non-current assets		14,741		11,086	Financial instruments - non-current liabilities		26,086		10,420
Total derivatives not designated as hedging instruments		$	14,741	$	11,086		$	73,826	$	40,867
Total derivatives		$	14,741	$	11,086	Total derivatives	$	73,826	$	40,867

Effect of derivative instruments on the Consolidated Statements of Operations

		Amount of Gain/(Loss)
Derivatives not designated as hedging instruments	Location of Gain or (Loss) Recognized	Year Ended December 31, 2012		Year Ended December 31, 2013		Year Ended December 31, 2014
Interest rate swaps	Gain/(Loss) on interest rate swaps	$	(54,073)	$	8,373	$	(15,528)
Total		$	(54,073)	$	8,373	$	(15,528)

Fair Value, assets measured on recurring and nonrecurring basis

	December 31, 2013		Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Recurring measurements:
Interest rate swaps – asset position	$	14,741	$	-	$	14,741	$	-
Interest rate swaps - liability position	$	(73,826)	$	-	$	(73,826)	$	-
Total	$	(59,085)	$	-	$	(59,085)	$	-
	December 31, 2014		Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Recurring measurements:
Interest rate swaps – asset position	$	11,086	$	-	$	11,086	$	-
Interest rate swaps - liability position	$	(40,867)	$	-	$	(40,867)	$	-
Total	$	(29,781)	$	-	$	(29,781)	$	-
		Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Impairment loss
Non-Recurring measurements:
Long lived assets held and used	$	-	$	71,000	$	-	$	(43,490)
Total	$	-	$	71,000	$	-	$	(43,490)
		Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Impairment Loss
Non-Recurring measurements:
Long lived assets held and used	$	-	$	10,500	$	-	$	(38,148)
Total	$	-	$	10,500	$	-	$	(38,148)

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Transactions with Related Parties - TMS Bulkers Ltd - TMS Tankers Ltd (Details)	12 Months Ended	16 Months Ended		36 Months Ended		16 Months Ended		36 Months Ended
	Dec. 31, 2014	Dec. 31, 2011 TMS Bulkers USD ($)	Dec. 31, 2011 TMS Bulkers EUR (€)	Dec. 31, 2014 TMS Bulkers USD ($)	Dec. 31, 2014 TMS Bulkers EUR (€)	Dec. 31, 2011 TMS Tankers USD ($)	Dec. 31, 2011 TMS Tankers EUR (€)	Dec. 31, 2014 TMS Tankers USD ($)	Dec. 31, 2014 TMS Tankers EUR (€)
Management fixed fee per vessel per day		$ 1,823	€ 1,500	$ 1,878	€ 1,545	$ 2,066	€ 1,700	$ 2,128	€ 1,751
Annual management fee adjustment maximum				5.00%	5.00%	5.00%	5.00%
Annual management fee adjustment minimum				3.00%	3.00%	3.00%	3.00%
Annual management fee adjustment applied				3.00%	3.00%			3.00%	3.00%
Construction supervisory fee				10.00%	10.00%			10.00%	10.00%
Commissions on charter hire agreements								1.25%	1.25%
Commission on purchase or sale price of vessels and rigs								1.00%	1.00%
Extra Superintendents Fee				$ 608	€ 500
Management fee extra period	3 months
Termination payment minimum period of fees	36 months
Termination payment maximum period of fees	48 months

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Long-Term Debt - Issuance of Senior Notes (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended			17 Months Ended	4 Months Ended	11 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Jan. 31, 2013	Apr. 30, 2010	Nov. 30, 2014	Nov. 30, 2009	Sep. 19, 2011	Sep. 18, 2011
Treasury Stock, Shares, Acquired				21,000,000
Unamortized discount	$ 118,710	$ 160,046
Interest and finance cost	411,021	332,129	210,128
Amortization of convertible notes discount	45,261	43,769	38,855
Carrying amount of liability	5,517,613	5,568,003
Repayment of convertible debt	700,000	0	0
Issuance of Convertible Unsecured Senior Notes in April 2010
Debt Instrument, Face Amount					240,000
Proceeds from Issuance of Unsecured Debt					237,202
Convertible Debt					168,483
Debt Instrument, Convertible, Carrying Amount of Equity Component					71,517
Debt Instrument, Convertible, Effective Interest Rate					14.00%
Issuance of Convertible Unsecured Senior Notes in November 2009
Debt Instrument, Face Amount							460,000
Proceeds from Issuance of Unsecured Debt							447,810
Convertible Debt							341,156
Debt Instrument, Convertible, Carrying Amount of Equity Component							118,844
Debt Instrument, Convertible, Effective Interest Rate							12.00%
Repurchase and cancelation of convertible debt						191,090
Repayment of convertible debt						508,910
Own Share Lending Agreement
Treasury Stock, Shares, Acquired	36,100,000	21,000,000
Number of common shares loaned		15,100,000
Nominal lending fee per share		$ 0.01
Outstanding loaned shares, fair value	0	70,970
Debt Instrument Interest Rate Without Share Lending Agreement					5.50%
Share lending agreement, fair value					14,476
Amortization of issuance costs associated with the share lending agreement	2,733	2,974	2,983
Unamortized balance of own share lending agreement issuance costs	0	2,733
Senior notes conversion price								$ 6.9	$ 7.19
Expenses Related To Convertible Unsecured Senior Notes
Unamortized discount	0	45,261
Senior notes interest rate		5.00%
Interest and finance cost	76,680	78,769	73,855
Amortization of convertible notes discount	45,261	43,769	38,855
Carrying amount of liability	0	654,738
Interest on long-term debt	31,419	35,000	35,000
Issuance of Convertible Unsecured Senior Notes in April 2010 - Initial Issuance
Debt Instrument, Face Amount					220,000
Issuance of Convertible Unsecured Senior Notes in November 2009 - Initial Issuance
Debt Instrument, Face Amount							400,000
Issuance of Convertible Unsecured Senior Notes in April 2010 - Exercise of over allotment option
Debt Instrument, Face Amount					20,000
Issuance of Convertible Unsecured Senior Notes in November 2009 - Exercise of over allotment option
Debt Instrument, Face Amount							$ 60,000

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Vessels, Drilling Rigs, Drillships, Machinery and Equipment - Drilling Rigs, Drillships, Machinery and Equipment (Tables) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Balance,at end of period	$ 6,259,747	$ 5,828,231
Cost | Drilling rigs, drillships, machinery and equipment
Balance,at beginning of period	6,637,843	5,021,508
Additions	755,330	1,616,335
Depreciation	0	0
Balance,at end of period	7,393,173	6,637,843
Accumulated Depreciation | Drilling rigs, drillships, machinery and equipment
Balance,at beginning of period	(809,612)	(574,778)
Additions	0	0
Depreciation	(323,814)	(234,834)
Balance,at end of period	(1,133,426)	(809,612)
Net Book Value | Drilling rigs, drillships, machinery and equipment
Balance,at beginning of period	5,828,231	4,446,730
Additions	755,330	1,616,335
Depreciation	(323,814)	(234,834)
Balance,at end of period	$ 6,259,747	$ 5,828,231

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Basis of presentation and general information (Table) (Details)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Customer A - Drilling segment
Major customer revenue percentage	12.00%	0.00%	0.00%
Customer B - Drilling segment
Major customer revenue percentage	15.00%	26.00%	38.00%
Customer C - Drilling segment
Major customer revenue percentage	0.00%	0.00%	14.00%
Customer D - Drilling segment
Major customer revenue percentage	12.00%	0.00%	0.00%
Customer E - Drilling segment
Major customer revenue percentage	10.00%	11.00%	0.00%
Customer F - Drilling segment
Major customer revenue percentage	25.00%	14.00%	0.00%

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Basis of Presentation and General Information

12 Months Ended

Dec. 31, 2014

Basis of Presentation and General Information

Basis of Presentation and General Information

1. Basis of Presentation and General Information:

The accompanying consolidated financial statements include the accounts of DryShips Inc., its subsidiaries and consolidated Variable Interest Entities ("VIEs") (collectively, the "Company" or "DryShips"). DryShipswas formed on September 9, 2004, under the laws of the Republic of the Marshall Islands. The Company is a provider of international seaborne drycargo and oil transportation services and deepwater drilling rig services.

Customers individually accounting for more than 10% of the Company's voyage revenues and drilling revenues during the years ended December 31, 2012, 2013 and 2014, were as follows:

	Year ended December 31,
	2012	2013	2014
Customer A - Drilling segment	-	-	12%
Customer B - Drilling segment	38%	26%	15%
Customer C - Drilling segment	14%	-	-
Customer D - Drilling segment	-	-	12%
Customer E - Drilling segment	-	11%	10%
Customer F - Drilling segment	-	14%	25%

The loss of any of these significant customers could have a material adverse effect on the Company's results of operations if they were not replaced by other customers.

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Vessels, Drilling Rigs, Drillships, Machinery and Equipment - Additional information (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Gain/(Loss) on sale of assets	$ 0	$ 0	$ (1,179)
Vessel impairment charge	38,148	43,490	0
Gain/ (Loss) on contract cancellation	(1,307)	0	0
Revenues	2,185,524	1,492,014	1,210,139
Vessels Avoca, Padre and Positano
Vessel impairment charge				(32,584)
Sale price			118,000
Vessels Avoca And Padre
Gain/(Loss) on sale of assets			(1,511)
Positano
Gain/(Loss) on sale of assets			492
Date of disposal / acquisition of vessel			May 04, 2012
Avoca
Date of disposal / acquisition of vessel			Feb. 22, 2012
Padre
Date of disposal / acquisition of vessel			Feb. 24, 2012
Raiatea
Price per Vessel/ Drillship	$ 53,000
Date of disposal / acquisition of vessel	Apr. 24, 2014

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Segment Information (Tables)

12 Months Ended

Dec. 31, 2014

Segment Information

Reporting Information by Segment

	Drybulk Segment			Drilling Segment			Tanker Segment			TOTAL
	2012	2013	2014	2012	2013	2014	2012	2013	2014	2012	2013	2014
Revenues	$ 227,141	$ 191,024	$ 205,630	$ 941,903	$ 1,180,250	$ 1,817,077	$ 41,095	$ 120,740	$ 162,817	$ 1,210,139	$ 1,492,014	$ 2,185,524
Vessels and rigs/ drillships operating expenses	69,640	78,594	90,376	563,583	504,957	727,832	16,499	26,214	26,052	649,722	609,765	844,260
Depreciation and amortization	94,716	96,624	99,631	225,650	236,689	325,744	15,092	24,059	24,417	335,458	357,372	449,792
Loss on sale of assets	1,046	-	-	133	-	-	-	-	-	1,179	-	-
Contract termination fees and other	-	32,283	-	-	-	-	41,339	1,010	-	41,339	33,293	-
Impairment charge	-	43,490	38,148	-	-	-	-	-	-	-	43,490	38,148
General and administrative expenses	52,576	44,819	48,441	83,647	126,868	131,745	9,712	13,035	13,500	145,935	184,722	193,686
Gain/(loss) on interest rate swaps	(13,229)	(1,226)	(1,142)	(36,974)	8,616	(12,671)	(3,870)	983	(1,715)	(54,073)	8,373	(15,528)
Gain/(loss) on FFA's	(13,934)	(31,362)	-	-	-	-	13,934	31,362	-	-	-	-
Income taxes	-	-	-	(43,957)	(44,591)	(77,823)	-	-	-	(43,957)	(44,591)	(77,823)
Net income/(loss)	(115,423)	(265,399)	(206,303)	(129,396)	64,287	259,654	(43,774)	3,084	4,669	(288,593)	(198,028)	58,020
Net income/(loss) attributable to Dryships Inc.	(115,423)	(265,399)	(206,303)	(87,581)	39,222	154,122	(43,774)	3,084	4,669	(246,778)	(223,093)	(47,512)
Interest and finance cost	(95,545)	(102,656)	(102,806)	(112,316)	(218,384)	(298,839)	(2,267)	(11,089)	(10,540)	(210,128)	(332,129)	(412,185)
Interest income	3,645	2,900	1,074	553	9,595	12,227	5	3	9	4,203	12,498	13,310
Change in fair value of derivatives (gain)/loss	(41,801)	(42,125)	(21,069)	(16,063)	(44,383)	(15,909)	3,358	(2,351)	7,674	(54,506)	(88,859)	(29,304)
Total assets	$ 2,020,180	$ 1,777,176	$ 1,741,235	$ 6,278,860	$ 7,674,674	$ 8,095,212	$ 579,451	$ 671,842	$ 652,735	$ 8,878,491	$ 10,123,692	$ 10,488,822

Segment Information Reconciliation

Interest and finance costs
Interest for reportable segments	412,185
Elimination of intersegment interest	(1,164)
Total consolidated interest and finance cost	411,021
Interest income
Interest for reportable segments	13,310
Elimination of intersegment interest	(1,164)
Total consolidated Interest income	12,146
Total Assets
Total Assets for reportable segment	10,488,822
Elimination of intersegment receivables	(117,219)
Total consolidated Assets	10,371,603

Revenue per country

	For the years ended December 31,
Country	2012		2013		2014
Ghana	$	175,595	$	-	$	-
Norway		-		157,740		220,044
Brazil		233,569		353,397		581,635
Greenland		136		-		-
Ivory Coast		-		86,486		97,232
Tanzania		196,415		72,083		-
Angola		79,884		227,603		807,742
Namibia		33,212		-		-
Falkland		166,795		-		-
Equatorial Guinea		56,297		-		-
Gabon/ West Africa		-		81,104		110,424
Liberia		-		55,601		-
Ireland		-		104,014		-
Sierra Leone		-		37,272		-
Other		-		4,950		-
Total leasing and service revenues	$	941,903	$	1,180,250	$	1,817,077

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Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2014

Significant Accounting Policies [Abstract]

Principles of Consolidation

a)Principles of consolidation: The accompanying consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("US GAAP") and applicable rules and regulations of the U.S. Securities and Exchange Committee (the "SEC") and include the accounts and operating results of DryShips, its wholly-owned subsidiaries and its VIEs. As of December 31, 2014, the Company consolidated 100% one VIE for which it is deemed to be the primary beneficiary, i.e. it has a controlling financial interest in this entity. The VIE's totalassets and liabilities, as of December 31, 2013, were $35,782 and $56,556, respectively, total liabilities exceeding totalassets by $20,774. The VIE's total assets and liabilities, as of December 31, 2014, were $64,314 and $65,358 respectively, with total liabilities exceeding total assets by $1,044. A VIE is an entity that in general does not have equity investors with voting rights or that has equity that do not provide sufficient financial resources for the entity to support its activities. A controlling financial interest in a VIE is present when a company has the power to direct the activities of a VIE that most significantly impact the entity's economic performance and absorbs a majority of an entity's expected losses, receives a majority of an entity's expected residual returns, or both.

All intercompany balances and transactions have been eliminated on consolidation.

Business Combinations

(b) Business combinations: The Company uses the acquisition method of accounting under the authoritative guidance on business combinations, which requires an acquirer in a business combination to recognize the assets acquired, the liabilities assumed and any non-controlling interest in the acquiree at their fair values at the acquisition date. The costs of the acquisition and any related restructuring costs are to be recognized separately in the Consolidated Statements of Operations. The acquired company's operating results are included in the Company's consolidated financial statements starting on the date of acquisition.

The purchase price is equivalent to the fair value of the consideration transferred and liabilities incurred, including liabilities related to contingent consideration. Tangible and identifiable intangible assets acquired and liabilities assumed as of the date of acquisition are recorded at the acquisition date fair value. Goodwill is recognized for the excess of the purchase price over the net fair value of assets acquired and liabilities assumed. When the fair value of net assets acquired exceeds the fair value of consideration transferred plus any non-controlling interest in the acquiree, the excess is recognized as a gain.

Use of Estimates

(c) Use of estimates: The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Comprehensive income/(loss)

(d) Comprehensive income/(loss): The Company's comprehensive income/(loss) is comprised of net income/(loss), actuarial gains/losses related to the adoption and implementation of ASC 715, "Compensation-Retirement Benefits", as well as losses in the fair value of the derivatives that qualify for hedge accounting in accordance with ASC 815 "Derivatives and Hedging" and realized gains/losses on cash flow hedges associated with capitalized interest in accordance with ASC 815-30-35-38 "Derivatives and Hedging".

During 2013, the Company adopted the requirements of Accounting Standard Update ("ASU") 2013-02, "Comprehensive Income (Topic 220) - Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income". The objective of this Update is to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments do not change the current requirements for reporting net income or other comprehensive income in the financial statements. However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under US GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under US GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under US GAAP that provide additional detail about those amounts.

Cash and Cash Equivalents

(e) Cash and cash equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents.

Restricted Cash

(f) Restricted cash: Restricted cash may include: (i) cash collateral required under the Company's financing and swap arrangements, (ii) retention accounts which can only be used to fund the loan installments coming due, (iii) minimum liquidity collateral requirements or minimum required cash deposits, as defined in the Company's loan agreements, (iv) taxes withheld from employees and deposited in designated bank accounts and, (v) amounts pledged as collateral for bank guarantees to suppliers.

Trade Accounts Receivable net

(g) Trade accounts receivable net: The amount shown as trade accounts receivable, at each balance sheet date, includes receivables from customers, net of allowance for doubtful receivables. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate allowance for doubtful receivables.

Short-term investments

(h) Short-term investments: Short-term investments generally represent investments in time deposits, which have maturities in excess of three months but less than twelve months. These investments are accounted for at cost.

Concentration of Credit Risk

(i)Concentration of credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents; trade accounts receivable and derivative contracts (interest rate swaps, foreign currency contracts and forward freight agreements). The maximum exposure to loss due to credit risk is the book value at the balance sheet date. The Company places its cash and cash equivalents, consisting mostly of bank deposits, with qualified financial institutions.

The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company is exposed to credit risk in the event of non-performance by counter parties to derivative instruments; however, the Company limits its exposure by diversifying among counter parties. The Company's major customers are oil companies, which reduces its credit risk. When considered necessary, additional arrangements are put in place to minimize credit risk, such as letters of credit or other forms of payment guarantees. The Company limits its credit risk with trade accounts receivable by performing ongoing credit evaluations of its customers' financial condition and generally does not require collateral for its trade accounts receivable. The Company has made advances for the construction of vessels and drillships to the yards. The ownership of the vessels and drillships is transferred from the yard to the Company at delivery. The credit risk of the advances is, to a large extent, reduced through refund guarantees issued by financial institutions.

As of December 31, 2014, cumulative installment payments made to the yards amounted to approximately $515,856for thedrillships under construction.These installment payments are, to a large extent, secured with irrevocable letters of guarantee, issued by financial institutions, or "refund guarantees".

Advances for vessels and drillships under construction

(j) Advances for vessels and drillships under construction: This represents amounts expended by the Company in accordance with the terms of the construction contracts for vessels and drillships as well as other expenses incurred directly or under a management agreement with a related party in connection with on site supervision. In addition, interest costs incurred during the construction (until the asset is substantially complete and ready for its intended use) are capitalized. The carrying value of vessels and drillships under construction ("Newbuildings") represents the accumulated costs at the balance sheet date. Cost components include payments for yard installments and variation orders, commissions to related party, construction supervision, equipment, spare parts and capitalized interest.

Capitalized interest

k) Capitalized interest: Interest expense is capitalized during the construction period of drilling rigs, drillships and vessels based on accumulated expenditures for the applicable project at the Company's current rate of borrowing. The amount of interest expense capitalized in an accounting period is determined by applying an interest rate ("the capitalization rate") to the average amount of accumulated expenditures for the asset during the period. The capitalization rates used in an accounting period are based on the rates applicable to borrowings outstanding during the period. The Company does not capitalize amounts in excess of actual interest expense incurred in the period. If the Company's financing plans associate a specific new borrowing with a qualifying asset, the Company uses the rate on that borrowing as the capitalization rate to be applied to that portion of the average accumulated expenditures for the asset that does not exceed the amount of that borrowing. If average accumulated expenditures for the asset exceed the amounts of specific new borrowings associated with the asset, the capitalization rate applied to such excess is a weighted average of the rates applicable to other borrowings of the Company. Capitalized interest expense for the years ended December 31, 2012, 2013 and 2014, amounted to $58,967, $69,714 and $39,225, respectively (Note 15).

Insurance Claims

(l) Insurance claims: The Company records insurance claim recoveries for insured losses incurred on damages to fixed assets, loss of hire and for insured crew medical expenses under "Other current assets". Insurance claims are recorded, net of any deductible amounts, at the time the Company's fixed assets suffer insured damages, loss due to the vessel/ drilling unit being wholly or partially deprived of income as a consequence of damage to the unit or when crew medical expenses are incurred, recovery is probable under the related insurance policies and the Company can make an estimate of the amount to be reimbursed following the insurance claim.

Inventories

(m) Inventories: Inventories consist of consumable bunkers (if any), lubricants and victualing stores, which are stated at the lower of cost or market value and are recorded under "Other current assets". Cost is determined by the first in, first out method.

Foreign Currency Translation

(n) Foreign currency translation: The functional currency of the Company is the U.S. Dollar since the Company operates in international shipping and drilling markets and, therefore, primarily transacts business in U.S. Dollars. The Company's accounting records are maintained in U.S. Dollars. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated into U.S. Dollars at the year-end exchange rates. Resulting gains or losses are included in "Other, net" in the accompanying consolidated statements of operations.

Fixed Assets, Net

(o) Fixed assets, net:

(i) Drybulk and tanker carrier vessels are stated at cost, which consists of the contract price and any material expenses incurred upon acquisition (initial repairs, improvements, delivery expenses and other expenditures to prepare the vessel for its initial voyage). Subsequent expenditures for major improvements are also capitalized when they appreciably extend the useful life, increase the earning capacity or improve the efficiency or safety of the vessels. The cost of each of the Company's vessels is depreciated beginning when the vessel is ready for its intended use, on a straight-line basis over the vessel's remaining economic useful life, after considering the estimated residual value. Vessel's residual value is equal to the product of its lightweight tonnage and estimated scrap rate per ton. In general, management estimates the useful life of the Company's vessels to be 25 years from the date of initial delivery from the shipyard. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the date such regulations are adopted.

(ii) Drilling rigs and drillships are stated at cost less accumulated depreciation. Such costs include the cost of adding or replacing parts of drilling rig or drillship machinery and equipment when the cost is incurred, if the recognition criteria are met. The recognition criteria require that the cost incurred extends the useful life of a drilling rig or drillship. The carrying amounts of those parts that are replaced are written off and the cost of the new parts is capitalized. Depreciation is calculated on a straight-line basis over the useful life of the assets after considering the estimated residual value as follows: bare deck 30 years and other asset parts 5 to 15 years. The residual values of the drilling rigs and drillships are estimated at $35,000 and $50,000, respectively, for the years ended December 31, 2012, 2013 and 2014.

Long lived assets held for sale

(p) Long lived assets held for sale: The Company classifies long lived assets and disposal groups as being held for sale in accordance with ASC 360, "Property, Plant and Equipment", when: (i) management has committed to a plan to sell the long lived assets; (ii) the long lived assets are available for immediate sale in their present condition; (iii) an active program to locate a buyer and other actions required to complete the plan to sell the long lived assets have been initiated; (iv) the sale of the long lived assets is probable and transfer of the asset is expected to qualify for recognition as a completed sale within one year; and (v) the long lived assets are being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Long lived assets classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These long lived assets are not depreciated once they meet the criteria to be classified as held for sale.

When the Company concludes a Memorandum of Agreement for the disposal of a vessel/drilling unit which has yet to complete a time charter or drilling contract, it is considered that the held for sale criteria discussed in guidance are not met until the time charter or drilling contract has been completed as the vessel/drilling unit is not available for immediate sale. As a result, such vessels/drilling units are not classified as held for sale.

When the Company concludes a Memorandum of Agreement for the disposal of a vessel/drilling unit which has no time charter or drilling contract to complete or a contract that is transferable to a buyer, it is considered that the held for sale criteria discussed in the guidance are met. As a result such vessels/drilling unit are classified as held for sale. Furthermore, in the period a long-lived asset meets the held for sale criteria, a loss is recognized for any reduction of the long-lived asset's carrying amount to its fair value less cost to sell. No such adjustments were identified for the years ended December 31, 2012, 2013 or 2014.

Impairment of Long-Lived Assets

(q) Impairment of long-lived assets: The Company reviews for impairment long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In this respect, the Company reviews its assets for impairment on an asset by asset basis. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, the Company evaluates the asset for impairment loss. The impairment loss is determined by the difference between the carrying amount of the asset and the fair value of the asset. The Company evaluates the carrying amounts of its vessels, drilling rigs and drillships by obtaining vessel, drilling rigs and drillships appraisals to determine if events have occurred that would require modification to their carrying values or useful lives. In evaluating useful lives and carrying values of long-lived assets, the Company reviews certain indicators of potential impairment, such as undiscounted projected operating cash flows, vessel, drilling rigs and drillships sales and purchases, business plans and overall market conditions. In developing estimates of future undiscounted cash flows, the Company makes assumptions and estimates about the vessels', drilling rigs and drillships, future performance, with the significant assumptions being related to charter and drilling rates, fleet utilization, operating expenses, capital expenditures, residual value and the estimated remaining useful life of each vessel, drilling rig and drillship. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends as well as future expectations. To the extent impairment indicators are present, the Company determines undiscounted projected net operating cash flows for each vessel, drilling rig and drillship and compares them to their carrying value. The projected net operating cash flows are determined by considering the charter revenues and drilling revenues from existing time charters and drilling contracts for the fixed fleet days and an estimated daily time charter equivalent for the unfixed days. The Company estimates the daily time charter equivalent for the unfixed days based on the most recent ten year historical average for similar vessels and utilizing available market data for time charter and spot market rates and forward freight agreements over the remaining estimated life of the vessel, drilling rig and drillship, net of brokerage commissions, expected outflows for vessels', drilling rigs' and drillships' maintenance and operating expenses (including planned drydocking and special survey expenditures), assuming an average annual inflation rate of 2% and fleet utilization of 98%. The salvage value used in the impairment test is estimated to be $250 per light weight ton (LWT) for vessels, while $35,000 and $50,000 for drilling rigs and drillships, respectively in accordance with the Company's vessels', drilling rigs', drillships' depreciation policy. If the Company's estimate of undiscounted future cash flows for any vessel, drilling rig and drillship is lower than its respective carrying value, the carrying value is written down, by recording a charge to operations, to its' respective fair market value if the fair market value is lower than the vessel's, drilling rig or drillship's carrying value.

The Company's analysis for the year ended December 31, 2014, which also involved sensitivity tests on the time charter rates, drilling rates and fleet utilization (being the most sensitive inputs to variances), allowing for variances ranging from 97.5% to 92.5% depending on vessel type on time charter rates, indicated a potential impairment loss forone of its vessels, andno impairment on any of its drilling rigs and drillships. Although the Company believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective. There can be no assurance as to how long charter rates and vessel values will remain at their currently low levels or whether they will improve by any significant degree. Charter rates may remain at depressed levels for some time which could adversely affect the Company's revenue and profitability, and future assessments of vessel impairment. While for the drilling segment there can be no assurance as to how long drilling rates and drilling rigs/drillships values will remain at their currently high levels or whether they will improve or the opposite by any significant degree. As a result of the impairment review, the Company determined that the carrying amounts of its assets were recoverable and, therefore, concluded that no impairment loss was necessary for 2012 and 2013. However, due to Company's decision to sell certain vessels during the years and/or subsequent to the balance sheet dates and based on the agreed-upon sales price, an impairment charge relating to assets held for use of $0 and $43,490 for each of the years ended December 31, 2012 and 2013, respectively, was recognized. As a result of the impairment review for the year ended December 31, 2014, the Company determined that the carrying amount of one of its drybulk vesselswasnot recoverable and, therefore, an impairment loss of $38,148 was recognized(Notes 7 and 10).

Dry-docking Costs

(r) Dry-docking costs: The Company follows the direct expense method of accounting for dry-docking costs whereby costs are expensed in the period incurred for the vessels, drilling rigs and drillships.

Class costs

(s) Class costs: The Company follows the direct expense method of accounting for periodic class costs incurred during special surveys of drilling rigs and drillships, normally every five years. Class costs and other maintenance costs are expensed in the period incurred and included in "Vessels, drilling rigs and drillships operating expenses".

Deferred Financing Costs

(t) Deferred financing costs: Deferred financing costs include fees, commissions and legal expenses associated with the Company's long- term debt. These costs are amortized over the life of the related debt using the effective interest method and are included in interest expense. Unamortized fees relating to loans repaid or refinanced as debt extinguishments are expensed as interest and finance costs in the period the repayment or extinguishment is made. Arrangement fees paid to lenders for loans which the Company has not drawn down are capitalized and included in other current and non-current assets. Amortization and write offs for each of the years ended December 31, 2012, 2013 and 2014, amounted to $17,565, $46,006 and $50,551 respectively (Note 15).

Convertible Senior Notes

(u) Convertible senior notes: In accordance with ASC Topic 470-20, "Debt with Conversion and Other Options," for convertible debt instruments that contain cash settlement options upon conversion at the option of the issuer, the Company determines the carrying amounts of the liability and equity components of its convertible notes by first determining the carrying amount of the liability component of the convertible notes by measuring the fair value of a similar liability that does not have an associated equity component. The carrying amount of the equity component representing the embedded conversion option is then determined by deducting the fair value of the liability component from the total proceeds. The resulting debt discount is amortized to interest cost using the effective interest method over the period the debt is expected to be outstanding as an additional non-cash interest expense. Transaction costs associated with the instrument are allocated pro-rata between the debt and equity components (Note 9).

Revenue and Related Expenses

(v) Revenue and related expenses:

(i)Drybulk carrier and tanker vessels:

Time and bareboat charters: The Company generates its revenues from charterers for the charter hire of its vessels, which are considered to be operating lease arrangements. Vessels are chartered using time and bareboat charters and where a contract exists, the price is fixed, service is provided and collection of the related revenue is reasonably assured, revenue is recognized as it is earned ratably on a straight-line basis over the duration of the period of each time charter as adjusted for the off-hire days that the vessel spends undergoing repairs, maintenance and upgrade work depending on the condition and specification of the vessel.

Voyage charters:Voyage charter is a charter where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified freight rate per ton. If a charter agreement exists and collection of the related revenue is reasonably assured, revenue is recognized as it is earned ratably during the duration of the period of each voyage. When a voyage charter agreement is in place, a voyage is deemed to commence upon the completion of discharge of the vessel's previous cargo and is deemed to end upon the completion of discharge of the current cargo. Demurrage income represents payments by a charterer to a vessel owner when loading or discharging time exceeds the stipulated time in the voyage charter and is recognized ratably as earned during the related voyage charter's duration period.

Pooling arrangements: For vessels operating in pooling arrangements, the Company earns a portion of the total revenues generated by the pool, net of expenses incurred by the pool. The amount allocated to each pool participant vessel, including the Company's vessels, is determined in accordance with an agreed-upon formula, which is determined by points awarded to each vessel in the pool based on the vessel's age, design and other performance characteristics. Revenue under pooling arrangements is accounted for on the accrual basis and is recognized when an agreement with the pool exists, price is fixed, service is provided and the collectability is reasonably assured.

The allocation of such net revenue may be subject to future adjustments by the pool however, historically, such changes have not been material.

