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, 2017
[_]	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 Kifissias Avenue and Sina Street

151 24, Marousi

Athens, Greece

(Address of principal executive offices)

Mr. Dimitris Dreliozis

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

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, 2017, there were 104,274,708 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  ☐	Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012

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

U.S. 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

Matters discussed in this report may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995, or the PSLRA, provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

We desire to take advantage of the safe harbor provisions of the PSLRA and are including this cautionary statement in connection therewith. This document and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. This document includes assumptions, expectations, projections, intentions and beliefs about future events. 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", "will" and "expect" and similar expressions identify 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;

· statements about the spinoff of our gas business;

· 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 credit facilities and finance lease arrangement and compliance with the covenants contained therein;

· our 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 our existing drybulk, tanker, gas carrier and offshore support vessels, as applicable;

· our offshore support contract revenues, offshore support contract awards and platform and offshore support vessels mobilizations and performance provisions,

· our future capital expenditures and investments in the construction, acquisition and refurbishment of our vessels (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, tanker, and gas shipping and offshore support market trends, charter rates and factors affecting supply and demand;

· our expectations regarding the availability of vessel 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 price and trading volume of our common stock, strength of world economies and currencies; general market conditions, including changes in charter rates and vessel values; the failure of a seller to deliver one or more vessels; the failure of a buyer to accept delivery of one or more vessels; 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, gas 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

Page

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	63
Item 6.	Directors and Senior Management	103
Item 7.	Major Shareholders and Related Party Transactions	107
Item 8.	Financial Information	113
Item 9.	The Offer and Listing	114
Item 10.	Additional Information	115
Item 11.	Quantitative and Qualitative Disclosures about Market Risk	125
Item 12.	Description of Securities Other than Equity Securities	126
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	130
Item 16H.	Mine Safety Disclosure	130
PART III.		130
Item 17.	Financial Statements	130
Item 18.	Financial Statements	130
Item 19.	Exhibits	131

i

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

Unless otherwise indicated, references in this annual report to "DryShips," "we," "us," "our" and the "Company" refer to DryShips Inc., a Marshall Islands corporation, and any one or more of our subsidiaries. Unless otherwise indicated, all references to "$" and "dollars" in this annual report are to United States dollars. Unless otherwise indicated,all share and per share amounts have been adjusted to account for all reverse stock splits, including the 1-for-25 reverse stock split on March 11, 2016, the 1-for-4 reverse stock split on August 15, 2016, the 1-for-15 reverse stock split on November 1, 2016, the 1-for-8 reverse stock split on January 23, 2017, the 1-for-4 reverse stock split on April 11, 2017, the 1-for-7 reverse stock split on May 11, 2017, the 1-for-5 reverse stock split on June 22, 2017, and the 1-for-7 reverse stock split on July 21, 2017.

We use "LPG" to refer to liquefied petroleum gas, "LNG" to refer to liquefied natural gas, "VLGC" to refer to very large gas carriers that carry LPG and "cbm" to refer to cubic meters in describing the carrying capacity of VLGCs. "DWT," expressed in metric tons each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.We use "VLCC" to refer to very large crude carriers with carrying capacity of between 200,000 and 320,000 DWT, "Suezmax" to refer to crude tankers with carrying capacity of between 120,000 and 170,000 DWT, "Aframax" to refer to crude tankers with carrying capacity of between 80,000 and 120,000 DWT, "Panamax" to refer to drybulk carriers with carrying capacities of between 65,000 and 80,000 DWT, "Newcastlemax" to refer to drybulk carriers with carrying capacity of between 200,000 DWT and 210,000 DWT, and "Kamsarmax" refer to drybulk carriers with carrying capacity of between 80,000 DWT and 90,000 dwt.

Reference in this annual report to "TMS Entities" refer to TMS Bulkers Ltd. ("TMS Bulkers"), TMS Tankers Ltd. ("TMS Tankers"), TMS Offshore Services Ltd. ("TMS Offshore Services"), and TMS Cardiff Gas Ltd. ("TMS Cardiff Gas"), all of which are entities that may be deemed to be beneficially owned by our Chairman and Chief Executive Officer, Mr. George Economou.

A.          Selected Financial Data

The following table sets forth our selected historical consolidated financial information and other operating data as of and for the periods indicated. Our selected historical consolidated financial information as of December 31, 2016 and 2017 and for the years ended December 31, 2015, 2016 and 2017 is derived from our audited consolidated financial statements included in "Item 18. Financial Statements" herein. The selected historical consolidated financial information as of December 31, 2013, 2014 and 2015 and for the years ended December 31, 2013 and 2014 is derived from our audited consolidated financial statements that are not included in this annual report. Our consolidated financial statements are prepared and presented in accordance with U.S. generally accepted accounting principles, or U.S. GAAP.

The information provided below should be read in conjunction with "Item 4. Information on the Company" and "Item 5. Operating and Financial Review and Prospects" and the consolidated financial statements, related notes and other financial information included herein.

1

	Year Ended December 31,
(In thousands of U.S. dollars except per share and share data)	2013			2014			2015			2016			2017
STATEMENT OF OPERATIONS
Total revenues	$	1,492,014		$	2,185,524		$	969,825		$	51,934		$	100,716
Voyage expenses		103,211			117,165			65,286			9,209			19,704
Vessels and drilling units operating expenses		609,765			844,260			371,074			45,563			59,348
Depreciation and amortization		357,372			449,792			227,652			3,466			14,966
Loss on contract cancellation		—			1,307			28,241			—			—
Contract termination fees and other		33,293			—			—			—			—
Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other		43,490			38,148			1,057,116			106,343			(4,125	)
Impairment on goodwill		—			—			—			7,002			—
General and administrative expenses – cash(1)		173,298			182,593			97,106			36,128			29,244
General and administrative expenses – non-cash		11,424			11,093			7,806			3,580			1,728
Legal settlements and other, net		4,585			(2,013	)		(2,948	)		(258	)		900
Operating income/(loss)		155,576			543,179			(881,508	)		(159,099	)		(21,049	)
Interest and finance costs		(332,129	)		(411,021	)		(172,132	)		(8,857	)		(14,707	)
Interest income		12,498			12,146			527			81			1,365
Gain on debt restructuring		—			—			—			10,477			—
Loss on Private Placement		—			—			—			—			(7,600	)
Gain/(loss) on interest rate swaps		8,373			(15,528	)		(11,601	)		403			—
Other, net		2,245			7,067			(9,275	)		(199	)		(401	)
Income/(loss) before income taxes and earnings of affiliated companies		(153,437	)		135,843			(1,073,989	)		(157,194	)		(42,392	)
Loss due to deconsolidation of Ocean Rig		—			—			(1,347,106	)		—			—
Income taxes		(44,591	)		(77,823	)		(37,119	)		(38	)		(152	)
Losses of affiliated companies		—			—			(349,872	)		(41,454	)		—
Net Income/(loss)		(198,028	)		58,020			(2,808,086	)		(198,686	)		(42,544	)
Less: Net income attributable to non-controlling interests		(25,065	)		(105,532	)		(38,975	)		—			—
Net loss attributable to DryShips Inc.	$	(223,093	)	$	(47,512	)	$	(2,847,061	)	$	(198,686	)	$	(42,544	)
Net loss attributable to common stockholders	$	(223,149	)	$	(48,209	)	$	(2,847,631	)	$	(206,381	)	$	(39,739	)
Loss per common share attributable to DryShips Inc. common stockholders, basic	$	(6,973,406.25	)	$	(1,236,128.21	)	$	(49,958,438.60	)	$	(455,587.20	)	$	(1.13	)
Weighted average number of common shares, basic(2)		32			39			57			453			35,225,784
Loss per common share attributable to DryShips Inc. common stockholders, diluted	$	(6,973,406.25	)	$	(1,236,128.21	)	$	(49,958,438.60	)	$	(455,587.20	)	$	(1.13	)
Weighted average number of common shares, diluted(2)		32			39			57			453			35,225,784
Dividends declared per share(2)	$	—		$	—		$	—		$	—		$	26.85

_______________________

(1) Cash compensation to members of our senior management and our executive and non-executive directors amounted to $4.8 million, $5.8 million, $8.4 million, $4.0 million, and $0.2 million for the years ended December 31, 2013, 2014, 2015, 2016 and 2017, respectively.

(2) All previously reported share and per share amounts have been adjusted to account for all reverse stock splits, including the 1-for-25 reverse stock split on March 11, 2016, the 1-for-4 reverse stock split on August 15, 2016, the 1-for-15 reverse stock split on November 1, 2016, the 1-for-8 reverse stock split on January 23, 2017, the 1-for-4 reverse stock split on April 11, 2017, the 1-for-7 reverse stock split on May 11, 2017, the 1-for-5 reverse stock split on June 22, 2017, and the 1-for-7 reverse stock split on July 21, 2017.

2

	As of and for the Year Ended December 31,
(In thousands of U.S. dollars except share data and fleet data)	2013			2014			2015			2016			2017
BALANCE SHEET DATA:
Total current assets		$	1,184,199		$	1,215,044		$	269,067		$	98,170		$	60,060
Total assets			10,123,692			10,359,370			476,052			193,730			934,925
Current liabilities, including current portion of long-term debt, net of deferred finance cost			2,171,714			1,609,527			354,640			27,339			22,555
Total long-term debt, including current portion			5,568,003			5,517,613			340,622			133,428			216,969
DryShips common stock			0			1			1			46			1,043
Number of shares issued			36,055			58,839			59,014			4,617,142			104,274,708
Total DryShips Inc. stockholders' equity			2,613,636			2,992,821			121,412			49,774			707,036

OTHER FINANCIAL DATA:
Net cash provided by/(used in) operating activities	$	245,980		$	475,108		$	215,747		$	(25,356	)	$	(38,019	)
Net cash provided by/(used in) investing activities		(1,234,330	)		(754,717	)		(465,698	)		69,718			(705,368	)
Net cash provided by/(used in) financing activities		1,241,542			250,709			(316,291	)		32,052			681,463
EBITDA(1)	$	523,566		$	984,510		$	(2,371,710	)	$	(186,406	)	$	(14,084	)

DRYBULK CARRIER FLEET DATA:
Average number of vessels(2)		37.15			38.69			35.78			19.44			18.09
Total voyage days for drybulk carrier fleet(3)		13,442			13,889			12,562			6,404			6,534
Total calendar days for drybulk carrier fleet(4)		13,560			14,122			13,060			7,116			6,604
Drybulk carrier fleet utilization(5)		99.13	%		98.35	%		96.19	%		89.99	%		98.94	%
(In Dollars)
AVERAGE DAILY RESULTS:
Time charter equivalent(6)	$	12,062		$	12,354		$	9,171		$	3,658		$	8,544
Vessel operating expenses(7)	$	5,796		$	6,400		$	6,715		$	4,826		$	6,061

TANKER FLEET DATA:
Average number of vessels(2)		9.86			10.00			6.21			—		2.50
Total voyage days for tanker fleet(3)		3,598			3,650			2,168			—		911
Total calendar days for tanker fleet(4)		3,598			3,650			2,267			—		911
Tanker fleet utilization(5)		100	%		100	%		95.63	%		—		100	%
(In Dollars)
AVERAGE DAILY RESULTS:
Time Charter Equivalent(6)	$	12,900		$	21,835		$	36,389		$	—	$	13,216
Vessel Operating Expenses(7)	$	7,286		$	7,138		$	8,721		$	—	$	9,693

GAS CARRIER FLEET DATA:
Average number of vessels(2)		—		—		—		—		0.97
Total voyage days for gas carrier fleet(3)		—		—		—		—		355
Total calendar days for gas carrier fleet(4)		—		—		—		—		355
Gas carrier fleet utilization(5)		—		—		—		—		100	%
(In Dollars)
AVERAGE DAILY RESULTS:
Time Charter Equivalent(6)	$	—	$	—	$	—	$	—	$	27,994
Vessel Operating Expenses(7)	$	—	$	—	$	—	$	—	$	16,183

OFFSHORE SUPPORT FLEET DATA:
Average number of vessels(2)		—		—		6.00			6.00			6.00
Total voyage days for offshore support fleet(3)		—		—		426			1,615			439
Total calendar days for offshore support fleet (4)		—		—		426			2,196			2,190
Offshore support fleet utilization(5)		—		—		100.0	%		73.54	%		20.05	%
(In Dollars)
AVERAGE DAILY RESULTS:
Time Charter Equivalent(6)	$	—	$	—	$	18,460		$	11,949		$	7,314
Vessel Operating Expenses(7)	$	—	$	—	$	9,336		$	9,032		$	10,818

(1) EBITDA, a non-U.S. GAAP measure, represents net income/(loss) before interest, taxes, depreciation and amortization. EBITDA does not represent and should not be considered as an alternative to net income/(loss) 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 we measure our operations. The following is a reconciliation of EBITDA to net loss attributable to the Company, the most directly comparable financial measure calculated in accordance with U.S. GAAP:

3

				For the Year Ended December 31,
(U.S. dollars in thousands)	2013			2014			2015			2016			2017
Net loss attributable to DryShips Inc.	$	(223,093	)	$	(47,512	)	$	(2,847,061	)	$	(198,686	)	$	(42,544	)
Add: Net interest expense		319,631			398,875			171,605			8,776			13,342
Add: Depreciation and amortization		357,372			449,792			227,652			3,466			14,966
Add: Income taxes		44,591			77,823			37,119			38			152
Add: Net income attributable to Non-controlling interests		25,065			105,532			38,975			—			—
EBITDA	$	523,566		$	984,510		$	(2,371,710	)	$	(186,406	)	$	(14,084	)

(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 our possession for the relevant period net of off-hire days associated with drydockings or special or intermediate surveys and laid up days.

(4) Calendar days are the total days the vessels in that fleet were in our possession for the relevant period including off-hire days associated with major repairs, drydockings or special or intermediate surveys and laid up days.

(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. Our 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 our management in making decisions regarding the deployment and use of our 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 tables reflect the calculation of our TCE rates for the periods presented:

4

	Year Ended December 31,
Drybulk Carrier Segment
(In thousands of U.S. dollars, except for TCE rates, which are expressed in U.S. dollars, and voyage days)
	2013			2014			2015			2016			2017
Voyage revenues (8)	$	191,024		$	205,630		$	138,828		$	30,777		$	65,724
Voyage expenses	$	(28,886	)	$	(34,044	)	$	(23,619	)	$	(7,349	)	$	(9,900	)
Time charter equivalent revenues	$	162,138		$	171,586		$	115,209		$	23,428		$	55,824
Total voyage days for drybulk carrier fleet		13,442			13,889			12,562			6,404			6,534
Time charter equivalent (TCE) rate	$	12,062		$	12,354		$	9,171		$	3,658		$	8,544

	Year Ended December 31,
Tanker Segment
(In thousands of U.S. dollars, except for TCE rates, which are expressed in U.S. dollars, and voyage days)
	2013			2014			2015			2016		2017
Voyage revenues	$	120,740		$	162,817		$	120,304		$	—	$	20,858
Voyage expenses	$	(74,325	)	$	(83,121	)	$	(41,413	)	$	—	$	(8,818	)
Time charter equivalent revenues	$	46,415		$	79,696		$	78,891		$	—	$	12,040
Total voyage days for tanker fleet		3,598			3,650			2,168			—		911
Time charter equivalent (TCE) rate	$	12,900		$	21,835		$	36,389		$	—	$	13,216

	Year Ended December 31,
Gas Carrier Segment
(In thousands of U.S. dollars, except for TCE rates, which are expressed in U.S. dollars, and voyage days)
	2013		2014		2015		2016		2017
Voyage revenues	$	—	$	—	$	—	$	—	$	10,316
Voyage expenses	$	—	$	—	$	—	$	—	$	(378	)
Time charter equivalent revenues	$	—	$	—	$	—	$	—	$	9,938
Total voyage days for gas carrier fleet		—		—		—		—		355
Time charter equivalent (TCE) rate	$	—	$	—	$	—	$	—	$	27,994

	Year Ended December 31,
Offshore Support Segment
(In thousands of U.S. dollars, except for TCE rates, which are expressed in U.S. dollars, and voyage days)
	2013		2014		2015			2016			2017
Voyage revenues	$	—	$	—	$	8,118		$	21,157		$	3,819
Voyage expenses	$	—	$	—	$	(254	)	$	(1,860	)	$	(608	)
Time charter equivalent revenues	$	—	$	—	$	7,864		$	19,297		$	3,211
Total voyage days for offshore support fleet		—		—		426			1,615			439
Time charter equivalent (TCE) rate	$	—	$	—	$	18,460		$	11,949		$	7,314

(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 net of laid up days for the relevant time period.

(8) Does not include accrual for the provision of the purchase options and write off in overdue receivables under certain time charter agreements.

5

B.          Capitalization and Indebtedness

Not applicable.

C.          Reasons for the Offer and Use of Proceeds

Not applicable.

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 stock. 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 shares of our common stock.

Risk Factors Relating to the Drybulk Shipping Industry

Charterhire rates for drybulk carriers are volatile, which has in the past had and may in the future have an adverse effect on our revenues, earnings and profitability.

The degree of charterhire rate volatility among different types of drybulk carriers has varied widely, and in recent years charterhire rates for drybulk carriers 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 carrier charter market and the performance of the overall drybulk shipping market. The BDI declined 98% in 2008 from a peak of 11,793 in May 2008 to a low of 290 in February 2016 and has remained volatile since then. Even though the BDI has increased to $1,191 on February 26, 2018, there can be no assurance that it will increase further, and the market could decline again.

The volatility in drybulk carrier charter rates has been due to various factors, including the over-supply of drybulk carriers and 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 carriers, 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 credit facilities and finance lease arrangement. 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 comply with the financial covenants in our credit facilities and finance lease arrangement. In such a situation, unless our lenders or counterparties are willing to provide waivers of covenant compliance or modifications to our financial covenants, they could accelerate our debt or terminate the bareboat charter arrangements, as applicable, and we could face the loss of our vessels. In addition, the decline in the drybulk carrier charter market has in the past 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 stock could be substantially reduced or eliminated.

As of December 31, 2017, we employed 17 of our drybulk carriers 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 four vessels scheduled to come off their time charters in 2018 for which we will be seeking new employment. We may not be able to successfully charter our drybulk carriers 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.

6

Factors that influence demand for drybulk carrier 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;

· 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 carrier 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 also have a material adverse effect on our business and operating results.

7

An over-supply of drybulk carrier capacity could inhibit the recent improvement in the freight market 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 February 1, 2018, newbuilding orders had been placed for an aggregate of 98% of the existing global drybulk fleet by dwt, with deliveries expected to reach 80.1 million dwt 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 drybulk carrier capacity could exert significant downward pressure on charter rates. If market conditions worsen, we may only be able to 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.

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

The weakness in demand for drybulk shipping services, which has only recently begun to recover, 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 that could have a material adverse effect on our financial condition and results of operations.

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 carriers 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.

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 Tanker Shipping Industry

If the tanker industry, which historically has been cyclical and volatile, 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. 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. As of April 4, 2018, three of our tanker vessels were employed in the spot market and one was employed under a long-term charter. As a result, our tanker vessels currently have limited contractual committed future revenues and thus are largely subject to spot market rates, which are highly volatile. If the tanker industry, which has been highly cyclical and volatile, is depressed in the future when a tanker vessel is employed in the spot market, when a charter expires, or at a time when we may want to sell a tanker vessel, our earnings and available cash flow will be adversely affected. There is no assurance that we will be able to successfully charter our tanker vessels in the future or renew our existing charters at rates sufficient to allow us to operate our business profitably or meet our obligations, including payment of debt service to lenders.

8

The factors affecting the supply and demand for tankers are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable. The tanker markets have been volatile as a result of the many conditions and factors that can affect the price, supply and demand for tanker capacity.

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;

· technological advances in tanker design and capacity;

· tanker freight rates, which are affected by factors that may affect 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.

9

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. Continued volatility 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.

Also, if the number of new ships delivered exceeds the number of tankers being scrapped and lost, tanker capacity will increase. The total newbuilding orderbook for VLCC, Suezmax and Aframax vessels scheduled to enter the fleet through 2018 as of February 2018 stood at 12.7%, 10.5% and 13.1% by dwt, respectively, and there can be no assurance that the orderbook will not increase further in proportion to the existing fleets. If the supply of tanker capacity does not normalize with respect to demand, charter rates could further decline and remain depressed for a prolonged period.

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

Demand for our tanker 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. Any protracted reduction in the consumption of crude oil and petroleum products and a decreased demand for our vessels and lower charter rates 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 low charter rates and vessel values or lead to 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 February 2018, the orderbook as a percentage of the global fleet by dwt for tankers was 11.3%, compared to a peak of just under 48.4% 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 does not normalize with respect to demand, charter rates could further decline and remain depressed for a prolonged period. A continued depression in charter rates and the value of our tanker vessels may have a material adverse effect on our results from operations.

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.

10

Risk Factors Relating to the Gas Shipping Industry

The cyclical nature of the demand for LPG and LNG transportation may lead to significant changes in charter rates, vessel utilization and vessel values, which may adversely affect our revenues, profitability and financial condition.