Voyage related and vessel operating costs: Under a time charter, specified voyage costs, such as fuel and port charges are paid by the charterer and other non-specified voyage expenses, such as commissions, are paid by the Company. Vessel operating costs including crew, maintenance and insurance are paid by the Company. Under voyage charter arrangements, voyage expenses, primarily consisting of commissions, port, canal and bunker expenses that are unique to a particular charter, are paid for by the Company, except for commissions, which are either paid for by the Company or are deducted from the freight revenue. All voyage and vessel operating expenses are expensed as incurred, except for commissions. Commissions are deferred and amortized over the related voyage charter period to the extent revenue has been deferred since commissions are earned as the Company's revenues are earned. Under a bareboat charter, the charterer assumes responsibility for all voyage and vessel operating expenses and risk of operation.

Deferred voyage revenue: Deferred voyage revenue primarily relates to cash advances received from charterers. These amounts are recognized as revenue over the voyage or charter period.

(ii)Drilling rigs and drillships:

Revenues: The Company's services and deliverables are generally sold based upon contracts with its customers that include fixed or determinable prices. The Company recognizes revenue when delivery occurs, as directed by its customer, and collectability is reasonably assured. The Company evaluates if there are multiple deliverables within its contracts and whether the agreement conveys the right to use the drilling rigs and drillships for a stated period of time and meets the criteria for lease accounting, in addition to providing a drilling services element, which is generally compensated for by day rates. In connection with drilling contracts, the Company may also receive revenues for preparation and mobilization of equipment and personnel or for capital improvements to the drilling rigs or drillships and day rate or fixed price mobilization and demobilization fees. Revenues are recorded net of agents' commissions. There are two types of drilling contracts: well contracts and term contracts.

(a) Well contracts: Well contracts are contracts under which the assignment is to drill a certain number of wells. Revenue from day-rate based compensation for drilling operations is recognized in the period during which the services are rendered at the rates established in the contracts. All mobilization revenues, direct incremental expenses of mobilization and contributions from customers for capital improvements are initially deferred and recognized as revenues and expenses, as applicable, over the estimated duration of the drilling period. To the extent that mobilization expenses exceed revenue to be recognized, they are expensed as incurred. Demobilization revenues and expenses are recognized over the demobilization period. All revenues for well contracts are recognized as "Service revenues" in the consolidated statement of operations.

(b) Term contracts: Term contracts are contracts under which the assignment is to operate the unit for a specified period of time. For these types of contracts the Company determines whether the arrangement is a multiple element arrangement containing both a lease element and drilling services element. For revenues derived from contracts that contain a lease, the lease elements are recognized as "Leasing revenues" in the consolidated statement of operations on a basis approximating straight line over the lease period. The drilling services element is recognized as "Service revenues" in the period in which the services are rendered at estimated fair value. Revenues related to the drilling element of mobilization and direct incremental expenses of drilling services are deferred and recognized over the estimated duration of the drilling period. To the extent that expenses exceed revenue to be recognized, they are expensed as incurred. Demobilization fees and expenses are recognized over the demobilization period. Contributions from customers for capital improvements are initially deferred and recognized as revenues over the estimated duration of the drilling contract.

Earnings/(loss) per Common Share

(w) Earnings/(loss) per common share: Basic earnings/(loss) per common share are computed by dividing net income/(loss) available to common stockholders by the weighted average number of common shares outstanding during the year. Diluted earnings per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised. Dilution is computed by the treasury stock method whereby all of the Company's dilutive securities are assumed to be exercised and the proceeds used to repurchase common shares at the weighted average market price of the Company's common stock during the relevant periods. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) are included in the denominator of the diluted earnings per share computation.

Segment Reporting

(x) Segment reporting: The Company determined that it operates under three reportable segments, as a provider of drybulk commodities transportation services for the steel, electric utility, construction and agri-food industries (drybulk segment), as a provider of ultra deep water drilling services (drilling segment) and as a provider of transportation services of crude and refined petroleum cargoes (tanker segment). The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company's consolidated financial statements.

Financial Instruments

(y) Financial instruments: The Company designates its derivatives based upon guidance on ASC 815, "Derivatives and Hedging" which establishes accounting and reporting requirements for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. The guidance on accounting for certain derivative instruments and certain hedging activities requires all derivative instruments to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings unless specific hedge accounting criteria are met.

(i)Hedge accounting: At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy undertaken for the hedge. The documentation includes identification of the hedging instrument, hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's effectiveness in offsetting exposure to changes in the hedged item's cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in cash flows and are assessed on an ongoing basis to determine whether they actually have been highly effective throughout the financial reporting periods for which they were designated.

The Company is party to interest swap agreements where it receives a floating interest rate and pays a fixed interest rate for a certain period. Contracts which meet the strict criteria for hedge accounting are accounted for as cash flow hedges. A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognized asset or liability, or a highly probable forecasted transaction that could affect profit or loss.

The effective portion of the gain or loss on the hedging instrument is recognized directly as a component of "Accumulated other comprehensive income/(loss)" in equity, while any ineffective portion, if any, is recognized immediately in current period earnings.

The Company discontinues cash flow hedge accounting if the hedging instrument expires and it no longer meets the criteria for hedge accounting or designation is revoked by the Company. At that time, any cumulative gain or loss on the hedging instrument recognized in equity is kept in equity until the forecasted transaction occurs. When the forecasted transaction occurs, any cumulative gain or loss on the hedging instrument is recognized in the consolidated statement of operations. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in equity is transferred to net profit or loss for the year as financial income or expense.

(ii)Other derivatives: Changes in the fair value of derivative instruments that have not been designated as hedging instruments are reported in current period earnings.

Fair Value Measurements

(z) Fair value measurements: The Company follows the provisions of ASC 820, "Fair Value Measurements and Disclosures" which defines, and provides guidance as to the measurement of, fair value. ASC 820 creates a hierarchy of measurement and indicates that, when possible, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets and the lowest priority (Level 3) to unobservable data, for example, the reporting entity's own data. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy (Note10).

Stock-based compensation

(aa) Stock-based compensation: Stock-based compensation represents vested and non-vested common stock granted to employees and directors, for their services. The Company calculates total compensation expense for the award based on its fair value on the grant date and amortizes the total compensation on an accelerated basis over the vesting period of the award or service period (Note 12).

Income Taxes

(ab) Income taxes: Income taxes have been provided for based upon the tax laws and rates in effect in the countries in which the Company's operations are conducted and income is earned. There is no expected relationship between the provision for/or benefit from income taxes and income or loss before income taxes because the countries in which the Company operates have taxation regimes that vary not only with respect to the nominal rate, but also in terms of the availability of deductions, credits and other benefits. Variations also arise because income earned and taxed in any particular country or countries may fluctuate from year to year. Deferred tax assets and liabilities are recognized for the anticipated future tax effects of temporary differences between the financial statement basis and the tax basis of the Company's assets and liabilities using the applicable jurisdictional tax in effect at the year end. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. The Company accrues interest and penalties related to its liabilities for unrecognized tax benefits as a component of income tax expense.

Commitments and Contingencies

(ac) Commitments and contingencies: Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate of the amount of the obligation can be made. Provisions are reviewed at each balance sheet date.

Recent accounting pronouncements

(ad) Recent accounting pronouncements:

Revenue from Contracts with Customers: The Financial Accounting Standards Board ("FASB") and the International Accounting Standards Board ("IASB") (collectively, the "Boards") jointly issued a standard in May 2014 that will supersede virtually all of the existing revenue recognition guidance in U.S. GAAP and International Financial Reporting Standards ("IFRS") and is effective for annual periods beginning on or after January 1, 2017. The standard establishes a five-step model that will apply to revenue earned from a contract with a customer (with limited exceptions), regardless of the type of revenue transaction or the industry. The standard's requirements will also apply to the recognition and measurement of gains and losses on the sale of some non-financial assets that are not an output of the entity's ordinary activities (e.g., sales of property, plant and equipment or intangibles). Extensive disclosures will be required, including disaggregation of total revenue, information about performance obligations, changes in contract asset and liability account balances between periods, and key judgments and estimates. The guidance in Accounting Standard Update ("ASU") 2014-09 Revenue from Contracts with Customers (Topic 606) supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, this ASU supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. Management is in the process of accessing the impact of the new standard on Company's financial position and performance.

(ae) Recent accounting pronouncements - continued:

Going Concern: In August 2014, the FASB issued ASU No. 2014-15–Presentation of Financial Statements - Going Concern. ASU 2014-15 provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 requires an entity's management to evaluate at each reporting period based on the relevant conditions and events that are known at the date of financial statements are issued, whether there are conditions or events, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued and to disclose the necessary information. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.

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Schedule I - Condensed Financial Information of Dryships Inc. (Parent Company Only)

12 Months Ended

Dec. 31, 2014

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Condensed Financial Information Of Parent Company Only Disclosure

	December 31,
	2013		2014
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	81	$	119
Restricted cash		232		4,043
Due from related parties		21,223		23,223
Other current assets		664		116
Total current assets		22,200		27,501
NON-CURRENT ASSETS:
Investments in subsidiaries*		4,842,130		4,900,142
Total non-current assets		4,842,130		4,900,142
Total assets	$	4,864,330	$	4,927,643
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	820,820	$	487,445
Due to subsidiaries*		1,405,024		1,428,489
Financial instruments		10,289		8,725
Due to related parties		51		2,194
Other current liabilities		6,596		6,175
Total current liabilities		2,242,780		1,933,028
NON-CURRENT LIABILITIES
Financial instruments		8,417		1,794
Total non-current liabilities		8,417		1,794
STOCKHOLDER'S EQUITY:		1-		1-
Preferred stock, $0.01 par value; 500,000,000 shares authorized at December 31, 2013 and 2014; 100,000,000 shares designated as Series A Convertible preferred stock; 0 shares of Series A Convertible Preferred Stock issued and outstanding at December 31, 2013 and 2014, respectively		-		-
Common stock, $0.01 par value; 1,000,000,000 shares authorized at December 31, 2013 and 2014; 432,654,477 and 706,064,321 shares issued and outstanding at December 31, 2013 and 2014, respectively		4,326		7,060
Treasury stock; $0.01 par value; 21,000,000 and 36,100,000 shares at December 31, 2013 and 2014, respectively		(210)		(361)
Additional paid-in capital		2,824,702		3,249,376
Accumulated other comprehensive loss		(6,062)		(6,622)
Accumulated deficit		(209,623)		(256,632)
Total stockholders' equity		2,613,133		2,992,821
Total liabilities and stockholders' equity	$	4,864,330	$	4,927,643
* Eliminated in consolidation

	For the year ended December 31,
		2012	2013		2014
EXPENSES:
General and administrative expenses	$	(29,408)	$	(21,090)	$	(23,893)
Operating loss		(29,408)		(21,090)		(23,893)
OTHER INCOME / (EXPENSES):
Interest and finance costs		(85,692)		(89,124)		(88,753)
Interest income		3,065		226		989
Loss on interest rate swaps		(9,513)		(774)		(739)
Other, net		672		(430)		(220)
Total other (expenses), net		(91,468)		(90,102)		(88,723)
Equity in earnings/(loss) of subsidiaries*		(125,902)		(112,404)		65,104
Net loss	$	(246,778)	$	(223,596)	$	(47,512)
Loss per share, basic		(0.65)		(0.58)		(0.10)
Weighted average number of shares, basic		380,159,088		384,063,306		456,031,628
Loss per share, diluted		(0.65)		(0.58)		(0.10)
Weighted average number of shares, diluted		380,159,088		384,063,306		456,031,628
* Eliminated in consolidation

	For the year ended December 31,
		2012		2013		2014
-Net loss	$	(246,788)	$	(223,596)	$	(47,512)
Other comprehensive income/ (loss):
-Unrealized gain/(loss) on senior notes		2,059		-		-
- Reclassification of gain associated with Senior Notes to Consolidated Statement of Operations, net		(709)		-		-
- Reclassification of losses on previously designated cash flow hedges to Consolidated Statement of Operations, net		15,261		-		-
- Reclassification of realized losses associated with capitalized interest to Consolidated Statement of Operations, net		371		331		327
- Actuarial gains/(losses)		(416)		2,087		(900)
Other comprehensive income/(loss)	$	16,566	$	2,418	$	(573)
Comprehensive loss	$	(230,212)	$	(221,178)	$	(48,085)

	For the year ended December 31,
		2012	2013		2014
Net Cash Used in Operating activities	$	(86,475)	$	(85,042)	$	(68,370)
Cash Flows from Investing Activities
Investments in subsidiaries		(107,463)		8,515		(32,250)
Dividends received		-		-		44,631
Restricted cash		408		52,033		(3,811)
Net Cash (Used in) / Provided by Investing activities		(107,055)		60,548		8,570
Cash Flows from Financing Activities
Due to subsidiaries		131,516		(67,735)		23,465
Payments of convertible notes		(72,804)		(97,164)		(700,000)
Net proceeds from common stock issuance		-		23,438		421,911
Net proceeds from sale of shares in subsidiary		180,485		122,960		-
Proceeds from long-term loans and notes		-		-		320,000
Payment of financing cost		(439)		(2,543)		(5,538)	1
Net Cash Provided by / (Used in) Financing Activities		238,758		(21,044)		59,838
Net (decrease) / increase in cash and cash equivalents		45,228		(45,538)		38
Cash and cash equivalents at beginning of year		391		45,619		81
Cash and cash equivalents at end of year	$	45,619	$	81	$	119

In the condensed financial information of the Parent Company, the Parent Company's investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries.The Parent Company, during the years ended December 31, 2012 and 2013, did not receive cash dividends from its subsidiaries, while during the year ended December 31, 2014 the Company received cash dividend from its subsidiary amounting of $44,631.

There are no legal or regulatory restrictions on the Parent Company's ability to obtain funds from its subsidiaries through dividends, loans or advances sufficient to satisfy the obligations discussed below that are due on or before December 31, 2015.

The Parent Company is the borrower under the credit facilities dated March 31, 2006 and November 14, 2014,amounting to $374,406 at December 31, 2014 and guarantor under the remaining shipping segment's loans outstanding at December 31, 2014.

On November 14, 2014, the Company entered into a facility agreement, as mentioned above, for a secured bridge loan facility in an amount of $200,000. The loan is repayable through a single repayment installment.

On November 18, 2014, the Company entered into a $120,000 unsecured facility with its subsidiary company, Ocean Rig UDW.

In November 2009 and April 2010, the Parent Company issued $400,000 and $220,000, respectively, aggregate principal amount of 5% Convertible unsecured Senior Notes (the "Notes"), which were due December 1, 2014. The full over allotment option granted was exercised and an additional $60,000 and $20,000, respectively, Notes were purchased. Accordingly, $460,000 and $240,000, respectively, in aggregate principal amount of Notes were sold, resulting in aggregate net proceeds of approximately $447,810 and $237,202, respectively, after underwriter commissions.During November 2014, the Company repurchased on the open market and cancelled $191,090 principal amount of its 5% convertible notes. On November 24, 2014, the Company repaid the remaining amount of its 5% convertible notes, amounting to $508,910.

The principal payments required to be made after December 31, 2014, for the loans discussed above are as follows:

Year ending December 31,		Amount
2015	$	494,406
Total principal payments		494,406
Less-Financing fees		(6,961)
Total debt	$	487,445

As of December 31, 2014, the Company was in breach of certain financial covenants, contained in its bank loan agreement. As a result of this non-compliance and in accordance with guidance related to the classification of obligations that are callable by the creditor, the Company has classified its bank loan amounting to $374,406 as current at December 31, 2014.

See Note 3 "Going concern" and Note 9 "Long-term Debt" to the consolidated financial statements for further information.

The condensed financial information of the Parent Company should be read in conjunction with the Company's consolidated financial statements.

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Schedule I - Condensed Financial Information of Dryships Inc. - Balance Sheets Parentheticals (Table) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Preferred stock par value	$ 0.01	$ 0.01
Preferred stock shares authorized	500,000,000	500,000,000
Common Stock Par Or Stated Value Per Share	$ 0.01	$ 0.01
Common stock shares authorized	1,000,000,000	1,000,000,000
Common stock shares issued	706,064,321	432,654,477
Common stock shares outstanding	706,064,321	432,654,477
Treasury Stock Par Value Per Share	$ 0.01	$ 0.01
Treasury stock, shares	36,100,000	21,000,000
Series A Convertible preferred stock
Preferred stock shares authorized	100,000,000	100,000,000
Issuance of preferred stock, shares	0	0
Preferred stock shares outstanding	0	0
Dryships Inc.
Preferred stock par value	$ 0.01	$ 0.01
Preferred stock shares authorized	500,000,000	500,000,000
Common Stock Par Or Stated Value Per Share	$ 0.01	$ 0.01
Common stock shares authorized	1,000,000,000	1,000,000,000
Common stock shares issued	706,064,321	432,654,477
Common stock shares outstanding	706,064,321	432,654,477
Treasury Stock Par Value Per Share	$ 0.01	$ 0.01
Treasury stock, shares	36,100,000	21,000,000
Dryships Inc. | Series A Convertible preferred stock
Preferred stock shares authorized	100,000,000	100,000,000
Issuance of preferred stock, shares	0	0
Preferred stock shares outstanding	0	0

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Transactions with Related Parties - Steel Wheel Investments Limited (Details) (Steel Wheel Investments)	12 Months Ended
	Dec. 31, 2014
Steel Wheel Investments
Ownership in Ocean Rig	1,570,226

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Earnings per share (Tables)

12 Months Ended

Dec. 31, 2014

Earnings per share [Abstract]

Earnings Per Share

	For the years ended December 31,
	2012			2013			2014
	Income (numerator)	Weighted-average number of outstanding shares (denominator)	Amount per share	Income (numerator)	Weighted-average number of outstanding share (denominator)	Amount per share	Income (numerator)	Weighted-average number of outstanding shares (denominator)	Amount per share
Net income/(loss) attributable to DryShips Inc.	$ (246,778)	$ -	$ -	$ (223,093)	$ -	$ -	$ (47,512)	$ -	$ -
-Less: Non vested common stock dividends declared and undistributed earnings	-	-	-	(56)	-	-	(697)	-	-
Basic EPS
Income/ (loss) available to common stockholders	$ (246,778)	380,159,088	$ (0.65)	$ (223,149)	384,063,306	$ (0.58)	$ (48,209)	456,031,628	$ (0.11)
Dilutive effect of securities
Diluted EPS
Income/ (loss) available to common stockholders	$ (246,778)	380,159,088	$ (0.65)	$ (223,149)	384,063,306	$ (0.58)	$ (48,209)	456,031,628	$ (0.11)

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Basis of Presentation and General Information (Tables)

12 Months Ended

Dec. 31, 2014

Basis of Presentation and General Information

Schedule of revenue by major customer pecentage

	Year ended December 31,
	2012	2013	2014
Customer A - Drilling segment	-	-	12%
Customer B - Drilling segment	38%	26%	15%
Customer C - Drilling segment	14%	-	-
Customer D - Drilling segment	-	-	12%
Customer E - Drilling segment	-	11%	10%
Customer F - Drilling segment	-	14%	25%

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Transactions with Related Parties (Tables)

12 Months Ended

Dec. 31, 2014

Transactions with Related Parties

Schedule of Related Party Transactions

	December 31,
		2013		2014
Balance Sheet
Due to related party - Cardiff Marine Inc.		$	(3)	$	-
Due to related party - Tri-Ocean Heidmar			(43)		-
Due to related party - Cardiff Tankers			(181)		(266)
Due to related party - Sigma and Blue Fin pool			(336)		-
Due to related party - Fabiana Services S.A.			-		(1,000)
Due to related party - Vivid Finance Limited			(48)		(164)
Due to related party - Cardiff Drilling			-		(4,287)
Due to related party - Azara Services S.A.			-		(4,000)
Due to related party - Basset Holding Inc.			-		(3,000)
Due to related party - Total			(611)		(12,717)
Due from related party - TMS Bulkers			29,059		28,318
Due from related party - TMS Tankers			9,964		9,903
Due from related party - Total		$	39,023	$	38,221
Advances for vessels and drillships under construction - Cardiff Drilling/TMS Bulkers/ TMS Tankers, for the year		$	4,778	$	1,546
Vessels, net - TMS Bulkers/ TMS Tankers, for the year			6,815		530
Drilling rigs, drillships, machinery and equipment, net - Cardiff/Cardiff Drilling, for the year			5,692		2,885
Trade Accounts Receivable- Accrued Receivables- Sigma and Blue Fin pools			386		-
	Year ended December 31,
Statement of Operations		2012		2013		2014
Voyage Revenues - Sigma and Blue Fin pool		$	27,306	$	5,306	$	44
Service Revenues, net - Cardiff/Cardiff Drilling			6,193		10,786		16,826
Voyage expenses - TMS Tankers			(507)		(1,483)		(2,002)
Voyage expenses - TMS Bulkers			(3,166)		(2,619)		(2,754)
Voyage expenses – Cardiff Tankers			(166)		(1,423)		(2,002)
Gain on sale of assets – commissions - TMS Bulkers			(1,180)		(710)		-
Contract termination fees and other			(300)		(23,048)		-
General and administrative expenses:
Consultancy fees – Fabiana Services S.A.			(4,397)		(3,593)		(4,595)
Management fees - TMS Tankers			(5,151)		(8,362)		(8,548)
Management fees - TMS Bulkers			(26,518)		(27,803)		(29,176)
Consultancy fees – Vivid Finance Limited			(14,201)		(18,056)		(16,242)
Consultancy fees - Azara Services S.A.			-		(5,000)		(9,000)
Consultancy fees - Basset Holding Inc.			(2,676)		(4,200)		(8,191)
Rent			(41)		-		-
Amortization of DryShips CEO stock based compensation		$	(12,663)	$	(7,780)	$	(7,516)
Amortization of Ocean Rig's CEO stock based compensation			-		(1,358)		(2,316)
(Per day and per quarter information in the note below is expressed in United States Dollars/Euros)

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash Flows from Operating Activities:
Net income/(loss)	$ 58,020	$ (198,028)	$ (288,593)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	449,792	357,372	335,458
Amortization, write off of deferred financing fees	53,063	48,980	20,548
Amortization of convertible senior notes debt discount	45,261	43,769	38,855
Amortization of fair value of acquired time charters and drilling contracts	7,443	10,759	20,527
Amortization of cash flow hedge reserve	0	0	22,904
Vessel impairment charge	38,148	43,490	0
Loss on sale of assets, net	0	0	1,179
Loss on contract cancellation	1,307	0	0
Gain on sale of notes	0	0	(709)
Forfeiture of advances for vessel acquisitions	13,933	0	19,939
Amortization of stock based compensation	11,093	11,424	13,299
Change in fair value of derivatives	(29,304)	(88,859)	(54,506)
Security deposits for derivatives	0	0	24,550
Amortization of free lubricants benefit	0	(12)	(14)
Changes in operating assets and liabilities:
Trade accounts receivable	(82,667)	(147,936)	(33,469)
Due from related parties	12,089	1,663	(14,540)
Other current and non-current assets	38,219	(33,164)	(58,277)
Accounts payable and other current and non-current liabilities	(25,489)	9,705	41,098
Accrued liabilities	(41,436)	55,509	57,277
Due to related parties	819	(4,139)	(2,768)
Deferred revenue	(75,183)	135,447	94,771
Net Cash Provided by Operating Activities	475,108	245,980	237,529
Cash Flows from Investing Activities:
Short term investment	368	(442)	0
Sale of notes	0	0	18,709
Advances for vessel acquisitions and drillships under construction	(296,306)	(235,346)	(276,956)
Vessel acquisitions and improvements	(54,660)	(181,176)	(177,724)
Drilling rigs, drillships equipment and other improvements	(455,595)	(1,051,704)	(97,868)
Proceeds from sale of vessels and contract cancellation	0	0	116,834
Decrease in restricted cash	51,476	234,338	27,058
Net Cash Used in Investing Activities	(754,717)	(1,234,330)	(389,947)
Cash Flows from Financing Activities:
Proceeds from long-term credit facilities, term loans and senior notes	2,617,100	2,982,576	966,103
Principal payments and repayments of long-term debt and senior notes	(2,008,826)	(1,803,366)	(867,932)
Payments of convertible notes	700,000	0	0
Net proceeds from common stock issuance	421,911	23,438	0
Net proceeds from sale in ownerships of subsidiary	0	122,960	180,485
Dividends paid	(30,563)	0	0
Payment of financing costs, net	(48,913)	(84,066)	(35,431)
Net Cash Provided by Financing Activities	250,709	1,241,542	243,225
Net increase/ (decrease) in cash and cash equivalents	(28,900)	253,192	90,807
Cash and cash equivalents at beginning of year	595,142	341,950	251,143
Cash and cash equivalents at end of year	566,242	595,142	341,950
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest, net of amount capitalized	267,554	171,649	118,606
Income taxes	60,374	50,392	45,450
Non cash financing and investing activities:
Issuance of non-vested shares	$ 12	$ 10	$ 0

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Other Current assets (Tables)

12 Months Ended

Dec. 31, 2014

Other Current Assets [Abstract]

Other Current Assets

	December 31,
	2013		2014
Inventories	$	25,640	$	20,304
Deferred mobilization expenses		75,804		66,169
Prepayments and advances		14,425		28,071
Insurance claims (Note 13)		2,012		7,201
Other		15,994		3,719
	$	133,875	$	125,464

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Commitment and contingencies - Purchase Obligations (Table) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2015	Dec. 31, 2014
2015	$ 566,300
Drillship building contracts
2015		566,300
2016		498,200
2017		864,400
Total		1,928,900
Total obligations
2015		566,300
2016		498,200
2017		864,400
Total		$ 1,928,900

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Commitment and contingencies (Tables)

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies [Abstract]

Purchase obligations

Obligations:	Total		2015		2016			2017
Drillship building contracts		1,928,900		566,300		498,200		864,400
Total obligations	$	1,928,900	$	566,300	$	498,200	$	864,400

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Transactions with Related Parties - Fabiana Services S.A. (Details) In Thousands, except Share data, unless otherwise specified			0 Months Ended									1 Months Ended					8 Months Ended			8 Months Ended				12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Jan. 12, 2011 Compensation Committee approval on 12 January 2011 USD ($)	Dec. 31, 2018 Compensation Committee approval on 12 January 2011	Dec. 31, 2017 Compensation Committee approval on 12 January 2011	Dec. 31, 2016 Compensation Committee approval on 12 January 2011	Dec. 31, 2015 Compensation Committee approval on 12 January 2011	Dec. 31, 2014 Compensation Committee approval on 12 January 2011	Dec. 31, 2013 Compensation Committee approval on 12 January 2011	Dec. 31, 2012 Compensation Committee approval on 12 January 2011	Dec. 31, 2011 Compensation Committee approval on 12 January 2011	Jan. 25, 2010 Compensation Committee approval on 25 January 2010 USD ($)	Jan. 25, 2010 Compensation Committee approval on 25 January 2010 EUR (€)	Dec. 31, 2012 Compensation Committee approval on 25 January 2010	Dec. 31, 2011 Compensation Committee approval on 25 January 2010	Dec. 31, 2010 Compensation Committee approval on 25 January 2010	Aug. 20, 2013 Compensation Committee approval on 20 August 2013 USD ($)	Aug. 20, 2015 Compensation Committee approval on 20 August 2013	Aug. 20, 2014 Compensation Committee approval on 20 August 2013	Aug. 19, 2014 Compensation Committee Approval On 19 August 2014 USD ($)	Dec. 31, 2016 Compensation Committee Approval On 19 August 2014	Dec. 31, 2015 Compensation Committee Approval On 19 August 2014	Dec. 31, 2014 Compensation Committee Approval On 19 August 2014	Dec. 30, 2014 Compensation Committee Approval On 30 December 2014 USD ($)	Dec. 31, 2017 Compensation Committee Approval On 30 December 2014	Dec. 31, 2016 Compensation Committee Approval On 30 December 2014	Dec. 31, 2015 Compensation Committee Approval On 30 December 2014
Annual Renumeration			$ 4,000									$ 3,700	€ 2,700
Shares Granted			9,000,000									4,500,000	4,500,000				1,000,000			1,200,000				2,100,000
Vesting period			8 years									3 years	3 years				2 years			3 years				3 years
Vested number of shares on grant date			1,000,000									1,000,000	1,000,000				333,334
Vested in period				1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000			1,500,000	1,000,000	1,000,000		333,333	333,333		400,000	400,000	400,000		700,000	700,000	700,000
Common stock par value	$ 0.01	$ 0.01										$ 0.01					$ 0.01			$ 0.01				$ 0.01
Sign on bonus																								$ 1,000

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Financial Instruments and Fair Value Measurements - Derivatives Not Designated As Hedging Instruments (Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Derivatives not designated as hedging instruments
Gain/(Loss) on interest rate swaps	$ (15,528)	$ 8,373	$ (54,073)
Total	(15,528)	8,373	(54,073)
Loss on interest rate swaps
Derivatives not designated as hedging instruments
Gain/(Loss) on interest rate swaps	$ (15,528)	$ 8,373	$ (54,073)

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
CURRENT ASSETS:
Cash and cash equivalents	$ 566,242	$ 595,142
Restricted cash (Note 2)	92,694	94,170
Trade accounts receivable, net of allowance for doubtful receivables of $2,948 and $2,825 at December 31, 2013 and 2014, respectively	404,656	321,989
Due from related parties (Note 4)	38,221	39,023
Other current assets (Note 5)	125,464	133,875
Total current assets	1,227,277	1,184,199
FIXED ASSETS, NET:
Advances for vessels and drillships under construction and related costs (Note 6)	623,984	679,008
Vessels, net (Note 7)	2,141,617	2,249,087
Drilling rigs, drillships, machinery and equipment, net (Note 7)	6,259,747	5,828,231
Total fixed assets, net	9,025,348	8,756,326
OTHER NON-CURRENT ASSETS:
Financial instruments (Note 10)	11,086	14,741
Restricted cash (Note 2)	0	50,000
Other non-current assets (Note 8)	107,892	118,426
Total other non-current assets	118,978	183,167
Total assets	10,371,603	10,123,692
CURRENT LIABILITIES:
Current portion of long-term debt, net of deferred finance costs (Note 9)	1,165,021	1,660,168
Accounts payable and other current liabilities	97,608	102,528
Accrued liabilities	192,239	232,623
Due to related parties (Note 4)	12,717	611
Deferred revenue	123,728	128,044
Financial instruments (Note 10)	30,447	47,740
Total current liabilities	1,621,760	2,171,714
NON-CURRENT LIABILITIES
Long-term debt, net of current portion and deferred finance costs (Note 9)	4,352,592	3,907,835
Financial instruments (Note 10)	10,420	26,086
Deferred revenue	81,359	152,226
Other non-current liabilities	15,084	34,133
Total non-current liabilities	4,459,455	4,120,280
COMMITMENTS AND CONTINGENCIES (Note 13)
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 500,000,000 shares authorized at December 31, 2013 and 2014; 100,000,000 shares designated as Series A Convertible preferred stock; 0 shares of Series A Convertible Preferred stock issued and outstanding at December 31, 2013 and 2014, respectively (Note 11)	0	0
Common stock, $0.01 par value; 1,000,000,000 shares authorized at December 31, 2013 and 2014; 432,654,477 and 706,064,321 shares issued and outstanding at December 31, 2013 and 2014, respectively (Note 11)	7,060	4,326
Treasury stock; $0.01 par value; 21,000,000 and 36,100,000 shares at December 31, 2013 and 2014, respectively (Note 11)	(361)	(210)
Additional paid-in capital (Note 11)	3,249,376	2,824,702
Accumulated other comprehensive loss (Note 14)	(6,622)	(6,062)
Accumulated deficit	(256,632)	(209,120)
Total DryShips Inc. stockholders' equity	2,992,821	2,613,636
Non-controlling interests	1,297,567	1,218,062
Total equity	4,290,388	3,831,698
Total liabilities and stockholders' equity	$ 10,371,603	$ 10,123,692

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Schedule Of Income Before Income Tax Domestic And Foreign

	Year ended December 31,
	2012		2013		2014
Domestic loss (Republic of the Marshall Islands)	$	(2,536)	$	(66,604)	$	(161,913)
Foreign income/(loss)		(85,843)		174,518		499,539
Total income/(loss) before taxes	$	(88,379)	$	107,914	$	337,626

Schedule Of Components Of Income Tax Expense Benefit

	Year ended December 31,
		2012		2013		2014
Current Tax expense	$	43,957	$	44,591	$	77,823
Income taxes	$	43,957	$	44,591	$	77,823
Effective tax rate		(49.7)%		41.3%		23.1%

Schedule Reconciliation Total Tax Expense

	Year Ended December 31,
Reconciliation of total tax expense:		2012		2013		2014
Change in valuation allowance		$	6,311	$	-	$	-
Differences in tax rates			(3,896)		89		-
Effect of permanent differences			120		-		-
Adjustments in respect to current income tax of previous years			184		683		-
Tax rate on interest			-		742		-
Effect of exchange rate differences			(1,599)		7		-
Income tax			42,837		43,070		70,441
Taxes on litigation matters subject to statutory rates, including interest and penalties			-		-		7,382
Total		$	43,957	$	44,591	$	77,823

Schedule Of Deferred Tax Assets And Liabilities

	Year ended December 31,
	2013		2014
Deferred tax assets
Net operations loss carry forward	$	1,723	$	-
Accelerated depreciation of assets		65		101
Pension		608		1,184
Total deferred tax assets	$	2,396	$	1,285
Less: valuation allowance		(2,396)		(1,285)
Total deferred tax assets, net	$	-	$	-
		1

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Income Taxes - Deferred Tax Assets (Table) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Deferred Tax Assets Net [Abstract]
Net operations loss carry forward	$ 0	$ 1,723
Deferred Tax Assets Tax Deferred Expense [Abstract]
Accelerated depreciation of assets	101	65
Pension	1,184	608
Total deferred tax assets	1,285	2,396
Less: valuation allowance	(1,285)	(2,396)
Total deferred tax assets, net	$ 0	$ 0

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Consolidated Statements of Comprehensive Income Loss (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Consolidated Statements of Comprehensive Income/ (loss)
Net income/(loss)	$ 58,020	$ (198,028)	$ (288,593)
Other comprehensive income/ (loss):
Unrealized gain/(loss) on senior unsecured notes	0	0	2,059
Reclassification of gain associated with senior unsecured notes to Consolidated Statement of Operations, net	0	0	(709)
Reclassification of losses on previously designated cash flow hedges to Consolidated Statement of Operations, net	0	0	22,904
Reclassification of realized losses associated with capitalized interest to Consolidated Statement of Operations, net	550	550	549
Actuarial gains/(losses)	(1,518)	3,335	(637)
Other comprehensive income/(loss)	(968)	3,885	24,166
Comprehensive income/(loss)	57,052	(194,143)	(264,427)
Less: comprehensive (income)/loss attributable to non-controlling interests	(105,137)	(26,532)	34,215
Comprehensive loss attributable to Dryships Inc.	$ (48,085)	$ (220,675)	$ (230,212)

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Income Taxes - Entity's Total Income Tax Expense for the Period and Statutory Tax Rate (Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Taxes [Abstract]
Current Tax expense	$ 77,823	$ 44,591	$ 43,957
Income taxes	$ 77,823	$ 44,591	$ 43,957
Effective tax rate	23.10%	41.30%	(49.70%)

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Advances for Vessels and Drillships under Construction and Acquisitions (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended			3 Months Ended		8 Months Ended	12 Months Ended	11 Months Ended	3 Months Ended	9 Months Ended	4 Months Ended	6 Months Ended	8 Months Ended	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Mar. 26, 2013	Apr. 12, 2011	Sep. 02, 2014	Dec. 16, 2011	Nov. 22, 2010	Apr. 18, 2011	Sep. 20, 2012	Apr. 27, 2011	Jun. 23, 2011	Aug. 30, 2013	Apr. 08, 2014
Cash consideration received for each newbuilding tanker	$ 0	$ 0	$ 116,834
Forfeiture of advances for vessel acquisitions	13,933	0	19,939
Advances for vessels and drillships under construction, for the year	623,984	679,008
Fees on contract termination	(1,307)	0	0
Contract termination fees	0	33,293	41,339
Vessel impairment charge	38,148	43,490	0
Hull 1241 and Hull 1242
Number of vessels/ drillships ordered	2
Size of Vessels	176,000
Vessel/ Drillship price per vessel				71,000	54,164
Contract termination fees				10,245
Vessel impairment charge				(31,617)
Hull 1241
Delivery Date	May 23, 2013
Hull 1242
Delivery Date	June 17, 2013
Vessels H1259, H1260, H1261 and H1262
Number of vessels/ drillships ordered	4
Size of Vessels	75,900
Vessel/ Drillship price per vessel							34,000
Fees on contract termination						(1,307)
Receipts due to cancellation of contracts						11,560
Very Large Ore Carriers
Number of vessels/ drillships ordered	5
Hull 1239 And Hull 1240
Number of vessels/ drillships ordered	2
Contract termination fees		18,305
Vessel impairment charge		(11,873)
Hull 1239
Delivery Date	Fourth Quarter 2013
Hull 1240
Delivery Date	First Quarter 2014
Twelve newbuilding tankers
Number of vessels/ drillships ordered								12
Vessel/ Drillship acquisition contract price								771,000
Esperona and Blanca tankers
Number of vessels/ drillships ordered			2
Cash consideration received for each newbuilding tanker			10,700
Contract termination fees			41,339
Saga
Delivery Date	January 18, 2011
Vilamoura
Delivery Date	March 23, 2011
Daytona
Delivery Date	April 29, 2011
Belmar
Delivery Date	October 7, 2011
Calida
Delivery Date	January 3, 2012
Lipari
Delivery Date	April 25, 2012
Petalidi
Delivery Date	May 31, 2012
Alicante
Delivery Date	January 8, 2013
Mareta
Delivery Date	January 15, 2013
Bordeira
Delivery Date	January 31, 2013
Ocean Rig
Number Of Options Exercised	4
Total number of options	2								6
Ocean Rig Mylos
Vessel/ Drillship price per vessel									608,000
Delivery Date									August 19, 2013
Ocean Rig Apollo
Vessel/ Drillship price per vessel										683,000
Delivery Date										March 5, 2015
Ocean Rig Skyros
Vessel/ Drillship price per vessel											608,000
Delivery Date											December 20, 2013
Ocean Rig Athena
Vessel/ Drillship price per vessel												608,000
Delivery Date												March 24, 2014
7th Generation Drillship
Vessel/ Drillship price per vessel													644,000
Delivery Date													June 2016
Advances for vessels and drillships under construction, for the year													127,000
7th Generation Drillship
Vessel/ Drillship price per vessel														728,000
Delivery Date														February 2017
Advances for vessels and drillships under construction, for the year														76,600
7th Generation Drillship
Vessel/ Drillship price per vessel														728,000
Delivery Date														June 2017
Advances for vessels and drillships under construction, for the year														$ 76,600

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Schedule I - Condensed Financial Information of Dryships Inc. - Balance Sheets (Table) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
CURRENT ASSETS:
Cash and cash equivalents	$ 566,242	$ 595,142	$ 341,950	$ 251,143
Restricted cash	92,694	94,170
Due from related parties	38,221	39,023
Other current assets	125,464	133,875
Total current assets	1,227,277	1,184,199
NON-CURRENT ASSETS:
Total assets	10,371,603	10,123,692	8,878,491
CURRENT LIABILITIES:
Current portion of long-term debt	1,165,021	1,660,168
Financial instruments	30,447	47,740
Due to related parties	12,717	611
Total current liabilities	1,621,760	2,171,714
NON-CURRENT LIABILITIES
Long-term debt, net of current portion	4,352,592	3,907,835
Financial instruments	10,420	26,086
Total non-current liabilities	4,459,455	4,120,280
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 500,000,000 shares authorized at December 31, 2013 and 2014; 100,000,000 shares designated as Series A Convertible preferred stock; 0 shares of Series A Convertible Preferred Stock issued and outstanding at December 31, 2013 and 2014, respectively	0	0
Common stock, $0.01 par value; 1,000,000,000 shares authorized at December 31, 2013 and 2014; 432,654,477 and 706,064,321 shares issued and outstanding at December 31, 2013 and 2014, respectively	7,060	4,326
Treasury stock; $0.01 par value; 21,000,000 and 36,100,000 shares at December 31, 2013 and 2014, respectively	(361)	(210)
Additional paid-in capital	3,249,376	2,824,702
Accumulated other comprehensive loss	(6,622)	(6,062)
Accumulated deficit	(256,632)	(209,120)
Total stockholders' equity	2,992,821	2,613,636
Total liabilities and stockholders' equity	10,371,603	10,123,692
Dryships Inc.
CURRENT ASSETS:
Cash and cash equivalents	119	81	45,619	391
Restricted cash	4,043	232
Due from related parties	23,223	21,223
Other current assets	116	664
Total current assets	27,501	22,200
NON-CURRENT ASSETS:
Investments in subsidiaries (eliminated in consolidation)	4,900,142	4,842,130
Total non-current assets	4,900,142	4,842,130
Total assets	4,927,643	4,864,330
CURRENT LIABILITIES:
Current portion of long-term debt	487,445	820,820
Due to subsidiaries (eliminated in consolidation)	1,428,489	1,405,024
Financial instruments	8,725	10,289
Due to related parties	2,194	51
Other current liabilities	6,175	6,596
Total current liabilities	1,933,028	2,242,780
NON-CURRENT LIABILITIES
Financial instruments	1,794	8,417
Total non-current liabilities	1,794	8,417
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 500,000,000 shares authorized at December 31, 2013 and 2014; 100,000,000 shares designated as Series A Convertible preferred stock; 0 shares of Series A Convertible Preferred Stock issued and outstanding at December 31, 2013 and 2014, respectively	0
Common stock, $0.01 par value; 1,000,000,000 shares authorized at December 31, 2013 and 2014; 432,654,477 and 706,064,321 shares issued and outstanding at December 31, 2013 and 2014, respectively	7,060	4,326
Treasury stock; $0.01 par value; 21,000,000 and 36,100,000 shares at December 31, 2013 and 2014, respectively	(361)	(210)
Additional paid-in capital	3,249,376	2,824,702
Accumulated other comprehensive loss	(6,622)	(6,062)
Accumulated deficit	(256,632)	(209,623)
Total stockholders' equity	2,992,821	2,613,133
Total liabilities and stockholders' equity	$ 4,927,643	$ 4,864,330

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Other non current assets (Tables)

12 Months Ended

Dec. 31, 2014

Other Non Current Assets [Abstract]

Other Non Current Assets

	December 31,
	2013		2014
Security deposits for derivatives	$	550	$	550
Deferred mobilization expenses		73,806		43,327
Prepaid investments		21,554		57,910
Intangible assets, net		6,175		4,732
Above-market acquired time charter contracts		8,816		1,373
Other		7,525		-
	$	118,426	$	107,892

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Long-Term Debt - Loan Movements (Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Sep. 20, 2012	Mar. 26, 2014	Apr. 27, 2011
December 31, 2013		$ 5,728,049
December 31, 2014	5,636,323	5,728,049
Secured Credit Facility
Loan agreement date	Oct. 02, 2007
Original Amount	35,000
December 31, 2013	17,000
New Loans	0
Repayments	(4,200)
December 31, 2014	12,800
Secured Credit Facility
Loan agreement date	Oct. 05, 2007
Original Amount	90,000
December 31, 2013	57,000
New Loans	0
Repayments	(4,000)
December 31, 2014	53,000
Secured Credit Facility
Loan agreement date	Jun. 20, 2008
Original Amount	103,200
December 31, 2013	24,250
New Loans	0
Repayments	(3,000)
December 31, 2014	21,250
Secured Credit Facility
Loan agreement date	May 13, 2008
Original Amount	125,000
December 31, 2013	21,595
New Loans	0
Repayments	(5,889)
December 31, 2014	15,706
Secured Credit Facility
Loan agreement date	May 05, 2008
Original Amount	90,000
December 31, 2013	36,000
New Loans	0
Repayments	(6,000)
December 31, 2014	30,000
Secured Credit Facility
Loan agreement date	Nov. 16, 2007
Original Amount	47,000
December 31, 2013	16,000
New Loans	0
Repayments	(2,000)
December 31, 2014	14,000
Secured Credit Facility
Loan agreement date	Jul. 23, 2008
Original Amount	126,400
December 31, 2013	53,225
New Loans	0
Repayments	(10,600)
December 31, 2014	42,625
Secured Credit Facility
Loan agreement date	Mar. 13, 2008
Original Amount	130,000
December 31, 2013	30,241
New Loans	0
Repayments	(1,336)
December 31, 2014	28,905
Secured Credit Facility
Loan agreement date	Feb. 07, 2011
Original Amount	70,000
December 31, 2013	57,167
New Loans	0
Repayments	(4,667)
December 31, 2014	52,500
Secured Credit Facility
Loan agreement date	Apr. 20, 2011
Original Amount	32,313
December 31, 2013	26,927
New Loans	0
Repayments	(2,154)
December 31, 2014	24,773
Secured Credit Facility
Loan agreement date	Oct. 26, 2011
Original Amount	141,350
December 31, 2013	123,230
New Loans	0
Repayments	(10,840)
December 31, 2014	112,390
Secured Credit Facility
Loan agreement date	Oct. 24, 2012
Original Amount	107,669
December 31, 2013	96,654
New Loans	0
Repayments	(8,405)
December 31, 2014	88,249
Senior Secured Credit Facility
Loan agreement date	Feb. 28, 2013
Original Amount	1,350,000
December 31, 2013	890,000
New Loans	450,000
Repayments	(1,340,000)
December 31, 2014	0
Term Loan B Facility
Loan agreement date	Jul. 12, 2013
Original Amount	1,900,000
December 31, 2013	1,895,250
New Loans	0
Repayments	(19,000)
December 31, 2014	1,876,250
Term Loan B Facility
Loan agreement date	Jul. 25, 2014
Original Amount	1,300,000
December 31, 2013	0
New Loans	1,300,000
Repayments	(3,250)
December 31, 2014	1,296,750
Secured Credit Facility
Loan agreement date	Mar. 31, 2006
Original Amount	753,637
December 31, 2013	174,406
New Loans	0
Repayments	0
December 31, 2014	174,406
Secured Credit Facility
Loan agreement date	Mar. 19, 2012
Original Amount	87,654
December 31, 2013	16,980
New Loans	0
Repayments	(1,191)
December 31, 2014	15,789
Secured Credit Facility
Loan agreement date	Feb. 14, 2012
Original Amount	122,580
December 31, 2013	115,590
New Loans	0
Repayments	(5,760)
December 31, 2014	109,830
Secured Bridge Credit Facility
Loan agreement date	Nov. 14, 2014
Original Amount	200,000
December 31, 2013	0
New Loans	200,000
Repayments	0
December 31, 2014	200,000
Senior Secured Credit Facility
Loan agreement date	Oct. 29, 2014
Original Amount	167,100
December 31, 2013	0
New Loans	167,100
Repayments	0
December 31, 2014	167,100
Secured Credit Facility
Loan agreement date	Sep. 18, 2007
Original Amount	325,000
December 31, 2013	76,534
New Loans	0
Repayments	(76,534)
December 31, 2014	0
5% Convertible Senior Unsecured Notes
Loan agreement date	Nov. 21, 2009
Original Amount	460,000
December 31, 2013	700,000
New Loans	0
Repayments	(700,000)
December 31, 2014	0
Ocean Rig's Senior Notes | 6.5% Drill Rigs Senior Secured Notes
Loan agreement date	Sep. 20, 2012
Original Amount	800,000		800,000
December 31, 2013	800,000
New Loans	0
Repayments	0
December 31, 2014	800,000
Ocean Rig's Senior Notes | 7.25% Ocean Rig's Senior Unsecured Notes
Loan agreement date	Mar. 26, 2014
Original Amount	500,000			500,000
December 31, 2013	0
New Loans	500,000
Repayments	0
December 31, 2014	500,000
Ocean Rig's Senior Notes | 9.5% Ocean Rig's Senior Unsecured Notes
Loan agreement date	Apr. 14, 2011
Original Amount	500,000				500,000
December 31, 2013	500,000
New Loans	0
Repayments	(500,000)
December 31, 2014	0
Total
December 31, 2013	5,728,049
New Loans	2,617,100
Repayments	(2,708,826)
December 31, 2014	$ 5,636,323

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Accumulated other comprehensive loss

12 Months Ended

Dec. 31, 2014

Accumulated other comprehensive loss [Abstract]

Accumulated other comprehensive loss

14. Accumulated other comprehensive loss:
The amounts in the accompanying balance sheets are analyzed as follows:
Year ended December 31,
	2013			2014
	Attributable to Dryships Inc.	Attributable to non controlling interest	Total	Attributable to Dryships Inc.	Attributable to non controlling interest	Total
Cash flows hedges realized loss	(8,915)	(6,083)	(14,998)	(8,570)	(5,878)	(14,448)
Actuarial pension gain	2,853	1,949	4,802	1,948	1,336	3,284
Total	(6,062)	(4,134)	(10,196)	(6,622)	(4,542)	(11,164)

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Long-term Debt (Tables)

12 Months Ended

Dec. 31, 2014

Long-term Debt [Abstract]

Long-term Debt

		December 31,
		2013		2014
5% Convertible Senior Unsecured Notes	$	700,000	$	-
6.5% Drill Rigs Senior Secured Notes		800,000		800,000
7.25% Ocean Rig Senior Unsecured Notes		-		500,000
9,5% Ocean Rig Senior Unsecured Notes		500,000		-
Secured Credit Facilities – Drybulk Segment		638,820		685,410
Secured Credit Facilities – Tanker Segment		303,979		277,913
Secured Bridge Credit Facility		-		200,000
$1.35 billion Secured Credit Facilities – Drilling Segment		890,000		-
$1.9 billion Term Loan B Facility - Drilling Segment		1,895,250		1,876,250
$1.3 billion Term Loan B Facility - Drilling Segment		-		1,296,750
Less: Deferred financing costs and equity component of notes		(160,046)		(118,710)
Total debt		5,568,003		5,517,613
Less: Current portion		(1,660,168)		(1,165,021)
Long-term portion	$	3,907,835	$	4,352,592

Loan movements for credit facilities and term loans throughout the year

Loan	Loan agreement date		Original Amount		December 31, 2013	New Loans	Repayments		December 31, 2014
Secured Credit Facility	October 2, 2007	$	35,000	$	17,000	-	(4,200)	$	12,800
Secured Credit Facility	October 5, 2007		90,000		57,000	-	(4,000)		53,000
Secured Credit Facility	June 20, 2008		103,200		24,250	-	(3,000)		21,250
Secured Credit Facility	May 13, 2008		125,000		21,595	-	(5,889)		15,706
Secured Credit Facility	May 5, 2008		90,000		36,000	-	(6,000)		30,000
Secured Credit Facility	November 16, 2007		47,000		16,000	-	(2,000)		14,000
Secured Credit Facility	July 23,2008		126,400		53,225	-	(10,600)		42,625
Secured Credit Facility	March 13, 2008		130,000		30,241	-	(1,336)		28,905
Secured Credit Facility	February 7, 2011		70,000		57,167	-	(4,667)		52,500
Secured Credit Facility	April 20, 2011		32,313		26,927	-	(2,154)		24,773
Secured Credit Facility	October 26, 2011		141,350		123,230	-	(10,840)		112,390
Secured Credit Facility	October 24, 2012		107,669		96,654	-	(8,405)		88,249
Senior Secured Credit Facility	February 28, 2013		1,350,000		890,000	450,000	(1,340,000)		-
Term Loan B Facility	July 12, 2013		1,900,000		1,895,250	-	(19,000)		1,876,250
Term Loan B Facility	July 25, 2014		1,300,000		-	1,300,000	(3,250)		1,296,750
Secured Credit Facility	March 31, 2006		753,637		174,406	-	-		174,406
Secured Credit Facility	March 19, 2012		87,654		16,980	-	(1,191)		15,789
Secured Credit Facility	February 14, 2012		122,580		115,590	-	(5,760)		109,830
Secured Bridge Credit Facility	November 14, 2014		200,000		-	200,000	-		200,000
Senior Secured Credit Facility	October 29, 2014		167,100		-	167,100	-		167,100
Secured Credit Facility	September 18, 2007		325,000		76,534	-	(76,534)		-
5% Convertible Senior Unsecured Notes	November 21, 2009		460,000		700,000	-	(700,000)		-
6.5% Drill Rigs Senior Secured Notes	September 20, 2012		800,000		800,000	-	-		800,000
7.25% Ocean Rig's Senior Unsecured Notes	March 26, 2014		500,000		-	500,000	-		500,000
9.5% Ocean Rig's Senior Unsecured Notes	April 14, 2011		500,000		500,000	-	(500,000)		-
				$	5,728,049	2,617,100	(2,708,826)	$	5,636,323

Principal payment

2015	$	1,195,323
2016		32,000
2017		832,000
2018		32,000
2019		532,000
2020 and thereafter		3,013,000
Total principal payments		5,636,323
Less: Financing fees and equity component of notes		(118,710)
Total debt	$	5,517,613

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Subsequent Events - Additional information (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	1 Months Ended	2 Months Ended
	Feb. 13, 2015	Feb. 24, 2015	Mar. 05, 2015
Ocean Rig Apollo
Syndicated secured term loan	$ 475,000
Variable rate basis	LIBOR
Debt instrument payment terms	The facility has a 5 year term, and approximate 12 year repayment profile, and bears interest at LIBOR plus a margin.
Ocean Rig Apollo | Senior secured term loan facility
Line of credit facility amount drawn down			$ 462,000
Ocean Rig
Dividend declared		$ 0.19
Date of dividend payment		Mar. 23, 2015
Date of dividend record		Mar. 10, 2015

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Segment Information

12 Months Ended

Dec. 31, 2014

Segment Information

Segment information

16. Segment information:

The Company has three reportable segments from which it derives its revenues: Drybulk, Tanker and Drilling segments. The reportable segments reflect the internal organization of the Company and are a strategic business that offers different products and services. The Drybulk business segment consists of transportation and handling of Drybulk cargoes through ownership and trading of vessels. The Drilling business segment consists of the deepwater drilling rig services of the drilling rigs and drillships through ownership of drilling rigs and drillships. The Tanker business segment consists of vessels for the transportation of crude and refined petroleum cargoes.

The tables below present information about the Company's reportable segments as of and for the years ended December 31, 2012, 2013 and 2014. The accounting policies followed in the preparation of the reportable segments are the same as those followed in the preparation of the Company's consolidated financial statements.

The Company measures segment performance based on net income. Summarized financial information concerning each of the Company's reportable segments is as follows:

	Drybulk Segment			Drilling Segment			Tanker Segment			TOTAL
	2012	2013	2014	2012	2013	2014	2012	2013	2014	2012	2013	2014
Revenues	$ 227,141	$ 191,024	$ 205,630	$ 941,903	$ 1,180,250	$ 1,817,077	$ 41,095	$ 120,740	$ 162,817	$ 1,210,139	$ 1,492,014	$ 2,185,524
Vessels and rigs/ drillships operating expenses	69,640	78,594	90,376	563,583	504,957	727,832	16,499	26,214	26,052	649,722	609,765	844,260
Depreciation and amortization	94,716	96,624	99,631	225,650	236,689	325,744	15,092	24,059	24,417	335,458	357,372	449,792
Loss on sale of assets	1,046	-	-	133	-	-	-	-	-	1,179	-	-
Contract termination fees and other	-	32,283	-	-	-	-	41,339	1,010	-	41,339	33,293	-
Impairment charge	-	43,490	38,148	-	-	-	-	-	-	-	43,490	38,148
General and administrative expenses	52,576	44,819	48,441	83,647	126,868	131,745	9,712	13,035	13,500	145,935	184,722	193,686
Gain/(loss) on interest rate swaps	(13,229)	(1,226)	(1,142)	(36,974)	8,616	(12,671)	(3,870)	983	(1,715)	(54,073)	8,373	(15,528)
Gain/(loss) on FFA's	(13,934)	(31,362)	-	-	-	-	13,934	31,362	-	-	-	-
Income taxes	-	-	-	(43,957)	(44,591)	(77,823)	-	-	-	(43,957)	(44,591)	(77,823)
Net income/(loss)	(115,423)	(265,399)	(206,303)	(129,396)	64,287	259,654	(43,774)	3,084	4,669	(288,593)	(198,028)	58,020
Net income/(loss) attributable to Dryships Inc.	(115,423)	(265,399)	(206,303)	(87,581)	39,222	154,122	(43,774)	3,084	4,669	(246,778)	(223,093)	(47,512)
Interest and finance cost	(95,545)	(102,656)	(102,806)	(112,316)	(218,384)	(298,839)	(2,267)	(11,089)	(10,540)	(210,128)	(332,129)	(412,185)
Interest income	3,645	2,900	1,074	553	9,595	12,227	5	3	9	4,203	12,498	13,310
Change in fair value of derivatives (gain)/loss	(41,801)	(42,125)	(21,069)	(16,063)	(44,383)	(15,909)	3,358	(2,351)	7,674	(54,506)	(88,859)	(29,304)
Total assets	$ 2,020,180	$ 1,777,176	$ 1,741,235	$ 6,278,860	$ 7,674,674	$ 8,095,212	$ 579,451	$ 671,842	$ 652,375	$ 8,878,491	$ 10,123,692	$ 10,488,822
A reconciliation of interest and finance costs and total segment assets with the consolidated amounts is as follows:
Interest and finance costs
Interest for reportable segments	412,185
Elimination of intersegment interest	(1,164)
Total consolidated Interest and finance cost	411,021
Interest income
Interest for reportable segments	13,310
Elimination of intersegment interest	(1,164)
Total consolidated Interest income	12,146
Total Assets
Total Assets for reportable segment	10,488,822
Elimination of intersegment receivables	(117,219)
Total consolidated Assets	10,371,603

The drilling revenue shown in the table below is analyzed by country based upon the location where the drilling takes place:
	For the years ended December 31,
Country	2012		2013		2014
Ghana	$	175,595	$	-	$	-
Norway		-		157,740		220,044
Brazil		233,569		353,397		581,635
Greenland		136		-		-
Ivory Coast		-		86,486		97,232
Tanzania		196,415		72,083		-
Angola		79,884		227,603		807,742
Namibia		33,212		-		-
Falkland		166,795		-		-
Equatorial Guinea		56,297		-		-
Gabon/ West Africa		-		81,104		110,424
Liberia		-		55,601		-
Ireland		-		104,014		-
Sierra Leone		-		37,272		-
Other		-		4,950		-
Total leasing and service revenues	$	941,903	$	1,180,250	$	1,817,077

The Company's vessels operate on many trade routes throughout the world, and, therefore, the provision of geographic information is considered impractical by management.