Historically, the gas shipping market has been cyclical with attendant volatility in profitability, charter rates and vessel values. The degree of charter rate volatility among different types of gas carriers has varied widely. Because many factors influencing the supply of, and demand for, vessel capacity are unpredictable, the timing, direction and degree of changes in the gas shipping market are also not predictable. If charter rates decline, our earnings may decrease. Our earnings may also decrease with respect to our vessels when their charters expire, as they may not be rechartered on favorable terms when compared to the terms of the expiring charters. Accordingly, a decline in charter rates would have an adverse effect on our revenues, profitability, liquidity, cash flow and financial position.

Future growth in the demand for gas carriers and charter rates will depend on economic growth in the world economy and demand for LPG and LNG product transportation that exceeds the capacity of the growing worldwide gas carrier fleet. We believe that the future growth in demand for gas carriers and the charter rate levels for gas carriers will depend primarily upon the supply and demand for LPG and LNG, particularly in the economies of China, India, Japan, Southeast Asia, the Middle East and the U.S. and upon seasonal and regional changes in demand and changes to the capacity of the world fleet. The capacity of the world gas shipping fleet appears likely to increase in the near term. Economic growth may be limited in the near term, and possibly for an extended period, as a result of the current global economic conditions, which could have an adverse effect on our business and results of operations.

The factors affecting the supply of and demand for gas carriers are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable.

The factors that influence demand for gas carrier capacity include:

· supply and demand for LPG and LNG products;

· global or regional economic or political conditions, particularly in LPG and LNG consuming regions;

· changes in global or general industrial activity;

· changes in the cost of petroleum and natural gas from which LPG and LNG is derived;

· changes in the consumption of LPG or LNG due to availability of new, alternative energy sources or changes in the price of LPG or LNG relative to other energy sources or other factors making consumption of LPG or LNG less attractive;

· the development and location of production facilities for LPG and LNG products;

· regional imbalances in production and demand of LPG and LNG products;

· the distance LPG and LNG products are to be moved by sea;

· worldwide production of natural gas;

· availability of competing LPG and LNG vessels;

· availability of alternative transportation means, including pipelines for LPG and LNG, linking production areas and industrial and residential areas consuming LPG and LNG, or the conversion of existing non-petroleum gas pipelines to petroleum gas pipelines in those markets;

· changes in seaborne and other transportation patterns;

11

· development and exploitation of alternative fuels and non-conventional hydrocarbon production;

· governmental regulations, including environmental or restrictions on offshore transportation of natural gas;

· local and international political, economic and weather conditions;

· domestic and foreign tax policies; and

· accidents, severe weather, natural disasters and other similar incidents relating to the natural gas industry.

The factors that influence the supply of gas vessel capacity include:

· current and expect newbuilding purchase order for gas carriers;

· the scrapping rate of older vessels;

· LPG and LNG vessel prices, including financing costs and the price of steel, other raw materials and vessel equipment;

· the availability of shipyards to build LPG and LNG vessels when demand is high;

· changes in environmental and other regulations that may limit the useful lives of vessels;

· technological advances in LPG and LNG vessel design and capacity; and

· the number of vessels that are out of service.

A significant decline in demand for the seaborne transport of LPG and LNG or a significant increase in the supply of LPG and LNG vessel capacity without a corresponding growth in LPG and LNG vessel demand could cause a significant decline in prevailing charter rates, which could materially adversely affect our financial condition and operating results and cash flow.

Fluctuations in overall LNG demand growth could adversely affect our ability to secure future time charters.

LNG trade increased by around 10% from 263 million tonnes per annum (mtpa) in 2016 to 290 mtpa in 2017. Future growth in the LNG trade, and therefore requirements for LNG liquefaction, shipping and regasification, is highly uncertain and could fall if existing markets for LNG decline, new users and uses for LNG do not materialize as anticipated and no major export projects are sanctioned over the coming years. In the event that we expand our fleet to include LNG carriers and we have not secured long-term charters for the vessels in our fleet, a reduction in LNG trade could have an adverse effect on our ability to secure future term charters at acceptable rates.

A shift in consumer demand from LPG and LNG towards other energy sources or changes to trade patterns may have a material adverse effect on our business.

A shift in the consumer demand from LPG and LNG towards other energy resources such as oil, wind energy, solar energy, or water energy will potentially affect the demand for our gas carriers. This could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Seaborne trading and distribution patterns are primarily influenced by the relative advantage of the various sources of production, locations of consumption, pricing differentials and seasonality. Changes to the trade patterns of LPG and LNG may have a significant negative or positive impact on the demand for our gas carrier vessels. This could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

12

An over-supply of gas carrier 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 gas carriers is affected by a number of factors such as demand for energy resources, natural gas, and petroleum products, as well as strong overall economic growth in parts of the world economy, including Asia. If the capacity of new vessels delivered exceeds the capacity of vessels being scrapped and lost, vessel capacity will increase. Gas carrier capacity is primarily a function of the size of the existing world fleet, the number of newbuildings being delivered and the scrapping of older vessels. According to industry sources, as of December 31, 2017, there were 1,397 and 450 LPG and LNG capable carriers with an aggregate capacity of approximately 32.7 million and 69.5 million cbm, respectively. As of such date, a further 82 LPG and 107 LNG capable carriers with an aggregate carrying capacity of roughly 3.9 million and 18.0 million cbm were on order for delivery by the end of 2020, equivalent to 12% and 24% of the existing fleet in capacity terms, respectively. In contrast to oil tankers and drybulk carriers, according to industry sources, the number of shipyards with LPG and LNG carrier experience is quite limited. Due to an influx of newbuild tonnage since early 2015, it is considered unlikely that significant vessel orders will be placed prior to the delivery of the contracted orderbook as of the time of writing. In the VLGC sector in which we operate, as of December 31, 2017, there were 263 vessels in the world fleet with 36 vessels on order for delivery by the end of 2020. As of December 31, 2017, 48% of the fleet capacity in the VLGC sector was less than 5 years old.

If the supply of gas carrier capacity increases and if the demand for gas carrier 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.

Our revenues, operations and future growth could be adversely affected by a decrease in the supply of or demand for LPG or LNG.

In recent years, there has been a strong supply of natural gas and an increase in the construction of plants and projects involving natural gas, of which LPG and LNG is a byproduct. Several of these projects, however, have experienced delays in their completion for various reasons and thus the expected increase in the supply of LPG and LNG from these projects may be delayed significantly. If the supply of natural gas decreases, we may see a concurrent reduction in the production of LPG and LNG and resulting lesser demand and lower charter rates for our gas carrier vessels, which could ultimately have a material adverse impact on our revenues, operations and future growth. Additionally, changes in environmental or other legislation establishing additional regulation or restrictions on LPG and LNG production and transportation, including the adoption of climate change legislation or regulations, or legislation in the United States placing additional regulation or restrictions on LPG and LNG production from shale gas could result in reduced demand for LPG and LNG shipping.

The recent downturn in the LPG spot market charter rates may have a negative effect on our results of operations and cash flows, including as a result of seasonal fluctuations, which may adversely affect our earnings.

As of the date of this annual report, we employ all of our VLGCs on long-term time charters. As these time charters expire, we may employ these vessels in the spot market.

Generally, the LPG spot market rates are highly seasonal, with typical strength in the second and third calendar quarters as suppliers build inventory for high consumption during the northern hemisphere winter. The successful operation of our vessels in the competitive and highly volatile spot charter market depends on, among other things, obtaining profitable spot charters, which depends greatly on vessel supply and demand, and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo.

Recently, there have been periods when LPG spot charter rates have declined below the operating costs of vessels. For example, the Baltic Exchange Liquid Petroleum Gas Index, an index published daily by the Baltic Exchange for the LPG spot market rate for the benchmark Ras Tanura-Chiba route (expressed as U.S. dollars per metric ton), has fallen 80% from a peak of $143.250 in July 2014 to $28.607 as of November 30, 2017. If future LPG (or LNG) spot charter rates decline, or remain depressed, then we may not profitably operate our vessels trading in the spot market, meet our obligations, including payments on indebtedness, or pay dividends.

Further, although our fixed time charters generally provide reliable revenues, they also limit the portion of our fleet available for spot market voyages during an upswing in the market when spot market voyages might be more profitable. Conversely, when the current charters for the vessels in our fleet on fixed time charter expire (or are terminated early), it may not be possible to re-charter these vessels at similar or higher rates, or at all. As a result, we may have to accept lower rates or experience off hire time for our vessels, which would adversely impact our revenues, results of operations and financial condition.

13

Our ability to renew the charters on our current vessels upon the expiration or termination of our current time charters 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, changes in the supply and demand for vessel capacity and changes in the supply and demand for the seaborne transportation of natural gas.

Our operating results are subject to seasonal fluctuations, which could affect our operating results and the amount of available cash with which we can pay dividends.

We operate our gas carriers in markets that have historically exhibited seasonal variations in demand and, as a result, in charter hire rates. The natural gas shipping market is typically stronger in the spring and summer months in anticipation of increased consumption of propane and butane for heating 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 from our gas carrier vessels 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.

The expansion of the Panama Canal may have an adverse effect on our results of operations.

In June 2016, the expansion of the Panama Canal, or the Canal, was completed. The new locks allow the Canal to accommodate significantly larger vessels, including VLGCs, which we operate. Transit from the U.S. Gulf to Asia, an important trade route for our customers, can now be shortened by approximately 15 days compared to transiting via the Cape of Good Hope. The decrease in voyage time may increase the number of VLGCs available for cargo lifting and thereby increase industry capacity, which may have an adverse effect on TCE rates.

Risk Factors Relating to the Offshore Support Vessel Industry

Our offshore support vessels rely on the oil industry generally and the offshore drilling industry specifically, and volatility in the oil industry impacts demand for our services.

Our fleet includes six offshore support vessels, or OSVs, which we acquired in 2015, comprising two platform supply vessels and four oil spill recovery vessels, all of which are currently laid up. Demand for those vessels' services depends on activity in offshore oil exploration, development and production. The level of exploration, development and production activity is affected by factors such as:

· prevailing oil and natural gas prices;

· expectations about future prices and price volatility;

· cost of exploring for, producing and delivering oil and natural gas;

· sale and expiration dates of available offshore leases;

· demand for petroleum products;

· current availability of oil and natural gas resources;

· rate of discovery of new oil and natural gas reserves in offshore areas;

· local and international political, environmental and economic conditions;

· technological advances; and

· ability of oil and natural gas companies to obtain leases, permits or obtain funds for capital.

14

The level of offshore exploration, development and production activity has historically and recently been volatile. Currently, oil companies are holding back new contracts for drilling rigs and this has lead, and will continue to lead, to reduced utilization of the rig fleet and correspondingly our OSVs. In addition, there is a risk that the worldwide OSV fleet will increase more than the demand for such vessels. Any such continuing decrease in activity or increase in worldwide fleet growth that surpasses demand is likely to negatively affect our day rates and our utilization rates and, therefore, could have a material effect on our financial condition and results of operations in the future.

An increase in the supply of OSVs would likely have a negative effect on charter rates for our vessels, which could reduce our earnings.

Charter rates for OSVs depend in part on the supply of vessels. Excess vessel capacity in the industry or a particular offshore market may result from:

· constructing new vessels;

· moving vessels from one offshore market area to another;

· converting vessels formerly dedicated to services other than offshore marine services; or

· vessel charters expiring and not being rechartered or vessels charters being terminated.

In the last few years, construction of OSVs has increased. The addition of new vessel capacity to the worldwide offshore support vessel fleet and the declining offshore oil drilling and production activities are currently, and will likely in the future, increase competition in markets where we plan to operate, which could further negatively affect day rates and utilization rates which would, in turn, affect our financial condition, results of operations and cash flows in the future.

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

The operations of our OSVs may be subject to seasonal factors dependent upon which region of the world they are operating. Since inception our OSVs operated mainly offshore of Brazil. However, if the terms and conditions for operations in other areas, such as the West Africa, South East, Brazil, Mediterranean and Middle East, are favorable, we may fix contracts for our vessels also in these markets.

Operations offshore of Brazil are generally cyclical affecting the movement and servicing of drilling rigs. This is likely to have an impact on our financial condition and results of operations, cash flows. Operations in any other market where we may charter our OSVs in the future could also be affected by seasonality, related to such things as unusually long or short construction seasons due to, among other things, abnormal weather conditions, as well as market demand associated with increased drilling and development activities.

Doing business in certain countries creates certain risks.

We have operated OSVs in the past in Brazil and had certain agreements with local companies as a result of local laws requiring a local company to perform certain operations. While the local company has knowledge and experience, entering into these types of agreements often requires us to surrender a measure of control, and occasions may arise when we do not agree with the business goals and objectives of the local company, or other factors may arise that make the continuation of the relationship unwise or untenable. Any such disagreements or discontinuation of the relationship could disrupt our operations, or affect the continuity of our business. If we are unable to resolve issues with the local company, we may decide to terminate these agreements and either locate a different local company and continue to work in the area or seek opportunities for our assets in another market. The unwinding of a local company could prove to be difficult or time-consuming, and the loss of revenue related to the termination of the agreements with the local company and costs related to the sourcing of a new local company or the mobilization of assets to another market could adversely affect our financial condition, results of operations or cash flows.

15

Any future operations offshore of Brazil will subject us to an increased risk from factors specifically affecting that area.

Our OSVs have in the past operated, and in the future may operate, offshore of Brazil. Regulations in Brazil stipulate that a Brazilian-built vessel can contest the charter of international vessels and take that work from the current foreign-built holder of the vessel charter ("blocking"), while the charterer bears no liability to pay a termination fee. Further, "blocking" is not limited only to vessels run by Brazilian shipowners but also foreign owners operating Brazilian vessels. "Blocking" has been on the rise in the offshore downturn. It is assumed that this tactic will increase as the downturn continues. If one of our vessels becomes the subject of "blocking" in the future, it may adversely affect our earnings and results of operations.

General Shipping Industry Risk Factors

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 some of our credit facilities and finance lease arrangement 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;

· 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.

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 charter rates and vessel operating expenses and fleet utilization. These items have been historically volatile and are based on historical trends as well as future expectations.

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.

In developing estimates of future undiscounted cash flows, we make assumptions and estimates about the vessels' future performance, with the significant assumptions being related to charter rates, fleet utilization, operating expenses, capital expenditures, residual value and the estimated remaining useful life of each vessel. 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 from existing time charters 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, we utilize the most recent ten year historical rates for similar vessels, adjusted for any outliers, and other available market data over the remaining estimated life of the vessel, assumed to be 25 years for drybulk carriers, 25 years for tankers, 35 years for gas carriers and 30 years for offshore support vessels from the delivery of the vessel from the shipyard.

16

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 shipping transportation 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.

For example, during 2016and as a result of the impairment review performed it was determined that the carrying amount of our drybulk carriers was not recoverable and, therefore, an impairment loss of $18.3 million was recognized, which was partly offset later in the year by $3.0 million due to the revaluation of three vessels to their fair values as determined by the sale prices concluded in the respective memoranda of agreement and a gain amounted to $1.9 million due to the reclassification of our drybulk carriers as held and used on December 31, 2016. An impairment charge amounting to $65.7 million was also recognized on December 31, 2016 as a result of the impairment review performed for our offshore support vessels. No impairment charge was recognized on December 31, 2017, as carrying amount of our fleet was recoverable.

Declining vessel 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 ability to maintain our targeted leverage rations, the requirement to repay outstanding amounts or a breach of covenants set forth in our existing and future credit facilities and finance lease arrangements.

An economic slowdown or changes in the economic and political environment in the Asia Pacific region could 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, oil and gas 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 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 was approximately 6.9% for the year ended December 31, 2017, as compared to approximately 6.7% for the year ended December 31, 2016, but 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, oil tanker and gas carrier companies and may hinder our ability to compete with them effectively. Moreover, an 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 in the past disrupted financial markets throughout the world, and 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. Future 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 another economic downturn in any of the aforementioned countries and regions.

17

If economic conditions throughout the world decline, 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. The presence of the United States and other armed forces in Afghanistan, additional acts of terrorism and armed conflict around the world may contribute to further economic instability in global financial markets.

The recent sovereign debt crisis in certain Eurozone countries, such as Greece, 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 contraction, deleveraging and reduced liquidity since the financial crisis in 2008, 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 U.S. Securities and Exchange Commission, or the SEC, 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. An extended period of deterioration in outlook for the world economy could reduce the overall demand for our services and could also adversely affect our ability to obtain financing on terms acceptable to us or at all.

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 may adversely affect our business or impair our ability to borrow amounts under our credit facilities or any future financial arrangements. In the absence of available financing, we also may be unable to take advantage of business opportunities or respond to competitive pressures.

As a result of any renewed concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of obtaining money from the credit markets may increase as many lenders will increase margins or interest rates, enact tighter lending standards, refuse to refinance existing debt at all or on terms similar to current debt and reduce, and in some cases cease, to provide funding to borrowers. Furthermore, certain banks that have historically been significant lenders to the shipping industry have recently 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 or otherwise take advantage of business opportunities as they arise.

In addition, as a result of the recent 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 instability of the euro or any inability of Eurozone countries to pay or 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 entered into force in May 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. A renewed period of adverse development in the outlook for European countries could reduce the overall demand for drybulk cargoes, oil and natural 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.

18

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. 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 and other geographic countries and areas, geopolitical events such as Brexit, terrorist or other attacks, and war (or threatened war) or international hostilities, such as those between the United States and North Korea. Terrorist attacks such as those in New York on September 11, 2001, in London on July 7, 2005, in Mumbai on November 26, 2008 and in Paris on November 13, 2015, 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 the presence of U.S. or other armed forces in Iraq, Syria, 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. Any of these occurrences could have a material adverse impact on our operating results, revenues and costs.

Further, governments may turn to trade barriers to protect their domestic industries against foreign imports, thereby depressing shipping demand. In particular, leaders in the United States have indicated the United States may seek to implement more protective trade measures. President Trump was elected on a platform promoting trade protectionism. The results of the presidential election have thus created significant uncertainty about the future relationship between the United States, China and other exporting countries, including with respect to trade policies, treaties, government regulations and tariffs. For example, on January 23, 2017, President Trump signed an executive order withdrawing the United States from the Trans-Pacific Partnership, a global trade agreement intended to include the United States, Canada, Mexico, Peru and a number of Asian countries. In March 2018, President Trump announced tariffs on imported steel and aluminum into the United States that could have a negative impact on international trade generally. Protectionist developments, or the perception they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade. Moreover, increasing trade protectionism may cause an increase in (a) the cost of goods exported from regions globally, (b) the length of time required to transport goods and (c) the risks associated with exporting goods. Such increases may significantly affect the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated costs.

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.

19

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, tanker, gas carrier and offshore support vessels 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.

Sulfur regulations to reduce air pollution from ships are likely to require retrofitting of vessels and may cause us to incur significant costs.

In October 2016, the IMO (defined below) set January 1, 2020 as the implementation date for vessels to comply with its low sulfur fuel oil requirement, which cuts sulfur levels from 3.5% to 0.5%. The interpretation of "fuel oil used on board" includes use in main engine, auxiliary engines and boilers. Shipowners may comply with this regulation by (i) using 0.5% sulfur fuels on board, which is likely to be available around the world by 2020 but likely at a higher cost; (ii) installing scrubbers for cleaning of the exhaust gas; or (iii) by retrofitting vessels to be powered by liquefied natural gas, which may not be a viable option due to the lack of supply network and high costs involved in this process. Costs of compliance with these regulatory changes may be significant and may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

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.

20

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, oil, and natural gas 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, oil or gas 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, tanker, gas carrier or offshore support 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

· 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.

21

Company Specific Risk Factors

Lawsuits may be brought against us in connection with the ongoing restructuring of our former subsidiaries.

On March 23, 2017, Ocean Rig UDW Inc., or Ocean Rig, its subsidiaries Drillships Financing Holding Inc., Drillships Ocean Ventures Inc., and Drill Rigs Holdings Inc., and certain initial supporting creditors entered into a restructuring agreement. We refer to Ocean Rig UDW Inc. and such subsidiaries as the Ocean Rig Parties. The Ocean Rig Parties are our former subsidiaries. The restructuring agreement provides that a restructuring will be implemented by four separate but interconnected schemes of arrangement under Cayman Islands law and ancillary proceedings under Chapter 15 of the U.S. Bankruptcy Code, seeking recognition of the Cayman provisional liquidation proceedings and the schemes of arrangement as foreign main proceedings and an order of the U.S. Bankruptcy Court giving effect to the schemes in the United States. We refer to these proceedings as the Restructuring Proceedings.

In connection with the Restructuring Proceedings, we and certain of our current executive officers are defendants in a lawsuit brought against us on August 31, 2017, by certain creditors of the Ocean Rig Parties, or the Ocean Rig Creditors, in the High Court of the Republic of the Marshall Islands. Ocean Rig has funded a preserved claims trust, or PCT. The PCT was established to preserve, for the benefit of scheme creditors, any causes of action held by Ocean Rig, Agon Shipping Inc. and/or Ocean Rig Investments Inc. arising from the facts and circumstances identified in the draft complaint prepared by the Ocean Rig Creditors. If the trustees under the PCT determine that there is merit to any such claims, the trustees may take legal action for the benefit of all of the scheme creditors in the restructuring.