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Long-Term Debt - Ocean Rig Notes (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended			4 Months Ended	9 Months Ended	3 Months Ended	0 Months Ended	2 Months Ended	4 Months Ended	12 Months Ended	4 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Apr. 27, 2011	Sep. 20, 2012	Mar. 26, 2014	Mar. 30, 2012	Jul. 27, 2011	Apr. 26, 2011	Dec. 31, 2011	May 13, 2014	Dec. 31, 2016	Sep. 30, 2016
Amortization of convertible notes discount	$ 45,261	$ 43,769	$ 38,855
Interest expense and debt amortization cost	367,966	297,602	222,635
Ocean Rig's Senior Notes | 9.5% Ocean Rig Senior Unsecured Notes
Principal amount of senior unsecured notes	500,000			500,000
Senior notes interest rate				9.50%
Proceeds from issuance of senior notes				487,500
Ocean Rig's Senior Notes | 6.5% Drill Rigs Senior Secured Notes
Principal amount of senior unsecured notes	800,000				800,000
Senior notes interest rate					6.50%
Proceeds from issuance of senior notes					781,965
Redemption Price Of Senior Note As Percentage Of Principal Amount					101.00%							100.00%	103.25%
Ocean Rig's Senior Notes | 7.25% Ocean Rig's Senior Unsecured Notes
Principal amount of senior unsecured notes	500,000					500,000
Senior notes interest rate						7.25%
Proceeds from issuance of senior notes						493,625
Redemption Price Of Senior Note As Percentage Of Principal Amount						101.00%
Repurchase And Sale Of Ocean Rig Senior Notes | 9.5% Ocean Rig Senior Unsecured Notes
Principal amount of senior unsecured notes							18,000	57,000
Principal amount of senior notes repurchased									75,000
Gain / (Loss) on sale of notes							709	1,406		(1,350)
Repurchase And Sale Of Ocean Rig Senior Notes | 7.25% Ocean Rig's Senior Unsecured Notes
Redemption Price Of Senior Note As Percentage Of Principal Amount						105.375%					104.50%
Principal amount of senior notes repurchased						462,300					37,700
Senior Secured Credit Facility Repaid | 6.5% Drill Rigs Senior Secured Notes
Principal amount of senior unsecured notes					$ 1,040,000

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Consolidated Statements of Stockholders' Equity (USD $) In Thousands, except Share data	Total	Common Stock	Treasury Stock	Additional Paid-in capital	Accumulated Other Comprehensive Loss	Retained Earnings/ (Accumulated Deficit)	Total DryShips Stockholders Equity	Non controlling interests
BALANCE value, at Dec. 31, 2011	$ 3,938,662	$ 4,247	$ (10)	$ 2,908,950	$ (28,610)	$ 260,751	$ 3,145,328	$ 793,334
BALANCE shares, at Dec. 31, 2011		424,762,094	(1,000,000)
Net income/ (loss)	(288,593)					(246,778)	(246,778)	(41,815)
Issuance of non vested shares, shares		150
Issuance of treasury stock, value			(100)	100
Issuance of treasury stock, shares			(10,000,000)
Issuance of subsidiary shares to non-controlling interest	180,485			(84,629)	2,869		(81,760)	262,245
Other comprehensive income	24,166				16,566		16,566	7,600
Amortization of stock based compensation	13,299			13,104			13,104	195
BALANCE value, at Dec. 31, 2012	3,868,019	4,247	(110)	2,837,525	(9,175)	13,973	2,846,460	1,021,559
BALANCE shares, at Dec. 31, 2012		424,762,244	(11,000,000)
Net income/ (loss)	(198,028)					(223,093)	(223,093)	25,065
Issuance of common stock, value	23,438	69		23,369			23,438
Issuance of common stock, shares		6,892,233
Issuance of non vested shares, value		10		(10)
Issuance of non vested shares, shares		1,000,000
Issuance of treasury stock, value			(100)	100
Issuance of treasury stock, shares			(10,000,000)
Issuance of subsidiary shares to non-controlling interest	122,960			(46,237)	695		(45,542)	168,502
Other comprehensive income	3,885				2,418		2,418	1,467
Amortization of stock based compensation	11,424			9,955			9,955	1,469
BALANCE value, at Dec. 31, 2013	3,831,698	4,326	(210)	2,824,702	(6,062)	(209,120)	2,613,636	1,218,062
BALANCE shares, at Dec. 31, 2013		432,654,477	(21,000,000)
Net income/ (loss)	58,020					(47,512)	(47,512)	105,532
Issuance of common stock, value	422,375	2,722		419,653			422,375
Issuance of common stock, shares		272,209,844
Issuance of non vested shares, value		12		(12)
Issuance of non vested shares, shares		1,200,000
Issuance of treasury stock, value			(151)	151
Issuance of treasury stock, shares			(15,100,000)
Issuance of subsidiary shares to non-controlling interest	(1,267)			(4,758)	13		(4,745)	3,478
Other comprehensive income	(968)				(573)		(573)	(395)
Amortization of stock based compensation	11,093			9,640			9,640	1,453
Dividends paid	(30,563)							(30,563)
BALANCE value, at Dec. 31, 2014	$ 4,290,388	$ 7,060	$ (361)	$ 3,249,376	$ (6,622)	$ (256,632)	$ 2,992,821	$ 1,297,567
BALANCE shares, at Dec. 31, 2014		706,064,321	(36,100,000)

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Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Consolidated Balance Sheets
Allowance for doubtful receivables	$ 2,825	$ 2,948
Statement [Line Items]
Preferred stock par value	$ 0.01	$ 0.01
Preferred stock shares authorized	500,000,000	500,000,000
Common Stock Par Or Stated Value Per Share	$ 0.01	$ 0.01
Common stock shares authorized	1,000,000,000	1,000,000,000
Common stock shares issued	706,064,321	432,654,477
Common stock shares outstanding	706,064,321	432,654,477
Treasury stock par value	$ 0.01	$ 0.01
Treasury stock, shares	36,100,000	21,000,000
Series A Convertible preferred stock
Statement [Line Items]
Preferred stock shares authorized	100,000,000	100,000,000
Issuance of preferred stock, shares	0	0
Preferred stock shares outstanding	0	0

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Long-term Debt

12 Months Ended

Dec. 31, 2014

Long-term Debt [Abstract]

Long-term Debt

9. Long-term Debt:
The amount of long-term debt shown in the accompanying consolidated balance sheets is analyzed as follows:
		December 31,
		2013		2014
5% Convertible Senior Unsecured Notes	$	700,000	$	-
6.5% Drill Rigs Senior Secured Notes		800,000		800,000
7.25% Ocean Rig Senior Unsecured Notes		-		500,000
9,5% Ocean Rig Senior Unsecured Notes		500,000		-
Secured Credit Facilities – Drybulk Segment		638,820		685,410
Secured Credit Facilities – Tanker Segment		303,979		277,913
Secured Bridge Credit Facility		-		200,000
$1.35 billion Secured Credit Facilities – Drilling Segment		890,000		-
$1.9 billion Term Loan B Facility - Drilling Segment		1,895,250		1,876,250
$1.3 billion Term Loan B Facility - Drilling Segment		-		1,296,750
Less: Deferred financing costs and equity component of notes		(160,046)		(118,710)
Total debt		5,568,003		5,517,613
Less: Current portion		(1,660,168)		(1,165,021)
Long-term portion	$	3,907,835	$	4,352,592

Convertible Senior Notes and Related Borrow Facility

In November 2009, the Company issued $400,000 aggregate principal amount of 5% Convertible unsecured Senior Notes (the "Notes"), which were due December 1, 2014. The full over allotment option granted was exercised and an additional $60,000 Notes were purchased. Accordingly, $460,000 in aggregate principal amount of Notes were sold, resulting in aggregate net proceeds of approximately $447,810 after the underwriters commissions.

As the Notes contained a cash settlement option upon conversion at the option of the issuer, the Company applied the guidance for "Accounting for Convertible Debt Instruments That May be Settled in Cash Upon Conversion (Including Partial Cash Settlement)" and therefore, on the day of the Note issuance, bifurcated the $460,000 principal amount of the Notes into liability and equity components of $341,156 and $118,844, respectively, by first determining the carrying amount of the liability component of the Notes by measuring the fair value of a similar liability that did not have an associated equity component. The equity component was calculated by deducting the fair value of the liability component from the total proceeds received at issuance. Additionally, the guidance required the Company to accrete the discount of $118,844 to the principal amount of the Notes over the term of the Notes. The Company's interest expense associated with this Note accretion was based on an effective interest rate of 12%.

In April 2010, the Company issued $220,000 aggregate principal amount of Notes, which were due December 1, 2014. These Notes were offered as additional Notes under the indenture, as supplemented by a supplemental indenture, pursuant to which the Company previously issued $460,000 aggregate principal amount of Notes due December 1, 2014 in November 2009. The terms of the Notes offered in April 2010 other than their issue date and public offering price, were identical to the Notes issued in November 2009.

The full over allotment option granted was exercised and an additional $20,000 aggregate principal amount of Notes were purchased. Accordingly, $240,000 in aggregate principal amount of Notes were sold, resulting in aggregate net proceeds of approximately $237,202 after the underwriters commissions. On the day of the Note issuance, the Company bifurcated the $240,000 principal amount of the Notes into the liability and equity components of $168,483 and $71,517, respectively, by first determining the carrying amount of the liability component of the Notes by measuring the fair value of a similar liability that did not have an associated equity component. The equity component was calculated by deducting the fair value of the liability component from the total proceeds received at issuance. Additionally, the Company was required to accrete the discount of $71,517 to the principal amount of the Notes over the term of the Notes. The Company's interest expense associated with this Note accretion was based on an effective interest rate of 14%.

In conjunction with the public offering of 5% Notes described above, the Company also entered into share lending agreements with an affiliate of the underwriter of the offering, or the share borrower, pursuant to which the Company loaned the share borrower approximately 36,100,000 shares of the Company's common stock. Under the share lending agreements, the share borrower was required to return the borrowed shares when the Notes were no longer outstanding. The Company did not receive any proceeds from the sale of the borrowed shares by the share borrower, but the Company did receive a nominal lending fee of $0.01 per share from the share borrower for the use of the borrowed shares. As of December 31, 2013, the share borrower had returned an aggregate 21,000,000 of the above-referenced loaned shares to the Company. As of December 31, 2014, the share borrower returned the remaining15,100,000 of the above mentioned loaned shares to the Company. The returned loaned shares were not retired and are included as treasury stock in theaccompanying balance sheets as of December 31, 2013 and 2014.

The fair value of the outstanding loaned shares as of December 31, 2013 and 2014, was $70,970and $0, respectively. On the day of the Notes issuance the fair value of the share lending agreements was determined to be $14,476, based on a 5.5% interest rate of the Notes without the share lending agreement and was recorded as debt issuance cost. Amortization of the issuance costs associated with the share lending agreement included in "Interest and finance costs" during the years ended December 31, 2012, 2013 and 2014, was $2,983, $2,974 and $2,733, respectively. The unamortized balance as ofDecember 31, 2013 and 2014, was $2,733 and $0, respectively.

Effective September 19, 2011, the applicable conversion price was changed to $6.9 per share. The previous conversion price of $7.19 per share was adjusted downward in connection with the Company's partial spin off of Ocean Rig.

The total interest expense related to the Notes in the Company's consolidated statements of operations for the years ended December 31, 2012, 2013 and 2014, was $73,855, $78,769 and $76,680 of which $38,855, $43,769 and $45,261, respectively are non-cash amortization of the discount on the liability component and $35,000, $35,000 and $31,419, respectively are the contractual interest payable semi-annually at a coupon rate of 5% per year. At December 31, 2013 and 2014, the net carrying amount of the liability component and unamortized discount were $654,738 and $0, respectively and $45,261 and $0, respectively.

The Company's interest expense associated with the $460,000 aggregate principal amount and $240,000 aggregate principal amount of Notes was accretive based on an effective interest rate of 12% and 14%, respectively.

DuringNovember 2014, the Company repurchased on the open market and cancelled $191,090 principal amount of its 5% convertible notes. On November 24, 2014, the Company repaid the remaining amount of its 5% convertible notes, amounting to $508,910.

Ocean Rig's 6.5% senior secured notes due 2017

On September 20, 2012, Ocean Rig's wholly owned subsidiary Drill Rigs Holdings Inc. ("the Issuer"), issued $800,000 aggregate principal amount of 6.50% Senior Secured Notes due 2017 (the "Drill Rigs Notes") offered in a private offering, resulting in net proceeds of approximately $781,965. Ocean Rig used a portion of the net proceeds of the notes to repay the full amount outstanding under its $1,040,000 senior secured credit facility as at September 20, 2012. The Drill Rigs Notes are secured obligations and rank senior in right of payment to any future subordinated indebtedness and equally in right of payment to all of its existing and future unsecured senior indebtedness.

The Drill Rigs Notes are fully and unconditionally guaranteed by Ocean Rig and certain of its existing and future subsidiaries (collectively, the "Issuer Subsidiary Guarantors" and, together with Ocean Rig, the "Guarantors").

Upon a change of control, which occurs if 50% or more of Ocean Rig's shares are acquired by any person or group other than DryShips or its affiliates, the Issuer will be required to make an offer to repurchase the notes at a price equal to 101% of the principal amount thereof, plus any accrued and unpaid interest thereon to the date of repurchase. On or after October 1, 2015, the Issuer may, at its option, redeem all or a portion of the notes, at one time or from time to time at 103.25% (from October 1, 2015 to September 30, 2016) or 100% (October 1, 2016 and thereafter) of the principal amount thereof, plus any accrued and unpaid interest thereon to the date of redemption.

The Drill Rigs Notes and the Drill Rigs Notes guarantees are secured, on a first priority basis, by a security interest in the Issuer's two semi-submersible offshore drilling rigs, the LeivEiriksson and the EirikRaude, and certain other assets of the Issuer and the Issuer Subsidiary Guarantors and by a pledge of the stock of the Issuer and the Issuer Subsidiary Guarantors, subject to certain exceptions. The contractual semi-annual coupon interest rate is 6.5% on the Drill Rigs Notes.

Ocean Rig's 7.25% senior unsecured notes due 2019

On March 26, 2014, Ocean Rig issued $500,000 aggregate principal amount of 7.25% senior unsecured notes due 2019 (the "7.25% Senior Unsecured Notes"), offered in a private placement, resulting in net proceeds of approximately $493,625. The 7.25% Senior Unsecured Notes are unsecured obligations and rank senior in right of payment to any future subordinated indebtedness and equally in right of payment to all of its existing and future unsecured senior indebtedness. Ocean Rig used the net proceeds from the offering ofthe 7.25% Senior Unsecured Notes, together with cash on hand and repurchased $462,300 of its 9.5% Senior Unsecured Notes, of which $500,000 in aggregate principal amount was outstanding prior to closing of the 7.25% Senior Unsecured Notes Offering, at atender premium of 105.375%, while the remaining $37,700, was redeemed at a redemption price of 104.5% on May 13, 2014.

The 7.25% Senior Unsecured Notes are not guaranteed by any of the Company's subsidiaries. Upon a change of control, which occurs if 50% or more of the Company's shares are acquired by any person or group other than DryShips or its affiliates, the noteholders will have an option to require the Company to purchase all outstanding notes at a redemption price of 101% of the principal amount thereof plus accrued and unpaid interest to the date of purchase. The contractual semi-annual coupon interest rate is 7.25% per year.

Ocean Rig's 9.5% senior unsecured notes due 2016

On April 27, 2011, Ocean Rig issued $500,000 aggregate principal amount of its 9.5% senior unsecured notes due 2016 (the "9.5% Senior Unsecured Notes") offered in a private placement, resulting in net proceeds of approximately $487.5 million. The 9.5% Senior Unsecured Noteswere unsecured obligations and ranked senior in right of payment to any future subordinated indebtedness and equally in right of payment to all of its existing and future unsecured senior indebtedness.

On April 26, 2011, DryShips agreed to purchase from three unaffiliated companies 9.5% Senior Unsecured Notesin the total aggregate principal amount of $75,000. During the period from May 19, 2011 to July 27, 2011, the Company sold to third parties these senior unsecured notes with notional amount of $57,000 resulting in a gain of $1,406. The remaining $18,000 senior unsecured notes were measured at fair value as of December 31, 2011 and a loss of $1,350 was recorded in "Other comprehensive income". During the period from March 15, 2012 to March 30, 2012, the remaining $18,000 of senior unsecured notes were also sold to third parties with a notional amount of $18,000 resulting in a gain of $709.

The 9.5% Senior Unsecured Notes were repurchased or redeemed by proceeds fromfrom the 7.25% Senior Unsecured Notes offering discussed above, together with cash on hand.

Term bank loans and credit facilities

The bank loans are payable in U.S. Dollars in quarterly and semi-annual installments with balloon payments due atmaturity between January 2015 and June 2025. Interest rates on the outstanding loans as at December 31, 2014, are basedon LIBOR plus a margin, except for an amount of $3,173,000 from the Loan facilities which are based on a fixed rate.

On March 28, 2014, the Company entered into a supplemental agreement relating to the loan agreement dated March 19, 2012, to amend certain financial covenants.

On May 29, 2014 the Company entered into a supplemental agreement to the loan agreement dated February 14, 2012 to amend certain definitions.

On July 7, 2014 the Company entered into an agreement with Commerzbank under the $35.0 million Senior Secured Credit Facility dated October 2, 2007, under which the Company agreed to make a cash prepayment of $2,700 to avoid a loan-to-value covenant breach.

On July 11, 2014, the Company entered into a supplemental agreement under the secured term loan facility dated July 23, 2008, to among other things, release the vessel Woolloomoloofrom the collateral package under this loan.

On July 17, 2014, the Company signed a supplemental agreement under the secured term loan facility dated October 26, 2011 for a waiver of a certain financial covenant until December 31, 2014.

Term bank loans and credit facilities – continued:

On July 31, 2014, the Company signed a supplemental agreement under the secured term loan facility dated October 24, 2012, for the relaxation of a certain financial covenant until December 31, 2014.

On October 29, 2014, the Company entered into a senior secured credit facility with Nordea Bank for up to $170,000 to refinance the existing indebtedness under the Company's $325,000 Senior Credit Facility, which had a balance of $50,010 as of October 31, 2014. This facility has a five-year term, bears interest at LIBOR plus a margin, isrepayable in quarterly installments and is secured by the six vessels that secured the $325,000 Senior Credit Facility, as well as three other vessels.

On November 12, 2014, the Company signed a supplemental agreement under the secured loan facility dated June 20, 2008, for relaxation of certain financial covenants.

On November 14, 2014, the Company entered into a facility agreement with ABN AMRO, for a secured bridge loan facility in an amount of $200,000. The loan is repayable through a single repayment installment. In connection with the ABN AMRO facility, on November 18, 2014, as required by that facility, Ocean Rig filed a prospectus supplement covering up to 78,301,755 of its common shares held by DryShips or its pledgees. Of the shares registered, 45,129,069 Ocean Rig shares were initially pledged by the Company to ABN AMRO under the terms of the ABN AMRO facility which requires collateral coverage based on the prevailing 30-day Volume Weighted Average Price (“VWAP”) at draw down. On January 9, 2015, the Company provided additional security in relation to the ABN AMRO facility in the form of 8,000,000 Ocean Rig shares owned by the Company. On January 20 and February 2, 2015, the Company made two prepayments of $10,000 and $5,000 plus accrued interest, respectively under this loan agreement.

On December23, 2014, the Company entered into an agreement with the lender under its two Senior Secured Credit Facilities, dated October 5, 2007 and March 13, 2008. Under the terms of these agreements, among other things, the lender has agreed to waive certain financial covenants until December 31, 2014 and relax other financial covenants until maturity, and theCompany has agreed to provide a pledge over 8,775,055 Ocean Rig shares owned by DryShips until December 31, 2014.

$1.35 billion Senior Secured Credit Facility

On February 28, 2013, Drillships Ocean Ventures Inc., a majority owned subsidiary and Ocean Rig's wholly-owned subsidiary, entered into a secured term loan facilities agreement with a syndicate of lenders and DNB Bank ASA, as facility agent and security agent, in the amount of $1,350,000 to partially finance the construction costs of the Ocean Rig Mylos, the Ocean Rig Skyros and the Ocean Rig Athena. The facilities agreement was comprised of three term loan facilities of up to $150,000 each (one relating to each of the aforementioned seventh generation drillships) made available by the commercial lenders, or the Commercial Facilities, three term loan facilities of up to $150,000 each (one relating to each of the aforementioned seventh generation drillships) made available by Eksportkreditt Norge AS, or the Eksportkreditt GIEK Facilities, and three term loan facilities of up to $150,000 each (one relating to each of the aforementioned seventh generation drillships) made available by the Export-Import Bank of Korea, or the Kexim Facilities. All term loan facilities bore interest at LIBOR plus a margin and were repayable in quarterly installments, beginning three months after the delivery of the first drillship. The Commercial Facilities matured five years after the first drawdown date while the Eksportkreditt GIEK Facilities and Kexim Facilities matured five or eleven years after the first drawdown date at the lenders option. In connection with this loan, Ocean Rig paid $22.4 million as loan origination fees. On August 20, 2013 and December 20, 2013, the Company drew down an amount of $900,000 in aggregate under the above facility in connection with the deliveries of the Ocean Rig Mylos and the Ocean Rig Skyros. On March 24, 2014, Ocean Rig drew down the remaining undrawn amount of $450,000, in connection with the delivery of Ocean Rig Athena.

Under the agreement, Ocean Rig would only pay dividends or make other distributions in respect of its capital stock under the $1,350,000 secured term loan facility in an amount of up to 50% of net income of each previous financial year, provided in each case that Ocean Rig maintained minimum liquidity in an aggregate amount of not less than $200,000 in cash and cash equivalents and restricted cash and maintain such level for the next 12 months following the date of the dividend payment.

On August 30, 2013, Ocean Rig signed a supplemental agreement to amend certain provisions in its $1,350,000 Senior Secured Facility dated February 28, 2013. Under the terms of the agreement, the existing dividend restriction of up to 50% of preceding fiscal year net income amended to apply on a cumulative basis from July 1, 2013 onwards (50% of cumulative net income) and include a carve-out to pay additional dividends up to the higher of (i) $150,000 and (ii) 5% of Ocean Rig's net tangible assets. Furthermore, the minimum interest coverage ratio requirement would be 2.0 times until June 30, 2015 and the maximum leverage ratio will be 6.5 times until June 30, 2014, 6.0 times until December 31, 2014 and 5.5 times until June 30, 2015.

On July 25, 2014, this facility was repaid in full and replaced by the $1,300,000 Senior Secured Term Loan B Facility (see below).

$1.3 billion Senior Secured Term Loan B Facility

On July 25, 2014, Ocean Rig's wholly owned subsidiary, Drillships Ocean Ventures Inc., entered into a $1,300,000 Senior Secured Term Loan B ("New Term Loan B") facility to repay the $1,350,000 Senior Secured Credit Facility, which had an outstanding loan balance of approximately $1,300,000 on that date. The unamortized balance of the deferred finance fees associated with the loan repaid, amounting to approximately $19,797, was written off in the consolidated statement of operations upon the extinguishment of the related debt in July 2014. In addition, restricted cash of $75,000 associated with the respective debt was released upon the repayment. The New Term Loan B facility which is secured primarily by first priority mortgages on the vessels, theOcean Rig Mylos, theOcean Rig Skyros and theOcean Rig Athena, bears interest at a fixed rate and matures on July 25, 2021.

$1.9 billion term loan B facilitiy

On July 12, 2013, Ocean Rig, through its wholly-owned subsidiaries, Drillships Financing Holding Inc. ("DFHI") and Drillships Projects Inc., entered into a $1,800,000 senior secured term loan facility, comprised of tranche B-1 term loans in an aggregate principal amount equal to $975,000 ("Tranche B-1 Term Loans") and tranche B-2 term loans in an aggregate principal amount equal to $825,000 ("Tranche B-2 Term Loans" and, together with the Tranche B-1 Term Loans, the "Term Loans"), with respective maturity dates in the first quarter of 2021, subject to adjustment to the third quarter of 2020 in certain circumstances and the third quarter of 2016. The Term Loans are initially guaranteed by Ocean Rig and certain existing and future subsidiaries of DFHI and are secured by certain assets of, and by a pledge of the stock of, DFHI and the subsidiary guarantors. The net proceeds of the Term Loans were used by Ocean Rig to repay in full amounts outstanding under Ocean Rig's $800,000 secured term loan agreement and the two $495,000 senior secured credit facilities, amounting to $1,519,168 in aggregate. The unamortized balance of the deferred finance fees associated with the repaid loans, amounting to approximately $23.3 million was written off upon the extinguishment of the related debt in July 2013. In addition, restricted cash of $131.6 million associated with the respective loans were released upon the repayment. On July 26, 2013, Ocean Rig through its wholly-owned subsidiaries DFHI and Drillships Projects Inc., entered into an incremental amendment to the $1,800,000 senior term loan for additional tranche B-1 term loans in a principal amount of $100,000.

On February 7, 2014, Ocean Rig refinanced its then existing short-term Tranche B-2 Term Loans with a fungible add-on to its existing long-term Tranche B-1 Term Loans. As a result of this refinancing, the total $1.9 billion of Tranche B-1 Term Loans will mature noearlier than the third quarter of 2020.

$12.5 million Sellers credit

On March 15, 2013, the Company reached an agreement with a far eastern shipyard for a $12,500 sellers credit to the Company. This credit was repayable to the yard in one bullet repayment two years after date of drawdown and it bore interest at 3% per annum. The Company agreed to provide a pledge of 1,602,500 shares in Ocean Rig that the Company owns, which pledge would be automatically released upon repayment of the credit. During March 2013, the Company drew the total amount of $12,500.        On January 8, 2015, this credit was repaid in full by the Company. On the date of repayment and termination of the loan agreement, the Company was released from its obligations and 1,602,500 shares of Ocean Rig UDW Inc. pledged by the Company to the shipyard were released and returned to the Company.

The aggregate available undrawn amounts under the Company's facilities at December 31, 2013 and 2014, were $450,000 and $0, respectively.

The weighted-average interest rates on the above outstanding debt were: 6.35%, 6.63% and 6.60% for the years ended December 31, 2012, 2013 and 2014, respectively.

The table below presents the movement for bank loans and notes throughout 2014:
Loan	Loan agreement date		Original Amount		December 31, 2013	New Loans	Repayments		December 31, 2014
Secured Credit Facility	October 2, 2007	$	35,000	$	17,000	-	(4,200)	$	12,800
Secured Credit Facility	October 5, 2007		90,000		57,000	-	(4,000)		53,000
Secured Credit Facility	June 20, 2008		103,200		24,250	-	(3,000)		21,250
Secured Credit Facility	May 13, 2008		125,000		21,595	-	(5,889)		15,706
Secured Credit Facility	May 5, 2008		90,000		36,000	-	(6,000)		30,000
Secured Credit Facility	November 16, 2007		47,000		16,000	-	(2,000)		14,000
Secured Credit Facility	July 23,2008		126,400		53,225	-	(10,600)		42,625
Secured Credit Facility	March 13, 2008		130,000		30,241	-	(1,336)		28,905
Secured Credit Facility	February 7, 2011		70,000		57,167	-	(4,667)		52,500
Secured Credit Facility	April 20, 2011		32,313		26,927	-	(2,154)		24,773
Secured Credit Facility	October 26, 2011		141,350		123,230	-	(10,840)		112,390
Secured Credit Facility	October 24, 2012		107,669		96,654	-	(8,405)		88,249
Senior Secured Credit Facility	February 28, 2013		1,350,000		890,000	450,000	(1,340,000)		-
Term Loan B Facility	July 12, 2013		1,900,000		1,895,250	-	(19,000)		1,876,250
Term Loan B Facility	July 25, 2014		1,300,000		-	1,300,000	(3,250)		1,296,750
Secured Credit Facility	March 31, 2006		753,637		174,406	-	-		174,406
Secured Credit Facility	March 19, 2012		87,654		16,980	-	(1,191)		15,789
Secured Credit Facility	February 14, 2012		122,580		115,590	-	(5,760)		109,830
Secured Bridge Credit Facility	November 14, 2014		200,000		-	200,000	-		200,000
Senior Secured Credit Facility	October 29, 2014		167,100		-	167,100	-		167,100
Secured Credit Facility	September 18, 2007		325,000		76,534	-	(76,534)		-
5% Convertible Senior Unsecured Notes	November 21, 2009		460,000		700,000	-	(700,000)		-
6.5% Drill Rigs Senior Secured Notes	September 20, 2012		800,000		800,000	-	-		800,000
7.25% Ocean Rig's Senior Unsecured Notes	March 26, 2014		500,000		-	500,000	-		500,000
9.5% Ocean Rig's Senior Unsecured Notes	April 14, 2011		500,000		500,000	-	(500,000)		-
				$	5,728,049	2,617,100	(2,708,826)	$	5,636,323

The above loans and secured notes are secured by a first priority mortgage over the Company's vessels, drilling rigs and drillships, corporate guarantees, first priority assignments of all freights, earnings, insurances and requisition compensation and pledges of the shares of capital stock of certain of the Company's subsidiaries. The loans contain covenants that restrict, without the bank's prior consent, changes in management and ownership of the vessels, the incurrence of additional indebtedness and mortgaging of vessels and changes in the general nature of the Company's business. In addition, some of the vessels owning companies are not permitted to pay any dividends to DryShips nor DryShips to its shareholders without the lender's prior consent. The loans also contain certain financial covenants relating to the Company's financial position, operating performance and liquidity, including maintaining working capital above a certain level. The Company's secured credit facilities impose operating and negative covenants on the Company and its subsidiaries. These covenants may limit the Dryships' subsidiaries' ability to, among other things, without the relevant lenders' prior consent (i) incur additional indebtedness, (ii) change the flag, class or management of the vessel mortgaged under such facility, (iii) create or permit to exist liens on their assets, (iv) make loans, (v) make investments or capital expenditures, and (vi) undergo a change in ownership or control.

As of December 31, 2014, the shipping segment was not in compliance with certain loan-to-value ratios contained in certain of its loan agreements. These loan-to-value ratio shortfalls do not constitute events of default that would automatically trigger the full repayment of the loan. Based on the loan agreements, loan-to-value shortfalls may be remedied by the Company by providing additional collateral or repaying the amount of the shortfall. In addition, as ofDecember 31, 2014, the shipping segment was in breach of certain financial covenants, contained in the Company's loan agreements relating to $259,537 of the Company's debt (Note 3). As a result of this non-compliance and of the cross default provisions contained in all bank loan agreements of the shipping segment and in accordance with guidance related to the classification of obligations that are callable by the creditor, the Company has classified all of its shipping segment's bank loans in breach amounting to $1,163,321 as current at December 31, 2014.

As of December 31, 2014, the Company was in compliance with all the financial covenants contained in its debt agreements relating to its drilling segment.

Total interest incurred on long-term debt and amortization of debt issuance costs, including capitalized interest, for the years ended December 31 2012, 2013 and 2014, amounted to $222,635, $297,602 and $367,996, respectively. These amounts net of capitalized interest are included in "Interest and finance costs" in the accompanying consolidated statement of operations.

The annual principal payments required to be made after December 31, 2014, including balloon payments, totaling $5,636,323 due through June 2025 are as follows:

2015	$	1,195,323
2016		32,000
2017		832,000
2018		32,000
2019		532,000
2020 and thereafter		3,013,000
Total principal payments		5,636,323
Less: Financing fees and equity component of notes		(118,710)
Total debt	$	5,517,613

XML

Schedule I - Condensed Financial Information of Dryships Inc. - Statements of Cash Flows (Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Net Cash Used in Operating Activities	$ 475,108	$ 245,980	$ 237,529
Cash Flows from Investing Activities:
Restricted cash	51,476	234,338	27,058
Net Cash (Used in) / Provided by Investing Activities	(754,717)	(1,234,330)	(389,947)
Cash Flows from Financing Activities:
Payments of convertible notes	(700,000)	0	0
Net proceeds from common stock issuance	421,911	23,438	0
Net proceeds from sale of shares in subsidiary	0	122,960	180,485
Proceeds from long-term loans and notes	2,617,100	2,982,576	966,103
Payment of financing costs	(48,913)	(84,066)	(35,431)
Net Cash Provided by / (Used in) Financing Activities	250,709	1,241,542	243,225
Net (decrease) / increase in cash and cash equivalents	(28,900)	253,192	90,807
Cash and cash equivalents at beginning of year	595,142	341,950	251,143
Cash and cash equivalents at end of year	566,242	595,142	341,950
Dryships Inc.
Net Cash Used in Operating Activities	(68,370)	(85,042)	(86,475)
Cash Flows from Investing Activities:
Investments in subsidiaries	(32,250)	8,515	(107,463)
Dividends received	44,631	0	0
Restricted cash	(3,811)	52,033	408
Net Cash (Used in) / Provided by Investing Activities	8,570	60,548	(107,055)
Cash Flows from Financing Activities:
Due to subsidiaries	23,465	(67,735)	131,516
Payments of convertible notes	(700,000)	(97,164)	(72,804)
Net proceeds from common stock issuance	421,911	23,438	0
Net proceeds from sale of shares in subsidiary	0	122,960	180,485
Proceeds from long-term loans and notes	320,000	0	0
Payment of financing costs	(5,538)	(2,543)	(439)
Net Cash Provided by / (Used in) Financing Activities	59,838	(21,044)	238,758
Net (decrease) / increase in cash and cash equivalents	38	(45,538)	45,228
Cash and cash equivalents at beginning of year	81	45,619	391
Cash and cash equivalents at end of year	$ 119	$ 81	$ 45,619

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Income Taxes - Ocean Rig Income/(Losses) Before Taxes by Country (Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
INCOME/(LOSS) BEFORE INCOME TAXES	$ 135,843	$ (153,437)	$ (244,636)
Drilling Segment
Domestic loss (Republic of the Marshall Islands)	(161,913)	(66,604)	(2,536)
Foreign income/ (loss)	499,539	174,518	(85,843)
INCOME/(LOSS) BEFORE INCOME TAXES	$ 337,626	$ 107,914	$ (88,379)

XML

Segment Information - Revenue per country (Table) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Total leasing and service revenues	$ 1,817,077	$ 1,180,250	$ 941,903
Ghana
Total leasing and service revenues	0	0	175,595
Norway
Total leasing and service revenues	220,044	157,740	0
Brazil
Total leasing and service revenues	581,635	353,397	233,569
Greenland
Total leasing and service revenues	0	0	136
Ivory Coast
Total leasing and service revenues	97,232	86,486	0
Tanzania
Total leasing and service revenues	0	72,083	196,415
Angola
Total leasing and service revenues	807,742	227,603	79,884
Namibia
Total leasing and service revenues	0	0	33,212
Falkland
Total leasing and service revenues	0	0	166,795
Equatorial Guinea
Total leasing and service revenues	0	0	56,297
Gabon/ West Africa
Total leasing and service revenues	110,424	81,104	0
Liberia
Total leasing and service revenues	0	55,601	0
Ireland
Total leasing and service revenues	0	104,014	0
Sierra Leone
Total leasing and service revenues	0	37,272	0
Other
Total leasing and service revenues	$ 0	$ 4,950	$ 0

XML

Document and Entity Information	12 Months Ended
	Dec. 31, 2014
Document And Entity Information [Abstract]
Document Type	20-F
Document Period End Date	Dec. 31, 2014
Amendment Flag	false
Entity Registrant Name	Dryships Inc.
Entity Central Index Key	0001308858
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Well Known Seasoned Issuer	No
Entity Common Stock Shares Outstanding	706,064,321
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Trading Symbol	Drys

XML

Financial Instruments and Fair Value Measurements

12 Months Ended

Dec. 31, 2014

Financial Instruments and Fair Value Measurements [Abstract]

Financial Instruments And Fair Value Measurements

10. Financial Instruments and Fair Value Measurements:

ASC 815, "Derivatives and Hedging" requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the statement of financial position. Effective January 1, 2011, the Company removed the designation of the cash flow hedges and discontinued hedge accounting for the associated interest rate swaps.

The Company recognizes all derivative instruments as either assets or liabilities at fair value on its consolidated balance sheets.

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income/ (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in the accompanying consolidated statement of operations. Changes in the fair value of derivative instruments that have not been designated as hedging instruments are reported in the accompanying consolidated statement of operations.

The Company enters into interest rate swap transactions to manage interest costs and risk associated with changing interest rates with respect to its variable interest rate loans and credit facilities. The Company entered into forward freight agreements ("FFA") and foreign currency forward contracts in order to manage risks associated with fluctuations in charter rates and foreign currencies, respectively. All of the Company's derivative transactions are entered into for risk management purposes.

10.1 Interest rate swaps, cap and floor agreements: As of December 31, 2012, 2013 and 2014 the Company had outstanding 43, 27 and 24 interest rate swaps of $4.6 billion, $2.9 billion and $2.4 billion notional amount, respectively,maturing from January 2015 through November 2017.

Effective January 1, 2011, the Company removed the designation of the cash flow hedges and discontinued hedge accounting for the associated interest rate swaps. As a result, as of December 31, 2012, 2013 and 2014, these agreements do not qualify for hedge accounting and, as such, changes in their fair values are included in the accompanying consolidated statement of operations. In accordance with ASC 815-30-40 the unrealized loss accumulated in "Accumulated other comprehensive income/(loss)" for previously designated cash flow hedges, which as of December 31, 2010, amounted to $35,992, is being reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings. As a result, during the year ended December 31, 2012, an amount of $22,904 was reclassified into the consolidated statement of operations. Included in the $22,904 is an amount of $13,088 that was transferred to the consolidated statements of operations immediately as a result of the early loan repayment, which ended the forecasted transaction.

Accumulated other comprehensive income/(loss) also included realized losses on cash flow hedges associated with interest capitalized during prior years under "Advances for vessels and drillships under construction and acquisitions" amounting to $16,463, which according to ASC 815-30-35 is being reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings. As a result, during the years ended December 31, 2013 and 2014,the amounts of $550 and $550, respectively were reclassified into the consolidated statement of operations.

The fair value of the above mentioned agreements equates to the amount that would be paid by the Company if the agreements were transferred to a third party at the reporting date, taking into account current interest rates and creditworthiness of both the financial instrument counterparty and the Company.

The change in the fair value of such agreements which do not qualify for hedge accounting for the years ended December 31, 2012, 2013 and 2014, amounted to gains of $54,506, $88,859 and $29,304, respectively and is included in "Gain/ (Loss) on interest rate swaps" in the accompanying consolidated statement of operations.

As of December 31, 2012, security deposits of $8,000 were provided as security by the Company. The Company has deposited also a cash collateral of $6,000 that was classified as current restricted cash. These amounts were released upon the delivery of theOcean Rig Mylosand the Ocean Rig Skyros (Note 6).

As of December 31, 2013 and 2014, security deposits of $550 for the tankers Saga and Vilamoura, were recorded as "Other non-current assets" in the accompanying consolidated balance sheet due to the market loss in the respective swap agreements as of the related dates.

10.2 Forward freight agreements: FFA trading generally has not qualified as hedge accounting and as such the trading of FFAs could lead to material fluctuations in the Company's reported results from operations on a period to period basis.

As of December 31, 2013 and 2014, the Company had no open FFAs.

10.3 Foreign currency forward contracts: As of December 31, 2012, 2013 and 2014, the Company had no outstanding forward contracts.

Tabular disclosure of financial instruments is as follows:

Fair Value of Derivative Instruments in the Consolidated Balance Sheets:
		Asset Derivatives					Liability Derivatives
Derivatives not designated as hedging instruments	Balance Sheet Location	December 31,		December 31,		Balance Sheet Location	December 31,		December 31,
			2013	2014			2013		2014
			Fair value	Fair value			Fair value		Fair value
Interest rate swaps	Financial instruments - current assets	$	-	$	-	Financial instruments-current liabilities	$	47,740	$	30,447
Interest rate swaps	Financial instruments-non-current assets		14,741		11,086	Financial instruments - non-current liabilities		26,086		10,420
Total derivatives not designated as hedging instruments		$	14,741	$	11,086		$	73,826	$	40,867
Total derivatives		$	14,741	$	11,086	Total derivatives	$	73,826	$	40,867

During the years ended December 31, 2012, 2013 and 2014, the losses transferred from other comprehensive income/ (loss) to the statement of operations were $23,453, $550 and $550, respectively. The estimated net amount of existing losses at December 31, 2014, that will be reclassified into earnings within the next twelve months related with cash flow hedges is $550.

		Amount of Gain/(Loss)
Derivatives not designated as hedging instruments	Location of Gain or (Loss) Recognized	Year Ended December 31, 2012		Year Ended December 31, 2013		Year Ended December 31, 2014
Interest rate swaps	Gain/(Loss) on interest rate swaps	$	(54,073)	$	8,373	$	(15,528)
Total		$	(54,073)	$	8,373	$	(15,528)

The carrying amounts of cash and cash equivalents, restricted cash, trade accounts receivable and accounts payable and other current liabilities reported in the consolidated balance sheets approximate their respective fair values because of the short term nature of these accounts. The fair value of credit facilities is estimated based on current rates offered to the Company for similar debt of the same remaining maturities. Additionally, the Company considers its creditworthiness in determining the fair value of the credit facilities. The carrying value approximates the fair market value for the floating rate loans. The fair value of the interest rate swaps was determined using a discounted cash flow method based on market-based LIBOR swap yield curves, taking into account current interest rates and the creditworthiness of both the financial instrument counterparty and the Company.

The Convertible Senior Notes, the OCR UDW Notes and the Drill Rigs Notes, have a fixed rate and their estimated fair values were determined through Level 2 inputs of the fair value hierarchy (quoted price in the over-the counter-market). The fair value of the outstanding balance of the $1,900,000 and $1,300,000 Term Loan B Facilities that have a fixed rate is estimated through Level 2 of the fair value hierarchy by discounting future cash flows using rates currently available for debt with similar terms, credit risk and remaining maturities. The estimated fair value of the above Convertible Senior Notes, 9.5% Senior Unsecured Notes, Drill Rigs Notes and loans at December 31, 2013, is approximately, $700,000, $531,250, $863,504 and $1,951,790, respectively compared to a carrying value net of finance fees of $649,966, $493,915, $784,485 and $1,839,170, respectively. The estimated fair value of the above 7.25% Senior Unsecured Notes and Drill Rigs Notes at December 31, 2014, is approximately $380,000 and $666,000, respectively, while the loan balances are approximately the same as their fair market values, compared to a carrying amount net of financing fees of $492,214, $788,224, $1,825,671 and $1,266,341, respectively.

The guidance for fair value measurements applies to all assets and liabilities that are being measured and reported on a fair value basis. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The statement requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The following table summarizes the valuation of assets and liabilities measured at fair value on a recurring basis as of the valuation date.

	December 31, 2013		Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Recurring measurements:
Interest rate swaps – asset position	$	14,741	$	-	$	14,741	$	-
Interest rate swaps - liability position	$	(73,826)	$	-	$	(73,826)	$	-
Total	$	(59,085)	$	-	$	(59,085)	$	-
	December 31, 2014		Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Recurring measurements:
Interest rate swaps – asset position	$	11,086	$	-	$	11,086	$	-
Interest rate swaps - liability position	$	(40,867)	$	-	$	(40,867)	$	-
Total	$	(29,781)	$	-	$	(29,781)	$	-
The following table summarizes the valuation of assets measured at fair value on a non-recurring basis as of the valuation date.
			Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)			Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Impairment loss
Non-Recurring measurements:
Long lived assets held and used			$	-	$	71,000	$	-	$	(43,490)
Total			$	-	$	71,000	$	-	$	(43,490)
In accordance with the provisions of relevant guidance, four newbuildings with a carrying amount of $43,490 were written down to their fair values as determined based on the agreed sale price, resulting in an impairment charge of $43,490, which was included in the accompanying consolidated statement of operations for the year ended December 31, 2013 (Note 6).

	Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)			Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Impairment loss
Non-Recurring measurements:
Long lived assets held and used	$	-	$	10,500	$	-	$	(38,148)
Total	$	-	$	10,500	$	-	$	(38,148)
As a result of the impairment analysis performed for the year ended December 31, 2014, one of the Company’s vessels, with a carrying amount of $48,648 was written down to its fair value as determined based on the valuations of the independent valuators, resulting in an impairment charge of $38,148, which was included in the accompanying consolidated statement of operations for the year ended December 31, 2014 (Note 7).

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Equity Incentive Plan - Vested Shares (Table) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Number of vested shares | Ocean Rig UDW
Number of vested shares
Balance at beginning of year	162,633	2,500
Granted and vested	111,585	117,133
Non vested shares granted in prior years and vested in year	93,558	43,000
Granted and vested shares in prior years, but cancelled during 2014	(58,324)
Balance at end of year	309,452	162,633
Number of vested shares | Dryships Inc.
Number of vested shares
Balance at beginning of year	9,936,355	8,598,021	6,092,871
Granted and vested	400,000	333,334
Non vested shares granted in prior years and vested in year	1,333,333	1,005,000	2,505,150
Balance at end of year	11,669,688	9,936,355	8,598,021
Weighted average grant date fair value per vested shares | Ocean Rig UDW
Weighted average grant date fair value per vested shares
Balance at beginning of year	16.90	16.50
Granted and vested	17.39	17.18
Non vested shares granted in prior years and vested in current year	17.2	16.16
Granted and vested shares in prior years, but cancelled during 2014	16.63
Balance at end of year	17.22	16.90
Weighted average grant date fair value per vested shares | Dryships Inc.
Weighted average grant date fair value per vested shares
Balance at beginning of year	12.66	13.91	17.23
Granted and vested	3.26	2.01
Non vested shares granted in prior years and vested in current year	4.63	5.50	5.83
Balance at end of year	11.42	12.66	13.91

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Segment Information - Reconciliation of interest and finance costs (Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Interest and finance cost	$ 411,021	$ 332,129	$ 210,128
Interest income	12,146	12,498	4,203
Total assets	10,371,603	10,123,692	8,878,491
Reportable Segment
Interest and finance cost	412,185
Interest income	13,310
Total assets	10,488,822
Intersegment Elimination
Interest and finance cost	(1,164)
Interest income	(1,164)
Total assets	$ (117,219)

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Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
REVENUES:
Voyage revenues (including amortization of above market acquired time charters)	$ 368,447	$ 311,764	$ 268,236
Service revenues, net	1,817,077	1,180,250	941,903
Total Revenues (Notes 2 and 16)	2,185,524	1,492,014	1,210,139
OPERATING EXPENSES/(INCOME):
Voyage expenses (Note 2)	117,165	103,211	30,012
Vessels, drilling rigs and drillships operating expenses	844,260	609,765	649,722
Depreciation and amortization (Note 7)	449,792	357,372	335,458
Loss on sale of assets, net (Note 7)	0	0	1,179
Loss on contract cancellation (Note 6)	1,307	0	0
Contract termination fees and other (Note 6)	0	33,293	41,339
Vessel impairment charge (Notes 7 and 10)	38,148	43,490	0
General and administrative expenses	193,686	184,722	145,935
Legal settlements and other, net (Note 13.1)	(2,013)	4,585	(9,360)
Operating income	543,179	155,576	15,854
OTHER INCOME / (EXPENSES):
Interest and finance costs (includes $22,195 accumulated other comprehensive classifications in 2012 for losses on previously designated cash flow hedges and gains on Senior Notes) (Note 15)	(411,021)	(332,129)	(210,128)
Interest income	12,146	12,498	4,203
Gain/(Loss) on interest rate swaps (Note 10)	(15,528)	8,373	(54,073)
Other, net (Note 10)	7,067	2,245	(492)
Total other expenses, net	(407,336)	(309,013)	(260,490)
INCOME/(LOSS) BEFORE INCOME TAXES	135,843	(153,437)	(244,636)
Less: Income taxes (Note 18)	(77,823)	(44,591)	(43,957)
NET INCOME/(LOSS)	58,020	(198,028)	(288,593)
Less: Net (income)/loss attributable to non-controlling interests	(105,532)	(25,065)	41,815
NET LOSS ATTRIBUTABLE TO DRYSHIPS INC.	(47,512)	(223,093)	(246,778)
NET LOSS ATTRIBUTABLE TO DRYSHIPS INC COMMON STOCKHOLDERS (Note 17)	$ (48,209)	$ (223,149)	$ (246,778)
LOSS PER COMMON SHARE ATTRIBUTABLE TO DRYSHIPS INC. COMMON STOCKHOLDERS, BASIC AND DILUTED (Note 17)	$ (0.11)	$ (0.58)	$ (0.65)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES, BASIC AND DILUTED (Note 17)	456,031,628	384,063,306	380,159,088

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Transactions with Related Parties

12 Months Ended

Dec. 31, 2014

Transactions with Related Parties

Transactions with Related Parties

4. Transactions with Related Parties:

The amounts included in the accompanying consolidated balance sheets and consolidated statements of operations are as follows:

	December 31,
		2013		2014
Balance Sheet
Due to related party - Cardiff Marine Inc.		$	(3)	$	-
Due to related party - Tri-Ocean Heidmar			(43)		-
Due to related party - Cardiff Tankers			(181)		(266)
Due to related party - Sigma and Blue Fin pool			(336)		-
Due to related party - Fabiana Services S.A.			-		(1,000)
Due to related party - Vivid Finance Limited			(48)		(164)
Due to related party - Cardiff Drilling			-		(4,287)
Due to related party - Azara Services S.A.			-		(4,000)
Due to related party - Basset Holding Inc.			-		(3,000)
Due to related party - Total			(611)		(12,717)
Due from related party - TMS Bulkers			29,059		28,318
Due from related party - TMS Tankers			9,964		9,903
Due from related party - Total		$	39,023	$	38,221
Advances for vessels and drillships under construction - Cardiff Drilling/TMS Bulkers/ TMS Tankers, for the year		$	4,778	$	1,546
Vessels, net - TMS Bulkers/ TMS Tankers, for the year			6,815		530
Drilling rigs, drillships, machinery and equipment, net - Cardiff/Cardiff Drilling, for the year			5,692		2,885
Trade Accounts Receivable- Accrued Receivables- Sigma and Blue Fin pools			386		-
	Year ended December 31,
Statement of Operations		2012		2013		2014
Voyage Revenues - Sigma and Blue Fin pool		$	27,306	$	5,306	$	44
Service Revenues, net - Cardiff/Cardiff Drilling			6,193		10,786		16,826
Voyage expenses - TMS Tankers			(507)		(1,483)		(2,002)
Voyage expenses - TMS Bulkers			(3,166)		(2,619)		(2,754)
Voyage expenses – Cardiff Tankers			(166)		(1,423)		(2,002)
Gain on sale of assets – commissions - TMS Bulkers			(1,180)		(710)		-
Contract termination fees and other			(300)		(23,048)		-
General and administrative expenses:
Consultancy fees – Fabiana Services S.A.			(4,397)		(3,593)		(4,595)
Management fees - TMS Tankers			(5,151)		(8,362)		(8,548)
Management fees - TMS Bulkers			(26,518)		(27,803)		(29,176)
Consultancy fees – Vivid Finance Limited			(14,201)		(18,056)		(16,242)
Consultancy fees - Azara Services S.A.			-		(5,000)		(9,000)
Consultancy fees - Basset Holding Inc.			(2,676)		(4,200)		(8,191)
Rent			(41)		-		-
Amortization of DryShips CEO stock based compensation		$	(12,663)	$	(7,780)	$	(7,516)
Amortization of Ocean Rig's CEO stock based compensation			-		(1,358)		(2,316)
(Per day and per quarter information in the note below is expressed in United States Dollars/Euros)

TMS Bulkers Ltd. - TMS Tankers Ltd.:

Effective January 1, 2011, each of the Company's drybulk vessel-owning subsidiaries entered into new management agreements with TMS Bulkers Ltd. ("TMS Bulkers"), which replaced the Company's management agreements with Cardiff Marine Inc. ("Cardiff" or the "Manager"), a related technical and commercial management company incorporated in Liberia, that were effective as of September 1, 2010 through December 31, 2010 and each of the Company's tanker ship-owning subsidiaries entered into new management agreements with TMS Tankers Ltd. ("TMS Tankers") (together, TMS Bulkers and TMS Tankers are hereinafter referred to as the "Managers"). The Managers are beneficiallyowned by Mr. George Economou, the Company's Chairman, President and Chief Executive Officer.

TMS Bulkers provides comprehensive drybulk ship management services, including technical supervision, such as repairs, maintenance and inspections, safety and quality, crewing and training as well as supply provisioning. TMS Bulkers' commercial management services include operations, chartering, sale and purchase, post-fixture administration, accounting, freight invoicing and insurance. Each new vessel management agreement provides for a fixed management fee, the same fee as was charged by Cardiff under the Company's previous management agreements effective from September 1, 2010, of Euro 1,500 ($1,823 based on the Euro/U.S. Dollar exchange rate at December 31, 2014) per vessel per day, which is payable in equal monthly installments in advance and can be adjusted each year to the Greek Consumer Price Index for the previous year by not less than 3% and not more than 5%. Effective January 1, 2012, the fixed management fee was adjusted by 3% to Euro 1,545 ($1,878 based on the Euro/U.S. Dollar exchange rate at December 31, 2014).

If TMS Bulkers is requested to supervise the construction of a newbuilding vessel, in lieu of the management fee, the Company will pay TMS Bulkers an upfront fee equal to 10% of the budgeted supervision cost. For any additional attendance above the budgeted superintendent expenses, the Company will be charged extra at a standard rate of Euro 500 (or $608 based on the Euro/U.S. Dollar exchange rate as of December 31, 2014) per day.

TMS Tankers provides comprehensive tanker ship management services, including technical supervision, such as repairs, maintenance and inspections, safety and quality, crewing and training as well as supply provisioning. TMS Tankers' commercial management services include operations, sale and purchase, post-fixture administration, accounting, freight invoicing and insurance. Under the management agreements, TMS Tankers is entitled to a daily management fee per vessel of Euro 1,700 ($2,066 based on the Euro/U.S. Dollar exchange rate at December 31, 2014), payable in equalmonthly installments in advance and may automatically be adjusted each year to the Greek Consumer Price Index for the previous year by not less than 3% and not more than 5%. Effective January 1, 2012, the fixed management fee was adjusted by 3% to Euro 1,751 ($2,128 based on the Euro/U.S. Dollar exchange rate at December 31, 2014). TMS Tankers is entitled to a construction supervisory fee of 10% of the budgeted supervision cost for the vessels under construction, payable up front in lieu of the fixed management fee.

Under their respective agreements, the Managers are also entitled to (i) a discretionary incentive fee, (ii) a commission of 1.25% on charter hire agreements that are arranged by the Managers; and (iii) a commission of 1% of the purchase price on sales or purchases of vessels in the Company's fleet that are arranged by the Managers.

In the event that the management agreements are terminated for any reason other than a default by the Managers or change of control of the Company's ownership, the Company will be required to pay the management fee for a further period of three calendar months as from the date of termination.

In the event of a change of control of the Company's ownership the Company will be required to pay the Managers a termination payment, representing an amount equal to the estimated remaining fees payable to the Managers under the then current term of the agreement which such payment shall not be less than the fees for a period of 36 months and not more than a period of 48 months.

Each management agreement has an initial term of five years and will be automatically renewed for a five year period and thereafter extended in five year increments, unless the Company provides notice of termination in the fourth quarter of the year immediately preceding the end of the respective term.

Transactions with TMS Bulkers and TMS Tankers in Euros were settled on the basis of the average U.S. Dollar rate on the invoice date.

Global Services Agreement: On December 1, 2010, the Company entered into a Global Services Agreement with Cardiff, effective December 21, 2010, pursuant to which the Company engaged Cardiff to act as consultant on matters of chartering and sale and purchase transactions for the offshore drilling units operated by the Company's majority-owned subsidiary, Ocean Rig. Under the Global Services Agreement, Cardiff, or its subcontractor, (i) provided consulting services related to the identification, sourcing, negotiation and arrangement of new employment for offshore assets of the Company and its subsidiaries, including the Company's drilling units; and (ii) identified, sourced, negotiated and arranged the sale or purchase of the offshore assets of the Company and its subsidiaries, including the Company's drilling units. In consideration of such services, the Company paid Cardiff a fee of 1.0% in connection with employment arrangements and 0.75% in connection with sale and purchase activities.

Effective January 1, 2013,Ocean Rig Management Inc. ("Ocean Rig Management"), a wholly-owned subsidiary of Ocean Rig, the Company's majority owned subsidiary, entered into a Global Services Agreement with Cardiff Drilling Inc. ("Cardiff Drilling") a company controlled by Mr. George Economou, the Company's Chairman, President and Chief Executive Officer, pursuant to which Ocean Rig Management engaged Cardiff Drilling to act as consultant on matters of chartering and sale and purchase transactions for the offshore drilling units operated by Ocean Rig. Under the Global Services Agreement, CardiffDrilling, or its subcontractor, (i) provides consulting services related to the identification, sourcing, negotiation and arrangement of new employment for offshore assets of Ocean Rig and its subsidiaries; and (ii) identifies, sources, negotiates and arranges the sale or purchase of the offshore assets of Ocean Rig and its subsidiaries. In consideration of such services, Ocean Rig will pay CardiffDrilling a fee of 1.0% in connection with employment arrangements and 0.75% in connection with sale and purchase activities. Costs from the Global Services Agreement are expensed in the consolidated statements of operations or capitalized as a component of "Advances for drillships under construction and related costs" being a directly attributable cost to the construction, as applicable.

Transactions with Cardiff in Euros were settled on the basis of the average USD rate on the invoice date.

Cardiff Marine Inc: On January 2, 2014, the Company entered into an agreement with certain clients of Cardiff, a company controlled by Mr. George Economou,the Company's Chairman, President and Chief Executive Officer, for the grant of seven rights of first refusal to acquire seven Newcastlemaxnewbuildings, should they wish to sell these vessels at some point in the future. The Company may exercise any one, several or all of the rights. Each right is valid until one day before the contractual date of delivery of each vessel. These newbuildings are scheduled for delivery between the fourth quarter of 2015 and the fourth quarter of 2016.

Mr. George Economou: As the Company's Chairman, President, Chief Executive Officer ("CEO") and principal shareholder, with a 17.3% shareholding as of December 31, 2014, Mr. George Economou has the ability to exert influence over the operations of the Company. In April 2012, companies affiliated with the Company's Chairman, President and Chief Executive Officer purchased a total of 2,185,000 common shares of Ocean Rig in the public offering by Ocean Rig of common shares of Ocean Rig owned by DryShips, that was completed on April 17, 2012 (Note 11). During March 2013, the Company accepted an offer from a company affiliated with Mr. George Economou for the sale of two Very Large Ore Carriers (VLOC) newbuildings (Note 6).

Fabiana Services S.A.: Under the consultancy agreements effective from February 3, 2008, between the Company and Fabiana Services S.A. ("Fabiana"), a related party entity incorporated in the Marshall Islands, Fabiana provides consultancy services relating to the services of Mr. George Economou in his capacity as Chief Executive Officer of the Company (Note 12).

On January 25, 2010, the Compensation Committee approved that a bonus in the form of 4,500,000 shares of the Company's common stock, with par value $0.01, be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2009 as well as for anticipated services during the years 2010, 2011 and 2012. The shares vest over a period of three years, with 1,000,000 shares vesting on the grant date; 1,000,000 shares vesting on December 31, 2010 and 2011 respectively; and 1,500,000 shares vesting on December 31, 2012. In addition, the annual remuneration to be awarded to Fabiana under the consultancy agreement was increased to Euro 2.7 million ($3.7 million based on the exchange rate as of December 31, 2013).

On January 12, 2011, the Compensation Committee approved a $4 million bonus and 9,000,000 shares of the Company's common stock payable to Fabiana for the provision of the services of the Company's Chief Executive Officer during 2010. The shares were granted to Fabiana and vest over a period of eight years, with 1,000,000 shares to vest on the grant date and 1,000,000 shares to vest annually on December 31, 2011 through 2018, respectively.

On August 20, 2013, the Compensation Committee approved that a bonus in the form of 1,000,000 shares of the Company's common stock, with par value $0.01, be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2012. The shares vest over a period of two years with 333,334 shares vesting on the grant date, 333,333 shares vesting on August 20, 2014 and, 333,333 shares vesting on August 20, 2015, respectively.

On August 19, 2014, the Compensation Committee approved that a bonus in the form of 1,200,000 shares of the Company's common stock, with par value $0.01, be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2013. The shares vest over a period of three years with 400,000 shares vesting on December 31, 2014, 400,000 shares vesting on December 31, 2015, and 400,000 vesting on December 31, 2016.

On December 30, 2014, the Compensation Committee approved that a bonus in the form of 2,100,000 shares of the Company's common stock, with par value $0.01, and a cash bonus of $1,000 be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2014. The shares vest over a period of three years with 700,000 shares vesting on December 31, 2015, 700,000 shares vesting on December 31, 2016, and 700,000 shares vesting on December 31, 2017.

Azara Services S.A.: Under the consultancy agreement entered on September 9, 2013 and effective from January 1, 2013, between one of the wholly owned subsidiaries of Ocean Rig and Azara Services S.A. ("Azara"), a related party entity incorporated in the Republic of Marshall Islands, Azara provides consultancy services relating to the services of Mr. George Economou in his capacity as Chief Executive Officer of Ocean Rig. The annual remuneration to be awarded to Azara under the consultancy agreement is $2,500 in cash.

On August 20, 2013, Ocean Rig's Compensation Committee approved a sign-on bonus of $2,500 cash and 150,000 shares of Ocean Rig's common stock to Azara, relating to the services of Mr. George Economou as Chief Executive Officer of Ocean Rig. The shares vest over a period of two years with 50,000 shares vesting on the grant date, 50,000 shares vesting on August 20, 2014 and, 50,000 vesting on August 20, 2015, respectively. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $17.56 per share.

On August 19, 2014, Ocean Rig's CompensationCommittee approved a bonus in the form of $2,500 cash and 150,000 shares of Ocean Rig's common stock to Azara, relating to the services of Mr. George Economou as Chief Executive Officer of Ocean Rig, rendered during 2013. The shares vest over a period of three years with 50,000 shares vesting on December 31, 2014, 50,000 shares vesting on December 31, 2015 and, 50,000 vesting on December 31, 2016. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $18.37 per share.

On December 30, 2014, Ocean Rig's Compensation Committee approved a bonus in the form of $4,000 cash and 300,000 shares of Ocean Rig's common stock to Azara, relating to the services of Mr. George Economou as Chief Executive Officer, during 2014. The shares vest over a period of three years with 100,000 shares vesting on December 31, 2015, 100,000 shares

vesting on December 31, 2016, and 100,000 vesting on December 31, 2017. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of Ocean Rig shares on the grant date of $9.46 per share.

Basset Holdings Inc.:Under the consultancy agreement effective from January 1, 2015, between the Company and Basset Holdings Inc. ("Basset"), a related party entity incorporated in the Republic of Marshall Islands, Basset provides consultancy services relating to the services of Mr. Anthony Kandylidis in his capacity as Executive Vice-President of the Company. The annual remuneration to be awarded to Basset under the consultancy agreement is Euro 0.45 million ($0.55 million based on the Euro/U.S. Dollar exchange rate as of December 31, 2014).

Under the consultancy agreement effective from June 1, 2012, between a wholly owned subsidiary of Ocean Rig and Basset, a related party entity incorporated in the Republic of Marshall Islands, Basset provides consultancy services relating to the services of Mr. Anthony Kandylidis in his capacity as Executive Vice-President of Ocean Rig. The annual remuneration to be awarded to Basset under the consultancy agreement was Euro 0.9 million ($1.1 million based on the Euro/U.S. Dollar exchange rate as of December 31, 2014). Effective January 1, 2015, the annual remuneration was reduced to Euro 0.45 million ($0.55 million based on the Euro/U.S. Dollar exchange rate as of December 31, 2014).

On August 20, 2013, the Compensation Committee of Ocean Rig approved that a cash bonus of $3,000 be paid to Basset for the contribution of Mr. Antony Kandylidis for Executive Vice President's services.

On August 19, 2014, the Compensation Committee of Ocean Rig approved that a cash bonus of $4,000 be paid to Basset for the contribution of Mr. Anthony Kandylidis for Executive Vice President's services, during 2013.

On December 30, 2014, the Compensation Committee of Ocean Rig approved that a cash bonus of $3,000 be paid to Basset for the contribution of Mr. Anthony Kandylidis for Executive Vice President's services, during 2014.

Bassetis also the owner of 114,286shares of Ocean Rig's common stock, as of December 31, 2014.

Steel Wheel Investments Limited: Steel Wheel Investments Limited ("Steel Wheel"), a company controlled by the Company'sExecutive Vice President, Mr. Antony Kandylidis, is the owner of 1,570,226shares of Ocean Rig's common stock, as of December 31, 2014.

Cardiff Tankers Inc.:Under charter agreements for all the Company's tankers, Cardiff Tankers Inc. ("Cardiff Tankers"), a related party entity incorporated in the Republic of the Marshall Islands, provides services related to the sourcing, negotiation and execution of charters, for which it is entitled to a 1.25% commission on charter hire earned by those tankers.

Vivid Finance Limited: Under the consultancy agreement effective from September 1, 2010 between the Company and Vivid Finance Limited ("Vivid"), a company controlled by the Chairman, President and Chief Executive Officer of the Company, Mr. George Economou, Vivid provides the Company with financing-related services such as (i) negotiating and arranging new loan and credit facilities, interest rate swap agreements, foreign currency contracts and forward exchange contracts, (ii) renegotiating existing loan facilities and other debt instruments, and (iii) the raising of equity or debt in the capital markets. In exchange for its services, Vivid is entitled to a fee equal to 0.20% on the total transaction amount. The consultancy agreement has a term of five years and may be terminated (i) at the end of its term unless extended by mutual agreement of the parties; (ii) at any time by the mutual agreement of the parties.