Further, additional lawsuits may be brought against us by the Ocean Rig Creditors. While we plan to vigorously contest the aforementioned lawsuit and any additional lawsuits that may be brought against us in the future, we can provide no assurance of the outcome of such potential lawsuits, the results of which could have a negative adverse effect on our financial condition.

We are currently subject to litigation and we may be subject to similar or other litigation in the future.

We and certain of our current executive officers are defendants in a purported class-action lawsuit pending in the U.S. District Court for the Eastern District of New York, brought on behalf of shareholders of the Company. The lawsuit alleges violations of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We and Mr. Economou were also defendants in a lawsuit filed in the High Court of the Marshall Islands alleging, in relevant part, breaches of fiduciary duty and constructive fraud, which was recently voluntarily dismissed. We and Mr. Economou are currently defendants in a lawsuit filed by the same plaintiff, asserting similar claims, in the Western District of Texas. Further, as noted above and below, we and certain of our current executive officers are also defendants in a lawsuit brought by certain Ocean Rig Creditors in the Republic of the Marshall Islands, which lawsuit alleges claims for avoidance and recovery of actual and/or constructive fraudulent conveyances and aiding and abetting fraudulent conveyances.

While we believe these claims to be without merit and intend to continue to defend these lawsuits vigorously, we cannot predict their outcome. Furthermore, we may, from time to time, be a party to other litigation in the normal course of business. Monitoring and defending against legal actions, whether or not meritorious, is time-consuming for our management and detracts from our ability to fully focus our internal resources on our business activities. In addition, legal fees and costs incurred in connection with such activities may be significant and we could, in the future, be subject to judgments or enter into settlements of claims for significant monetary damages. A decision adverse to our interests could result in the payment of substantial damages and could have a material adverse effect on our cash flow, results of operations and financial position.

With respect to any litigation, our insurance may not reimburse us or may not be sufficient to reimburse us for the expenses or losses we may suffer in contesting and concluding such lawsuit. Substantial litigation costs, including the substantial self-insured retention that we were required to satisfy before any insurance applied to the claim, or an adverse result in any litigation may adversely impact our business, operating results or financial condition.

22

The planned spinoff of 49% of the common stock of Gas Ships Limited, which owns the four VLGC vessels in our fleet, may not achieve the intended results.

On February 8, 2018, we announced plans for the separation of 49% of the common stock of Gas Ships Limited, our pre-spinoff wholly-owned subsidiary, into a separate publicly traded company. There can be no assurance regarding the ultimate timing of any separation, the form or terms of any separation or that any separation will in fact, be completed. Any separation of Gas Ships Limited and DryShips into two separate public companies will be subject to customary regulatory approvals, final approval of our board of directors and other customary matters and is dependent on numerous factors that include the macroeconomic environment, credit markets and equity markets.

There is also the potential that a separation may result in various adverse impacts on the Company and our businesses including, without limitation, the risk that any separation of our interests in Gas Ships Limited cannot be implemented, the risk that the separation does not achieve the expected benefits for the parties, the risk that the separation of Gas Ships Limited has an adverse impact on the Company, and the costs and disruptions that may result from the separation of businesses that were previously co-mingled including necessary ongoing relationships, and potential for adverse customer impacts. Moreover, the form or nature of the spinoff may have an adverse impact on our operations and our stock price.

The amount of our debt could limit our liquidity and flexibility in obtaining additional financing and in pursuing other business opportunities.

Our indebtedness could affect our future operations, as a portion of our cash flow from operations will be dedicated to the payment of interest and principal on such debt and will not be available for other purposes. Covenants contained in our credit facilities and finance lease arrangement may affect our flexibility in planning for, and reacting to, changes in our business or economic conditions, limit our ability to dispose of assets or place restrictions on the use of proceeds from such dispositions, withstand current or future economic or industry downturns and compete with others in our industry for strategic opportunities, and limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions, general corporate and other purposes.

Our ability to service our debt and finance lease arrangement 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 results are not sufficient to service our current or future indebtedness or finance lease arrangement, we will be forced to take actions such as reducing or delaying our business activities, acquisitions, investments or capital expenditures, reducing or eliminating dividends to our shareholders, selling assets, restructuring or refinancing our debt, or seeking additional equity capital or bankruptcy protection. We may not be able to affect any of these remedies on satisfactory terms, or at all.

We are also a guarantor under (i) our subsidiary's finance lease arrangement, (ii) our subsidiaries' $90.0 million secured credit facility dated January 24, 2018, (iii) our subsidiaries' $35.0 million secured credit facility dated January 29, 2018, (iv) our subsidiaries' $30.0 million secured credit facility dated March 8, 2018 and (v) our subsidiary's $150.0 million secured credit facility dated June 22, 2017. See "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources." Any inability by our subsidiaries to honor their obligations under the aforementioned credit facilities or finance lease arrangement could require us to honor their obligations, which could negatively impact our business.

We may be unable to comply with covenants in our current or future financing arrangements.

Our credit facilities and finance lease arrangement, as applicable, impose operating restrictions on us that prohibit, or otherwise limit our ability, or the ability of our subsidiaries party thereto, to:

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

· undergo a change in control or merge or consolidate with, or transfer all or substantially all our assets to, another person;

· change the flag, class or technical or commercial management of the vessel mortgaged under such facility or terminate or materially amend the management agreement relating to such vessel;

23

· incur additional indebtedness, including issuing guarantees, or refinancing or prepaying any indebtedness, unless certain conditions exist;

· create or permit liens on our assets;

· acquire or sell vessels, unless certain conditions exist;

· enter into other finance lease arrangements;

· make investments;

· change the general nature of our business;

· enter into transactions with affiliates;

· amend, modify or change our organizational documents;

· make capital expenditures; and

· sell, transfer or lease the vessel mortgaged under the facility.

Additionally, under the $150.0 million secured credit facility dated June 22, 2017, subject to certain qualifying events, we must generally continue to beneficially own at least 50% of either (i) Gas Ships Limited' issued and outstanding share capital or (ii) Gas Ships Limited's issued and outstanding voting share capital. Under the facility, Mr. Economou must also generally continue to beneficially own at least 50% of either (i) our issued and outstanding share capital or (ii) our issued and outstanding voting share capital.

Under the $90.0 million secured credit facility dated January 24, 2018, the $35.0 million secured credit facility dated January 29, 2018 and the $30.0 million secured credit facility dated March 8, 2018, subject to certain qualifying events, we must generally continue to beneficially own 100% of all issued and outstanding common stock and voting rights of our vessel-owning subsidiaries that are the borrowers under the facilities. Mr. Economou must also generally continue to beneficially own at least 50% of either (i) our issued and outstanding share capital or (ii) our issued and outstanding voting share capital.

Therefore, we may need to seek permission from our lenders in order to engage in some corporate actions. Our lenders' interests may be different from ours and we may not be able to obtain our lenders' permission when needed. This may limit our ability to pay dividends, finance our future operations or capital requirements, make acquisitions or pursue business opportunities.

In addition, our credit facilities require us and our subsidiaries to satisfy certain financial covenants. In general, these financial covenants require us to maintain (i) minimum liquidity; (ii) a maximum leverage ratio; (iii) a minimum debt service cover ratio; (iv) a minimum market adjusted net worth, (v) a minimum solvency ratio and (vi) a minimum working capital level. In addition, our credit facilities, which are secured by mortgages on our vessels, require us to maintain specified financial ratios, mainly to ensure that the market value of the mortgaged vessels 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. All of our credit facilities also contain cross-acceleration or cross-default provisions that may be triggered by a default under one of our other credit facilities.

Our finance lease arrangement requires us to maintain specified financial ratios and satisfy financial covenants. These financial ratios and covenants require us, among other things, to maintain (i) minimum liquidity; (ii) a minimum working capital level and (iii) a maximum leverage ratio. In addition, our finance lease arrangement requires us to ensure that the market value of the vessel does not fall below a certain percentage of the outstanding amount of the finance lease arrangement, which we refer to as value maintenance clause or loan-to-value ratio.

Covenants contained in the $150.0 million secured credit facility dated June 22, 2017, under which we are a guarantor, further require Gas Ships Limited to meet certain financial tests. Any inability of Gas Ships Limited or its subsidiaries to meet the financial tests of the $150.0 million secured credit facility dated June 22, 2017 could negatively impact our business.

A violation of any of the operating restrictions and financial covenants contained in our existing credit facilities or finance lease arrangement could constitute an event of default under the agreement, which, unless cured, if applicable, or waived or modified by our lenders or counterparties, provides our lenders or counterparties, as applicable, with the right to, among other things, require us to post additional collateral, enhance our equity and liquidity, increase our interest payments, pay down our indebtedness to a level where we are in compliance with our financial covenants, sell vessels in our fleet, reclassify our indebtedness as current liabilities and accelerate our indebtedness, foreclose their liens on our vessels and the other assets securing the credit facilities, and/or allow the charterer to terminate the bareboat charter and withdraw the vessel, which would impair our ability to continue to conduct our business.

24

Events beyond our control, including changes in the economic and business conditions in the international markets in which we operate, may affect our ability to comply with the financial covenants and loan-to-value ratios required by our credit facility. For example, during 2015 and 2016, we were not in compliance with several financial and other covenants in our then outstanding credit facilities. Further, although we have settled or refinanced all of our commercial credit facilities entered into prior December 31, 2016, we were as recently as April 24, 2017 not in compliance with the value maintenance clause in our since repaid commercial credit facility relating to our drybulk carrier segment and the various financial covenants therein. Our ability to maintain compliance also depends substantially on the value of our assets, our charterhire, our ability to obtain charters, our success at keeping our costs low and our ability to successfully implement our overall business strategy.

As of December 31, 2017, we were in compliance with the financial covenants contained in our then outstanding credit facilities.

We expect our future credit agreements and other financing arrangements will also contain restrictive covenants that may limit our liquidity and corporate activities, which could limit our operational flexibility and have an adverse effect on our financial condition and results of operations.

We anticipate entering into additional credit facilities and other financing arrangements that we expect will contain customary covenants and event of default clauses, including cross-default and cross acceleration provisions, financial covenants, restrictive covenants and performance requirements, which may affect our operational and financial flexibility. Such restrictions could affect, and in many respects limit or prohibit, among other things, our ability to pay dividends, incur additional indebtedness, create liens, sell assets, or engage in mergers or acquisitions. These restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. There can be no assurance that such restrictions will not adversely affect our ability to finance our future operations or capital needs.

As a result of the restrictions in our future credit facilities, or similar restrictions in other future financing arrangements, we may need to seek permission from our lenders in order to engage in some corporate actions. Our lenders' interests may be different from ours and we may not be able to obtain their permission when needed. This may prevent us from taking actions that we believe are in our best interests, which may adversely impact our revenues, results of operations and financial condition.

A failure by us to meet our payment and other obligations, including our financial covenants and any security coverage requirements, could lead to defaults under our future loan or financing agreements. Likewise, a decrease in vessel values or adverse market conditions could cause us to breach our financial covenants or security requirements. A default under one of our future loan or financing agreements could result in the cross-acceleration of our other indebtedness. In the event of a default that we cannot remedy, our lenders or counterparties could then accelerate our indebtedness and foreclose on the vessels in our fleet. The loss of any of our vessels could have a material adverse effect on our business, results of operations and financial condition.

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, any future newbuilding installments, and other obligations 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, LPG, tanker and offshore support shipping industries or the economy generally. In particular, our ability to generate steady cash flow will depend on our ability to secure employment at acceptable rates. Our ability to renew our existing time charters or obtain new charters at 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 and financing agreements, the provisions of Marshall Islands or Cyprus law affecting the payment of dividends and other factors.

25

If our operating cash flows are insufficient to service our debt, any future newbuilding installments 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 current or future 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.

Investor confidence may be adversely impacted if we are unable to comply with Section 404 of the Sarbanes-Oxley Act of 2002.

We have implemented procedures in order to meet the evaluation requirements of Rules 13a-15(c) and 15d-15(c) under the Exchange Act, for the assessment under Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404. Section 404 requires us to include in our annual reports on Form 20-F (i) our management's report on, and assessment of, the effectiveness of our internal controls over financial reporting and (ii) our independent registered public accounting firm's attestation to and report on the effectiveness of our internal controls over financial reporting in our annual report. If we fail to maintain the adequacy of our internal controls over financial reporting, we will not be in compliance with all of the requirements imposed by Section 404. Any failure to comply with Section 404 could result in an adverse reaction in the financial marketplace due to a loss of investor confidence in the reliability of our financial statements, which ultimately could harm our business.

We rely on our information systems to conduct our business, and failure to protect these systems against security breaches could adversely affect our business and results of operations. Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed.

The efficient operation of our business, including processing, transmitting and storing electronic and financial information, is dependent on computer hardware and software systems.  Information systems are vulnerable to security breaches by computer hackers and cyber terrorists.  We rely on industry accepted security measures and technology to securely maintain confidential and proprietary information maintained on our information systems.  However, these measures and technology may not adequately prevent security breaches.  In addition, the unavailability of the information systems or the failure of these systems to perform as anticipated for any reason could disrupt our business and could result in decreased performance and increased operating costs, causing our business and results of operations to suffer.  Any significant interruption or failure of our information systems or any significant breach of security could adversely affect our business and results of operations.

The failure of our counterparties to meet their obligations under our time charter agreements could cause us to suffer losses or otherwise adversely affect our business.

As of December 31, 2017, nine of our vessels were employed under long time charters with an aggregate six charterers. 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, tanker, gas, or offshore support shipping industries 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 charter-hire or attempt to renegotiate charter rates.

Our ability to renew the charters on our vessels upon the expiration or termination of our current charters, 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.

26

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, tanker, gas or offshore support shipping industries 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 our current or future credit facilities and financing agreements.

Our future offshore support contracts may be terminated early due to certain events.

All of our OSVs are currently laid up. However, any future customers under our offshore support contracts are expected to have the right to terminate our offshore support contracts. Generally, we expect our contracts to 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 future customers may no longer need an offshore support vessel that is currently under contract or may be able to obtain a comparable vessel 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 future customers' ability to perform their obligations under their offshore support 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 future 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.

Any future contracted revenue for our fleet of offshore support vessels may not be ultimately realized.

As of April 4, 2018, we have no future contracted revenue for our fleet of OSVs because all the vessels in our OSV fleet are laid up.  Further, any future contracted revenue for our fleet of OSVs may not be ultimately realized. We may not be able to perform under our future time-charter contracts due to events beyond our control, and our future customers may seek to cancel or renegotiate our contracts for various reasons, including adverse conditions, resulting in lower daily rates. Our inability or the inability of our future customers to perform under the respective contractual obligations may have a material adverse effect on our financial position, results of operations and cash flows.

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

We recently acquired eight secondhand drybulk carriers and two secondhand tankers from unaffiliated third-parties. 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.

New vessels may experience initial operational difficulties and unexpected incremental start-up costs.

New vessels, during their initial period of operation, have the possibility of encountering structural, mechanical and electrical problems as well as unexpected incremental start-up costs. Typically, the purchaser of a newbuilding will receive the benefit of a warranty from the shipyard for newbuildings, but we cannot assure you that any warranty we obtain will be able to resolve any problem with the vessel without additional costs to us and off-hire periods for the vessel. Upon delivery of a newbuild vessel from a shipyard, we may incur operating expenses above the incremental start-up costs typically associated with such a delivery and such expenses may include, among others, additional crew training, consumables and spares.

27

If any of our vessels fail to maintain their class certification and/or fail any annual survey, intermediate survey, drydocking or special survey, that vessel 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, tanker, gas carrier and offshore support vessel 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 International Convention for the Safety of Life at Sea of 1974, or SOLAS. All of our drybulk, tanker and gas carrier vessels are certified as being "in class" by major Classification Societies (e.g., American Bureau of Shipping, Lloyd's Register of Shipping, DNV-GL, and Korean Register of Shipping). Each of our operating offshore support vessels is certified as being "in class" by American Bureau of Shipping. Our six operating offshore support vessels will complete their first Special Periodical Surveys upon reactivation.

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.

If any of our vessels 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 and finance lease arrangement. 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 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 April 4, 2018, all of the vessels in our fleet had an average age of 7.2 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. Effective as of January 1, 2018, RightShip's age trigger for a dry cargo inspection for vessels over 8,000 dwt changed from 18 years to 14 years, after which an annual acceptable RightShip inspection will be required. RightShip may downgrade any vessel over 18 years of age that has not completed a satisfactory inspection by RightShip, in the same manner as any other vessel over 14 years of age, to two stars, which significantly decreases its chances of entering into a charter. Therefore, as some of our drybulk carriers approach 18 years of age, we may not be able to operate these vessels profitably during the remainder of their useful lives. As of April 4, 2018, none of our drybulk carriers are over 18 years of age.

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

If our drybulk, tanker, gas carrier or offshore support vessels 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 also 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.

We may not be able to maintain or replace our drybulk, tanker, gas carrier or offshore support vessels 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 or future drybulk, tanker, gas carrier or offshore support vessels units, as applicable, 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 drybulk, tanker, gas carrier and/or offshore support vessels.

28

We may not be able to pay 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, previously suspended dividends on shares of our common stock. Beginning for the fourth quarter ended December 31, 2016, our board of directors approved a dividend policy to declare and pay quarterly dividends of $2.5 million to holders of our common stock. The dividend per share to be paid by the Company is determined based on the number of shares outstanding on the applicable record date. Accordingly, our board of directors declared quarterly dividends of $2.5 million to holders of our common stock for the quarters ended December 31, 2016, March 31, 2017, June 30, 2017, September 30, 2017, and December 31, 2017, respectively.

The timing and amount of dividends will depend on our earnings, financial condition, cash requirements and availability, restrictions in our credit facilities and finance lease arrangement, the provisions of Marshall Islands law affecting the payment of dividends and other factors. The declaration and payment of dividends, if any, will always be subject to the discretion of our board of directors. The timing and amount of any dividends declared will depend on, among other things, our earnings, financial condition and cash requirements and availability, our ability to obtain debt and equity financing on acceptable terms as contemplated by our growth strategy and provisions of Marshall Islands law affecting the payment of dividends. The international drybulk, tanker, gas and offshore support shipping industries are highly volatile, and we cannot predict with certainty the amount of cash, if any, that will be available for distribution as dividends in any period. Also, there may be a high degree of variability from period to period in the amount of cash that is available for the payment of dividends.

Further, we may incur expenses or liabilities or be subject to other circumstances in the future that reduce or eliminate the amount of cash that we have available for distribution as dividends, including as a result of the risks described in this annual report. Our growth strategy contemplates that we will finance the acquisition of additional vessels through a combination of debt and equity financing on terms acceptable to us. If financing is not available to us on acceptable terms, our board of directors may determine to finance or refinance acquisitions with cash from operations, which would reduce or even eliminate the amount of cash available for the payment of dividends.

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 satisfy our financial obligations and to make dividend payments, if any, in the future depends on our subsidiaries and their ability to distribute funds to us. 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. As of December 31, 2017, we did not have any derivative instruments.

The derivative contracts we enter into, or may enter into, to hedge our exposure to fluctuations in interest rates could result in higher than market interest rates and charges against our income.

From time to time, we enter into 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 strategy, however, may not be effective and we may incur substantial losses if interest rates move materially differently from our expectations. 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. As of December 31, 2017, we did not have any interest rate swaps.

29

Our financial condition could be materially adversely affected to the extent we do not hedge our exposure to interest rate fluctuations under our current or future 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 our vessels, 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 our offshore support vessels was received 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 were paid in Euros, Brazilian Real or other currencies depending in part on the location of our operations. For the year ended December 31, 2017, approximately 37.5% 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. 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 financing 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 financing agreements, our lending costs could increase significantly, which would have an adverse effect on our profitability, earnings and cash flow.

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

Our debt under 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 the TMS Entities to manage and charter our drybulk, tanker, gas carrier, and offshore support fleet.

Since January 1, 2011, we have subcontracted the commercial and technical management of our drybulk, tanker and offshore vessels, including crewing, maintenance and repair, to TMS Bulkers, TMS Tankers and TMS Offshore Services. On December 9, 2016, we entered into a new agreement, or the New TMS Agreement, with TMS Bulkers and TMS Offshore Services for vessel management services, including executive management services, effective as of January 1, 2017. Each of our respective vessel-owning subsidiaries has subsequently entered into separate service agreements with TMS Bulkers, TMS Tankers, TMS Offshore Services and TMS Cardiff Gas in accordance with the terms of the New TMS Agreement.

30

The TMS Entities may be deemed to be beneficially owned by our Chairman and Chief Executive Officer, Mr. George Economou. The loss of the services of the TMS Entities 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 the TMS Entities if they default on their obligations to us, you will have no recourse against any of them. Further, we are required to seek approval from our lenders to change our manager.

Under our new service agreements with the TMS Entities, as with previous arrangements, the TMS Entities will not be liable to us for any losses or damages arising in the course of their performance under the agreement unless such loss or damage will be proved to have resulted from the negligence, gross negligence or willful default by any TMS Entity, their employees or agents and in such case each TMS Entity's 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 new management agreements with the TMS Entities further provide that the TMS Entities are not 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 were shown to have resulted from a failure by any TMS Entity to perform their obligations with respect to management of the crew. Except to the extent of the liability cap described above, we will indemnify each TMS Entity and their employees and agents against any losses incurred in the course of the performance of these agreements.

The TMS Entities are privately held companies and there is little or no publicly available information about them.

The ability of the TMS Entities to continue providing services for our benefit will depend in part on their own financial strength. Circumstances beyond our control could impair the financial strength of each of the TMS Entities, and because they are privately held it is unlikely that information about their financial strength would become public unless any of the TMS Entitiesbegan to default on their obligations. As a result, an investor in our shares might have little advance warning of problems affecting any of the TMS Entities, 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 the TMS Entitiesto 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 the TMS Entities 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 and Chief Executive Officer Mr. George Economou.

Our continued operations depend to a significant extent upon the abilities and efforts of our Chairman and Chief Executive Officer, Mr. George Economou. The loss of Mr. Economou's services to our Company could adversely affect our relationship with our lenders and the management of our fleet 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 and Chief Executive Officer has affiliations with TMS Bulkers, TMS Tankers, TMS Offshore Services and TMS Cardiff Gas, which could create conflicts of interest.

Mr. Economou may be deemed to be the beneficial owner of the TMS Entities. 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 any of the TMS Entities, on the other hand. These conflicts may arise in connection with the chartering, purchase, sale and operations of the vessels in our fleet versus vessels managed by any of the TMS Entitiesand/ or other companies that may be deemed to be beneficially owned by the TMS Entitiesand Mr. Economou.

31

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

While we adhere to high standards of evaluating related party transactions, agreements between us and other related parties may be challenged as less favorable than agreements that we could obtain from unaffiliated third parties. Further, conflicts of interest that arise in connection with Mr. Economou's related parties may be resolved in a manner adverse to us.

Our management agreements with the TMS Entities, as well as other securities we may issue and agreements we may enter into in the future with related parties, may be challenged to be on terms that are less favorable to us than terms that would be obtained in arm's-length negotiations with unaffiliated third-parties.

Further, to the extent that we do business with companies that may be deemed to be beneficially owned by Mr. Economou or compete with such companies for business opportunities, prospects or financial resources, or participate in ventures in which companies that may be deemed to be beneficially owned by Mr. Economou participate, there may be actual or apparent conflicts of interest in decisions made for us or those companies that could have adverse consequences for us. These decisions may relate to corporate opportunities, corporate strategies, potential acquisitions or disposals of businesses or vessels, inter-company agreements, financing arrangements, the issuance or disposition of securities, the election of new or additional directors and other matters. Such potential conflicts may delay or limit the opportunities available to us, and it is possible that conflicts may be resolved in a manner adverse to us.

Our executive officers do not devote all of their time to our business, which may hinder our ability to operate successfully.

Mr. George Economou, our Chairman and Chief Executive Officer, Mr. Anthony Kandylidis, our President and Chief Financial Officer, and certain other officers who perform executive officer functions for us, are not required to work full-time on our affairs and are involved in business activities not related to us, which may result in their spending less time than is appropriate or necessary to manage our business successfully. While we estimate that certain of our executive officers may spend a substantial portion of their monthly business time on business activities not related to our business, the actual allocation of time could vary significantly from time to time depending on various circumstances and needs of the other businesses, such as the relative levels of strategic activities of such businesses. As a result, there could be material competition for the time and effort of our officers who also provide services to other businesses, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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.

32

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.

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 stock, as if the excess distribution or gain had been recognized ratably over the U.S. shareholder's holding period of our common stock. 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 stock owned, in the aggregate, 50% or more of our outstanding common stock 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 offshore support 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 offshore support 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 support 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 or Brazil, our effective tax rate on our worldwide earnings from our offshore support operations could increase substantially and our earnings and cash flows from these operations could be materially adversely affected.

33

Our subsidiaries that provide services relating to offshore support 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 stock arising in an investor's particular situation under U.S. federal, state, local and foreign law.

Our vessels may call on ports located in or 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 stock.

While none of our vessels called on ports located in countries subject to U.S. sanctions during 2017, and we intend to comply with all applicable sanctions and embargo laws and regulations, our vessels may call on ports or operate in these countries from time to time in the future on our charterers' instructions in the future, and there can be no assurance that we will maintain such compliance, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations.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. With effect from July 1, 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 addition, on May 1, 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 U.S. persons are generally prohibited from all transactions or dealings with such persons, whether direct or indirect. Among other things, foreign sanctions evaders are unable to transact 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.

On July 14, 2015, the P5+1 and the EU announced that they reached a landmark agreement with Iran titled the Joint Comprehensive Plan of Action Regarding the Islamic Republic of Iran's Nuclear Program, or the JCPOA, which is intended to significantly restrict Iran's ability to develop and produce nuclear weapons for 10 years while simultaneously easing sanctions directed toward non-U.S. persons for conduct involving Iran, but taking place outside of U.S. jurisdiction and does not involve U.S. persons.  On January 16, 2016, or Implementation Day, the United States joined the EU and the UN in lifting a significant number of their nuclear-related sanctions on Iran following an announcement by the International Atomic Energy Agency, or the IAEA, that Iran had satisfied its respective obligations under the JCPOA.

U.S. sanctions prohibiting certain conduct that is now permitted under the JCPOA have not actually been repealed or permanently terminated at this time. Rather, the U.S. government has implemented changes to the sanctions regime by: (1) issuing waivers of certain statutory sanctions provisions; (2) committing to refrain from exercising certain discretionary sanctions authorities; (3) removing certain individuals and entities from OFAC's sanctions lists; and (4) revoking certain Executive Orders and specified sections of Executive Orders. These sanctions will not be permanently "lifted" until the earlier of "Transition Day," set to occur on October 20, 2023, or upon a report from the IAEA stating that all nuclear material in Iran is being used for peaceful activities. On October 13, 2017, the President Trump announced that he would not certify Iran's compliance with the JCPOA. This did not withdraw the U.S. from the JCPOA or reinstate any sanctions. However, President Trump must periodically renew sanctions waivers and his refusal to do so could result in the reinstatement of certain sanctions currently suspended under the JCPOA. Although it is our intention to comply with the provisions of the JCPOA, 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 JCPOA, as noted above.

34

Current or future counterparties of ours may be affiliated with persons or entities that are or may be in the future the subject of sanctions imposed by the Trump administration, the EU, and/or other international bodies as a result of the annexation of Crimea by Russia in March 2014. If we determine that such sanctions require us to terminate existing or future contracts to which we or our subsidiaries are party or if we are found to be in violation of such applicable sanctions, our results of operations may be adversely affected or we may suffer reputational harm. Currently, we do not believe that any of our existing counterparties are affiliated with persons or entities that are subject to such sanctions.

Although it is our intention to comply with the provisions of the JPCOA, 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 JPCOA.

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 stock may adversely affect the price at which our common stock trades. 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 stock may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.

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

For the vessels in our fleet, 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.

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 have or 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 vessels in an effort to prevent such releases, future releases could occur, especially as our vessels 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 vessels, 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.

35

We expect that we will be able to obtain some degree of contractual indemnification from our customers in most of our offshore support 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.

Regulations relating to ballast water discharge coming into effect during September 2019 may adversely affect our revenues and profitability.

The IMO has imposed updated guideline of ballast water management systems specifying the maximum amount of viable organisms allowed to be discharged from a vessel's ballast water.  Depending on the date of the IOPP renewal survey, existing vessels must comply with the updated D-2 standard on or after September 8, 2019.  For most vessels, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. We currently have 24 vessels that do not comply with the updated guideline and costs of compliance may be substantial and adversely affect our revenues and profitability.

Failure to comply with the U.S. Foreign Corrupt Practices Act and anti-bribery and anti-corruption regulations in other jurisdictions in which we operate could result in fines, criminal penalties, offshore support 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 related parties 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 and anti-corruption and anti-bribery laws in other jurisdictions in which we operate such as Brazil and the U.K. 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.

Risks Relating to Our Common Stock

Our Chairman and Chief Executive Officer, who may be deemed to beneficially own, directly or indirectly, 71.4% of our issued and outstanding common stock, has control over us, which will limit your ability to influence our actions.

As of April 4, 2018, our Chairman and Chief Executive Officer, Mr. George Economou, may be deemed to have beneficially owned, directly or indirectly, approximately 71.4% of our outstanding common stock and therefore has the power to exert considerable influence over our actions. The interests of our Chairman and Chief Executive Officer may be different from your interests.

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

The market price of shares of our common stock could decline due to sales, or the announcements of proposed sales, of a large number of shares of common stock in the market, including sales of shares of common stock 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 shares of our common stock.

Our Amended and Restated Articles of Incorporation, as amended, 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 stock 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 stock 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.

36

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

Our common stock commenced trading on the Nasdaq National Market, now the Nasdaq Global Market, in February 2005. Our common stock now trades on the Nasdaq Capital Market. We cannot assure you that an active and liquid public market for our common stock will continue. The price of our common stock 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, tanker, gas shipping or offshore support industries 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.

Our common stock currently trades above the minimum $1.00 bid price, but there is no guarantee that our shares will stay above the minimum $1.00 bid price. If we fail to maintain compliance with Nasdaq's listing standards, our common stock may be delisted.

Delisting from the Nasdaq could have an adverse effect on our business and on the trading of our common stock. If a delisting of our common stock were to occur, such shares may trade in the over-the-counter market such as on the OTC Bulletin Board or on the "pink sheets." The over-the-counter market is generally considered to be a less efficient market, and this could diminish investors' interest in our common stock as well as significantly impact the price and liquidity of our common stock. Any such delisting may also severely complicate trading of our common stock by our shareholders, or prevent them from re-selling their common stock at/or above the price they paid.

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 stock.

Several provisions of our Amended and Restated Articles of Incorporation and Second 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 stock entitled to vote for the directors;

37

· 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.

The above anti-takeover provisions 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 stock 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.

Additionally, the Republic of the Marshall Islands does not have a legal provision for bankruptcy or a general statutory mechanism for insolvency proceedings.  As such, in the event of a future insolvency or bankruptcy, our shareholders and creditors may experience delays in their ability to recover their claims after any such insolvency or bankruptcy. Further, in the event of any bankruptcy, insolvency, liquidation, dissolution, reorganization or similar proceeding involving us or any of our subsidiaries, bankruptcy laws other than those of the United States could apply. If we become a debtor under U.S. bankruptcy law, bankruptcy courts in the United States may seek to assert jurisdiction over all of our assets, wherever located, including property situated in other countries. There can be no assurance, however, that we would become a debtor in the United States, or that a U.S. bankruptcy court would be entitled to, or accept, jurisdiction over such a bankruptcy case, or that courts in other countries that have jurisdiction over us and our operations would recognize a U.S. bankruptcy court's jurisdiction if any other bankruptcy court would determine it had jurisdiction.

We are a "foreign private issuer," which could make our common stock 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 10-Q 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 stock less attractive to some investors or otherwise harm our stock price.

38

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 Kifissias Avenue and Sina Street, Marousi, 151 24, Athens, Greece. Our telephone number at that address is +30-216-200-6600.

Business Development

Developments related to Ocean Rig

On June 8, 2015, Ocean Rig successfully completed the offering of 28,571,428 shares of its common stock, par value $0.01 per share, at a price of $7.00 per share, resulting in proceeds of $194.1 million, after deducting placement fees. As a result of the offering we lost our controlling financial interest in Ocean Rig, therefore, from June 8, 2015, Ocean Rig has been considered as an affiliated entity and not as a controlled subsidiary.

On June 4, 2015, we reached an agreement with Ocean Rig under the $120.0 million Exchangeable Promissory Note (the "Note"), dated November 18, 2014, to, among other things, partially exchange $40.0 million of the Note for 4,444,444 of Ocean Rig's shares owned by us, amend the interest of the Note and pledge to Ocean Rig 20,555,556 of Ocean Rig's stock owned by us. On August 13, 2015, we reached an agreement with Ocean Rig and exchanged the remaining outstanding balance of $80.0 million owed to Ocean Rig under the Note, for 17,777,778 shares of Ocean Rig owned by us. The agreement was approved by a committee of independent directors.

On April 5, 2016, we sold all of our shares of Ocean Rig to Ocean Rig Investments, Inc., a subsidiary of Ocean Rig and as such we no longer hold any shares of Ocean Rig as of the date of this annual report.

Developments related to Sifnos and Sierra

On October 21, 2015, as amended on November 11, 2015, we entered into a secured revolving credit facility of up to $60.0 million, or the Initial Revolving Credit Facility, with Sifnos Shareholders Inc., or Sifnos, an entity that may be deemed to be beneficially owned by Mr. George Economou, our Chairman and Chief Executive Officer, for general working purposes. The loan was secured by shares that we held in Ocean Rig and in Nautilus (defined below) and by a first priority mortgage over one Panamax drybulk carrier and had a tenor of three years. In addition, the lenders and the borrowers had certain conversion rights the exercise of which was approved by our board of directors on December 11, 2015. Our board of directors elected to convert $10.0 million of the outstanding principal amount of the Sifnos Loan into 8 shares of our Series B Preferred Stock (100,000,000 before the 1-for-25, 1-for-4, 1-for-15, 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits). Each preferred share had five votes and was mandatorily converted into shares of our common stock on a one to one basis within three months after the issuance thereof on a date selected by us, no later than March 30, 2016.

On March 24, 2016, we entered into an agreement to increase the Initial Revolving Credit Facility. The facility was amended to increase the maximum available amount by $10.0 million to $70.0 million, to give us an option to extend the maturity of the facility by 12 months to October 21, 2019, and to cancel the option of the lender to convert the outstanding loan to our common stock. Additionally, subject to Sifnos prior written consent, we obtained the right to convert $8.75 million of the outstanding balance of the loan into 29 of our preferred shares (3,500,000 shares before the 1-for-15, 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits shares). As part of the transaction, we also entered into a Preferred Stock Exchange Agreement to exchange the 8 Series B Preferred Shares (100,000,000 before the 1-for-25, 1-for-4, 1-for-15, 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) held by the lender for $8.75 million. We subsequently cancelled the Series B Preferred Shares previously held by Sifnos, effective March 24, 2016.

On April 5, 2016, the Initial Revolving Credit Facility was further amended, in connection with the sale of all of the shares we held in Ocean Rig to Ocean Rig Investments, Inc. whereby Sifnos agreed to, among other things, (i) release its lien over the Ocean Rig shares and (ii) waive any events of default, subject to a similar agreement being reached with the rest of the lenders to DryShips, in exchange for a 40% LTV maximum loan limit, being introduced under the facility. In addition, the interest rate under the loan was reduced to 4% plus LIBOR. On April 5, 2016, we paid Sifnos $45.0 million from our proceeds of the sale of the Ocean Rig shares to Ocean Rig Investments Inc.

39

On September 9, 2016, we entered into an agreement to convert $8.75 million of the outstanding balance of the Initial Revolving Credit Facility into 29 shares of Series D Preferred Stock (3,500,000 shares before the 1-for-15, 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits shares), which shares were issued on September 13, 2016. Each shares of Series D Preferred Stock had 100,000 votes and was not convertible into our common stock.

On October 31, 2016, the Initial Revolving Credit Facility was amended to increase the maximum available amount by $5.0 million to $75.0 million and to give us an option within 365 days to convert $7.5 million of the outstanding loan into shares of our common stock.

On December 30, 2016, Sifnos entered into a new revolving credit facility of up to $200.0 million, or the New Revolving Credit Facility, with the Company.  The New Revolving Credit Facility was secured by all of our then present and future assets except the MV Raraka. This new loan carried an interest rate of LIBOR plus 5.5%, was non-amortizing, had a tenor of three years, had no financial covenants and was arranged with a fee of 2.0%. In addition, Sifnos had the ability to participate in realized asset value increases of the collateral base in a fixed percentage of 30%.

On May 23, 2017, we were released of all of our obligations and liabilities under the New Revolving Credit Facility, through a Notice of Release from Sifnos, and entered into an unsecured revolving facility agreement, or the Sierra Credit Facility, with Sierra Investments Inc., an entity that may be deemed to be beneficially owned by Mr. Economou, or Sierra, and a separate participation rights agreement with Mountain Investments Inc., or Mountain, both entities that may be deemed to be beneficially owned by Mr. George Economou, our Chairman and Chief Executive Officer. The Sierra Credit Facility carried an interest rate of LIBOR plus 6.5%, was non-amortizing, had a tenor of five years, had no financial covenants and was arranged with a fee of 1.0%. In addition, Mountain had the ability to participate in realized asset value increases of all of our present and future assets, except the vessel Samsara, in a fixed percentage of 30% in case of their sale and has a duration of up to the maturity of the Sierra Credit Facility. The transaction was approved by the independent members of our board of directors and a fairness opinion was obtained in connection with this transaction.

On August 11, 2017, our Audit Committee approved a binding term sheet, or the Term Sheet, to sell shares of our common stock to entities that may be deemed to be beneficially owned by Mr. Economou for aggregate consideration of $100.0 million at a price of $2.75 per share, or the Private Placement. Pursuant to the Term Sheet, the Audit Committee also approved a subsequent rights offering, or the Rights Offering, that would allow our shareholders to purchase their pro rata portion of up to $100.0 million of our common stock at a price of $2.75 per share. The Term Sheet, Private Placement and Rights Offering were approved by the Audit Committee, which is comprised of independent members of our board of directors, taking into account a fairness opinion from an independent third-party financial advisor. We also entered into a backstop purchase agreement, or the Backstop Agreement, with Sierra, pursuant to which Sierra agreed to purchase from us, at $2.75 per share, the number of shares of common stock offered pursuant to the Rights Offering that were not issued pursuant to existing shareholders' exercise in full of their subscription rights.

The Private Placement closed on August 29, 2017, when we issued an aggregate of 36,363,636 shares of our common stock to several entities that may be deemed to be beneficially owned by Mr. Economou as consideration for: (i) the acquisition of 100.0% of the issued and outstanding equity interests of Shipping Pool Investors Inc., which directly holds a 49% interest in Heidmar Holdings LLC, or Heidmar, a global tanker pool operator, from SPII Holdings Inc., an entity that may be deemed to be beneficially owned by Mr. Economou; (ii) the termination of the participation rights set forth in the participation rights agreement dated May 23, 2017 issued by the Company providing certain participation rights to Mountain; (iii) forfeiture by Sifnos of all outstanding shares of Series D Preferred Stock held prior to the closing of the Private Placement; and (iv) the reduction in principal outstanding balance by $27.0 million of the Sierra Credit Facility.

On August 29, 2017, we announced our intention to launch our previously announced Rights Offering to our shareholders of record as of August 31, 2017. On October 4, 2017, we announced the closing of the Rights Offering. Rights holders subscribed for an aggregate of 305,760 shares of our common stock and we raised approximately $0.8 million of gross proceeds therefrom, while 36,057,876 shares of our common stock was issued to Sierra in exchange for the reduction in principal outstanding balance by $99.2 million of the Sierra Credit Facility.

40

On October 25, 2017, we refinanced the Sierra Credit Facility with a new secured loan facility, or the Loan Facility Agreement, secured by assets, with a loan to value ratio of 50%, a tenor of five years, no amortization and interest of LIBOR plus 4.5%. No arrangement fees or otherwise were charged in connection with the refinancing. As of December 31, 2017, the outstanding balance under the Loan Facility Agreement was $73.8 million.

On February 1, 2018, we repaid in full the outstanding balance of $73.8 million under the Loan Facility Agreement.

Other Developments

On October 21, 2015, we entered into an agreement to acquire Mezzanine Financing Investment III Ltd. ("Mezzanine") and Oil and Gas Ships Investor Limited (Oil and Gas), which owned in aggregate, directly or indirectly, 97.44% of the issued and outstanding share capital of Nautilus Offshore Services Inc. ("Nautilus"), for a purchase price of $87.0 million plus the assumption of approximately $33.0 million of net debt. As part of the acquisition cost, we also paid $3.6 million for the working capital of Nautilus as at September 30, 2015, as agreed between the parties. In addition, on November 24, 2015, Mezzanine, entered into an agreement with VRG AS, which owned the remaining 2.56% issued and outstanding share capital of Nautilus, and acquired its equity stake.

On June 8, 2016, we entered into a securities purchase agreement with an institutional investor for the sale of 5,000 newly designated Series C Convertible Preferred Shares, warrants to purchase 5,000 Series C Convertible Preferred Shares and 0 shares of common stock (148,998 shares before the 1-for-4, 1-for-15, 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits). As of November 18, 2016, the 5,000 Series C Convertible Preferred Shares and the 5,000 Series C Convertible Preferred Shares issued due to the exercise of the respective warrant have been converted (including their respective dividends) into an aggregate 181 shares of our common stock (21,038,020 shares before the 1-for-4, 1-for-15, 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits).