Effective January 1, 2013, the Company, amended the agreement with Vivid to limit the scope of the services provided under the agreement to DryShips Inc. and its subsidiaries or affiliates, except for Ocean Rig and its subsidiaries. In essence, post-amendment, the consultancy agreement between the DryShips Inc. and Vivid is in effect for the Company's tanker and drybulk shipping segments only.

Effective January 1, 2013, Ocean Rig Management Inc., a wholly-owned subsidiary of Ocean Rig, entered into a new consultancy agreement with Vivid, on the same terms and conditions as in the consultancy agreement, dated as of September 1, 2010, between DryShips Inc. and Vivid, except that under the new agreement, Ocean Rig is obligated to pay directly the fee of 0.20% to Vivid on the total transaction amount in consideration of the services provided by Vivid in respect of Ocean Rig's offshore drilling business, whereas under the consultancy agreement between DryShips Inc. and Vivid, this fee was paid by DryShips Inc.

Lease Agreement: The Company leased office space in Athens, Greece from a son of Mr. George Economou until December 31, 2012.

Sigma Tankers Inc. pool and Blue Fin Tankers Inc. pool: Three of the Suezmax tankers, Vilamoura, Lipari and Petalidi, operated in the Blue Fin Tankers pool ("Blue Fin") until the termination of the pooling agreements with Blue Fin relating to such vessels in October 2012, March 2013 and November 2012, respectively. The Aframax tankers Saga, Daytona, and Belmar andCalida operated in the Sigma Tanker Pool ("Sigma") until the termination of the pooling agreements with Sigma relating to such vessels in April 2012, October 2012, January 2013 and October 2013, respectively. Sigma and Blue Fin are spot market pools managed by Heidmar Inc. Mr. George Economou is a member of the Board of Directors of Heidmar Inc.

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Going Concern

12 Months Ended

Dec. 31, 2014

Disclosure Text Block [Abstract]

Going Concern

3. Going Concern

As of December 31,2014, the drilling segment was in compliance with its financial covenants while the shipping segment was in breach of certain financial covenants, contained in the Company's loan agreements relating to $259,537 , of the Company's debt. Even though as of the date of approval of the consolidated financial statements none of the lenders have declared an Event of Default under the loan agreements, these breaches constitute events of default and may result in the lenders requiring immediate repayment of the loans. As a result of this non-compliance and of the cross default provisions contained in all bank loan agreements of the shipping segment, the Company has classified the respective bank loans amounting to $1,163,321 at December 31, 2014, as current liabilities (Note 9). As a result, the Company reports a working capital deficit of $394,483 at December 31, 2014.

In addition, and as further discussed in Note 13, the Company's expected short term capital commitments to fund the construction installments under the drillshipsnewbuilding contracts in the year ending December 31, 2015, amount to $566,300,which will be partially financed by the $475,000 million secured credit facility signed on February 13, 2015. Furthermore, the Company's current maturities of long-term debt (excluding the balance classified as current due to the breach in convenants) at December 31, 2014, amounted to $475,717.The Company expects to finance its current maturities of long-term debt and unfinanced capital commitments with cash on hand, operational cash flow and debt or equity issuances, or a combination thereof.

The Company is currently in negotiations with its lenders to obtain waivers or waiver extensions. Management expects that the lenders will not demand payment of the loans before their maturity, provided that the Company pays scheduled loan installments and accumulated or accrued interest as they fall due under the existing credit facilities. Management plans to settle the loan interest and scheduled loan repayments with cash expected to be generated from operations and from financing activities.

The consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Accordingly, the consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, the amounts and classification of liabilities, or any other adjustments that might result in the event the Company is unable to continue as a going concern.

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Interest and Finance Costs

12 Months Ended

Dec. 31, 2014

Interest and Finance Costs [Abstract]

Interest and Finance Costs

15. Interest and Finance Costs:
The amounts in the accompanying consolidated statements of operations are analyzed as follows:
	Year ended December 31,
	2012		2013		2014
Interest incurred on long-term debt	$	205,070	$	251,596	$	317,445
Amortization and write-off of financing fees		17,565		46,006		50,551
Amortization of convertible notes discount		38,855		43,769		45,261
Amortization of share lending agreement-note issuance costs		2,983		2,974		2,733
Commissions, commitment fees and other financial expenses		4,622		57,498		34,256
Capitalized interest		(58,967)		(69,714)		(39,225)
Total	$	210,128	$	332,129	$	411,021

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Common Stock and Additional Paid-in Capital

12 Months Ended

Dec. 31, 2014

Common Stock and Additional Paid-in Capital

Common Stock and Additional Paid-in Capital

11. Common Stock and Additional Paid-in Capital
Net Loss Attributable to Dryships Inc and Transfers from the Non-controlling Interest:
The following table represents the effects of any changes in Dryships Inc. ownership interest in a subsidiary on the equity
attributable to the shareholders of Dryships Inc.
		Year Ended December 31,
		2012		2013		2014
Net loss attributable to Dryships Inc.	$	(246,778)	$	(223,093)	$	(47,512)
Transfers to the non-controlling interest:
Decrease in Dryships Inc. equity for reduction in subsidiary ownership		(81,760)		(45,542)		(4,758)
Net transfers to the non-controlling interest		(81,760)		(45,542)		(4,758)
Net loss attributable to Dryships Inc. and transfers to/from the non-controlling interest	$	(328,538)	$	(268,635)	$	(52,270)

Issuance of common shares

On October 4, 2013, the Company filed a prospectus supplement to the universal shelf registration statement on Form F-3 filed on August 30, 2013, pursuant to an at-the-market offering for up to $200,000 of the Company's common shares. In connection with the offering, the Company entered into a Sales Agreement with Evercore Group L.L.C., ("Evercore"), the sales agent, dated October 4, 2013. During 2013, 6,892,233 common shares were issued and sold pursuant to the at-the-market offering, resulting in net proceeds of $23,655, after deducting commissions, while in 2014, 22,209,844 common shares were issued and sold pursuant to the at-the-market offering, resulting in net proceeds of $90,016, after deducting commissions.

On October 29, 2014, the Company successfully completed the offering of 250,000,000 shares of its common stock, par value $0.01 per share, at a price of $1.40 per share. As part of the offering, George Economou, the Company's Chairman, President and Chief Executive Officer, has purchased $80,000, or 57,142,000 shares, of common stock in the offering at the public offering price.The Company used the net proceeds of approximately $332,852 from the offering to repurchase a portion of its $700,000 principal amount of indebtedness under the 5.0% Convertible Senior Notes matured on December 1, 2014.

Sale of Ocean Rig shares

On April 17, 2012, the Company completed a public offering of an aggregate of 11,500,000 common shares of Ocean Rig owned by DryShips. The Company received approximately $180,485 of net proceeds from the public offering. The net assets of Ocean Rig as of April 17, 2012, amounted to $3,003,954. At the date of the transaction, the carrying amounts of Ocean Rig's assets and liabilities did not require fair value adjustments. The difference between the net consideration received and the amount attributed to the non-controlling interests which amounted to $81,760 was recognized in equity attributable to the controlling interest.

On February 14, 2013, the Company completed a public offering of an aggregate of 7,500,000 common shares of Ocean Rig owned by DryShips. The Company received approximately $122,960 of net proceeds from the public offering. The net assets of Ocean Rig as of February 14, 2013, amounted to $2,950,992. At the date of the transaction, the carrying amounts of Ocean Rig's assets and liabilities did not require fair value adjustments. The difference between the net consideration received and the amount attributed to the non-controlling interests, which amounted to $45,542, was recognized in equity attributable to the controlling interest.

Treasury stock

During September 2011, April 2012 and January 2013 the share borrower described in Note 9 returned to the Company an aggregate of 21,000,000 loaned shares of the Company's common stock, which were not retired and are held as treasury stock. During December, 2014 the share borrower described in Note 9 returned to the Company the remaining 15,100,000 loaned shares of the Company's common stock, which were not retired and are held as treasury stock.

Stockholders Rights Agreement

As of January 18, 2008, the Company entered into a Stockholders Rights Agreement (the "Agreement"). Under the Agreement, the Company's Board of Directors declared a dividend payable of one preferred share purchase right, ("Right"), to purchase one one-thousandth of a share of the Company's Series A Participating Preferred Stock for each outstanding common share. Each Right entitles the registered holder, upon the occurrence of certain events, to purchase from the Company one one-thousandth of a share of Series A Participating Preferred Stock or additional shares of common stock. As of December 31, 2014, no exercise of any Rights had occurred. As of July 9, 2009, an amendment was effected to the Agreement to reflect the issuance of Series A Convertible Preferred Stock.

Dividends

On May 8, 2014, Ocean Rig's Board of Directors declared a quarterly cash dividend with respect to the quarter ended March 31, 2014 of $0.19 per common share, to shareholders on record as of May 20, 2014. The dividend was paid in May, 2014.

On July 21, 2014, Ocean Rig's Board of Directors declared a quarterly cash dividend with respect to the quarter ended June 30, 2014 of $0.19 per common share, to shareholders on record as of August 1, 2014. The dividend was paid in August, 2014.

On October15, 2014, Ocean Rig's Board of Directors declared a quarterly cash dividend with respect to the quarter ended September 30, 2014, of $0.19 per common share, to shareholders on record as of October 31, 2014.The dividend was paid in November, 2014.

Ocean Rig paid dividends amounting to $30,563, to shareholders other than the Company, during the year ended December 31, 2014.

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Commitment and contingencies - Contractual Charter Revenue (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Unbilled Receivables, Not Billable at Balance Sheet Date [Abstract]
Twelve months ending December 31, 2015	$ 132,470
Twelve months ending December 31, 2016	104,130
Twelve months ending December 31, 2017	103,296
Twelve months ending December 31, 2018	72,735
Twelve months ending December 31, 2019	32,682
Twelve months ending December 31, 2020 and thereafter	$ 1,695

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Vessels, Drilling Rigs, Drillships, Machinery and Equipment

12 Months Ended

Dec. 31, 2014

Vessels, Drilling Rigs, Drillships, Machinery And Equipment [Abstract]

Vessels, Drilling Rigs, Drillships, Machinery And Equipment

7. Vessels, Drilling Rigs, Drillships, Machinery and Equipment:
Vessels: The amounts in the accompanying consolidated balance sheets are analyzed as follows:
	Cost		Accumulated Depreciation		Net Book Value
Balance, December 31, 2012	$	2,562,411	$	(502,841)	$	2,059,570
Additions/transfers from vessels under construction		310,047		-		310,047
Depreciation		-		(120,530)		(120,530)
Balance, December 31, 2013		2,872,458		(623,371)		2,249,087
Additions		54,660		-		54,660
Depreciation		-		(123,982)		(123,982)
Vessel impairment charge		(53,167)		15,019		(38,148)
Balance, December 31, 2014	$	2,873,951	$	(732,334)	$	2,141,617

On February 10, 2012, the Company concluded two Memoranda of Agreement for the sale of vessels Avoca and Padre and on March 16, 2012, for the sale of vessel Positano, for a sale price of $118,000 in the aggregate. The Company did not classify the above vessels as "held for sale" in the accompanying consolidated balance sheet as of December 31, 2011, as all criteria required for their classification as "Vessels held for sale" were not met. An impairment loss of $32,584 in the aggregate, was recognized, as a result of the reduction of the vessels' carrying amount to their fair value in 2011. The vessels Avoca and Padre were delivered to their new owners on February 22, 2012 and February 24, 2012, respectively, realizing a loss of $1,511 in 2012. The vessel Positano was delivered to her new owners on May 4, 2012, realizing a gain of $492 in 2012.

On March 18, 2014, the Company concluded a Memorandum of Agreement with an unaffiliated third party for the acquisition of one second hand Capesize vessel with an attached time charter, Raiatea (ex. Conches), for a purchase price of $53,000. The vessel was delivered on April 24, 2014.

As a result of the impairment review for the year ended December 31, 2014, the Company determined that the carrying amount of one of its assets wasnot recoverable and, therefore, an impairment loss of $38,148 was recognized, as a result of the reduction of the vessel's carrying amount to its fair value.

Drilling rigs, drillships, machinery and equipment:

The amounts in the accompanying consolidated balance sheets are analysed as follows:

		Cost		Accumulated Depreciation		Net Book Value
Balance, December 31, 2012	$	$5,021,508	$	($574,778)	$	$4,446,730
Additions		1,616,335		-		1,616,335
Depreciation		-		(234,834)		(234,834)
Balance, December 31, 2013	$	6,637,843	$	(809,612)	$	5,828,231
Additions		755,330		-		$755,330
Depreciation		-		(323,814)		(323,814)
Balance, December 31, 2014	$	7,393,173	$	(1,133,426)	$	6,259,747

As of December 31, 2014, all of the Company's operating vessels, drilling rigs and drillships, have been pledged as collateral to secure the bank loans, Ocean Rig's 6.5% senior secured notes due 2017 and the term loan B facilities (Note 9).

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Vessels, Drilling Rigs, Drillships, Machinery and Equipment - Vessels (Tables) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Balance,at beginning of period	$ 2,249,087
Vessel impairment charge	38,148	43,490	0
Balance,at end of period	2,141,617	2,249,087
Cost | Vessels
Balance,at beginning of period	2,872,458	2,562,411
Additions/transfers from vessels under construction	54,660	310,047
Depreciation	0	0
Vessel impairment charge	(53,167)
Balance,at end of period	2,873,951	2,872,458
Accumulated Depreciation | Vessels
Balance,at beginning of period	(623,371)	(502,841)
Additions/transfers from vessels under construction	0	0
Depreciation	(123,982)	(120,530)
Vessel impairment charge	15,019
Balance,at end of period	(732,334)	(623,371)
Net Book Value | Vessels
Balance,at beginning of period	2,249,087	2,059,570
Additions/transfers from vessels under construction	54,660	310,047
Depreciation	(123,982)	(120,530)
Vessel impairment charge	(38,148)
Balance,at end of period	$ 2,141,617	$ 2,249,087

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Other Current assets

12 Months Ended

Dec. 31, 2014

Other Current Assets [Abstract]

Other Current assets

5. Other Current assets
The amount of other current assets shown in the accompanying consolidated balance sheets is analyzed as follows:
	December 31,
	2013		2014
Inventories	$	25,640	$	20,304
Deferred mobilization expenses		75,804		66,169
Prepayments and advances		14,425		28,071
Insurance claims (Note 13)		2,012		7,201
Other		15,994		3,719
	$	133,875	$	125,464

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Advances for Vessels and Drillships under Construction and Acquisitions

12 Months Ended

Dec. 31, 2014

Advances for Vessels and Rigs under Construction and Acquisitions [Abstract]

Advances for Vessels and Drillshipss under Construction and Acquisitions

6. Advances for Vessels and Drillships under Construction and Acquisitions: The amounts shown in the accompanying consolidated balance sheets include milestone payments relating to the drillships building contracts with the shipyards, supervision costs and any material related expenses incurred during the construction periods, all of which are capitalized in accordance with the accounting policy discussed in Note 2. As of December 31, 2013 and 2014, the movement of the advances for vessels and drillships under construction and acquisitions are set forth below:
	December 31,
	2013		2014
Balance at beginning of year	$	1,201,807	$	679,008
Advances for drillships under construction and related costs		1,279,281		691,755
Cancellation of vessel acquisitions		-		(15,240)
Vessels' impairment charge		(43,490)		-
Vessels/drillships delivered		(1,758,590)		(731,539)
Balance at end of year	$	679,008	$	623,984

On April 12, 2011, the Company concluded an order with an established Chinese shipyard for two 176,000 dwt drybulk vessels, namely hull number H1241 and H1242, for an aggregated price of $54,164 per vessel. On March 26, 2013, the Company concluded two Memoranda of Agreements with an unrelated party for the sale of the Capesizenewbuildings, Hull 1241 and Hull 1242, for a sale price of $71,000 in the aggregate. An impairment loss of $31,617 in the aggregate, was recognized in 2013 as a result of the reduction of the vessels' carrying amount to their fair value. In addition, an amount of $10,245 related to this agreement was paid in 2013 and included in "Contract termination fees and other" in the consolidated financial statements. On May 23, 2013 and June 17, 2013, Hull 1241 and Hull 1242, were delivered to their new owners, respectively.

On December 16, 2011, the Company placed an order for four 75,900 dwt Panamax ice class bulk vessels, namely hull number H1259, H1260, H1261 and H1262, with Jiangsu Rongsheng Heavy Industries, for a price of $34,000 each. On August 24, 2014, the Company agreed with Jiangsu Rongsheng Heavy Industries to cancel the construction of the four newbuilding Ice class Panamax vessels. On September 2, 2014, the Company received in connection with the cancellation of these newbuilding contracts all installments previously paid to the shipyard of $11,560, plus interest, which resulted to a loss of $1,307 recognized in the consolidated statement of operations for the year ended December 31, 2014.

In connection with OceanFreight's acquisition, the Company acquired the orders for five Very Large Ore Carriers, or VLOCs with an established Chinese shipyard. On September 10, 2012, the vessel Fakarava was delivered to the Company while on May 23, 2013 and June 18, 2013, the Company took delivery of its newbuilding VLOC's Negonego (ex. H1229) and Rangiroa (ex. H1228), respectively. During March 2013, the Company accepted an offer from an entity affiliated with Mr. George Economou, the Company's Chairman, President and Chief Executive Officer (Note 4), for the novation of the shipbuilding contracts of two VLOC under construction, Hull 1239 and Hull 1240, scheduled for delivery during the fourth quarter 2013 and the first quarter 2014, respectively. An impairment loss of $11,873 in the aggregate, was recognized in 2013, as a result of the reduction of the vessels carrying amount to their fair value. In addition, due to the novation agreements, which were signed on April 17, 2013, an amount of $18,305 was paid in 2013 and included in "Contract termination fees and other" in the consolidated financial statements.

On November 22, 2010, the Company placed an order for twelve tanker vessels (six Aframax and six Suezmax), with an established Korean shipyard, for a total consideration of $771,000. On January 18, 2011, March 23, 2011, April 29, 2011 and October 7, 2011, the Company took delivery of its newbuilding tankers Saga, Vilamoura, Daytona and Belmar, respectively. On January 3, 2012, April 25, 2012 and May 31, 2012, the Company took delivery of its newbuilding tankers Calida, Lipari and Petalidi, respectively, while on January 8, 2013, January 15, 2013 and January 31, 2013, the Company took delivery of its newbuilding tankers Alicante, Mareta and Bordeira. On December 27, 2012, the Company entered into two novation agreements with an unrelated party for the sale of the remaining two newbuilding tankers Esperona and Blanca. The total cost of $41,339, including capitalized expenses, included in "Contract termination fees and other " in the accompanying 2012 consolidated statement of operations consists mainly of the forfeiture of $19,939 in deposits (including capitalized expenses) for the acquisition of the tanker vessels already made by the Company and $10,700 in cash consideration for each newbuilding tanker.

On April 18, 2011, April, 27, 2011, June 23, 2011 and September 20, 2012, pursuant to the option contract with Samsung Heavy Industries Co Ltd. ("Samsung"), the Company's majority owned subsidiary, Ocean Rig exercised four of its six newbuilding drillship options, and entered into building contracts for four seventh generation ultra-deepwaterdrillships, namely the Ocean Rig Mylos, the Ocean Rig Skyros, the Ocean Rig Athena, and the Ocean Rig Apollo for a total contractual cost of approximately $608,000 per drillship for the initial three and $683,000 for the fourth. The Ocean Rig Mylos, the Ocean Rig Skyros, the Ocean Rig Athenaand the Ocean Rig Apollowere delivered on August 19, 2013, December 20, 2013, March 24, 2014 and March 5, 2015, respectively.

On August 30, 2013, Drillship Santorini Owners Inc., a wholly owned subsidiary of Ocean Rig, the Company's majority owned subsidiary, signed a contract to construct theOcean RigSantorini, a 7th generation ultra deepwater drillship at Samsung Heavy Industries. This 7th generation drillship is a sister ship to theOcean Rig Skyros, theOcean Rig Athena and theOcean Rig Apollo. The Ocean Rig Santorini, which is equipped with two blow-out preventers and the Company has advanced $127,000 to the yard, is scheduled to be delivered in June 2016. The total project cost is estimated to be approximately $644,000.

On April 8, 2014, two contracts between Drillship Crete Owners Inc. and Drillship Amorgos Owners Inc., two wholly owned subsidiaries of Ocean Rig, the Company`s majority owned subsidiary and Samsung Heavy Industries Co., Ltd ("Samsung") became effective for the construction of two seventh generation new integrated design drillships at Samsung and paid $76,600 as first installment to the yard for each of the new drillships, which are equipped with two blow-outpreventers. The drillships are scheduled to be delivered to the Company in February 2017 and June 2017, respectively. The total project cost is approximately $728,000, per drillship.

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Other non-current assets

12 Months Ended

Dec. 31, 2014

Other Non Current Assets [Abstract]

Other Non-Current assets

8. Other non-current assets:
The amounts included in the accompanying consolidated balance sheets are as follows:
		December 31,
		2013		2014
	Security deposits for derivatives	$	550	$	550
	Deferred mobilization expenses		73,806		43,327
	Prepaid investments		21,554		57,910
	Intangible assets, net		6,175		4,732
	Above-market acquired time charter contracts		8,816		1,373
	Other		7,525		-
		$	118,426	$	107,892

As of December 31, 2013 and 2014, security deposits of $550 for the tankers Saga and Vilamoura, were recorded as "Other non-current assets" in the accompanying consolidated balance sheets due to the market loss in the swap agreements as of the related dates.

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Long-Term Debt (Table) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Secured Credit Facilities - Drybulk Segment	$ 685,410	$ 638,820
Secured Credit Facilities - Tanker Segment	277,913	303,979
Secured Bridge Credit Facility	200,000	0
Less: Deferred financing costs and equity component of notes	(118,710)	(160,046)
Total debt	5,517,613	5,568,003
Less: Current portion	(1,165,021)	(1,660,168)
Long-term portion	4,352,592	3,907,835
5% Convertible Senior Unsecured Notes
5% Convertible Senior Unsecured Notes	0	700,000
6.5% Drill Rigs Senior Secured Notes
Senior Notes	800,000	800,000
7.25% Ocean Rig's Senior Unsecured Notes
Senior Notes	500,000	0
9.5% Ocean Rig Senior Unsecured Notes
Senior Notes	0	500,000
$1.35 Billion Secured Credit Facilities - Drilling Segment
Secured Credit Facilities - Drilling Segment	0	890,000
$1.3 Billion Term Loan B Facility - Drilling Segment
Term Loan B Facility - Drilling Segment	1,296,750	0
$1.9 Billion Term Loan B Facility - Drilling Segment
Term Loan B Facility - Drilling Segment	$ 1,876,250	$ 1,895,250

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Commitment and contingencies - Legal proceeding - Additional Information (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended			7 Months Ended	5 Months Ended	8 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Jul. 31, 2013	May 24, 2012	Aug. 31, 2012
Legal Settlements And Other	$ (2,013)	$ 4,585	$ (9,360)
Loss of hire insurance recoveries recognized as revenue	2,185,524	1,492,014	1,210,139
Receivables previously recognized	2,825	2,948
Capricorn Greenland Exploitation 1 Limited and Cairn Energy Plc
Legal Settlements And Other		6,000
Proceeds from legal settlements				5,000
Previously recognized insurance claim		11,000
Leiv Eiriksson
Payments for Legal Settlements					6,100
Legal Settlements And Other			6,100
Ocean Rig Corcovado
Proceeds from legal settlements	20,200					24,600
Loss of hire insurance recoveries recognized as revenue	20,200		24,600
Ocean Rig Mylos
Proceeds from legal settlements	39,100
Loss of hire insurance recoveries recognized as revenue	$ 39,600

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Long-Term Debt - Principal Payments (Tables) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Long-term Debt, by Maturity [Abstract]
2015	$ 1,195,323
2016	32,000
2017	832,000
2018	32,000
2019	532,000
2020 and thereafter	3,013,000
Total principal payments	5,636,323	5,728,049
Less: Financing fees and equity component of notes	(118,710)	(160,046)
Total debt	$ 5,517,613	$ 5,568,003

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Schedule I - Condensed Financial Information of Dryships Inc. - Statements of Comprehensive Income/(loss) (Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Net income/(loss)	$ 58,020	$ (198,028)	$ (288,593)
Other comprehensive income/ (loss):
Unrealized gain/(loss) on senior notes	0	0	2,059
Reclassificaton of gain associated with Senior Notes to Consolidated Statement of Operations, net	0	0	(709)
Reclassification of losses on previously designated cash flow hedges to Consolidated Statement of Operations, net	0	0	22,904
Reclassification of realized losses associated with capitalized interest to Consolidated Statement of Operations, net	550	550	549
Actuarial gains/(losses)	(1,518)	3,335	(637)
Other comprehensive income	(968)	3,885	24,166
Comprehensive income/(loss)	57,052	(194,143)	(264,427)
Dryships Inc.
Net income/(loss)	(47,512)	(223,596)	(246,778)
Other comprehensive income/ (loss):
Unrealized gain/(loss) on senior notes	0	0	2,059
Reclassificaton of gain associated with Senior Notes to Consolidated Statement of Operations, net	0	0	(709)
Reclassification of losses on previously designated cash flow hedges to Consolidated Statement of Operations, net	0	0	15,261
Reclassification of realized losses associated with capitalized interest to Consolidated Statement of Operations, net	327	331	371
Actuarial gains/(losses)	(900)	2,087	(416)
Other comprehensive income	(573)	2,418	16,566
Comprehensive income/(loss)	$ (48,085)	$ (221,178)	$ (230,212)

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Other non-current assets (Table) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
OTHER NON-CURRENT ASSETS:
Security deposits for derivatives	$ 550	$ 550
Deferred mobilization expenses	43,327	73,806
Prepaid investments	57,910	21,554
Intangible assets, net	4,732	6,175
Above-market acquired time charter contracts	1,373	8,816
Other	0	7,525
Total	$ 107,892	$ 118,426

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Earnings per share (Table) (details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Earnings Per Share Reconciliation [Abstract]
Net income/(loss) attributable to Dryships Inc.	$ (47,512)	$ (223,093)	$ (246,778)
Less: Non-vested common stock dividends declared and undistributed earnings	(697)	(56)	0
Basic EPS
Income/(loss) available to common stockholders	(48,209)	(223,149)	(246,778)
Weighted average number of outstanding shares, basic	456,031,628	384,063,306	380,159,088
Amount per share	$ (0.11)	$ (0.58)	$ (0.65)
Dilutive effect of securities	0	0	0
Diluted EPS
Income/ (Loss) available to common stockholders	$ (48,209)	$ (223,149)	$ (246,778)
Weighted average number of outstanding shares, diluted	456,031,628	384,063,306	380,159,088
Amount per share	$ (0.11)	$ (0.58)	$ (0.65)

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Vessels, Drilling Rigs, Drillships, Machinery and Equipment (Tables)

12 Months Ended

Dec. 31, 2014

Vessels, Drilling Rigs, Drillships, Machinery And Equipment [Abstract]

Vessels

	Cost		Accumulated Depreciation		Net Book Value
Balance, December 31, 2012	$	2,562,411	$	(502,841)	$	2,059,570
Additions/transfers from vessels under construction		310,047		-		310,047
Depreciation		-		(120,530)		(120,530)
Balance, December 31, 2013		2,872,458		(623,371)		2,249,087
Additions		54,660		-		54,660
Depreciation		-		(123,982)		(123,982)
Vessel impairment charge		(53,167)		15,019		(38,148)
Balance, December 31, 2014	$	2,873,951	$	(732,334)	$	2,141,617

Drilling rigs, drillships, machinery and equipment

		Cost		Accumulated Depreciation		Net Book Value
Balance, December 31, 2012	$	$5,021,508	$	($574,778)	$	$4,446,730
Additions		1,616,335		-		1,616,335
Depreciation		-		(234,834)		(234,834)
Balance, December 31, 2013	$	6,637,843	$	(809,612)	$	5,828,231
Additions		755,330		-		$755,330
Depreciation		-		(323,814)		(323,814)
Balance, December 31, 2014	$	7,393,173	$	(1,133,426)	$	6,259,747

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Transactions with Related Parties - Statement of Operations (Tables) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Voyage Revenues	$ 368,447	$ 311,764	$ 268,236
Voyage expenses	(117,165)	(103,211)	(30,012)
Contract termination fees and other	0	(33,293)	(41,339)
General and administrative expenses:
Rent	0	0	(41)
Amortization of CEO stock based compensation	(11,093)	(11,424)	(13,299)
Sigma and Blue Fin pool
Voyage Revenues	44	5,306	27,306
Cardiff/ Cardiff Drilling
Service Revenues, net	16,826	10,786	6,193
TMS Tankers
Voyage expenses	(2,002)	(1,483)	(507)
General and administrative expenses:
Management fees	(8,548)	(8,362)	(5,151)
TMS Bulkers
Voyage expenses	(2,754)	(2,619)	(3,166)
Gain on sale of assets - commissions	0	(710)	(1,180)
General and administrative expenses:
Management fees	(29,176)	(27,803)	(26,518)
Cardiff Tankers
Voyage expenses	(2,002)	(1,423)	(166)
Fabiana Services S.A.
General and administrative expenses:
Consultancy fees	(4,595)	(3,593)	(4,397)
Vivid Finance Limited
General and administrative expenses:
Consultancy fees	(16,242)	(18,056)	(14,201)
Azara Services S.A.
General and administrative expenses:
Consultancy fees	(9,000)	(5,000)	0
Basset Holding Inc.
General and administrative expenses:
Consultancy fees	(8,191)	(4,200)	(2,676)
Related Party
Contract termination fees and other	0	(23,048)	(300)
Dryships Inc.
General and administrative expenses:
Amortization of CEO stock based compensation	(7,516)	(7,780)	(12,663)
Ocean Rig
General and administrative expenses:
Amortization of CEO stock based compensation	$ (2,316)	$ (1,358)	$ 0

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Commitment and contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies [Abstract]

Commitments and contingencies

13. Commitment and contingencies:

13.1 Legal proceedings

Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping and drilling business.

The Company has obtained hull and machinery insurance for the assessed market value of the Company's fleet and protection and indemnity insurance. However, such insurance coverage may not provide sufficient funds to protect the Company from all liabilities that could result from its operations in all situations. Risks against which the Company may not be fully insured or insurable include environmental liabilities, which may result from a blow-out or similar accident, or liabilities resulting from reservoir damage alleged to have been caused by the negligence of the Company.

The Company's loss of hire insurance coverage does not protect against loss of income from day one. It covers approximately one year for the loss of time but will be effective after 45 days' off-hire. During 2012, the Ocean Rig Corcovado,a drillship owned by Ocean Rig,incurred off-hire due to a failure in one of its engines which was a covered event under the loss of hire policy that resulted in $24.6 million being recognized as revenue during the year ended December 31, 2012. The amount of $24.6 million was reimbursed by the insurers to the Company in August 2012. During 2014, the Ocean Rig Corcovado incurred off-hire for the same event and, as a result,an additional amount of $20.2 million for the above covered event was recognized as revenue during the year ended December 31, 2014, and was reimbursed during the same period. During 2014, the Ocean Rig Mylos incurred off-hire due to damage to the blow-out-preventer stack during testing, which was a covered event under the loss of hire policy that resulted in $39.6 million being recognized as revenue during the year ended December 31, 2014, from which an amount of $39.1 was reimbursed during the year.

As part of the normal course of operations, the Company's customers may disagree on amounts due to the Company under the provision of the contracts which are normally settled though negotiations with the customer. Disputed amounts are normally reflected in revenues at such time as the Company reaches agreement with the customer on the amounts due.

Ocean Rig's drilling rig, the LeivEiriksson operated in Angola during the period from 2002 to 2007. Ocean Rig's manager in Angola during this period made a legal claim for reimbursement of import/export duties for two export/importation events in the period 2002 to 2007 retroactively levied by the Angolan government. Agreement was reached between the parties to settle this claim for an amount of $6.1 million which was paid by Ocean Rig's relevant subsidiary on May 24, 2012, to the claimant, in full and final settlement of the London Court Proceedings. Ocean Rig recorded a charge of $6.1 million during the year ended December 31, 2012, which is included in "Legal settlements and other, net" in the consolidated statements of operations.

On May 10, 2013, Drillship Hydra Owners Inc., being the owning company of the drillship, the Ocean Rig Corcovado, filed a claim against Capricorn Greenland Exploration 1 Limited and Cairn Energy Plc with the High Court in London in connection with the loss of daily earnings and cost of repair for the Blow Out Preventer of the Ocean Rig Corcovado in June and July 2011. In July 2013, Ocean Rig reached an out-of-court commercial agreement with Capricorn Greenland Exploration 1 Limited and Cairn Energy Plc to receive a compensation amounting to $5.0 million and a Settlement Agreement and Release dated September 12, 2013, was entered and the relevant claim filed in the High Court in London, U.K. was dropped. In this respect, Ocean Rig, having previously recognized a receivable of $11.0 million, recorded a charge of $6.0 million during the year ended December 31, 2013, which is included under "Legal settlements and other, net" in the consolidated statement of operations.

Ocean Rig Norway Operations Inc. ("OCR"), a subsidiary of Ocean Rig, was notified by a letter dated November 13, 2013, that arbitration proceedings were commenced against it by Westcon Yard AS of Norway ("Westcon"), in connection to an alleged outstanding unpaid amount of Norwegian Krone Seventy Seven Million Three Hundred Eighty Three Thousand Eight Hundred and Three and Fifty Eight Шre (NOK 77,383,803.58), $10.4 million (based on based on the NOK/U.S. Dollar exchange rate as of December 31, 2014) plus interest and costs related to upgrades performed in the drilling unit the LeivEiriksson in late 2012 and early 2013. The counterparties reached an agreement during the year ended December 31, 2014.

13.2 Purchase obligations:

The following table sets forth the Company's contractual obligations and their maturity dates as of December 31, 2014, for a period of three fiscal years:

Obligations:	Total		2015		2016			2017
Drillship building contracts		1,928,900		566,300		498,200		864,400
Total obligations	$	1,928,900	$	566,300	$	498,200	$	864,400

13.3 Contractual charter revenue

Future minimum contractual charter revenue, based on vessels committed to non-cancelable, long-term time contracts as of December 31, 2014, will be $132,470 during 2015, $104,130 during 2016, $103,296 during 2017, $72,735 during 2018, $32,682 during 2019 and $1,695 during 2020 and thereafter. These amounts do not include any assumed off-hire.

Under seven of the Company's charter agreements, the charterer has the option to (i) acquire the vessels at fair market value as determined by two independent brokers, at the date that the options are exercised, less $5,000 per vessel or, (ii) to require a cash payout of $5,000 per charter agreement in which case the charter agreement will automatically be terminated on the date of completion of the current voyage. These options are exercisable beginning late March 2015 and throughout the term of the charter agreements which expire through 2020. The option will be amortized over the term of the charter agreements or when exercised, if earlier.

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Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation [Abstract]

Income Taxes

18. Income Taxes:

18.1 Drybulk and Tanker Segments

Neither the Republic of the Marshall Islands nor Malta imposes a tax on international shipping income earned by a "non-resident" corporation thereof. Under the laws of the Republic of the Marshall Islands and Malta, the countries in which Dryships and the vessels owned by subsidiaries of the Company are registered, the Company's subsidiaries (and their vessels) are subject to registration fees and tonnage taxes, as applicable, which have been included in Vessels' operating expenses in the accompanying consolidated statements of operations.

Pursuant to Section 883 of the United States Internal Revenue Code (the "Code") and the regulations there under, a foreign corporation engaged in the international operation of ships is generally exempt from U.S. federal income tax on its U.S.-source shipping income if the foreign corporation meets both of the following requirements: (a) the foreign corporation is organized in a foreign country that grants an "equivalent exemption" to corporations organized in the United States for the types of shipping income (e.g., voyage, time, bareboat charter) earned by the foreign corporation and (b) more than 50% of the value of the foreign corporation's stock is owned, directly or indirectly, by individuals who are "residents" of the foreign corporation's country of organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States (the "50% Ownership Test"). For purposes of the 50% Ownership Test, stock owned in a foreign corporation by a foreign corporation whose stock is "primarily and regularly traded on an established securities market" in the United States (the "Publicly-Traded Test") will be treated as owned by individuals who are "residents" in the country of organization of the foreign corporation that satisfies the Publicly-Traded Test.

The Republic of the Marshall Islands and Malta, the jurisdictions where the Company and its ship-owning subsidiaries are incorporated, each grants an "equivalent exemption" to United States corporations with respect to each type of shipping income earned by the Company's ship-owning subsidiaries. Therefore, the ship-owning subsidiaries will be exempt from United States federal income taxation with respect to U.S.-source shipping income if they satisfy the 50% Ownership Test. The Company believes that each of the Company's Republic of the Marshall Islands and Malta ship-owning subsidiaries will be entitled to exemption from U.S. federal income tax in respect of their U.S. source shipping income.

The Company believes that it satisfied the Publicly-Traded Test for its 2012, 2013 and 2014 Taxable Years and, therefore, 100% of the stock of its Republic of the Marshall Islands and Malta ship-owning subsidiaries will be treated as owned by individuals "resident" in the Republic of the Marshall Islands. As such, each of the Company's Republic of the Marshall Islands and Malta ship-owning subsidiaries will be entitled to exemption from U.S. federal income tax in respect of their U.S. source shipping income. The Company's ship-owning subsidiaries intend to take such position on their U.S. federal income tax returns for the 2014 taxable year.

18.2 Drilling Segment:

Ocean Rig UDW operates through its various subsidiaries in a number of countries throughout the world. Income taxes have been provided based upon the tax laws and rates in the countries in which operations are conducted and income is earned. The countries in which the Company operates have taxation regimes with varying nominal rates, deductions, credits and other tax attributes. Consequently, there is not an expected relationship between the provision for/or benefit from income taxes and income or loss before income taxes.

The components of the Company's income/ (losses) before taxes are as follows:

	Year ended December 31,
	2012		2013		2014
Domestic loss (Republic of the Marshall Islands)	$	(2,536)	$	(66,604)	$	(161,913)
Foreign income/(loss)		(85,843)		174,518		499,539
Total income/(loss) before taxes	$	(88,379)	$	107,914	$	337,626

The components of the Company's tax expense were as follows:
	Year ended December 31,
		2012		2013		2014
Current Tax expense	$	43,957	$	44,591	$	77,823
Income taxes	$	43,957	$	44,591	$	77,823
Effective tax rate		(49.7)%		41.3%		23.1%

The current tax expense is mainly related to withholding tax based on total contract revenue or bareboat fees. In 2014, approximately 64% of the current tax expense was related to withholding taxes in Angola. In 2013, approximately 72% of the current tax expense was related to withholding taxes in Angola, Tanzania, Sierra Leone, Liberia and Gabon, while in 2012 approximately 81% of the current tax expense was related to withholding taxes in Angola, Equatorial Guinea, Ivory Coast and Ghana. Taxes have not been reflected in other comprehensive income/(loss) since the valuation allowances would result in no recognition of deferred tax.
	Year Ended December 31,
Reconciliation of total tax expense:		2012		2013		2014
Change in valuation allowance		$	6,311	$	-	$	-
Differences in tax rates			(3,896)		89		-
Effect of permanent differences			120		-		-
Adjustments in respect to current income tax of previous years			184		683		-
Tax rate on interest			-		742		-
Effect of exchange rate differences			(1,599)		7		-
Income tax			42,837		43,070		70,441
Taxes on litigation matters subject to statutory rates, including interest and penalties			-		-		7,382
Total		$	43,957	$	44,591	$	77,823

Ocean Rig UDW has from 2011 elected to use the statutory tax rate for each year based upon the location where the largest parts of its operations were domiciled. During 2012, 2013 and 2014, most of its activities were in the Republic of the Marshall Islands with tax rate of zero.

Ocean Rig UDW is subject to changes in tax laws, treaties, regulations and interpretations in and between the countries in which its subsidiaries operate. A material change in these tax laws, treaties, regulations and interpretations could result in a higher or lower effective tax rate on worldwide earnings.

Deferred tax assets and liabilities are recognized for the anticipated future tax effects of temporary differences between the financial statement basis and the tax basis of the Company's assets and liabilities at the applicable tax rates in effect. The Company has not recognized any deferred tax liability, while the significant components of deferred tax assets are as follows:

	Year ended December 31,
	2013		2014
Deferred tax assets
Net operations loss carry forward	$	1,723	$	-
Accelerated depreciation of assets		65		101
Pension		608		1,184
Total deferred tax assets	$	2,396	$	1,285
Less: valuation allowance		(2,396)		(1,285)
Total deferred tax assets, net	$	-	$	-
		1

A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. The Company provides a valuation allowance to offset deferred tax assets for net operating losses ("NOL") incurred during the year in certain jurisdictions and for other deferred tax assets where, in the Company's opinion, it is more likely than not that the financial statement benefit of these losses will not be realized. The Company provides a valuation allowance for foreign tax loss carry forward to reflect the possible expiration of these benefits prior to their utilization. As of December 31, 2014, the valuation allowance for deferred tax assets is decreased from $2,396 in 2013 to $1,285 in 2014 reflecting a decrease in net deferred tax assets during the year.

We are under tax audits in several jurisdictions for the years 2008 – 2012 and have not received any assessments or proposed assessment that we would expect to result in a material assessment of taxes.

The company repatriates earnings from subsidiaries that are not subject to taxes and it has the intention to indefinitely reinvest the undistributed earnings of its subsidiaries that are subject to tax, thus no deferred tax liability would be recognized.

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Income Taxes - Reconciliation of Total Tax Expense (Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation [Abstract]
Change in valuation allowance	$ 0	$ 0	$ 6,311
Differences in tax rates	0	89	(3,896)
Effect of permanent differences	0	0	120
Adjustments in respect to current income tax of previous years	0	683	184
Tax rate on interest	0	742	0
Effect of exchange rate differences	0	7	(1,599)
Income tax	70,441	43,070	42,837
Taxes on litigation matters subject to statutory rates, including interest and penalties	7,382	0	0
Total	$ 77,823	$ 44,591	$ 43,957

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Going Concern (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2013	Feb. 13, 2015
Loans with breached covenants	$ 259,537
Reclassification Of Long Term Debt	1,163,321
Working capital deficit	394,483
Current portion of long-term debt	1,165,021		1,660,168
Purchase obligations funded by short term capital commitments		566,300
Excluding balance classified current due to breach covenant
Current portion of long-term debt	475,717
Ocean Rig Apollo
Syndicated secured term loan				$ 475,000

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Schedule I - Condensed Financial Information of Dryships Inc. - Narratives (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended			4 Months Ended	11 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Apr. 30, 2010	Nov. 30, 2014	Nov. 30, 2009	Nov. 14, 2014	Nov. 18, 2014
Long-term Debt, Gross	$ 5,636,323	$ 5,728,049
Repayment of convertible debt	700,000	0	0
Current portion of long-term debt	1,165,021	1,660,168
Issuance of Convertible Unsecured Senior Notes in April 2010
Debt Instrument, Face Amount				240,000
Proceeds from Issuance of Unsecured Debt				237,202
Issuance of Convertible Unsecured Senior Notes in November 2009
Debt Instrument, Face Amount						460,000
Proceeds from Issuance of Unsecured Debt						447,810
Repurchase and cancelation of convertible debt					191,090
Repayment of convertible debt					508,910
Issuance of Convertible Unsecured Senior Notes in April 2010 - Initial Issuance
Debt Instrument, Face Amount				220,000
Issuance of Convertible Unsecured Senior Notes in November 2009 - Initial Issuance
Debt Instrument, Face Amount						400,000
Issuance of Convertible Unsecured Senior Notes in April 2010 - Exercise of over allotment option
Debt Instrument, Face Amount				20,000
Issuance of Convertible Unsecured Senior Notes in November 2009 - Exercise of over allotment option
Debt Instrument, Face Amount						60,000
Secured Credit Facility
Debt Instrument, Face Amount	753,637
Long-term Debt, Gross	174,406	174,406
Secured Bridge Loan Facility
Line of credit facility amount outstanding							200,000
Dryships Inc.
Long-term Debt, Gross	494,406
Repayment of convertible debt	700,000	97,164	72,804
Current portion of long-term debt	487,445	820,820
Dryships Inc. | Due to breach of covenant
Current portion of long-term debt	374,406
Ocean Rig | Unsecured Debt
Unsecured Debt								$ 120,000

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Accumulated other comprehensive loss (Tables)

12 Months Ended

Dec. 31, 2014

Accumulated other comprehensive loss [Abstract]

Schedule of Accumulated Other Comprehensive Loss

	Year ended December 31,
	2013			2014
	Attributable to Dryships Inc.	Attributable to non controlling interest	Total	Attributable to Dryships Inc.	Attributable to non controlling interest	Total
Cash flows hedges realized loss	(8,915)	(6,083)	(14,998)	(8,570)	(5,878)	(14,448)
Actuarial pension gain	2,853	1,949	4,802	1,948	1,336	3,284
Total	(6,062)	(4,134)	(10,196)	(6,622)	(4,542)	(11,164)

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Consolidated Statement of Operations (Parentherticals) (Reclassifications Of Losses On Previously Designated Cash Flow Hedges, USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012
Reclassifications Of Losses On Previously Designated Cash Flow Hedges
Interest expense	$ 22,195

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Interest and Finance Costs (Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Interest and Finance Costs [Abstract]
Interest incurred on long-term debt	$ 317,445	$ 251,596	$ 205,070
Amortization and write-off of financing fees	50,551	46,006	17,565
Amortization of convertible notes discount	45,261	43,769	38,855
Amortization of share lending agreement-note issuance costs	2,733	2,974	2,983
Commisions, commitment fees and other financial expenses	34,256	57,498	4,622
Capitalized interest	(39,225)	(69,714)	(58,967)
Total	$ 411,021	$ 332,129	$ 210,128

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Significant Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting policies:

(a)Principles of consolidation: The accompanying consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("US GAAP") and applicable rules and regulations of the U.S. Securities and Exchange Committee (the "SEC") and include the accounts and operating results of DryShips, its wholly-owned subsidiaries and its VIEs. As of December 31, 2014, the Company consolidated 100% one VIE for which it is deemed to be the primary beneficiary, i.e. it has a controlling financial interest in this entity. The VIE's totalassets and liabilities, as of December 31, 2013, were $35,782 and $56,556, respectively, total liabilities exceeding totalassets by $20,774. The VIE's total assets and liabilities, as of December 31, 2014, were $64,314 and $65,358 respectively, with total liabilities exceeding total assets by $1,044. A VIE is an entity that in general does not have equity investors with voting rights or that has equity that do not provide sufficient financial resources for the entity to support its activities. A controlling financial interest in a VIE is present when a company has the power to direct the activities of a VIE that most significantly impact the entity's economic performance and absorbs a majority of an entity's expected losses, receives a majority of an entity's expected residual returns, or both.

All intercompany balances and transactions have been eliminated on consolidation.

(b) Business combinations: The Company uses the acquisition method of accounting under the authoritative guidance on business combinations, which requires an acquirer in a business combination to recognize the assets acquired, the liabilities assumed and any non-controlling interest in the acquiree at their fair values at the acquisition date. The costs of the acquisition and any related restructuring costs are to be recognized separately in the Consolidated Statements of Operations. The acquired company's operating results are included in the Company's consolidated financial statements starting on the date of acquisition.

The purchase price is equivalent to the fair value of the consideration transferred and liabilities incurred, including liabilities related to contingent consideration. Tangible and identifiable intangible assets acquired and liabilities assumed as of the date of acquisition are recorded at the acquisition date fair value. Goodwill is recognized for the excess of the purchase price over the net fair value of assets acquired and liabilities assumed. When the fair value of net assets acquired exceeds the fair value of consideration transferred plus any non-controlling interest in the acquiree, the excess is recognized as a gain.

(c) Use of estimates: The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(d) Comprehensive income/(loss): The Company's comprehensive income/(loss) is comprised of net income/(loss), actuarial gains/losses related to the adoption and implementation of ASC 715, "Compensation-Retirement Benefits", as well as losses in the fair value of the derivatives that qualify for hedge accounting in accordance with ASC 815 "Derivatives and Hedging" and realized gains/losses on cash flow hedges associated with capitalized interest in accordance with ASC 815-30-35-38 "Derivatives and Hedging".

During 2013, the Company adopted the requirements of Accounting Standard Update ("ASU") 2013-02, "Comprehensive Income (Topic 220) - Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income". The objective of this Update is to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments do not change the current requirements for reporting net income or other comprehensive income in the financial statements. However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under US GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under US GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under US GAAP that provide additional detail about those amounts.

(e) Cash and cash equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents.

(f) Restricted cash: Restricted cash may include: (i) cash collateral required under the Company's financing and swap arrangements, (ii) retention accounts which can only be used to fund the loan installments coming due, (iii) minimum liquidity collateral requirements or minimum required cash deposits, as defined in the Company's loan agreements, (iv) taxes withheld from employees and deposited in designated bank accounts and, (v) amounts pledged as collateral for bank guarantees to suppliers.

(g) Trade accounts receivable net: The amount shown as trade accounts receivable, at each balance sheet date, includes receivables from customers, net of allowance for doubtful receivables. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate allowance for doubtful receivables.

(h) Short-term investments: Short-term investments generally represent investments in time deposits, which have maturities in excess of three months but less than twelve months. These investments are accounted for at cost.

(i)Concentration of credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents; trade accounts receivable and derivative contracts (interest rate swaps, foreign currency contracts and forward freight agreements). The maximum exposure to loss due to credit risk is the book value at the balance sheet date. The Company places its cash and cash equivalents, consisting mostly of bank deposits, with qualified financial institutions.

The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company is exposed to credit risk in the event of non-performance by counter parties to derivative instruments; however, the Company limits its exposure by diversifying among counter parties. The Company's major customers are oil companies, which reduces its credit risk. When considered necessary, additional arrangements are put in place to minimize credit risk, such as letters of credit or other forms of payment guarantees. The Company limits its credit risk with trade accounts receivable by performing ongoing credit evaluations of its customers' financial condition and generally does not require collateral for its trade accounts receivable. The Company has made advances for the construction of vessels and drillships to the yards. The ownership of the vessels and drillships is transferred from the yard to the Company at delivery. The credit risk of the advances is, to a large extent, reduced through refund guarantees issued by financial institutions.

As of December 31, 2014, cumulative installment payments made to the yards amounted to approximately $515,856for thedrillships under construction.These installment payments are, to a large extent, secured with irrevocable letters of guarantee, issued by financial institutions, or "refund guarantees".

(j) Advances for vessels and drillships under construction: This represents amounts expended by the Company in accordance with the terms of the construction contracts for vessels and drillships as well as other expenses incurred directly or under a management agreement with a related party in connection with on site supervision. In addition, interest costs incurred during the construction (until the asset is substantially complete and ready for its intended use) are capitalized. The carrying value of vessels and drillships under construction ("Newbuildings") represents the accumulated costs at the balance sheet date. Cost components include payments for yard installments and variation orders, commissions to related party, construction supervision, equipment, spare parts and capitalized interest.

(k) Capitalized interest: Interest expense is capitalized during the construction period of drilling rigs, drillships and vessels based on accumulated expenditures for the applicable project at the Company's current rate of borrowing. The amount of interest expense capitalized in an accounting period is determined by applying an interest rate ("the capitalization rate") to the average amount of accumulated expenditures for the asset during the period. The capitalization rates used in an accounting period are based on the rates applicable to borrowings outstanding during the period. The Company does not capitalize amounts in excess of actual interest expense incurred in the period. If the Company's financing plans associate a specific new borrowing with a qualifying asset, the Company uses the rate on that borrowing as the capitalization rate to be applied to that portion of the average accumulated expenditures for the asset that does not exceed the amount of that borrowing. If average accumulated expenditures for the asset exceed the amounts of specific new borrowings associated with the asset, the capitalization rate applied to such excess is a weighted average of the rates applicable to other borrowings of the Company. Capitalized interest expense for the years ended December 31, 2012, 2013 and 2014, amounted to $58,967, $69,714 and $39,225, respectively (Note 15).

(l) Insurance claims: The Company records insurance claim recoveries for insured losses incurred on damages to fixed assets, loss of hire and for insured crew medical expenses under "Other current assets". Insurance claims are recorded, net of any deductible amounts, at the time the Company's fixed assets suffer insured damages, loss due to the vessel/ drilling unit being wholly or partially deprived of income as a consequence of damage to the unit or when crew medical expenses are incurred, recovery is probable under the related insurance policies and the Company can make an estimate of the amount to be reimbursed following the insurance claim.

(m) Inventories: Inventories consist of consumable bunkers (if any), lubricants and victualing stores, which are stated at the lower of cost or market value and are recorded under "Other current assets". Cost is determined by the first in, first out method.

(n) Foreign currency translation: The functional currency of the Company is the U.S. Dollar since the Company operates in international shipping and drilling markets and, therefore, primarily transacts business in U.S. Dollars. The Company's accounting records are maintained in U.S. Dollars. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated into U.S. Dollars at the year-end exchange rates. Resulting gains or losses are included in "Other, net" in the accompanying consolidated statements of operations.

(o) Fixed assets, net:

(i) Drybulk and tanker carrier vessels are stated at cost, which consists of the contract price and any material expenses incurred upon acquisition (initial repairs, improvements, delivery expenses and other expenditures to prepare the vessel for its initial voyage). Subsequent expenditures for major improvements are also capitalized when they appreciably extend the useful life, increase the earning capacity or improve the efficiency or safety of the vessels. The cost of each of the Company's vessels is depreciated beginning when the vessel is ready for its intended use, on a straight-line basis over the vessel's remaining economic useful life, after considering the estimated residual value. Vessel's residual value is equal to the product of its lightweight tonnage and estimated scrap rate per ton. In general, management estimates the useful life of the Company's vessels to be 25 years from the date of initial delivery from the shipyard. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the date such regulations are adopted.

(ii) Drilling rigs and drillships are stated at cost less accumulated depreciation. Such costs include the cost of adding or replacing parts of drilling rig or drillship machinery and equipment when the cost is incurred, if the recognition criteria are met. The recognition criteria require that the cost incurred extends the useful life of a drilling rig or drillship. The carrying amounts of those parts that are replaced are written off and the cost of the new parts is capitalized. Depreciation is calculated on a straight-line basis over the useful life of the assets after considering the estimated residual value as follows: bare deck 30 years and other asset parts 5 to 15 years. The residual values of the drilling rigs and drillships are estimated at $35,000 and $50,000, respectively, for the years ended December 31, 2012, 2013 and 2014.

(p) Long lived assets held for sale: The Company classifies long lived assets and disposal groups as being held for sale in accordance with ASC 360, "Property, Plant and Equipment", when: (i) management has committed to a plan to sell the long lived assets; (ii) the long lived assets are available for immediate sale in their present condition; (iii) an active program to locate a buyer and other actions required to complete the plan to sell the long lived assets have been initiated; (iv) the sale of the long lived assets is probable and transfer of the asset is expected to qualify for recognition as a completed sale within one year; and (v) the long lived assets are being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Long lived assets classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. These long lived assets are not depreciated once they meet the criteria to be classified as held for sale.

When the Company concludes a Memorandum of Agreement for the disposal of a vessel/drilling unit which has yet to complete a time charter or drilling contract, it is considered that the held for sale criteria discussed in guidance are not met until the time charter or drilling contract has been completed as the vessel/drilling unit is not available for immediate sale. As a result, such vessels/drilling units are not classified as held for sale.

When the Company concludes a Memorandum of Agreement for the disposal of a vessel/drilling unit which has no time charter or drilling contract to complete or a contract that is transferable to a buyer, it is considered that the held for sale criteria discussed in the guidance are met. As a result such vessels/drilling unit are classified as held for sale. Furthermore, in the period a long-lived asset meets the held for sale criteria, a loss is recognized for any reduction of the long-lived asset's carrying amount to its fair value less cost to sell. No such adjustments were identified for the years ended December 31, 2012, 2013 or 2014.

(q) Impairment of long-lived assets: The Company reviews for impairment long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In this respect, the Company reviews its assets for impairment on an asset by asset basis. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of the asset is less than its carrying amount, the Company evaluates the asset for impairment loss. The impairment loss is determined by the difference between the carrying amount of the asset and the fair value of the asset. The Company evaluates the carrying amounts of its vessels, drilling rigs and drillships by obtaining vessel, drilling rigs and drillships appraisals to determine if events have occurred that would require modification to their carrying values or useful lives. In evaluating useful lives and carrying values of long-lived assets, the Company reviews certain indicators of potential impairment, such as undiscounted projected operating cash flows, vessel, drilling rigs and drillships sales and purchases, business plans and overall market conditions. In developing estimates of future undiscounted cash flows, the Company makes assumptions and estimates about the vessels', drilling rigs and drillships, future performance, with the significant assumptions being related to charter and drilling rates, fleet utilization, operating expenses, capital expenditures, residual value and the estimated remaining useful life of each vessel, drilling rig and drillship. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends as well as future expectations. To the extent impairment indicators are present, the Company determines undiscounted projected net operating cash flows for each vessel, drilling rig and drillship and compares them to their carrying value. The projected net operating cash flows are determined by considering the charter revenues and drilling revenues from existing time charters and drilling contracts for the fixed fleet days and an estimated daily time charter equivalent for the unfixed days. The Company estimates the daily time charter equivalent for the unfixed days based on the most recent ten year historical average for similar vessels and utilizing available market data for time charter and spot market rates and forward freight agreements over the remaining estimated life of the vessel, drilling rig and drillship, net of brokerage commissions, expected outflows for vessels', drilling rigs' and drillships' maintenance and operating expenses (including planned drydocking and special survey expenditures), assuming an average annual inflation rate of 2% and fleet utilization of 98%. The salvage value used in the impairment test is estimated to be $250 per light weight ton (LWT) for vessels, while $35,000 and $50,000 for drilling rigs and drillships, respectively in accordance with the Company's vessels', drilling rigs', drillships' depreciation policy. If the Company's estimate of undiscounted future cash flows for any vessel, drilling rig and drillship is lower than its respective carrying value, the carrying value is written down, by recording a charge to operations, to its' respective fair market value if the fair market value is lower than the vessel's, drilling rig or drillship's carrying value.

The Company's analysis for the year ended December 31, 2014, which also involved sensitivity tests on the time charter rates, drilling rates and fleet utilization (being the most sensitive inputs to variances), allowing for variances ranging from 97.5% to 92.5% depending on vessel type on time charter rates, indicated a potential impairment loss forone of its vessels, andno impairment on any of its drilling rigs and drillships. Although the Company believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective. There can be no assurance as to how long charter rates and vessel values will remain at their currently low levels or whether they will improve by any significant degree. Charter rates may remain at depressed levels for some time which could adversely affect the Company's revenue and profitability, and future assessments of vessel impairment. While for the drilling segment there can be no assurance as to how long drilling rates and drilling rigs/drillships values will remain at their currently high levels or whether they will improve or the opposite by any significant degree. As a result of the impairment review, the Company determined that the carrying amounts of its assets were recoverable and, therefore, concluded that no impairment loss was necessary for 2012 and 2013. However, due to Company's decision to sell certain vessels during the years and/or subsequent to the balance sheet dates and based on the agreed-upon sales price, an impairment charge relating to assets held for use of $0 and $43,490 for each of the years ended December 31, 2012 and 2013, respectively, was recognized. As a result of the impairment review for the year ended December 31, 2014, the Company determined that the carrying amount of one of its drybulk vesselswasnot recoverable and, therefore, an impairment loss of $38,148 was recognized(Notes 7 and 10).

(r) Dry-docking costs: The Company follows the direct expense method of accounting for dry-docking costs whereby costs are expensed in the period incurred for the vessels, drilling rigs and drillships.

(s) Class costs: The Company follows the direct expense method of accounting for periodic class costs incurred during special surveys of drilling rigs and drillships, normally every five years. Class costs and other maintenance costs are expensed in the period incurred and included in "Vessels, drilling rigs and drillships operating expenses".

(t) Deferred financing costs: Deferred financing costs include fees, commissions and legal expenses associated with the Company's long- term debt. These costs are amortized over the life of the related debt using the effective interest method and are included in interest expense. Unamortized fees relating to loans repaid or refinanced as debt extinguishments are expensed as interest and finance costs in the period the repayment or extinguishment is made. Arrangement fees paid to lenders for loans which the Company has not drawn down are capitalized and included in other current and non-current assets. Amortization and write offs for each of the years ended December 31, 2012, 2013 and 2014, amounted to $17,565, $46,006 and $50,551 respectively (Note 15).

(u) Convertible senior notes: In accordance with ASC Topic 470-20, "Debt with Conversion and Other Options," for convertible debt instruments that contain cash settlement options upon conversion at the option of the issuer, the Company determines the carrying amounts of the liability and equity components of its convertible notes by first determining the carrying amount of the liability component of the convertible notes by measuring the fair value of a similar liability that does not have an associated equity component. The carrying amount of the equity component representing the embedded conversion option is then determined by deducting the fair value of the liability component from the total proceeds. The resulting debt discount is amortized to interest cost using the effective interest method over the period the debt is expected to be outstanding as an additional non-cash interest expense. Transaction costs associated with the instrument are allocated pro-rata between the debt and equity components (Note 9).

(v) Revenue and related expenses:

(i)Drybulk carrier and tanker vessels:

Time and bareboat charters: The Company generates its revenues from charterers for the charter hire of its vessels, which are considered to be operating lease arrangements. Vessels are chartered using time and bareboat charters and where a contract exists, the price is fixed, service is provided and collection of the related revenue is reasonably assured, revenue is recognized as it is earned ratably on a straight-line basis over the duration of the period of each time charter as adjusted for the off-hire days that the vessel spends undergoing repairs, maintenance and upgrade work depending on the condition and specification of the vessel.

Voyage charters:Voyage charter is a charter where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified freight rate per ton. If a charter agreement exists and collection of the related revenue is reasonably assured, revenue is recognized as it is earned ratably during the duration of the period of each voyage. When a voyage charter agreement is in place, a voyage is deemed to commence upon the completion of discharge of the vessel's previous cargo and is deemed to end upon the completion of discharge of the current cargo. Demurrage income represents payments by a charterer to a vessel owner when loading or discharging time exceeds the stipulated time in the voyage charter and is recognized ratably as earned during the related voyage charter's duration period.