On November 16, 2016, we entered into a Securities Purchase Agreement with Kalani Investments Limited, or Kalani, for the sale of 20,000 newly designated Series E-1 Convertible Preferred Shares, preferred warrants to purchase 30,000 Series E-1 Convertible Preferred Shares, preferred warrants to purchase 50,000 newly designated Series E-2 Convertible Preferred Shares, prepaid warrants to initially purchase an aggregate of 47 shares of our common stock (372,874 shares before the 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits), and 0 shares of our common stock (100 shares before the 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits). As of December 12, 2016, the initial 20,000 Series E-1 Convertible Preferred Shares, the E-1 and E-2 Convertible Preferred Shares issued due to the exercise of the preferred warrants (including their respective dividends) and the prepaid warrants have been converted and/or exercised into 4,073 shares of our common stock (31,932,629 shares before the 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits).

On December 23, 2016, we entered into a common stock purchase agreement, or the 2016 Purchase Agreement, with Kalani. The 2016 Purchase Agreement provided that, upon the terms and subject to the conditions set forth therein, Kalani was committed to purchase up to $200.0 million worth of shares of our common stock over the 24-month term of the purchase agreement and would receive up to an aggregate of $1.5 million of shares of our common stock as a commitment fee in consideration for entering into the 2016 Purchase Agreement. As of January 31, 2017, we completed the sale to Kalani of the full $200.0 million worth of shares of our common stock under the 2016 Purchase Agreement, which then automatically terminated in accordance with its terms. Between the date of the 2016 Purchase Agreement, December 23, 2016, and January 30, 2017, we sold an aggregate of 32,681 shares of our common stock (71,864,590 shares before the 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) at an average price of approximately $2.78 per share, and issued an aggregate of 263 shares of our common stock (844,335 shares before the 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) to Kalani as a commitment fee for entering into the 2016 Purchase Agreement. Our net proceeds from the sale of these shares were approximately $198.0 million, after deducting estimated aggregate offering expenses.

On February 17, 2017, we entered into a common stock purchase agreement, or the February 2017 Purchase Agreement, with Kalani. The February 2017 Purchase Agreement provided that, upon the terms and subject to the conditions set forth therein, Kalani was committed to purchase up to $200.0 million worth of shares of our Common Stock over the 24-month term of the purchase agreement and would receive up to an aggregate of $1.5 million of shares of our Common Stock as a commitment fee in consideration for entering into the February 2017 Purchase Agreement. As of March 17, 2017, we completed the sale to Kalani of the full $200.0 million worth of shares of our Common Stock under the February 2017 Purchase Agreement, which then automatically terminated in accordance with its terms. Between the date of the February 2017 Purchase Agreement, February 17, 2017, and March 16, 2017, we sold an aggregate of 118,165 shares of our common stock (115,801,710 shares before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits)to Kalani at an average price of approximately $1.73 per share, and issued an aggregate of 872 shares of our common stock (854,631 shares before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits)to Kalani as a commitment fee for entering into the February 2017 Purchase Agreement.

41

On April 3, 2017, we entered into a common stock purchase agreement, or the April 2017 Purchase Agreement, with Kalani. The April 2017 Purchase Agreement provided that, upon the terms and subject to the conditions set forth therein, Kalani was committed to purchase up to $226.4 million worth of shares of our common stock over the 24-month term of the purchase agreement and would receive up to an aggregate of $1.5 million of shares of our common stock as a commitment fee in consideration for entering into the April 2017 Purchase Agreement. As of August 11, 2017, we sold to Kalani $191.6 million worth of shares of our common stock under the April 2017 Purchase Agreement. Between the date of the April 2017 Purchase Agreement, April 3, 2017, and August 10, 2017, we sold an aggregate of 31,392,280 shares of our common stock (123,998,456 shares before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits)to Kalani at an average price of approximately $1.56 per share, and issued an aggregate of 42,630 shares of our common stock (879,711 shares before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits)to Kalani as a commitment fee for entering into the April 2017 Purchase Agreement. On August 11, 2017, we terminated the April 2017 Purchase Agreement.

Reverse Stock Splits

On February 22, 2016, a committee of our board of directors determined to effect a 1-for-25 reverse stock split of shares of our common stock. The reverse stock split occurred, and shares of our common stock began trading on a split adjusted basis on Nasdaq as of the opening of trading on March 11, 2016.

On July 29, 2016, our board of directors determined to effect a 1-for-4 reverse stock split, and shares of our common stock began trading on a split adjusted basis on Nasdaq as of opening of trading on August 15, 2016.

On October 27, 2016, a reverse stock split committee of our board of directors determined to effect a 1-for-15 reverse stock split of shares of our common stock. The reverse stock split occurred and shares of our common stock began trading on a split adjusted basis on Nasdaq as of the opening of trading on November 1, 2016.

On January 18, 2017, our board of directors determined to effect a 1-for-8 reverse stock split of shares of our Common Stock. The reverse stock split occurred, and shares of our Common Stock began trading on a split adjusted basis on Nasdaq as of the opening of trading on January 23, 2017.

On April 6, 2017, our board of directors determined to effect a 1-for-4 reverse stock split of shares of our Common Stock. The reverse stock split occurred, and shares of our Common Stock began trading on a split adjusted basis on Nasdaq as of the opening of trading on April 11, 2017.

On May 2, 2017, our board of directors determined to effect a 1-for-7 reverse stock split of shares of our Common Stock. The reverse stock split occurred, and shares of our Common Stock began trading on a split adjusted basis on Nasdaq as of the opening of trading on May 11, 2017.

On June 16, 2017, our board of directors determined to effect a 1-for-5 reverse stock split of shares of our Common Stock. The reverse stock split occurred, and shares of our Common Stock began trading on a split adjusted basis on Nasdaq as of the opening of trading on June 22, 2017.

On July 18, 2017, our board of directors determined to effect a 1-for-7 reverse stock split of shares of our Common Stock. The reverse stock split occurred, and shares of our Common Stock began trading on a split adjusted basis on Nasdaq as of the opening of trading on July 21, 2017.

Vessel Acquisitions and Dispositions

During 2015, we (i) sold our entire tanker fleet, for an aggregate sales price of $536.0 million; (ii) we sold five of our drybulk carriers and 14 drybulk carrier owning companies for an aggregate price of $389.3 million, (iii) acquired Nautilus, which indirectly through its subsidiaries owns six offshore support vessels and (iv) through our then affiliate, Ocean Rig, which was our majority owned subsidiary until June 8, 2015, took delivery of the Ocean Rig Apollo.

During 2016, we sold four of our drybulk carriers and six drybulk vessel-owning companies along with their vessels for an aggregate price of $108.3 million.

42

During 2017, we (i) acquired four Newcastlemax and five Kamsarmax drybulk carriers for an aggregate price of $237.0 million, (ii) acquired three tankers and one tanker vessel-owning company for an aggregate price of $194.5 million, (iii) acquired four VLGC vessel companies that were party to four newbuilding contracts for an aggregate price of $334.0 million, $44.9 of which was settled in January 2018, and (iv) sold one drybulk carrier for an aggregate gross price of $8.5 million.

For more information, please see Note 6 to our consolidated financial statements included herein.

Recent Developments

On January 4, 2018, our subsidiary, Gas Ships Limited, took delivery of its fourth VLGC, the Mont Gelé. On January 11, 2018, the Mont Gelé commenced a fixed-rate time charter with ten year firm duration to an oil major trading company.

On January 24, 2018, we entered into a $90.0 million secured credit facility that bears interest at LIBOR plus a margin, is repayable in twenty quarterly installments and balloon payments at maturity, has customary financial covenants, and is secured by first priority mortgages over the tankers Shiraga, Samsara, Stamos and Balla. On January 26, 2018, we drew down the full amount of $90.0 million under the facility.

On January 29, 2018, we entered into a $35.0 million secured credit facility that bears interest at LIBOR plus a margin, is repayable in twenty-four quarterly installments and balloon payments at maturity, has customary financial covenants, and is secured by first priority mortgages over the vessels Valadon, Matisse and Rapallo. On March 7, 2018, we drew down the full amount of $35.0 million under the facility.

On February 1, 2018, we repaid in full the outstanding balance of $73.8 million under the Loan Facility Agreement.

On February 6, 2018, our board of directors declared a quarterly dividend of $2.5 million with respect to the quarter ended December 31, 2017 to the shareholders of record as of February 20, 2018. The dividend was paid on March 6, 2018.

Also on February 6, 2018, our board of directors approved a stock repurchase program, under which the Company may repurchase up to $50.0 million of its outstanding common shares for a period of 12 months. We may repurchase shares in privately negotiated or open-market purchases in accordance with applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. As of April 4, 2018, we have repurchased 2,816,445 shares of our common stock for a gross consideration of $11.3 million, including commission fees. As of April 4, 2018, the number of shares of our common stock outstanding is 101,458,263.

On February 8, 2018, we announced the planned spinoff of the Company's gas carrier business from the Company. In the spinoff, we plan to distribute to holders of our common stock 49% of the issued and outstanding shares of Gas Ships Limited's common stock, our wholly-owned subsidiary. Following the spinoff, Gas Ships Limited will be a publicly-traded company, and we will retain a 51% ownership interest in Gas Ships Limited. See "—B. Business Overview—Separation of Gas Ships Limited" below.

The Company refers to its earnings release dated February 27, 2018, covering its fiscal quarter ended December 31, 2017.  Having now completed its mark to market valuation procedures of Heidmar Holdings LLC, the non-cash gain of $9.7 million is no longer incorporated in the Company's net income for that quarter.  Accordingly, the Company's net income for the quarter ended December 31, 2017 is reduced to $1.8 million. Consequential non-cash revisions are included in the Company's annual report.

On March 8, 2018, we entered into a $30.0 million secured credit facility that bears interest at LIBOR plus margin, is repayable in twenty-four quarterly installments and a balloon payment at maturity, has customary financial covenants, and is secured by first priority mortgages over the vessels Judd and Raraka. On March 13, 2018, we drew down the full amount of $30.0 million under this facility.

43

On April 2, 2018, we entered into a finance lease arrangement with a major Chinese leasing company for our Kamsarmax drybulk vessel, the Kelly, pursuant to a memorandum of agreement and a bareboat charter agreement. The financing provides for the transfer of the Kelly to the buyer for 50% of the agreed purchase price, which will be calculated as the lower of (a) the vessel's net book value as of June 30, 2017 and (b) the vessel's fair value close to the delivery date, and as part of the agreement, our wholly-owned subsidiary will bareboat charter the vessel back for a period of ten years (expiry in April 2028). Charterhire under the bareboat arrangement is comprised of a fixed, quarterly repayment amount corresponding to a 15-year amortization profile plus a variable component calculated at LIBOR plus margin. We have purchase options to re-acquire the vessel during the bareboat charter period, with the first of such options exercisable on the first anniversary from the vessel's delivery date. There is also a purchase obligation upon the expiration of the agreement for 33% of the financing amount. The Company is also a guarantor under the bareboat charter, which also includes customary terms, conditions and financial covenants. The vessel is expected to be delivered and leased back to us in April 2018.

B.          Business Overview

Overview

We are a diversified owner of ocean going cargo vessels.

As of April 4, 2018, we owned a fleet of 35 vessels comprised of (i) 12 Panamax drybulk carriers; (ii) four Newcastlemax drybulk carriers; (iii) five Kamsarmax drybulk carriers; (iv) one VLCC; (v) two Aframax tankers; (vi) one Suezmax tanker; (vii) four VLGCs and (viii) six offshore support vessels, including two platform supply and four oil spill recovery vessels.

Our drybulk carriers, tankers, gas carriers and offshore support vessels 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.

Separation of Gas Ships Limited

On February 8, 2018, we announced plans for the legal and structural separation of 49% of our wholly-owned subsidiary, Gas Ships Limited, a Marshall Islands corporation (formerly known as LPG Investments Inc.), from the Company into a separate public company. Gas Ships Limited owns all of the gas carriers in our fleet through its wholly-owned subsidiaries. Following the spinoff, Gas Ships Limited will be a publicly-traded company, and we will retain a 51% ownership interest in Gas Ships Limited. The spinoff however is subject to certain conditions, including the effectiveness of Gas Ships Limited's Form F-1 registration statement and final approval and declaration of the distribution by our board of directors. We may, at any time until the closing of the spinoff, decide to abandon, modify or change the terms of the spinoff.

Our Fleet

Set forth below is summary information concerning our fleet as of April 4, 2018.

44

Drybulk Carriers

						Redelivery
	Year Built(1)	DWT(2)	Type	Current employment	Gross rate per day	Earliest	Latest
Panamax:
Raraka	2012	76,037	Panamax	Spot	Spot	N/A	N/A
Rapallo	2009	75,123	Panamax	Spot	Spot	N/A	N/A
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
Mendocino	2002	76,623	Panamax	Spot	Spot	N/A	N/A
Bargara	2002	74,832	Panamax	Spot	Spot	N/A	N/A
Capitola	2001	74,816	Panamax	Spot	Spot	N/A	N/A
Levanto	2001	73,925	Panamax	Spot	Spot	N/A	N/A
Maganari	2001	75,941	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

(1) The average age of the Panamax drybulk carriers in our fleet, based on year built, is 14.4 years.

(2) The total aggregate DWT of the Panamax drybulk carriers in our fleet is 899,066.

						Redelivery
	Year Built(1)	DWT(2)	Type	Current employment (3)	Gross rate per day(3)	Earliest	Latest
Newcastlemax:
Bacon	2013	205,170	Newcastlemax	T/C Index Linked	T/C Index Linked	Aug-18	Jan-19
Judd	2015	205,796	Newcastlemax	T/C	$9,350	Apr-18	May-18
Marini	2014	205,854	Newcastlemax	T/C Index Linked	T/C Index Linked	Dec-18	Feb-19
Morandi	2013	205,854	Newcastlemax	T/C Index Linked	T/C Index Linked	Apr-18	May-18

(1) The average age of the Newcastlemax drybulk carriers in our fleet, based on year built, is 4.0 years.

(2) The total aggregate DWT of the Newcastlemax drybulk carriers in our fleet is 822,674.

(3) T/C means time charter.

						Redelivery
	Year Built(1)	DWT(2)	Type	Current employment	Gross rate per day	Earliest	Latest
Kamsarmax:
Castellani	2014	82,129	Kamsarmax	Spot	Spot	N/A	N/A
Kelly	2017	81,300	Kamsarmax	Spot	Spot	N/A	N/A
Matisse	2014	81,128	Kamsarmax	Spot	Spot	N/A	N/A
Nasaka	2014	81,918	Kamsarmax	Spot	Spot	N/A	N/A
Valadon	2014	81,198	Kamsarmax	Spot	Spot	N/A	N/A

(1) The average age of the Kamsarmax drybulk carriers in our fleet, based on year built, is 3.2 years.

(2) The total aggregate DWT of the Kamsarmax drybulk carriers in our fleet is 407,673.

45

Tankers

							Redelivery
	Year Built(1)	DWT(2)	Type	Current employment (3)	Gross rate per day		Earliest	Latest
Balla	2017	113,293	Aframax	Spot		Spot	N/A	N/A
Samsara	2017	159,855	Suezmax	T/C		$18,000 Base rate plus profit share	Mar-22	May-25
Shiraga	2011	320,105	VLCC	Spot		Spot	N/A	N/A
Stamos	2012	115,666	Aframax	Spot		Spot	N/A	N/A

(1) The average age of the tanker vessels in our fleet, based on year built, is 3.5 years.

(2) The total aggregate DWT of the tanker vessels in our fleet is 708,919.

(3) T/C means time charter.

Gas Carriers

						Redelivery
	Year Built	cbm(1)	Type	T/C(2) (Gross Rate/Day)		Earliest	Latest
Anderida(3)	2017	78,700	VLGC	$	30,000(4)	Jun-22	Jun-25
Aisling(3)	2017	78,700	VLGC	$	30,000(5)	Sep-22	Sep-25
Mont Fort(3)	2017	78,700	VLGC	$	28,833(6)	Nov-27	Nov-27
Mont Gelé(3)	2018	78,700	VLGC	$	28,833(7)	Jan-28	Jan-28

(1) The total aggregate cbm of the gas carriers in our fleet is 314,800.

(2) T/C means time charter.

(3) Owned by our subsidiary Gas Ships Limited.  See "—B. Business Overview—Separation of Gas Ships Limited" above.

(4) T/C expires in June 2025 (including charterers' option period).

(5) T/C expires in September 2025 (including charterers' option period).

(6) T/C expires in November 2027.

(7) T/C expires in January 2028.

46

Offshore support Vessels

							Redelivery
	Year Built(1)	DWT(2)	Type	Current employment or employment upon delivery	Gross rate per day		Earliest	Latest
Platform Supply Vessels:
Crescendo	2012	1,457	PSV	Laid up		N/A	N/A	N/A
Colorado	2012	1,430	PSV	Laid up		N/A	N/A	N/A
Oil Spill Recovery Vessels
Indigo	2013	1,401	OSRV	Laid up		N/A	N/A	N/A
Jacaranda	2012	1,360	OSRV	Laid up		N/A	N/A	N/A
Emblem	2012	1,363	OSRV	Laid up		N/A	N/A	N/A
Jubilee	2012	1,317	OSRV	Laid up		N/A	N/A	N/A

(1) The average age of the offshore support vessels in our fleet, based on year built, is 5.1 years.

(2) The total aggregate DWT of the offshore support vessels in our fleet is 8,328.

Our Drybulk Operations

During 2017, we expanded our drybulk fleet by acquiring four Newcastlemax and five Kamsarmax drybulk carriers. See "—Our Fleet" above.

Management of our Drybulk Carriers

We do not employ personnel to run our drybulk carrier operating and chartering business on a day-to-day basis. Effective January 1, 2011, we previously entered into management agreements with TMS Bulkers, a company that may be deemed to be beneficially owned by our Chairman and Chief Executive Officer, Mr. George Economou. For a description of the terms of our prior management agreements with TMS Bulkers, see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with TMS Bulkers, TMS Offshore Services, TMS Tankers and TMS Cardiff Gas—Management Agreements—Drybulk Carrier Segment." Effective from December 31, 2016, all prior management agreements with TMS Bulkers were terminated at no cost by mutual agreement of the parties.

Effective January 1, 2017, we and our vessel-owning subsidiaries entered into new agreements with TMS Bulkers, in accordance with the terms of the New TMS Agreement, to streamline the services offered by our managers. The all-in base cost for providing the increased scope of services was reduced to $1,643 per day per vessel, based on a minimum of 20 vessels, decreasing thereafter to $1,500 per day per vessel. The term of the management agreements with the TMS Bulkers is 10 years.

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 experienced personnel 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, and has obtained documents of compliance for its office and safety management certificates for our drybulk carriers as required by the ISM Code and is ISO 14001 certified in recognition of its commitment to overall quality.

TMS Bulkers may be deemed to be beneficially owned by our Chairman 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 our management agreements.

47

Chartering of our Drybulk Carriers

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

As of the date of this annual report, all but four of our drybulk carriers are currently employed in the spot market.

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 Panamax, Newcastlemax and Kamsarmax size sectors. Ownership of drybulk carriers is highly fragmented and is divided between over 1,900 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 operators.

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, 2017, one of our customers accounted for more than ten percent of our total drybulk revenues: Customer A (10%). During the year ended December 31, 2016, one of our customers accounted for more than ten percent of our total drybulk revenues: Customer A (19%). During the year ended December 31, 2015, two of our customers accounted for more than ten percent of our total drybulk revenues: Customer A (51%), Customer B (25%). Given our exposure to, and focus on, the long-term and short-term, or spot, time charter markets, we do not foresee any 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 drybulk carriers in our fleet during a time when seasonal variations have reduced prevailing charter rates, our operating results may be adversely affected.

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 carriers 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.

48

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 290 on February 10, 2016, and even though it has increased since then to 1,191 on February 26, 2018, there can be no assurance that they will increase further, and the market could decline again.

The International Drybulk Shipping Industry

Drybulk cargo is shipped and can be easily stowed in a single hold with little risk of cargo damage. According to industry sources, in 2017, approximately 5,103 million tonnes of cargo was transported by drybulk carriers, including iron ore, coal and grains representing 29%, 24% and 10% 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. One of the main reasons for the increase in drybulk trade was the growth in imports by China of iron ore, coal and grains. In 2017, Chinese seaborne imports of these major bulk commodities increased 5.1% year-on-year to approximately 1,124 million tonnes, representing 22% of the total drybulk trade.

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.

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 100,000-199,999 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 65,000 and 99,999 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.

49

· Handymax Vessels have a carrying capacity of between 40,000 and 64,999 dwt. The subcategory of vessels that have a carrying capacity of between 50,000 and 59,999 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 between 10,000 and 39,999 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 carriers scheduled to be delivered in 2018 represents approximately 3.8% of the world drybulk fleet by dwt as of February 1, 2018. 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; however in prior deteriorating freight environments, we have seen vessels as young as 16 years old being sent to the scrap yards.

Our Offshore Support Operations

On October 21, 2015 and November 24, 2015, we acquired 97.44% and 2.56% of the issued and outstanding share capital of Nautilus, which indirectly through its subsidiaries owns six offshore support vessels.