Pooling arrangements: For vessels operating in pooling arrangements, the Company earns a portion of the total revenues generated by the pool, net of expenses incurred by the pool. The amount allocated to each pool participant vessel, including the Company's vessels, is determined in accordance with an agreed-upon formula, which is determined by points awarded to each vessel in the pool based on the vessel's age, design and other performance characteristics. Revenue under pooling arrangements is accounted for on the accrual basis and is recognized when an agreement with the pool exists, price is fixed, service is provided and the collectability is reasonably assured.

The allocation of such net revenue may be subject to future adjustments by the pool however, historically, such changes have not been material.

Voyage related and vessel operating costs: Under a time charter, specified voyage costs, such as fuel and port charges are paid by the charterer and other non-specified voyage expenses, such as commissions, are paid by the Company. Vessel operating costs including crew, maintenance and insurance are paid by the Company. Under voyage charter arrangements, voyage expenses, primarily consisting of commissions, port, canal and bunker expenses that are unique to a particular charter, are paid for by the Company, except for commissions, which are either paid for by the Company or are deducted from the freight revenue. All voyage and vessel operating expenses are expensed as incurred, except for commissions. Commissions are deferred and amortized over the related voyage charter period to the extent revenue has been deferred since commissions are earned as the Company's revenues are earned. Under a bareboat charter, the charterer assumes responsibility for all voyage and vessel operating expenses and risk of operation.

Deferred voyage revenue: Deferred voyage revenue primarily relates to cash advances received from charterers. These amounts are recognized as revenue over the voyage or charter period.

(ii)Drilling rigs and drillships:

Revenues: The Company's services and deliverables are generally sold based upon contracts with its customers that include fixed or determinable prices. The Company recognizes revenue when delivery occurs, as directed by its customer, and collectability is reasonably assured. The Company evaluates if there are multiple deliverables within its contracts and whether the agreement conveys the right to use the drilling rigs and drillships for a stated period of time and meets the criteria for lease accounting, in addition to providing a drilling services element, which is generally compensated for by day rates. In connection with drilling contracts, the Company may also receive revenues for preparation and mobilization of equipment and personnel or for capital improvements to the drilling rigs or drillships and day rate or fixed price mobilization and demobilization fees. Revenues are recorded net of agents' commissions. There are two types of drilling contracts: well contracts and term contracts.

(a) Well contracts: Well contracts are contracts under which the assignment is to drill a certain number of wells. Revenue from day-rate based compensation for drilling operations is recognized in the period during which the services are rendered at the rates established in the contracts. All mobilization revenues, direct incremental expenses of mobilization and contributions from customers for capital improvements are initially deferred and recognized as revenues and expenses, as applicable, over the estimated duration of the drilling period. To the extent that mobilization expenses exceed revenue to be recognized, they are expensed as incurred. Demobilization revenues and expenses are recognized over the demobilization period. All revenues for well contracts are recognized as "Service revenues" in the consolidated statement of operations.

(b) Term contracts: Term contracts are contracts under which the assignment is to operate the unit for a specified period of time. For these types of contracts the Company determines whether the arrangement is a multiple element arrangement containing both a lease element and drilling services element. For revenues derived from contracts that contain a lease, the lease elements are recognized as "Leasing revenues" in the consolidated statement of operations on a basis approximating straight line over the lease period. The drilling services element is recognized as "Service revenues" in the period in which the services are rendered at estimated fair value. Revenues related to the drilling element of mobilization and direct incremental expenses of drilling services are deferred and recognized over the estimated duration of the drilling period. To the extent that expenses exceed revenue to be recognized, they are expensed as incurred. Demobilization fees and expenses are recognized over the demobilization period. Contributions from customers for capital improvements are initially deferred and recognized as revenues over the estimated duration of the drilling contract.

(w) Earnings/(loss) per common share: Basic earnings/(loss) per common share are computed by dividing net income/(loss) available to common stockholders by the weighted average number of common shares outstanding during the year. Diluted earnings per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised. Dilution is computed by the treasury stock method whereby all of the Company's dilutive securities are assumed to be exercised and the proceeds used to repurchase common shares at the weighted average market price of the Company's common stock during the relevant periods. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) are included in the denominator of the diluted earnings per share computation.

(x) Segment reporting: The Company determined that it operates under three reportable segments, as a provider of drybulk commodities transportation services for the steel, electric utility, construction and agri-food industries (drybulk segment), as a provider of ultra deep water drilling services (drilling segment) and as a provider of transportation services of crude and refined petroleum cargoes (tanker segment). The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company's consolidated financial statements.

(y) Financial instruments: The Company designates its derivatives based upon guidance on ASC 815, "Derivatives and Hedging" which establishes accounting and reporting requirements for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. The guidance on accounting for certain derivative instruments and certain hedging activities requires all derivative instruments to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings unless specific hedge accounting criteria are met.

(i)Hedge accounting: At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy undertaken for the hedge. The documentation includes identification of the hedging instrument, hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument's effectiveness in offsetting exposure to changes in the hedged item's cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in cash flows and are assessed on an ongoing basis to determine whether they actually have been highly effective throughout the financial reporting periods for which they were designated.

The Company is party to interest swap agreements where it receives a floating interest rate and pays a fixed interest rate for a certain period. Contracts which meet the strict criteria for hedge accounting are accounted for as cash flow hedges. A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognized asset or liability, or a highly probable forecasted transaction that could affect profit or loss.

The effective portion of the gain or loss on the hedging instrument is recognized directly as a component of "Accumulated other comprehensive income/(loss)" in equity, while any ineffective portion, if any, is recognized immediately in current period earnings.

The Company discontinues cash flow hedge accounting if the hedging instrument expires and it no longer meets the criteria for hedge accounting or designation is revoked by the Company. At that time, any cumulative gain or loss on the hedging instrument recognized in equity is kept in equity until the forecasted transaction occurs. When the forecasted transaction occurs, any cumulative gain or loss on the hedging instrument is recognized in the consolidated statement of operations. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in equity is transferred to net profit or loss for the year as financial income or expense.

(ii)Other derivatives: Changes in the fair value of derivative instruments that have not been designated as hedging instruments are reported in current period earnings.

(z) Fair value measurements: The Company follows the provisions of ASC 820, "Fair Value Measurements and Disclosures" which defines, and provides guidance as to the measurement of, fair value. ASC 820 creates a hierarchy of measurement and indicates that, when possible, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets and the lowest priority (Level 3) to unobservable data, for example, the reporting entity's own data. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy (Note10).

(aa) Stock-based compensation: Stock-based compensation represents vested and non-vested common stock granted to employees and directors, for their services. The Company calculates total compensation expense for the award based on its fair value on the grant date and amortizes the total compensation on an accelerated basis over the vesting period of the award or service period (Note 12).

(ab) Income taxes: Income taxes have been provided for based upon the tax laws and rates in effect in the countries in which the Company's operations are conducted and income is earned. There is no expected relationship between the provision for/or benefit from income taxes and income or loss before income taxes because the countries in which the Company operates have taxation regimes that vary not only with respect to the nominal rate, but also in terms of the availability of deductions, credits and other benefits. Variations also arise because income earned and taxed in any particular country or countries may fluctuate from year to year. Deferred tax assets and liabilities are recognized for the anticipated future tax effects of temporary differences between the financial statement basis and the tax basis of the Company's assets and liabilities using the applicable jurisdictional tax in effect at the year end. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. The Company accrues interest and penalties related to its liabilities for unrecognized tax benefits as a component of income tax expense.

(ac) Commitments and contingencies: Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate of the amount of the obligation can be made. Provisions are reviewed at each balance sheet date.

(ad) Recent accounting pronouncements:

Revenue from Contracts with Customers: The Financial Accounting Standards Board ("FASB") and the International Accounting Standards Board ("IASB") (collectively, the "Boards") jointly issued a standard in May 2014 that will supersede virtually all of the existing revenue recognition guidance in U.S. GAAP and International Financial Reporting Standards ("IFRS") and is effective for annual periods beginning on or after January 1, 2017. The standard establishes a five-step model that will apply to revenue earned from a contract with a customer (with limited exceptions), regardless of the type of revenue transaction or the industry. The standard's requirements will also apply to the recognition and measurement of gains and losses on the sale of some non-financial assets that are not an output of the entity's ordinary activities (e.g., sales of property, plant and equipment or intangibles). Extensive disclosures will be required, including disaggregation of total revenue, information about performance obligations, changes in contract asset and liability account balances between periods, and key judgments and estimates. The guidance in Accounting Standard Update ("ASU") 2014-09 Revenue from Contracts with Customers (Topic 606) supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, this ASU supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. Management is in the process of accessing the impact of the new standard on Company's financial position and performance.

(ae) Recent accounting pronouncements - continued:

Going Concern: In August 2014, the FASB issued ASU No. 2014-15–Presentation of Financial Statements - Going Concern. ASU 2014-15 provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 requires an entity's management to evaluate at each reporting period based on the relevant conditions and events that are known at the date of financial statements are issued, whether there are conditions or events, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued and to disclose the necessary information. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.

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Advances for Vessels and Drillships under Construction and Acquisitions (Table) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Advances for Vessels and Rigs under Construction and Acquisitions [Abstract]
Balance at beginning of year	$ 679,008
Vessels' impairment charge	(38,148)	(43,490)	0
Balance at end of year	623,984	679,008
Advances for vessels under construction and acquisitions
Advances for Vessels and Rigs under Construction and Acquisitions [Abstract]
Balance at beginning of year	679,008	1,201,807
Advances for drillships under construction and related costs	691,755	1,279,281
Cancellation of vessel acquisitions	(15,240)	0
Vessels' impairment charge	0	(43,490)
Vessels/drillships delivered	(731,539)	(1,758,590)
Balance at end of year	$ 623,984	$ 679,008

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Equity Incentive Plan - Additional Information Ocean Rig UDW Inc. (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended			1 Months Ended	4 Months Ended	11 Months Ended	4 Months Ended	8 Months Ended	3 Months Ended	8 Months Ended	10 Months Ended	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Feb. 14, 2012	May 15, 2012	Dec. 05, 2012	May 16, 2013	Aug. 20, 2013	Mar. 31, 2014	Aug. 19, 2014	Nov. 04, 2014	Dec. 30, 2014	Mar. 21, 2012	Aug. 20, 2015	Aug. 20, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017
Number of forfeited shares	171,626
Number of vested shares	309,452
Ocean Rig
Unrecognized compensation cost related to non-vested share arrangements granted	$ 6,235	$ 2,724
Weighted average period of recognition for unrecognised compensation cost		2 years
Allocated Share-based Compensation Expense	3,576	3,634	613
Number of shares forfeited		93,050
Number of vested shares		162,633
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value	$ 2,383	$ 2,959	$ 37
Compensation Committee Approval On 14 February 2012 | Ocean Rig
Shares Granted				112,950
Grant date fair value				$ 16.5
Vesting period				3 years
Equity Incentive Plan 2012 | Ocean Rig
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized													2,000,000
Officer | Ocean Rig
Shares Granted					4,500	7,500
Grant date fair value					$ 15.92	$ 15.75
Sign Up Bonus | Ocean Rig
Shares Granted					28,200
Grant date fair value					$ 15.92
Compensation Committee Approval On 16 May 2013 | Ocean Rig
Shares Granted							192,400
Grant date fair value							$ 16.9
Vesting period							3 years
Compensation Committee approval on 20 August 2013 | Azara
Vested number of shares on grant date								50,000
Vested in period														50,000	50,000
Grant date fair value								$ 17.56
Vesting period								2 years
Shares issued by the company for the sign on bonus								150,000
Employees | Ocean Rig
Shares Granted	139,202
Compensation Committee Approval On 31 March 2014 | Ocean Rig
Shares Granted									161,200
Grant date fair value									$ 17.79
Vesting period									3 years
Compensation Committee Approval On 19 August 2014 | Azara
Shares Granted										150,000
Vested in period	50,000															50,000	50,000
Grant date fair value										$ 18.37
Vesting period										3 years
Compensation Committee Approval On 4 November 2014 | Ocean Rig
Shares Granted											45,450
Grant date fair value											$ 12.6
Vesting period											3 years
Compensation Committee Approval On 30 December 2014 | Azara
Shares Granted												300,000
Vested in period																100,000	100,000	100,000
Grant date fair value												$ 9.46
Vesting period												3 years

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Long-Term Debt - Covenant Description and Compliance (Details)	12 Months Ended
	Dec. 31, 2014
Compliance with loan-to-value ratios	As of December 31, 2014, the shipping segment was not in compliance with certain loan-to-value ratios contained in certain of its loan agreements. These loan-to-value ratio shortfalls do not constitute events of default that would automatically trigger the full repayment of the loan. Based on the loan agreements, loan-to-value shortfalls may be remedied by the Company by providing additional collateral or repaying the amount of the shortfall. In addition, as of December 31, 2014, the shipping segment was in breach of certain financial covenants, contained in the Company's loan agreements relating to $259,537 of the Company's debt (Note 3). As a result of this non-compliance and of the cross default provisions contained in all bank loan agreements of the shipping segment and in accordance with guidance related to the classification of obligations that are callable by the creditor, the Company has classified all of its shipping segment's bank loans in breach amounting to $1,163,321 as current at December 31, 2014.
Ocean Rig
Debt Instrument, Convertible, Terms of Conversion Feature	Under the terms of the agreement, the existing dividend restriction of up to 50% of preceding fiscal year net income amended to apply on a cumulative basis from July 1, 2013 onwards (50% of cumulative net income) and include a carve-out to pay additional dividends up to the higher of (i) $150,000 and (ii) 5% of Ocean Rig's net tangible assets. Furthermore, the minimum interest coverage ratio requirement would be 2.0 times until June 30, 2015 and the maximum leverage ratio will be 6.5 times until June 30, 2014, 6.0 times until December 31, 2014 and 5.5 times until June 30, 2015.
Ocean Rig Mylos
Debt instrument covenant description	Under the agreement, Ocean Rig would only pay dividends or make other distributions in respect of its capital stock under the $1,350,000 secured term loan facility in an amount of up to 50% of net income of each previous financial year, provided in each case that Ocean Rig maintained minimum liquidity in an aggregate amount of not less than $200,000 in cash and cash equivalents and restricted cash and maintain such level for the next 12 months following the date of the dividend payment.
Ocean Rig Skyros
Debt instrument covenant description	Under the agreement, Ocean Rig would only pay dividends or make other distributions in respect of its capital stock under the $1,350,000 secured term loan facility in an amount of up to 50% of net income of each previous financial year, provided in each case that Ocean Rig maintained minimum liquidity in an aggregate amount of not less than $200,000 in cash and cash equivalents and restricted cash and maintain such level for the next 12 months following the date of the dividend payment.
Ocean Rig Athena
Debt instrument covenant description	Under the agreement, Ocean Rig would only pay dividends or make other distributions in respect of its capital stock under the $1,350,000 secured term loan facility in an amount of up to 50% of net income of each previous financial year, provided in each case that Ocean Rig maintained minimum liquidity in an aggregate amount of not less than $200,000 in cash and cash equivalents and restricted cash and maintain such level for the next 12 months following the date of the dividend payment.
All three term loan facilities
Debt instrument payment terms	All term loan facilities bore interest at LIBOR plus a margin and were repayable in quarterly installments, beginning three months after the delivery of the first drillship. The Commercial Facilities matured five years after the first drawdown date while the Eksportkreditt GIEK Facilities and Kexim Facilities matured five or eleven years after the first drawdown date at the lenders option.

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Subsequent Events

12 Months Ended

Dec. 31, 2014

Subsequent Events

Subsequent Events

19. Subsequent Events:

20.1 On February 13, 2015Ocean Rig executed definitive loan documentationfor an up to a $475,000 syndicated secured term loan to partially finance the construction costs of the Ocean Rig Apollo. The facility has a 5 year term and approximate 12 year repayment profile and bears interest at LIBOR plus a margin.

20.2 On February 20, 2015, Tankships Investment Holdings Inc., a subsidiary of the Company, filed a registration statement on Form F-1 with the SEC relating to a possible initial public offering.

20.3 On February 24, 2015, Ocean Rigs' Board of Directors declared a quarterly cash dividend with respect to the quarter ended December 31, 2014, of $0.19 per common share, to Ocean Rig shareholders of record as of March 10, 2015 and payable on or about March 23, 2015.

20.4 On March 5, 2015, Ocean Rig took delivery of the of the Ocean Rig Apollo and drew down an amount of $462,000 under the $475 million syndicated secured term loan in connection with the delivery.

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Financial Instruments and Fair Value Measurements - Non Recurring Measurements (Table) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)
Non-Recurring measurements:
Long-lived assets held and used	$ 0	$ 0
Total	0	0
Significant Other Observable Inputs (Level 2)
Non-Recurring measurements:
Long-lived assets held and used	10,500	71,000
Total	10,500	71,000
Unobservable Inputs (Level 3)
Non-Recurring measurements:
Long-lived assets held and used	0	0
Total	0	0
Impairment loss
Non-Recurring measurements:
Long-lived assets held and used	(38,148)	(43,490)
Total	$ (38,148)	$ (43,490)

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Common Stock and Additional Paid-in Capital (Tables)

12 Months Ended

Dec. 31, 2014

Common Stock and Additional Paid-in Capital

Net Loss Attributable to Dryships Inc. and Transfers to the Non Controlling Interest

		Year Ended December 31,
		2012		2013		2014
Net loss attributable to Dryships Inc.	$	(246,778)	$	(223,093)	$	(47,512)
Transfers to the non-controlling interest:
Decrease in Dryships Inc. equity for reduction in subsidiary ownership		(81,760)		(45,542)		(4,758)
Net transfers to the non-controlling interest		(81,760)		(45,542)		(4,758)
Net loss attributable to Dryships Inc. and transfers to/from the non-controlling interest	$	(328,538)	$	(268,635)	$	(52,270)

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Equity Incentive Plan

12 Months Ended

Dec. 31, 2014

Equity Incentive Plan [Abstract]

Equity incentive plan

12. Equity incentive plan

On January 16, 2008, the Company's Board of Directors approved the 2008 Equity Incentive Plan (the "Plan"). Under the Plan, officers, key employees and directors are eligible to receive awards of stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock units and unrestricted stock. On January 25, 2010, the Company's Board of Directors amended the 2008 Equity Incentive Plan to provide that a total of 21,834,055 common shares be reserved for issuance.

On March 5, 2008, 1,000,000 shares of non-vested common stock out of the 1,834,055 shares then reserved under the Plan were granted to Fabiana, an entity that offers consultancy services to the Chief Executive Officer, Mr. George Economou. The shares vested quarterly in eight equal installments with the first installment of 125,000 common shares vesting on May 28, 2008. The stock-based compensation was recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $75.09 per share. As of December 31, 2014, the shares have vested in full.

On October 2, 2008, the Company's Board of Directors and Compensation Committee approved grants for the non-executive directors of the Company. On October 2, 2008, 9,000 shares of non-vested common stock and 9,000 shares of vested common stock were granted to the non-executive directors. The non-vested common stock vested evenly over a three-year period with the first vesting date commencing on January 1, 2009. For the director vested and non-vested stock, the fair value of each share on the grant date was $33.59. As of December 31, 2014, these shares have vested in full.

On March 12, 2009, 70,621 shares of non-vested common stock out of the 1,834,055 shares then reserved under the Plan were granted to an executive of the Company. The shares vested in annual installments of 42,373 and 28,248 shares on March 1, 2010 and 2011, respectively. The fair value of each share on the grant date was $3.54. As of December 31, 2014, the shares have vested in full.

On January 25, 2010, 4,500,000 shares of non-vested common stock out of 21,834,055 shares reserved under the Plan were granted to Fabiana as a bonus for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2009 as well as for anticipated services during the years 2010, 2011 and 2012. The shares vested over a period of three years, with 1,000,000 shares vesting on the grant date; 1,000,000 shares vesting on December 31, 2010 and 2011, respectively; and 1,500,000 shares vesting on December 31, 2012. The stock-based compensation was recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $6.05 per share. As of December 31, 2014, the shares have vested in full.

On March 5, 2010, 2,000 shares of non-vested common stock and 1,000 shares of vested common stock out of the 21,834,055 shares reserved under Plan were granted to an executive of the Company. The shares vested in annual installments of 1,000 shares on March 5, 2010, December 31, 2010 and 2011, respectively. The shares were issued during July 2010 and the fair value of each share, on the grant date, was $5.66. As of December 31, 2014, the shares have vested in full.

On January 12, 2011, 9,000,000 shares of the non-vested common stock out of 21,834,055 shares reserved under the Plan were granted to Fabiana as a bonus for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2010. The shares were granted to Fabiana and vest over a period of eight years, with 1,000,000 shares vesting on the grant date and 1,000,000 shares vesting annually on December 31, 2011, through 2018, respectively. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $5.50 per share. As of December 31, 2014, 5,000,000 of these shares have vested.

On February 4, 2011, 15,000 shares of non-vested common stock out of the 21,834,055 shares reserved under Plan were granted to an executive of the Company. The shares vest on a pro-rata basis over a period of three years from the date of the non-vested stock award agreement. The fair value of each share, on the grant date, was $5.01. As of December 31, 2014, the shares have vested in full.

On August 20, 2013, the Compensation Committee approved that a bonus in the form of 1,000,000 shares of the Company's common stock, with par value $0.01, be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2012. The shares vest over a period of two years with 333,334 shares vesting on the grant date, 333,333 shares vesting on August 20, 2014 and 333,333 vesting on August 20, 2015, respectively. The stock based compensation is being recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $2.01 per share. As of December 31, 2014, 666,667 of these shares have vested.

On August 19, 2014, the Compensation Committee approved that a bonus in the form of 1,200,000 shares of the Company's common stock, with par value $0.01, be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2013. The shares vest over a period of three years, with 400,000 shares vesting on December 31, 2014, 400,000 shares vesting on December 31, 2015, and 400,000 vesting on December 31, 2016. The stock based compensation is being recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $3.26 per share. As of December 31, 2014, 400,000 of these shares have vested.

On December30, 2014, the Compensation Committee approved that a bonus in the form of 2,100,000 shares of the Company's common stock, with par value $0.01, be granted to Fabiana for the contribution of Mr. George Economou for Chief Executive Officer's services rendered during 2014. The shares vest over a period of three years, with 700,000 shares vesting on December 31, 2015, 700,000 shares vesting on December 31, 2016, and 700,000 vesting on December 31, 2017. The stock based compensation is being recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $1.07 per share.As of December 31, 2014, none of these shares have vested.

A summary of the status of the Company's non vested shares as of December 31, 2012, 2013 and 2014 and movement for the years ended December 31, 2012, 2013 and 2014, is presented below. There were no shares forfeited in 2012, 2013 and 2014.

	Number of non vested shares		Weighted average grant date fair value per non vested shares
Balance December 31, 2011	8,510,150	$	5.60
Vested	(2,505,150)		5.83
Balance December 31, 2012	6,005,000	$	5.50
Granted	1,000,000		2.01
Vested	(1,338,334)		4.63
Balance December 31, 2013	5,666,666	$	5.09
Granted	3,300,000		1.87
Vested	(1,733,333)		4.31
Balance December 31, 2014	7,233,333	$	3.81
	Number of  vested shares		Weighted average grant date fair value per vested shares
As at December 31, 2011	6,092,871	$	17.23
Non vested shares granted in prior years and vested 2012	2,505,150		5.83
As at December 31, 2012	8,598,021	$	13.91
Granted and vested	333,334		2.01
Non vested shares granted in prior years and vested 2013	1,005,000		5.50
As at December 31, 2013	9,936,355	$	12.66
Granted and vested	400,000		3.26
Non vested shares granted in prior years and vested 2014	1,333,333		4.63
As at December 31, 2014	11,669,688	$	11.42

As of December 31, 2012, 2013 and 2014, there was $19,725, $13,947 and $12,589 respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of four years. The stock based compensation recognized to expenses amounted to $12,686, $7,790 and $7,516 and is recorded in "General and administrative expenses", in the accompanying consolidated statements of operations for the years ended December 31, 2012, 2013 and 2014, respectively. The total fair value of shares vested during the years ended December 31, 2012, 2013 and 2014, were $4,008, $5,394 and $2,561 respectively.

Ocean Rig UDW Inc.

On February 14, 2012, Ocean Rig's Compensation Committee approved the grant of 112,950 shares of non-vested common stock to officers and key employees of Ocean Rig`s subsidiary, Ocean Rig AS, as a bonus for their services rendered during 2011. The shares vest over a period of three years, one third on each December 31, 2012, 2013 and 2014.The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the shares on the grant date of $16.50 per share.

On March 21, 2012, Ocean Rig's Board of Directors approved the 2012 Equity Incentive Plan (the "Plan") and reserved a total of 2,000,000 common shares. Under the Plan, officers, key employees, and directors are eligible to receive awards of stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock units and unrestricted stock.

On May 15, 2012, Ocean Rig's Compensation Committee approved the grant of: a) 4,500 shares of non-vested common stock to an officer as an additional bonus for his services rendered during 2011 and b) 28,200 shares to new recruited employees as a sign-up stock bonus. The shares vest over a period of three years, one third on each of December 31, 2012, 2013 and 2014. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $15.92 per share.

On December 5, 2012, 7,500 shares awarded to an officer of Ocean Rig. The fair value of the shares on the grant date was $15.75 and the shares vested in March 2013.

On May 16, 2013, Ocean Rig's Compensation Committee approved the grant of 192,400 shares of non-vested common stock to Ocean Rig's employees. The shares vest over a period of three years. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $16.90 per share.

On August 20, 2013, Ocean Rig's Compensation Committee approved a sign-on bonus of 150,000 shares of Ocean Rig's common stock to Azara, pursuant to a consultancy agreement with Azara effective January 1, 2013, relating to the services of Mr. George Economou as Chief Executive Officer. The shares vest over a period of two years with 50,000 shares vesting on the grant date, 50,000 shares vesting on August 20, 2014 and 50,000 vesting on August 20, 2015 respectively. The stock based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $17.56 per share.

On March 31, 2014, Ocean Rig's Compensation Committee approved the grant of 161,200 shares of non-vested common stock to employees of Ocean Rig. The shares vest over a period of three years. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $17.79 per share.

On August 19, 2014, Ocean Rig's Compensation Committee approved a bonus of 150,000 shares of Ocean Rig's common stock to Azara, pursuant to a consultancy agreement with Azara effective January 1, 2013, relating to the services of Mr. George Economou as Chief Executive Officer of Ocean Rig, rendered during 2013. The shares vest over a period of three years with 50,000 shares vesting on December 31, 2014, 50,000 shares vesting on December 31, 2015, and 50,000 vesting on December 31, 2016, respectively. The stock based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $18.37 per share.

On November 4, 2014, Ocean Rig's Compensation Committee approved the grant of 45,450 shares of non-vested common stock to employees of Ocean Rig. The shares vest over a period of three years. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $12.60 per share.

On December 30, 2014, Ocean Rig's Compensation Committee approved a bonus in the form of 300,000 of Ocean Rig's common stock to be granted to Azara for the contribution of Mr. George Economou for Chief Executive Officer's services rendered to Ocean Rig during 2014. The shares vest over a period of three years with 100,000 shares vesting on December 31, 2015, 100,000 shares vesting on December 31, 2016, and 100,000 vesting on December 31, 2017. The stock-based compensation is being recognized to expenses over the vesting period and based on the fair value of the Ocean Rig shares on the grant date of $9.46 per share.

As of December 31, 2014 309,452 shares have vested, while 171,626 shares were forfeited due to employees' resignations.

A summary of the status of Ocean Rig's non vested shares as of December 31, 2014 and movement during the year then ended, is presented below.

	Number of non vested shares		Weighted average grant date fair value per non vested shares
Balance December 31, 2012	73,500	$	16.40
Granted	342,400		17.19
Forfeited	(15,900)		16.90
Vested	(160,133)		16.92
Balance December 31, 2013	239,867	$	17.15
Granted	656,650		13.76
Forfeited	(78,576)		16.93
Vested	(205,143)		17.31
Balance December 31, 2014	612,798	$	13.49
	Number of  vested shares		Weighted average grant date fair value per vested shares
As at December 31, 2012	2,500		16.50
Granted and vested	117,133		17.18
Non vested shares granted in prior years and vested 2013	43,000		16.16
As at December 31, 2013	162,633		16.90
Granted and vested	111,585		17.39
Non vested shares granted in prior years and vested 2014	93,558		17.20
Granted and vested shares in prior years, but cancelled during 2014	(58,324)		16.63
As at December 31, 2014	309,452		17.22

As of December 31, 2013 and 2014, there was $2,724 and $6,235 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted by Ocean Rig, respectively. That cost is expected to be recognized over a period of two years. The amounts of $613, $3,634 and $3,576 represents the stock based compensation expense for each year accordingly and are recorded in "General and administrative expenses", in the accompanying consolidated statements of operations for the years ended December 31, 2012, 2013 and 2014. The total fair value of shares vested during the years ended December 31, 2012, 2013 and 2014, was $37, $2,959 and $2,383, respectively. As of December 31, 2014, there were 139,202 shares of common stock which had been granted to employees and vested but which had not yet been issued by the Company.

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Schedule I - Condensed Financial Information of Dryships Inc. - Statements of Operations (Table) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
EXPENSES:
General and administrative expenses	$ (193,686)	$ (184,722)	$ (145,935)
Operating loss	543,179	155,576	15,854
OTHER INCOME / (EXPENSES):
Interest and finance cost	(411,021)	(332,129)	(210,128)
Interest income	12,146	12,498	4,203
Loss on interest rate swaps	(15,528)	8,373	(54,073)
Other, net	7,067	2,245	(492)
Total other (expenses), net	(407,336)	(309,013)	(260,490)
Net income/(loss)	58,020	(198,028)	(288,593)
Loss per share, basic	$ (0.11)	$ (0.58)	$ (0.65)
Weighted average number of shares, basic	456,031,628	384,063,306	380,159,088
Loss per share, diluted	$ (0.11)	$ (0.58)	$ (0.65)
Weighted average number of outstanding shares, diluted	456,031,628	384,063,306	380,159,088
Dryships Inc.
EXPENSES:
General and administrative expenses	(23,893)	(21,090)	(29,408)
Operating loss	(23,893)	(21,090)	(29,408)
OTHER INCOME / (EXPENSES):
Interest and finance cost	(88,753)	(89,124)	(85,692)
Interest income	989	226	3,065
Loss on interest rate swaps	(739)	(774)	(9,513)
Other, net	(220)	(430)	672
Total other (expenses), net	(88,723)	(90,102)	(91,468)
Equity in earnings/ (loss) of subsidiaries (eliminated in consolidation)	65,104	(112,404)	(125,902)
Net income/(loss)	$ (47,512)	$ (223,596)	$ (246,778)
Loss per share, basic	$ (0.10)	$ (0.58)	$ (0.65)
Weighted average number of shares, basic	456,031,628	384,063,306	380,159,088
Loss per share, diluted	$ (0.10)	$ (0.58)	$ (0.65)
Weighted average number of outstanding shares, diluted	456,031,628	384,063,306	380,159,088