Management of our Offshore Support Vessels

We do not employ personnel to run our offshore support operating and chartering business on a day-to-day basis. Effective January 1, 2011, we previously entered into management agreements with TMS Offshore Services, a company that may be deemed to be beneficially owned by our Chairman and Chief Executive Officer, Mr. George Economou. For a description of the terms of our prior management agreements with TMS Offshore Services, see "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with TMS Bulkers, TMS Offshore Services, TMS Tankers and TMS Cardiff Gas—Management Agreements—Offshore Support Segment." Effective from December 31, 2016, all prior management agreements with TMS Offshore Services were terminated at no cost by mutual agreement of the parties.

Effective January 1, 2017, we and our vessel-owning subsidiaries entered into new agreements with TMS Offshore Services, in accordance with the terms of the New TMS Agreement, to streamline the services offered by our managers. The all-in base cost for providing the increased scope of services was reduced to $1,643 per day per vessel, based on a minimum of 20 vessels, decreasing thereafter to $1,500 per day per vessel. The term of the management agreements with the TMS Offshore Services is 10 years.

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

Chartering of our Offshore Support Vessels

We actively manage the deployment of our offshore support fleet. As of the date of this annual report, all of our offshore support vessels are laid up.

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 Offshore Services' reputation and experience in the shipping industry will continue to provide competitive employment opportunities for our offshore support vessels in the future.

During the year ended December 31, 2017, 100% of our total revenues for our offshore support segment derived from one customer.

50

Our Gas Operations

On January 12, 2017, we entered into a "zero cost" option agreement, or the LPG Option Agreement, with companies that may be deemed to be beneficially owned by Mr. Economou to purchase up to four high specifications VLGC newbuildings with Hyundai Samho Heavy Industries Co., Ltd., or HHI. In January 2017, March 2017, and April 2017, we exercised all four of our options under the LPG Option Agreement, pursuant to which we acquired (i) the four owning companies that were parties to the four aforementioned VLGC newbuilding contracts with HHI and (ii) Cardiff LPG Ships Ltd and Cardiff LNGShips Ltd. As of the date of this annual report, all four of our VLGCs have been delivered and are currently employed on time charters that are set to expire between June 2025 (including charterers' option period) and January 2028.  See also "—B. Business Overview—Separation of Gas Ships Limited" above.

Management of our Gas Carriers

We do not employ personnel to run our gas carrier operating and chartering business on a day-to-day basis. During the fiscal year ended December 31, 2017, we and our vessel-owning subsidiaries entered into agreements with TMS Cardiff Gas, in accordance with the terms of the New TMS Agreement, to streamline the services offered by our managers. TMS Cardiff Gas is a company that may be deemed to be beneficially owned by our Chairman and Chief Executive Officer, Mr. George Economou. The all-in base cost for providing the increased scope of services was reduced to $1,643 per day per vessel, based on a minimum of 20 vessels, decreasing thereafter to $1,500 per day per vessel. The term of the management agreements with the TMS Cardiff Gas is 10 years.

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

Chartering of our Gas Carriers

We actively manage the deployment of our gas carrier fleet. As of the date of this annual report, all four of our VLGCs are currently employed on time charters that are set to expire between June 2025 (including charterers' option period) and January 2028.

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 Cardiff Gas' reputation and experience in the shipping industry will continue to provide competitive employment opportunities for our offshore support vessels in the future.

During the year ended December 31, 2017, 100% of our total revenues for our gas carrier segment derived from two customers.

Seasonality

Liquefied gases are primarily used for power generation, cooking, fuel, industrial and domestic heating, as a chemical and refinery feedstock, as a transportation fuel and in agriculture. The LPG and LNG shipping market is typically stronger in the spring and summer months in anticipation of increased consumption of propane and butane for heating during the winter months. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and the supply of certain commodities. Demand for our vessels therefore may be stronger in our quarters ending June 30 and September 30 and relatively weaker during our quarters ending December 31 and March 31, although 12-month time charter rates tend to smooth these short-term fluctuations. To the extent any of our time charters expire during the relatively weaker fiscal quarters ending December 31 and March 31, it may not be possible to re-charter our vessels at similar rates. As a result, we may have to accept lower rates or experience off-hire time for our vessels, which may adversely impact our business, financial condition and operating results.

The Gas Shipping Industry

International seaborne LPG and LNG transportation services are generally provided by two types of operators: LPG or LNG distributors and traders and independent shipowners. Traditionally the main trading route in our industry has been the transport of LPG and LNG from the Arabian Gulf to Asia. With the emergence of the United States as a major LPG and LNG export hub, the United States Gulf to Asia has become an important trade route. Vessels are generally operated under time charters, bareboat charters, spot charters, or contracts of affreightment. LPG and LNG distributors and traders use their fleets not only to transport their own LPG and LNG, but also to transport LPG and LNG for third-party charterers in direct competition with independent owners and operators in the tanker charter market. We operate in markets that are highly competitive and based primarily on supply and demand of available vessels. Generally, we compete for charters based upon charter rate, customer relationships, operating expertise, professional reputation and vessel specifications (size, age and condition). Our industry is subject to strict environmental regulation, including emissions regulations, and we believe our current modern fleet makes us a preferred provider of VLGC tonnage.

51

Our Tanker Operations

During 2017, we acquired and took delivery of four tanker vessels, comprised of one VLCC, two Aframax tankers and one Suezmax tanker. See "—Our Fleet" above.

Management of our Tankers

Our tankers are managed by TMS Tankers, a company that may be deemed to be beneficially owned by Mr. George Economou, on similar terms as the service agreements contemplated by the New TMS Agreement with TMS Bulkers and TMS Offshore Services. 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.

Chartering of our Tankers

We employ our tankers in the spot market and on long-term time charters. TMS Tankers may seek to hedge our spot exposure through the use of freight forward agreements or other financial instruments. 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.

As of the date of this annual report, all but one of our tankers are employed in the spot market.

Customers

Our assessment of a charterer's financial condition, creditworthiness, reliability and track record are important factors in negotiating employment for our tankers. During the year ended December 31, 2017, three of our customers accounted for more than ten percent of our total tanker revenues: Customer A (25%), Customer B (19%) and Customer C (16%).

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.

52

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 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.

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, or USCG, 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.

It should be noted that the U.S. is currently experiencing changes in its environmental policy, the results of which have yet to be fully determined.  For example, in April 2017, President Trump signed an executive order regarding environmental regulations, specifically targeting the U.S. offshore energy strategy, which may affect parts of the maritime industry and our operations. Furthermore, recent action by the IMO's Maritime Safety Committee and United States agencies indicate that cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity threats. For example, cyber-risk management systems must be incorporated by ship-owners and managers by 2021. This might cause companies to cultivate additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. However, the impact of such regulations is hard to predict at this time.

53

International Maritime Organization

The International Maritime Organization, the United Nations agency for maritime safety and the prevention of pollution by vessels, or the IMO, has adopted the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as MARPOL, adopted the International Convention for the Safety of Life at Sea of 1974, or the SOLAS Convention, and the International Convention on Load Lines of 1966, or the LL Convention. MARPOL establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions, handling and disposal of noxious liquids and the handling of harmful substances in packaged forms. MARPOL is applicable to drybulk, tanker and LPG 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 in 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.

In 2013, the IMO's Marine Environmental Protection Committee, or the MEPC, adopted a resolution amending MARPOL Annex I Condition Assessment Scheme, or CAS. These amendments became effective on October 1, 2014, and require compliance with the 2011 International Code on the Enhanced Programme of Inspections during Surveys of Bulk Carriers and Oil Tankers, or ESP Code, which provides for enhanced inspection programs. The above is applicable for tanker vessels over 15 years of age and drybulk carriers. We may need to make certain financial expenditures to comply with these amendments.

Air Emissions

In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution from vessels. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxide emissions from all commercial vessel exhausts and prohibits "deliberate emissions" of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatile compounds from cargo tanks, and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions, as explained below.  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.  We believe that all our vessels are currently compliant in all material respects with these regulations.

The IMO's Marine Environmental Protection Committee, or MEPC, adopted amendments to Annex VI regarding emissions of sulfur oxide, nitrogen oxide, particulate matter and ozone depleting substances, 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. On October 27, 2016, at its 70th session, the MEPC agreed to implement a global 0.5% m/m sulfur oxide emissions limit (reduced from the current 3.50%) starting from January 1, 2020.  This limitation can be met by using low-sulfur complaint fuel oil, alternative fuels, or certain exhaust gas cleaning systems.  Once the cap becomes effective, ships will be required to obtain bunker delivery notes and International Air Pollution Prevention, or IAPP, Certificates from their flag states that specify sulfur content.  This subjects ocean-going vessels in these areas to stringent emissions controls, and may cause us to incur additional costs.

Sulfur content standards are even stricter within certain "Emission Control Areas," or ECAs. As of January 1, 2015, ships operating within an ECA were not permitted to use fuel with sulfur content in excess of 0.1%. Amended Annex VI establishes procedures for designating new ECAs. Currently, the IMO has designated four ECAs, including specified portions of the Baltic Sea area, North Sea area, North American area and United States Caribbean area.  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 U.S. Environmental Protection Agency, or 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.

Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for marine diesel engines, depending on their date of installation. At the MEPC meeting held from March to April 2014, amendments to Annex VI were adopted which address the date on which Tier III Nitrogen Oxide (NOx) standards in ECAs will go into effect.  Under the amendments, Tier III NOx standards apply to ships that operate in the North American and U.S. Caribbean Sea ECAs designed for the control of NOx with a marine diesel engine installed and constructed on or after January 1, 2016.  Tier III requirements could apply to areas that will be designated for Tier III NOx in the future. At MEPC 70 and MEPC 71, the MEPC approved the North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built after January 1, 2021. The U.S. Environmental Protection Agency promulgated equivalent (and in some senses stricter) emissions standards in late 2009.  As a result of these designations or similar future designations, we may be required to incur additional operating or other costs.

54

As determined at the MEPC 70, the new Regulation 22A of MARPOL Annex VI is effective as of March 1, 2018 and requires ships above 5,000 gross tonnage to collect and report annual data on fuel oil consumption to an IMO database, with the first year of data collection commencing on January 1, 2019.

As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. All ships are now required to develop and implement Ship Energy Efficiency Management Plans, or SEEMPS, and new ships must be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy Efficiency Design Index.  Under these measures, by 2025, all new ships built will be 30% more energy efficient than those built in 2014.

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 SOLAS Convention was amended to address the safe manning of vessels and emergency training drills.  The Convention of Limitation of Liability for Maritime Claims, or the LLMC, sets limitations of liability for a loss of life or personal injury claim or a property claim against ship owners. We believe that all of our vessels are in substantial compliance with SOLAS and LL Convention standards.

Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or the ISM Code, our operations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop 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 operating its vessels safely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical management team have developed for compliance with the ISM Code. The failure of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available 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 applicable 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.

Regulation II-1/3-10 of the SOLAS Convention governs ship construction and stipulates that ships over 150 meters in length must have adequate strength, integrity and stability to minimize risk of loss or pollution. Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012, with July 1, 2016 set for application to new oil tankers and bulk carriers. The SOLAS Convention regulation II-1/3-10 on goal-based ship construction standards for bulk carriers and oil tankers, which entered into force on January 1, 2012, requires that all oil tankers and bulk carriers of 150 meters in length and above, for which the building contract is placed on or after July 1, 2016, satisfy applicable structural requirements conforming to the functional requirements of the International Goal-based Ship Construction Standards for Bulk Carriers and Oil Tankers (GBS Standards).

Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be in compliance with the International Maritime Dangerous Goods Code, or the IMDG Code. Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions from the International Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods, and (3) new mandatory training requirements.

The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, or STCW.  As of February 2017, all seafarers are required to meet the STCW standards and be in possession of a valid STCW certificate. Flag states that have ratified SOLAS and STCW generally employ the classification societies, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.

55

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 an International Convention for the Control and Management of Ships' Ballast Water and Sediments, or the BWM Convention, in 2004. The BWM Convention entered into force on September 9, 2017.  The BWM Convention requires ships to manage their ballast water to remove, render harmless, or avoid the uptake or discharge of new or invasive aquatic organisms and pathogens within ballast water and sediments.  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, and require all ships to carry a ballast water record book and an international ballast Water management certificate.

On December 4, 2013, the IMO Assembly passed a resolution revising the application dates of BWM Convention so that the dates are triggered by the entry into force date and not the dates originally in the BWM Convention.  This, in effect, makes all vessels delivered before the entry into force date "existing vessels" and allows for the installation of ballast water management systems on such vessels at the first International Oil Pollution Prevention, or IOPP, renewal survey following entry into force of the convention. The MEPC adopted updated guidelines for approval of ballast water management systems (G8) at MEPC 70. At MEPC 71, the schedule regarding the BWM Convention's implementation dates was also discussed and amendments were introduced to extend the date existing vessels are subject to certain ballast water standards.  Ships over 400 gross tons generally must comply with a "D-1 standard," requiring the exchange of ballast water only in open seas and away from coastal waters.  The "D-2 standard" specifies the maximum amount of viable organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. Depending on the date of the IOPP renewal survey, existing vessels must comply with the D2 standard on or after September 8, 2019. For most ships, compliance with the D2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Costs of compliance may be substantial.

Once mid-ocean ballast exchange ballast water treatment requirements become mandatory under the BWM Convention, the cost compliance could increase for ocean carriers and may be material. However, many countries already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmful species via such discharges. The U.S., for example, requires vessels entering its waters from another country to conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certain reporting requirements.  The costs of compliance with a mandatory mid-ocean ballast exchange could be material, and it is difficult to predict the overall impact of such a requirement on our operations.

The IMO 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 may be strictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain exceptions.  The 1992 Protocol changed certain limits on liability expressed using the International Monetary Fund currency unit, the 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 shipowner's actual fault and under the 1992 Protocol where the spill is caused by the shipowner's intentional or reckless act or omission where the shipowner knew pollution damage would probably result. The CLC requires ships over 2,000 tons 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. We have protection and indemnity insurance for environmental incidents.

Anti‑Fouling Requirements

In 2001, the IMO adopted the International Convention on the Control of Harmful Anti‑fouling Systems on Ships, or the "Anti‑fouling Convention." The Anti‑fouling Convention, which entered into force on September 17, 2008, prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls of vessels. Vessels of over 400 gross tons engaged in international voyages will also be required to undergo an initial survey before the vessel is put into service or before an International Anti‑fouling System Certificate is issued for the first time; and subsequent surveys when the anti‑fouling systems are altered or replaced. We have obtained Anti‑fouling System Certificates for all of our vessels that are subject to the Anti‑fouling Convention.

56

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. The USCG and European Union authorities have indicated that vessels not in compliance with the ISM Code by applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively. 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.

United States Regulations

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 or operate with the U.S., its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.'s territorial sea and its 200 nautical mile exclusive economic zone around the U.S.  The U.S. 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 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" and 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 discharges or threatened discharges of oil from their vessels, including bunkers (fuel).  OPA defines these other damages broadly to include:

(i)          injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;

(ii)          injury to, or economic losses resulting from, the destruction of real and personal property;

(iii)          loss of subsistence use of natural resources that are injured, destroyed or lost;

(iv) net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;

(v) lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and

(vi) net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources.

OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs.  Effective December 21, 2015, the USCG adjusted the limits of OPA liability for a tank vessel, other than a single-hull tank vessel, over 3,000 gross tons liability is limited to the greater of $2,200 per gross ton or $18,796,800.  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.

57

CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well as damages 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.

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 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 and plan to in the future comply with the USCG's financial responsibility regulations by providing applicable certificates of financial responsibility.

The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives or statutes, including the raising of liability caps under OPA, new regulations regarding offshore oil and gas drilling, and a pilot inspection program for offshore facilities.  However, the status of several of these initiatives and regulations is currently in flux.  For example, the U.S. Bureau of Safety and Environmental Enforcement, or BSEE, announced a new Well Control Rule in April 2016, but pursuant to orders by President Trump in early 2017, the BSEE announced in August 2017 that this rule would be revised. In January 2018, President Trump proposed leasing new sections of U.S. waters to oil and gas companies for offshore drilling, vastly expanding the U.S. waters that are available for such activity over the next five years. The effects of the proposal are currently unknown. 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. Additional legislation or regulations applicable to the operation of our vessels that may be implemented in the future could adversely affect our business.

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. 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. Moreover, some states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters, although in some cases, states which have enacted this type of legislation have not yet issued implementing regulations defining tanker owners' responsibilities under these laws. We intend to comply with all applicable state regulations in the ports where our vessels call.

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.

Other United States Environmental Initiatives

The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990), or CAA, 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. 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. Our vessels operating in such regulated port areas with restricted cargoes are equipped with vapor recovery systems that satisfy these existing requirements.

58

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.

The EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict our vessels from entering U.S. Waters.  The EPA requires 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. On March 28, 2013, the EPA re-issued the VGP for another five years from the effective date of December 19, 2013. The 2013 VGP focuses on authorizing discharges incidental to operations of commercial vessels, and contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive species in U.S. waters, stringent requirements for exhaust gas scrubbers, and requirements for the use of environmentally acceptable lubricants. For a new vessel delivered to an owner or operator after December 19, 2013 to be covered by the VGP, the owner must submit a Notice of Intent, or NOI, at least 30 days (or 7 days for eNOIs) before the vessel operates in United States waters. We have submitted NOIs for our vessels where required.

The USCG regulations adopted under the U.S. National Invasive Species Act, or NISA, 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 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, and/or may otherwise restrict our vessels from entering U.S. waters.  The USCG has implemented revised regulations on ballast water management by establishing standards on the allowable concentration of living organisms in ballast water discharged from ships in U.S. waters. As of January 1, 2014, vessels were technically subject to the phasing-in of these standards, and the USCG must approve any technology before it is placed on a vessel. The USCG first approved said technology in December 2016, and continues to review ballast water management systems. The USCG may also provide waivers to vessels that demonstrate why they cannot install the new technology.  The USCG has set up requirements for ships constructed before December 1, 2013 with ballast tanks trading with exclusive economic zones of the U.S. to install water ballast treatment systems as follows: (1) ballast capacity 1,500-5,000m3—first scheduled drydock after January 1, 2014; and (2) ballast capacity above 5,000m3—first scheduled drydock after January 1, 2016.  All of our vessels, except two tankers, have ballast capacities over 5,000m3 (while our offshore support vessels have less than 1,500m3), and those of our vessels trading in the U.S. will have to install water ballast treatment plants at their first drydock after January 1, 2016, unless an extension is granted by the USCG.

The EPA, on the other hand, has taken a different approach to enforcing ballast discharge standards under the VGP. On December 27, 2013, the EPA issued an enforcement response policy in connection with the new VGP in which the EPA indicated that it would take into account the reasons why vessels do not have the requisite technology installed, but will not grant any waivers.  In addition, through the CWA certification provisions that allow U.S. states to place additional conditions on the use of the VGP within state waters, a number of states have proposed or implemented a variety of stricter ballast requirements including, in some states, specific treatment standards.  Compliance with the EPA, USCG and state regulations could require the installation of equipment on our vessels 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.

Two recent United States court decisions should be noted.  First, in October 2015, the Second Circuit Court of Appeals issued a ruling that directed the EPA to redraft the sections of the 2013 VGP that address ballast water. However, the Second Circuit stated that 2013 VGP will remains in effect until the EPA issues a new VGP.  The effect of such redrafting remains unknown.  Second, on October 9, 2015, the Sixth Circuit Court of Appeals stayed the Waters of the United States rule, or WOTUS, which aimed to expand the regulatory definition of "waters of the United States," pending further action of the court.  In response, regulations have continued to be implemented as they were prior to the stay on a case-by-case basis. In February 2017, President Trump issued an executive order directing the EPA and U.S. Army Corps of Engineers publish a proposed rule rescinding or revising the WOTUS rule.  In January 2018, the EPA and Army Corps of Engineers issued a final rule pursuant to the President's order, under which the Agencies will interpret the term "waters of the United States" to mean waters covered by the regulations, as they are currently being implemented, within the context of the Supreme Court decisions and agency guidance documents, until February 6, 2020.  Litigation regarding the status of the WOTUS rule is currently underway, and the effect of future actions in these cases upon our operations is unknown.

59

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. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships or where human safety or that of the ship is in danger. 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 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. Furthermore, the EU has implemented regulations requiring vessels to use reduced sulfur content fuel for their main and auxiliary engines. The EU Directive 2005/33/EC (amending Directive 1999/32/EC) introduced requirements parallel to those in Annex VI relating to the sulfur content of marine fuels. In addition, the EU imposed a 0.1% maximum sulfur requirement for fuel used by ships at berth in EU ports.

International Labour Organization

The International Labor Organization, or the ILO, is a specialized agency of the UN that has adopted the Maritime Labor Convention 2006, or the MLC 2006. A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance is required to ensure compliance with the MLC 2006 for all ships above 500 gross tons in international trade. We believe that all our vessels are in substantial compliance with and are certified to meet MLC 2006.

Greenhouse Gas Regulation

Currently, the emissions of greenhouse gases from international shipping 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 with targets extended through 2020.  International negotiations are continuing with respect to a successor to the Kyoto Protocol, and restrictions on shipping emissions may be included in any new treaty. In December 2009, more than 27 nations, including the U.S. and China, signed the Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gas emissions. The 2015 United Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force on November 4, 2016 and does not directly limit greenhouse gas emissions from ships.  On June 1, 2017, President Trump announced that it is withdrawing from the Paris Agreement.  The timing and effect of such action has yet to be determined.

At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO strategy on reduction of greenhouse gas emissions from ships was approved. In accordance with this roadmap, an initial IMO strategy for reduction of greenhouse gas emissions is expected to be adopted at MEPC 72 in April 2018. The IMO may implement market-based mechanisms to reduce greenhouse gas emissions from ships at the upcoming MEPC session.

The EU made a unilateral commitment to reduce overall greenhouse gas emissions from its member states from 20% of 1990 levels by 2020. The EU also committed to reduce its emissions by 20% under the Kyoto Protocol's second period from 2013 to 2020.  Starting in January 2018, large ships calling at EU ports are required to collect and publish data on carbon dioxide emissions and other information.

In the United States, the EPA issued a finding that greenhouse gases endanger the public health and safety, adopted regulations to limit greenhouse gas emissions from certain mobile sources, and proposed regulations to limit greenhouse gas emissions from large stationary sources. However, in March 2017, President Trump signed an executive order to review and possibly eliminate the EPA's plan to cut greenhouse gas emissions. The outcome of this order is not yet known. Although the mobile source emissions regulations do not apply to greenhouse gas emissions from vessels, the EPA or individual U.S. states could enact environmental regulations that would affect our operations. For example, California has introduced a cap-and-trade program for greenhouse gas emissions, aiming to reduce emissions 40% by 2030.

60

Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S. or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol or Paris Agreement, that restricts emissions of greenhouse gases could require us to make significant financial expenditures which we cannot predict with certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate change may result in sea level changes or more intense weather events.

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 the MTSA. To implement certain portions of the MTSA, the USCG issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States and at certain ports and facilities, some of which are regulated by the EPA.

Similarly, Chapter XI-2 of the SOLAS Convention imposes 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. To trade internationally, a vessel must attain an International Ship Security Certificate, or ISSC, from a recognized security organization approved by the vessel's flag state. Ships operating without a valid certificate may be detained, expelled from, or refused entry at port until they obtain an ISSC.  The following are among the various requirements, some of which are found in the SOLAS Convention:

· 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;

· 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.

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 the SOLAS Convention security requirements and the ISPS Code. Future security measures could have a significant financial impact on us. We have and intend to comply with the various security measures addressed by MTSA, the SOLAS Convention and the ISPS Code.

Inspection by Classification Societies

The hull and machinery of every commercial vessel 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. Most insurance underwriters make it a condition for insurance coverage and lending that a vessel be certified "in class" by a classification society which is a member of the International Association of Classification Societies, the IACS. The IACS has adopted harmonized Common Structural Rules, or the Rules, which apply to oil tankers and bulk carriers constructed on or after July 1, 2015.  The Rules attempt to create a level of consistency between IACS Societies.  All of our vessels are certified as being "in class" by all the applicable Classification Societies (e.g., American Bureau of Shipping, Lloyd's Register of Shipping, DNV-GL, and Korean Registry of Shipping).

61

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 30 to 36 months for inspection of the underwater parts of the vessel.  If any vessel 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 and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our credit facilities and finance lease arrangement, as applicable. Any such inability to carry cargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.

Risk of Loss and Liability Insurance

General

The operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, piracy incidents, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon shipowners, operators and bareboat charterers of any vessel trading in the exclusive economic zone of the United States 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 carry insurance coverage as customary in the shipping industry. However, not all risks can be insured, specific claims may be rejected, and we might not be always 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 our fleet. Our vessels are each covered up to at least fair market value with deductibles 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.

Our current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident. The 13 P&I 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. Each P&I Association has capped its exposure to this pooling agreement at $4.5 billion. As a member of a P&I Association, which is a member of the International Group, we are subject to calls payable to the associations based on our claim records as well as the claim records of all other members of the individual associations and members of the shipping pool of P&I Associations comprising the International Group.

Insurance for our Offshore Support Vessels

We maintain insurance for our offshore support vessels 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 Institute Time Clauses, Hulls, 1.10.83 (Cl. 280), 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 offshore support vessels, as assessed by 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 $11,000 per event and in the case of other hull and machinery claims, our average deductible is $55,000 per event. Our insurance coverage may not protect fully against losses resulting from a required cessation of offshore support vessels operations for environmental or other reasons. During trading we also have loss of hire insurance cover for approximately 90 days which becomes effective after 14 days. This loss of hire insurance is recoverable only if there is physical damage to the vessel 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.

62

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. The kinds of permits, licenses and certificates required depend upon several factors, including the commodity transported, the waters in which a vessel operates, the nationality of a vessel's crew and the age of a vessel. We have obtained all permits, licenses and certificates currently required to permit our vessels 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 April 4, 2018, we owned all of our drybulk, tanker, gas carrier and offshore support vessels through our wholly-owned subsidiaries. Please see Exhibit 8.1 to this annual report for a list of our subsidiaries. As of April 5, 2016, we no longer owned any stock of common stock of Ocean Rig.

D.          Property, Plant and Equipment

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

Our interests in our drybulk, tanker, gas carrier and offshore support vessels 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.

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 mainly pursuant to long or short 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. 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 and laid up days. 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.

63

· 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 and laid up days. 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. We use 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.

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

	Year Ended December 31,
	2013			2014			2015			2016			2017
Average number of vessels		37.15			38.69			35.78			19.44			18.09
Total voyage days for fleet		13,442			13,889			12,562			6,404			6,534
Total calendar days for fleet		13,560			14,122			13,060			7,116			6,604
Fleet utilization		99.13	%		98.35	%		96.19	%		89.99	%		98.94	%
Time charter equivalent	$	12,062		$	12,354		$	9,171		$	3,658		$	8,544

Voyage Revenues

Our drybulk 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.

64

Voyage Expenses—Related Party

"Voyage expenses—related party" primarily consists of commissions, bunkers and port expenses.

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 drybulk carriers 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

See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions— Agreements with TMS Bulkers, TMS Offshore Services, TMS Tankers, and TMS Cardiff Gas—Management Agreements—Drybulk Carrier Segment."

General and Administrative Expenses

Our general and administrative expenses mainly include salaries, consultancy fees and legal expenses. See Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Consultancy Agreements" for a discussion of our prior arrangements for compensating our executive officers, which arrangements have since been terminated at no cost with effect as of December 31, 2016.

Interest and Finance Costs

We have historically incurred interest expense and financing costs in connection with our debt agreements.

Inflation—Drybulk Carrier Segment

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 Tanker Segment

During 2015, we entered into sales agreements with entities that may be deemed to be beneficially owned by our Chairman and Chief Executive Officer, Mr. George Economou, to sell our tanker fleet comprised of four Suezmax tankers and six Aframax tankers. Also during 2015, all our tanker vessels were sold and delivered to their new owners. For a discussion of our re-entry into the tanker market in 2017, please see "Item 4.B—Business Overview—Our Tanker Operations."

Factors Affected our Results of Operations—Tanker Segment

We believe that the most important measures for analyzing trends in the results of our tanker operations consisted 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 and laid up days. 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.

65

· 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 and laid up days. 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. We use 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 tankers, 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.

	Year Ended December 31,
	2013				2014				2015				2016			2017
Average number of vessels			9.86				10.00				6.21				-			2.5
Total voyage days for fleet			3,598				3,650				2,168				-			911
Total calendar days for fleet			3,598				3,650				2,267				-			911
Fleet utilization			100	%			100	%			95.63	%			-			100	%
Time charter equivalent		$	12,900			$	21,835			$	36,389			$	-		$	13,216

Depreciation

We depreciate our tankers 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 to Related Party

See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with TMS Bulkers, TMS Offshore Services, TMS Tankers and TMS Cardiff Gas—Management Agreements—Tanker Segment."

General and Administrative Expenses

Our general and administrative expenses mainly include salaries, consultancy fees and legal expenses. See also Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Consultancy Agreements" for a discussion of our prior arrangements for compensating our executive officers, which arrangements have since been terminated at no cost with effect as of December 31, 2016.

Interest and finance costs

We have historically incurred interest expense and financing costs in connection with our debt agreements.

66

Our Offshore Support Segment

On October 21, 2015, we acquired Nautilus, which indirectly through its subsidiaries owns six offshore support vessels.

Factors Affecting Our Results of Operations—Offshore Support Segment

We have chartered our offshore support vessels 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 currently laid up. 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 and laid up days. 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 and laid up days. 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.

· TCE rates. We define TCE rates as our 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 offshore support vessels, the most directly comparable U.S. GAAP measure, because it assists our management in making decisions regarding the deployment and use of our 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.

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

	Year Ended December 31,
	2013		2014		2015			2016			2017
Average number of vessels		-		-		6.0			6.0			6.0
Total voyage days for fleet		-		-		426			1,615			439
Total calendar days for fleet		-		-		426			2,196			2,190
Fleet utilization		-		-		100.0	%		73.54	%		20.05	%
Time charter equivalent		-		-	$	18,460		$	11,949		$	7,314

67

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 offshore support market and other factors affecting spot market charter rates for offshore support vessels.

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

Voyage expenses primarily consists of commissions paid and bunker expenses.

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. 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 cause these expenses to increase.

Depreciation

We depreciate our vessels on a straight-line basis over their estimated useful lives determined to be 30 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

See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with TMS Bulkers, TMS Offshore Services, TMS Tankers and TMS Cardiff Gas—Management Agreements—Offshore Support Segment."

Our Gas Carrier Segment

On January 12, 2017, we entered into a "zero cost" option agreement, or the LPG Option Agreement, with companies that may be deemed to be beneficially owned by Mr. Economou to purchase up to four high specifications VLGC newbuildings with Hyundai Samho Heavy Industries Co., Ltd., or HHI. In January 2017, March 2017, and April 2017, we exercised all four of our options under the LPG Option Agreement, pursuant to which we acquired (i) the four owning companies that were parties to the four aforementioned VLGC newbuilding contracts with HHI and (ii) Cardiff LPG Ships Ltd and Cardiff LNGShips Ltd. As of the date of this annual report, all four of our VLGCs have been delivered and are currently employed on time charters that are set to expire between June 2025 (including charterers' option period) and January 2028. See also "—B. Business Overview—Separation of Gas Ships Limited" above.

68

Factors Affecting Our Results of Operations—Gas Segment

We charter our gas carrier vessels 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 currently employed on time charters that are set to expire between June 2025 (including charterers' option period) and January 2028.  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 and laid up days. 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 and laid up days. 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. We use 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.

· 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 gas 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.

The following table reflects our voyage days, calendar days, fleet utilization and TCE rates for our gas carrier segment for the year ended December 31, 2017.

Average number of vessels		1.0
Total voyage days for fleet		355
Total calendar days for fleet		355
Fleet utilization		100	%
Time charter equivalent	$	27,994

Voyage Revenues

Our revenues are driven primarily by the number of vessels in our current fleet, the number of days during which our vessels operate and the amount of daily rates that our vessels earn under our charters, which, in turn, are affected by a number of factors, including levels of demand and supply in the LPG and LNG shipping industry; the age, condition and specifications of our vessels; the duration of our charters; the amount of time that we spend positioning our vessels; the availability of our vessels, which is related to the amount of time that our vessels spend in drydock undergoing repairs and the amount of time required to perform necessary maintenance or upgrade work; and other factors affecting rates for LPG and LNG vessels.

69

Voyage Expenses—Related Party

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. 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 cause these expenses to increase.

Depreciation

We depreciate our vessels on a straight-line basis over their estimated useful lives determined to be 35 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

See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Agreements with TMS Bulkers, TMS Offshore Services, TMS Tankers and TMS Cardiff Gas—Management Agreements—Gas Carrier Segment."

General and Administrative Expenses

Our general and administrative expenses mainly include salaries, legal expenses as well as the consultancy fees paid to TMS Cardiff Gas.

Interest and finance costs

We have incurred interest expense and financing costs in connection with the $150.0 million secured credit facility dated June 22, 2017. We capitalized our interest and financing costs on the debt we have incurred in connection with our VLGCs previously under construction.

Our Offshore Drilling Segment - consolidatedup to June 8, 2015

From June 8, 2015 through April 5, 2016, Ocean Rig has been considered as an affiliated entity and not as our controlled subsidiary. As a result, Ocean Rig has been accounted for under the equity method and its operating results are consolidated in our consolidated statement of operations only up to June 8, 2015.

Revenue from Drilling Contracts

Our drilling revenues were driven primarily by the number of drilling units in our fleet, the contractual dayrates and the utilization of the drilling units. This, in turn, was 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 units operating expenses

Drilling units operating expenses included 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 drilling units operating expenses, which generally represented 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 had experienced a significant price increase over the previous two to three years. Other factors beyond our control, some of which might affect the offshore drilling industry in general, including developments relating to market prices for insurance, might also cause these expenses to increase. In addition, these drilling unit operating expenses were higher when operating in harsh environments, though an increase in expenses was typically offset by the higher dayrates we received when operating in these conditions.

70

Depreciation

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

Management Fees of the Drilling units

Ocean Rig Management Inc., Ocean Rig's wholly owned subsidiary, provides supervisory management services including onshore management to the operating drilling units and drilling units under construction, 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 drilling units.

In addition, Ocean Rig has engaged Cardiff Drilling Inc., a company that may be deemed to be beneficially owned by our Chairman and Chief Executive Officer Mr. George Economou, to provide Ocean Rig with consulting and other services with respect to the agreement of employment and relating to the purchase and sale of drilling units. See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions."

General and Administrative Expenses

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

Interest and finance cost

As of December 31, 2015, 2016 and 2017 and due to the deconsolidation of Ocean Rig at June 8, 2015, Ocean Rig's long term debt is not consolidated in our balance sheet. We capitalized our interest on the debt we have incurred in connection with our drilling units under construction.

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 2015, we acquired Nautilus Offshore Services Inc, which indirectly owns six offshore support vessels, all of which were on time charters to Petrobras. During 2016, we did not acquire any vessels that were under existing bareboat or time charter contracts. During 2017, we acquired six vessels (two Newcastlemax drybulk carriers and four VLGCs) that were under existing time charter contracts.

71

When we purchase a vessel and assume or renegotiate a related time charter, we may 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;

· 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, tanker, gas, and offshore support vessels; and

· management of the financial, general and administrative elements involved in the conduct of our business and ownership of our drybulk, gas and tanker vessels and offshore support 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.

72

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, tanker, gas and offshore support vessels;

· levels of drybulk, tanker, gas and offshore support vessels 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.

As of December 31, 2017, the Company determined that the carrying amounts of its vessels were recoverable and, therefore, concluded that no impairment charge was necessary for 2017.

As of December 31, 2016, we have reclassified our entire drybulk fleet (previously classified as held for sale) as held and used as all criteria were met. As a result, our drybulk carriers were re-measured at the lower of their fair market value and their carrying amount before were classified as held for sale, adjusted for any depreciation (amortization) expense that would have been recognized had the vessels been continuously classified as held and used as of December 31, 2016 resulting in a gain of $1.9 million. In addition as a result of the impairment review performed, which indicated that the carrying amount of our offshore support fleet was not recoverable, our offshore support vessels were written down to their charter free market values as of December 31, 2016. Therefore, the aggregate carrying value of the offshore support vessels in our fleet as of December 31, 2016 equals their aggregate charter-free market value, 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, 2017 and 2016, 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, 2017 and 2016, respectively.

73

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.

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—General Shipping Industry Risk Factors—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 some of our credit facilities and finance lease arrangement and we may incur a loss if we sell vessels following a decline in their market value."

74

Drybulk Carriers	Dwt		Year Built		Carrying Value December 31, 2016 (in millions)			Carrying Value December 31, 2017 (in millions)
Mendocino		76,623		2002		5.0	*		4.7	**
Maganari		75,941		2001		4.6	*		4.4	**
Ligari		75,583		2004		5.9	*		5.6	**
Rapallo		75,123		2009		8.5	*		8.2	**
Bargara		74,832		2002		4.3	*		4.1	**
Capitola		74,816		2001		3.9	*		3.8	**
Majorca		74,477		2005		5.1	*		5.0	**
Redondo		74,716		2000		3.5	*		3.5	**
Catalina		74,432		2005		5.1	*		5.0	**
Levanto		73,925		2001		3.9	*		3.8	**
Marbella		72,561		2000		4.4	*		4.2	**
Raraka		76,037		2012		10.3	*		9.9	**
Ecola		73,931		2001		3.9	*		–
Bacon		205,170		2013		–			29.6	**
Judd		205,796		2015		–			32.7	**
Marini		205,854		2014		–			30.9	**
Morandi		205,854		2013		–			29.0	**
Castellani		82,129		2014		–			23.4	**
Kelly		81,300		2017		–			25.8	**
Matisse		81,128		2014		–			22.4	**
Nasaka		81,918		2014		–			21.9	**
Valadon		81,198		2014		–			22.4	**
Total for drybulk carriers		2,203,344			$	68.4		$	300.3

75

Offshore support vessels	Dwt		Year Built		Carrying Value December 31, 2016 (in millions)				Carrying Value December 31, 2017 (in millions)
Colorado		1,430		2012			3.6	*			3.5	**
Crescendo		1,457		2012			3.6	*			3.5	**
Jubilee		1,317		2012			5.0	*			4.8	**
Emblem		1,363		2012			5.0	*			4.8	**
Jacaranda		1,393		2012			5.0	*			4.8	**
Indigo		1,393		2013			5.0	*			4.8	**
Total for offshore support vessels		8,353				$	27.2			$	26.2
Tankers	Dwt		Year Built		Carrying Value December 31, 2016 (in millions)				Carrying Value December 31, 2017 (in millions)
Balla		113,293		2017			–				43.9	**
Samsara		159,855		2017			–				62.3	***
Shiraga		320,105		2011			–				56.2	**
Stamos		115,666		2012			–				28.5	**
Total for tanker vessels		708,919				$	–			$	190.9

Gas Carriers	cbm		Year Built		Carrying Value December 31, 2016 (in millions)		Carrying Value December 31, 2017 (in millions)
Aisling		78,700		2017		–		77.6	***
Anderida		78,700		2017		–		77.3	***
Mont Fort		78,700		2017		–		76.7	***
Mont Gelé		78,700		2018		–		76.8	***
Total for gas vessels		314,800			$	–	$	308.4

*As of December 31, 2016, our entire drybulk and offshore fleet were stated at their fair value due to the reclassification of the drybulk carriers as held and used and due to the impairment review performed that indicated that the carrying amount of the offshore support vessels were not recoverable through their undiscounted cash flows. As of December 31, 2016, no tanker vessels and gas carriers were owned or operated by the Company.

** As of December 31, 2017, the basic charter-free market value for the relevant fleet exceeds the vessel's carrying value.

*** As of December 31, 2017, the basic charter-free market value is lower than the vessels carrying value. Our impairment review for the year ended December 31, 2017, indicated that the carrying amount of the vessels were recoverable through their undiscounted cash flows, thus, no impairment loss was recognized for 2017. We believe that the aggregate basic charter-free market value of those vessels is below their aggregate carrying value by approximately $24.2 million.

76

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, investments, property and equipment, intangible assets and goodwill, income taxes and share based compensation. We base our estimates on historical experience and on various 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 our significant accounting policies, see Note 2 to our consolidated financial statements included herein.

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). We estimate the useful life of our drybulk carriers to be 25 years, the useful life of our tankers to be 25 years, the useful life of our gas carriers to be 35 years and the useful life of offshore support vessels to be 30 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 become effective.

Drilling unit machinery and equipment, net (June 8, 2015 up to the deconsolidation date)

Drilling units were stated at historical cost less accumulated depreciation. Such costs included the cost of adding or replacing parts of drilling unit machinery and equipment when that cost was incurred, if the recognition criteria were met. The recognition criteria required that the cost incurred extends the useful life of a drilling unit. The carrying amounts of those parts that were replaced were written off and the cost of the new parts was capitalized. Depreciation was 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, five to 15 years. The residual values of the drill rigs and drillships were estimated at $35.0 million and $50.0 million, respectively.

Long lived assets held for sale

We classify 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 we conclude a memorandum of agreement for the disposal of a vessel that has yet to complete a time charter, it is considered that the held for sale criteria discussed in guidance are not met until the time charter has been completed as the vessel is not available for immediate sale. As a result, such vessels are not classified as held for sale.

77

When we conclude a memorandum of agreement for the disposal of a vessel that has no time charter 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 vesselsare 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. For the years ended December 31, 2015, 2016, and 2017, a charge of $967.1 million, $13.4 million (including a gain of $1.9 million due to the reclassification of the drybulk carriers as held and used, effective December 31, 2016), and $0, respectively were recognized.

If circumstances arise that previously were considered unlikely and, as a result, we decide not to sell a long-lived asset previously classified as held for sale, the asset  shall be reclassified as held and used. A long-lived asset that is reclassified shall be measured individually at the lower of its carrying amount before the asset or disposal group was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the asset or disposal group been continuously classified as held and used and its fair value at the date of the subsequent decision not to sell.

Impairment of Long Lived Assets

We review 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, we review our 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, we evaluate 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. We evaluate the carrying amounts of our vessels, by obtaining vessel independent 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, we review 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, we make assumptions and estimates about the vessels' future performance, with the significant assumptions being related to charter rates, fleet utilization, operating expenses, capital expenditures, residual value and the estimated remaining useful life of each vessel. 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, we determine undiscounted projected net operating cash flows for each vessel and compare them to their carrying value. The projected net operating cash flows are determined by considering the charter revenues from existing time charters for the fixed fleet days and an estimated daily time charter equivalent for the unfixed days. We estimate the daily time charter equivalent for the unfixed days of drybulk, tanker and gas carrier vessels based on the most recent ten year historical rates for similar vessels, adjusted for any outliers, where applicable, and utilizing available market data for time charter and spot market rates and forward freight agreements, and for offshore support vessels based on available market data, over the remaining estimated life of the vessel, assumed to be 25 years for drybulk and tanker vessels, 35 years for gas carriers and 30 years for offshore support vessels 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 based on the global consumer price index ("CPI") changes and fleet utilization of 99% decreasing by 5% every five years after the first ten years. The salvage value used in the impairment test is estimated to be $250 per light weight ton (LWT) for vessels, in accordance with our vessels' depreciation policy. If our 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.

Our analysis for our vessels held for use, for the year ended December 31, 2017, indicated that the carrying amounts of our vessels were recoverable and, therefore, no impairment loss was necessary for 2017.

Our analysis for our vessels held for use, for the year ended December 31, 2016, indicated that the carrying amount of our offshore support fleet is not recoverable through its undiscounted future cash flows; therefore an impairment loss of $65.7 million was recorded. Although we believe that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective.

78

As of December 31, 2015, we determined that the carrying amounts of our assets held for use were recoverable, and therefore, concluded that no impairment loss was necessary to be recorded. However, during 2015 and as a result of the impairment review performed, prior to the entering into agreements for the sale of our vessels and vessel owning companies it was determined that the carrying amount of one of our assets was not recoverable and, therefore, an impairment loss of $83.9 million was recognized. In addition, due to our decision to sell certain vessels and vessel owning companies and based on the agreed-upon sales price, as well as due to the reduction of the vessels' held for sale carrying amount to their fair value less cost to sell, an impairment charge of $967.1 million was recognized, for the year ended December 31, 2015.

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 shares of our common stock.

There can be no assurance as to how long charter rates and vessel values will remain at lower levels or whether they will improve by any significant degree. Charter rates may remain at depressed levels for some time, which could adversely affect our revenue and profitability, and future assessments of vessel impairment.

Revenue and Related Expenses

(i) Drybulk Carrier, Tanker, Gas Carrier and Offshore Support Vessels:

Time and bareboat charters: We generate our revenues from charterers for the charterhire of our vessels, which are considered to be operating lease arrangements. For vessels 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 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.

Profit Sharing agreements: Profit-sharing revenues are calculated at an agreed percentage of the excess of the charterer's average daily income over an agreed amount and accounted for on an accrual basis based on provisional amounts and for those contracts that provisional accruals cannot be made due to the nature of the profit share elements, these are accounted for on the actual cash settlement.

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 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 us, except for commissions, which are either paid for by us 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.

79

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 included up to June 8, 2015 (date of deconsolidation):

Revenues: Our services and deliverables were generally sold based upon contracts with our customers that included fixed or determinable prices. We recognized revenue when delivery occurred, as directed by our customer and collectability was reasonably assured. We evaluated if there were multiple deliverables within the contracts and whether the agreement conveys the right to use the drilling units for a stated period of time and met the criteria for lease accounting, in addition to providing a drilling services element, which were generally compensated for by day rates. In connection with drilling contracts, we may also receive revenues for preparation and mobilization of equipment and personnel or for capital improvements to the drilling units and dayrate or fixed price mobilization and demobilization fees. Revenues were recorded net of agents' commissions. There were two types of drilling contracts: well contracts and term contracts.

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

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

Business combinations

We use 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 our 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.

Investments in Affiliates

Affiliates are entities over which we generally have between 20% and 50% of the voting rights, or over which we have significant influence, but over which we do not exercise control. Investments in these entities are accounted for by the equity method of accounting. Under this method we record an investment in the stock of an affiliate at cost or at fair value in case of a retained investment in the common stock of an investee in a deconsolidation transaction, and adjust the carrying amount for our share of the earnings or losses of the affiliate subsequent to the date of investment and report the recognized earnings or losses in income. Dividends received from an affiliate reduce the carrying amount of the investment. When our share of losses in an affiliate equals or exceeds our interest in the affiliate, we do not recognize further losses, unless we have incurred obligations or made payments on behalf of the affiliate.

80

In accordance with ASC 825-10 entities are allowed to elect to measure certain financial assets and financial liabilities (as well as certain non-financial instruments that are similar to financial instruments) at fair value. Equity method investments are eligible for the fair value option.

If the fair value option is applied to an investment that would otherwise be accounted for under the equity method, ASC 825-10-25-7 requires that the fair value option be applied to all of the investor's eligible interests in that investee. The fair value option election is non-revocable even if the company loses significant influence over the investee. Under the fair value model, an investment in an affiliate is recognized initially at the transaction price and at each reporting date, an investor shall measure its investments in affiliates at fair value, with changes recognized in profit or loss.

Selected Financial Data

Prior to 2015, we had three reportable segments: the drybulk carrier segment, tanker segment and the offshore drilling segment.

During 2015, we (i) entered the offshore support segment by acquiring the majority of the issued and outstanding share capital of Nautilus, which indirectly through its subsidiaries owns six offshore support vessels, and (ii) sold our entire tanker fleet. Also during 2015, we lost our controlling financial interest in Ocean Rig, deconsolidated the entity from our financial statements, and thereby exited the offshore drilling market.

During 2016, we sold all our shares in Ocean Rig and no longer hold any equity interest in Ocean Rig.

During 2017, we (i) re-entered the tanker market by acquiring four tanker vessels and (ii) entered the gas carrier segment by acquiring four newbuilding VLGCs from entities that may be deemed to be beneficially owned by Mr. Economou.

As of December 31, 2017, we had four reportable segments: the drybulk carrier segment, the tanker segment, the gas carrier segment and the offshore support segment.

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

81

Drybulk Carrier Segment

	Year Ended December 31,
	2015			2016			2017
Average number of vessels		35.78			19.44			18.09
Total voyage days for fleet		12,562			6,404			6,534
Total calendar days for fleet		13,060			7,116			6,604
Fleet utilization		96.19	%		89.99	%		98.94	%
Time charter equivalent	$	9,171		$	3,658		$	8,544

Tanker Segment

	Year Ended December 31,
	2015			2016		2017
Average number of vessels		6.21			—		2.50
Total voyage days for fleet		2,168			—		911
Total calendar days for fleet		2,267			—		911
Fleet utilization		95.63	%		—		100	%
Time charter equivalent	$	36,389		$	—	$	13,216

Gas Carrier Segment

	Year Ended December 31,
	2015		2016		2017
Average number of vessels		—		—		1.0
Total voyage days for fleet		—		—		355
Total calendar days for fleet		—		—		355
Fleet utilization		—		—		100	%
Time charter equivalent	$	—	$	—	$	27,994

Offshore Support Segment

	Year Ended December 31,
	2015			2016			2017
Average number of vessels		6.0			6.0			6.0
Total voyage days for fleet		426			1,615			439
Total calendar days for fleet		426			2,196			2,190
Fleet utilization		100.0	%		73.54	%		20.05	%
Time charter equivalent	$	18,460		$	11,949		$	7,314

82

Year ended December 31, 2017 compared to the year ended December 31, 2016

(Expressed in thousands of U.S. Dollar)	Year ended December 31,						Change
REVENUES:	2016			2017			Amount			%
Voyage and time charter revenues (including amortization of acquired time charters)	$	51,934		$	100,716		$	48,782			93.9	%
Total Revenues		51,934			100,716			48,782			93.9	%
EXPENSES:
Voyage expenses		9,209			19,704			10,495			114.0	%
Vessels operating expenses		45,563			59,348			13,785			30.3	%
Depreciation		3,466			14,966			11,500			331.8	%
Impairment loss,(gain)/loss from sale of vessels and vessel owning companies and other		106,343			(4,125	)		(110,468	)		(103.9	)%
Impairment on goodwill		7,002			-			(7,002	)		(100.0	)%
General and administrative expenses		39,708			30,972			(8,736	)		(22.0	)%
Legal settlements and other, net		(258	)		900			1,158			(448.8	)%
Operating loss		(159,099	)		(21,049	)		138,050			(86.8	)%
OTHER INCOME/(EXPENSES):
Interest and finance costs		(8,857	)		(14,707	)		(5,850	)		66.0	%
Gain on debt restructuring		10,477			-			(10,477	)		(100.0	)%
Interest income		81			1,365			1,284			1,585.2	%
Gain on interest rate swaps		403			-			(403	)		(100.0	)%
Loss on private placement		-			(7,600	)		(7,600	)		N/A
Other, net		(199	)		(401	)		(202	)		101.5	%
Total other income / (expenses), net		1,905			(21,343	)		(23,248	)		(1,220.4	)%
LOSS BEFORE INCOME TAXES AND EARNINGS OF AFFILIATED COMPANIES		(157,194	)		(42,392	)		114,802			(73.0	)%
Income taxes		(38	)		(152	)		(114	)		300.0	%
Losses of affiliated companies		(41,454	)		-			41,454			(100.0	)%
NET LOSS ATTRIBUTABLE TO DRYSHIPS INC.	$	(198,686	)	$	(42,544	)	$	156,142			(78.6	)%

Revenues

Drybulk carrier segment

Voyage revenues increased by $34.9 million, or 113.3%, to $65.7 million for the year ended December 31, 2017, as compared to $30.8 million for the year ended December 31, 2016. The aforementioned increase is attributable to higher hire charter rates during the year ended December 31, 2017, amounted to $33.6 million and to an increase in total voyage days by 130 days from 6,404 days to 6,534 days during the year ended December 31, 2017, as compared to the year ended December 31, 2016. The increase in voyage days is due to the decrease in laid up days for our vessels during the year ended December 31, 2017, partly offset by the decrease of the average number of vessels in our fleet by 1.4 vessels due to the sale of ten vessels and vessel owning companies during the year ended December 31, 2016.

Tanker segment

Voyage revenues amounted to $20.9 million for the year ended December 31, 2017, representing revenues from four tankers, all of which were acquired during the year ended December 31, 2017. No revenues were recorded for the tanker segment during the same period in 2016, when no tankers were owned or operated by the Company.

Gas carrier segment

Voyage revenues amounted to $10.3 million for the year ended December 31, 2017, representing revenues from three VLGCs which were acquired during the year ended December 31, 2017. No revenues were recorded for the gas carrier segment during the same period in 2016, when no VLGCs were owned or operated by the Company.

Offshore support segment

Voyage revenues decreased by $17.3 million, or 82.0%, to $3.8 million for the year ended December 31, 2017, as compared to $21.1 million for the year ended December 31, 2016. The decrease is mainly due to the termination of the contracts with Petrobras Brasileiro S.A., or Petrobras, for the vessels Crescendo, Jubilee, Indigo and Jacaranda, effective as of March 6, 2016, March 9, 2016, April 6, 2016 and May 3, 2017, respectively, as well as the expiration of the contracts with Petrobras for the vessels Colorado and Emblem on December 27, 2016 and June 21, 2017, respectively.

83

Voyage expenses

Drybulk carrier segment

Voyage expenses increased by $2.6 million, or 35.6%, to $9.9 million for the year ended December 31, 2017, as compared to $7.3 million for the year ended December 31, 2016. The increase in voyage expenses is as a result of the corresponding increase in voyage revenues.

Tanker segment

Voyage expenses amounted to $8.8 million for the year ended December 31, 2017, representing expenses from the four tankers acquired during the year ended December 31, 2017. No voyage expenses were recorded for the tanker segment during the same period in 2016, when no tankers were owned or operated by the Company.

Gas carrier segment

Voyage expenses amounted to $0.4 million for the year ended December 31, 2017 and are associated mainly to revenue commissions for our three VLGCs. No voyage expenses were recorded for the gas carrier segment during the same period in 2016, when no gas carriers were owned or operated by the Company.

Offshore support segment

Voyage expenses decreased by $1.3 million, or 68.4%, to $0.6 million for the year ended December 31, 2017, as compared to $1.9 million for the year ended December 31, 2016. The decrease relates to the corresponding decrease in voyage revenues.

Vessels' operating expenses

Drybulk carrier segment

Vessels' operating expenses increased by $9.0 million, or 29.0%, to $40.0 million for the year ended December 31, 2017, as compared to $31.0 million for the year ended December 31, 2016. The increase is mainly attributed to initial expenses incurred for the newly delivered vessels, partly offset by a decrease of average number of operating vessels by 1.4 vessels from 19.5 during the year ended December 31, 2016 to 18.1 during the year ended December 31, 2017.

Tanker segment

Vessels' operating expenses amounted to $8.8 million for the year ended December 31, 2017, representing expenses from four tankers that were acquired during the year ended December 31, 2017. No operating expenses were recorded for the tanker segment during the same period in 2016, when no tankers were owned or operated by the Company.

Gas carrier segment

Vessels' operating expenses amounted to $5.7 million for the year ended December 31, 2017, representing expenses for three VLGCs acquired during the year ended December 31, 2017. No operating expenses were recorded for the gas carrier segment during the same period in 2016, when no gas carriers were owned or operated by the Company.

Offshore support segment

Vessels' operating expenses decreased by $9.8 million, or 67.1%, to $4.8 million for the year ended December 31, 2017, as compared to $14.6 million for the year ended December 31, 2016. The decrease is mainly due to the lay up of the vessels Crescendo, Jubilee and Indigo during 2016 and of vessels Colorado, Jacaranda and Emblem during 2017.

84

Depreciation

Drybulk carrier segment

Depreciation expense amounted to $7.3 million for the year ended December 31, 2017, as compared to $0 for the year ended December 31, 2016. No depreciation charge was recorded for our drybulk carriers for the year ended December 31, 2016 due to the classification of the vessels as held for sale. The vessels were reclassified as held and used, effective December 31, 2016.

Tanker segment

Depreciation expense amounted to $4.7 million for the year ended December 31, 2017 and is related to the four tankers acquired during the year ended December 31, 2017. The tanker segment did not incur any depreciation charges during the same period in 2016, when no tankers were owned or operated by the Company.

Gas carrier segment

Depreciation expense amounted to $2.0 million for the year ended December 31, 2017 and is related to the three VLGCs acquired during the year ended December 31, 2017. No depreciation charge was recorded for the gas carrier segment during the same period in 2016, when no gas carriers were owned or operated by the Company.

Offshore support segment

Depreciation expense decreased by $2.5 million, or 71.4%, to $1.0 million for the year ended December 31, 2017, as compared to $3.5 million for the year ended December 31, 2016. The decrease is due to the decreased net book value of the vessels on January 1, 2017, as compared to their book values as of January 1, 2016, as a result of the impairment loss charged to the offshore support fleet as of December 31, 2016.

Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other

Drybulk carrier segment

During the year ended December 31, 2016, we recorded a charge of $35.5 million included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" due to the gain/loss from the sale of vessels and vessel owning companies amounting to $22.1 million, the deterioration of the market values of the vessels held for sale as of March 31, 2016, which resulted in a reduction of their carrying amounts to their fair value less cost to sell amounting to $18.3 million, partially offset by $3.0 million as a result of the revaluation of three vessels to their values based on their agreed purchase prices and $1.9 million resulting from the gain recognized due to the reclassification of the vessels held for sale as held and used on December 31, 2016. For the year ended December 31, 2017, we recorded a gain of $4.4 million attributable to the sale of drybulk Ecola on December 29, 2017.

Tanker segment

The tanker segment did not incur any impairment loss, (gain)/loss from sale of vessels and vessel owning companies or other during the relevant periods.

Gas carrier segment

The gas carrier segment did not incur any impairment loss, (gain)/loss from sale of vessels and vessel owning companies or other during the relevant periods.

Offshore support segment

Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other decreased by $70.6 million, or 99.6%, to $0.3 million for the year ended December 31, 2017, as compared to $70.9 million for the year ended December 31, 2016. The decrease is mainly due to impairment review that indicated that the carrying amount of our offshore support vessels was not recoverable and, resulted in the recognition of a charge amounting to $65.7 million and to the higher write offs of the fair value of the above market acquired time charter contracts that were terminated early by Petrobras during the year ended December 31, 2016, which amounted to $5.2 million as compared to $0.3 million during the same period in 2017.

85

Impairment on goodwill

Drybulk carrier segment

The drybulk segment did not incur any impairment on goodwill during the relevant periods.

Tanker segment

The tanker segment did not incur any impairment on goodwill during the relevant periods.

Gas carrier segment

The gas carrier segment did not incur any impairment on goodwill during the relevant periods.

Offshore support segment

Impairment on goodwill for the offshore support segment amounted to $7.0 million for the year ended December 31, 2016 due to the outcome of the annual review of goodwill. No such loss was recorded during the same period in 2017.

General and administrative expenses

Drybulk carrier segment

General and administrative expenses decreased by $10.9 million, or 36.3%, to $19.1 million for the year ended December 31, 2017, compared to $30.0 million for the year ended December 31, 2016. General and administrative expenses decreased mainly due to lower fees paid under the new management agreement with TMS Bulkers and other related entities, effective January 1, 2017.

Tanker segment

General and administrative expenses amounted to $2.4 million for the year ended December 31, 2017 and are related to the four tankers acquired during the year ended December 31, 2017. The tanker segment did not incur any general and administrative expenses during the same period in 2016, when no tankers were owned or operated by the Company.

Gas carrier segment

General and administrative expenses amounted to $1.8 million for the year ended December 31, 2017 and are related to the three VLGCs acquired during the year ended December 31, 2017. The gas carrier segment did not incur any general and administrative expenses during the same period in 2016, when no gas carriers were owned or operated by the Company.

Offshore support segment

General and administrative expenses decreased by $2.1 million, or 21.4%, to $7.7 million for the year ended December 31, 2017, compared to $9.8 million for the year ended December 31, 2016. The decrease in general and administrative expenses is mainly due to the termination of the agreement with Galaxia Maritima, Brazilian provider, partly offset by the higher fees paid under the new management agreement with TMS Offshore Services and other related entities, effective January 1, 2017.

Legal settlements and other, net

Drybulk carrier segment

Legal settlements and other, net amounted a gain of $0.1 million for the year ended December 31, 2017, as compared to a gain of $0.6 million for the year ended December 31, 2016.

86

Tanker segment

The tanker segment did not incur any other expenses during the relevant periods.

Gas carrier segment

The gas carrier segment did not incur any other expenses during the relevant periods.

Offshore support segment

Legal settlements and other, net amounted to a loss of $1.0 million for the year ended December 31, 2017, as compared to a loss of $0.3 million for the year ended December 31, 2016. The losses we incurred during both fiscal years were mainly as a result expenses relating to our laid up vessels, six of which were laid up as of December 31, 2017, as compared to three laid up vessels as of December 31, 2016.

Interest and finance costs

Drybulk carrier segment

Interest and finance costs increased by $4.8 million, or 55.2%, to $13.5 million for the year ended December 31, 2017, as compared to $8.7 million for the year ended December 31, 2016. The increase is mainly due to increased interest and finance costs from related party credit facilities, partly offset by the loans associated with the vessels and vessel owning companies sold during 2016 that were either repaid or transferred to the new owners of vessel owning companies.

Tanker segment

The tanker segment did not incur any material interest and finance costs during the relevant periods.

Gas carrier segment

Interest and finance costs amounted to $1.2 million for the year ended December 31, 2017 and are associated with drawdowns under the $150.0 million secured credit facility dated June 22, 2017, obtained to partially finance the construction costs of our four VLGC newbuildings, three of which were delivered during the period. The gas carrier segment did not incur any interest and finance costs during the year ended December 31, 2016.

Offshore support segment

The offshore support segment did not incur any material interest and finance costs during the relevant periods.

Interest income

Drybulk carrier segment

Interest income amounted to $1.3 million for the year ended December 31, 2017, as compared to $0.1 million for the year ended December 31, 2016. The increase is due to increased cash balances during the year ended December 31, 2017, as compared to the same period in 2016.

Tanker segment

The tanker segment did not earn any material interest income during the relevant periods.

Gas carrier segment

The gas carrier segment did not earn any material interest income during the relevant periods.

Offshore support segment

The offshore support segment did not earn any material interest income during the relevant periods.

87

Gain on debt restructuring

Drybulk carrier segment

Gain on debt restructuring amounted to $10.5 million during the year ended December 31, 2016 and resulted from the agreements concluded with some of our lenders for the settlement of the respective loan facilities. No such gain incurred during the same period in 2017.

Tanker segment

The tanker segment did not incur any such gain during the relevant periods.

Gas carrier segment

The gas carrier segment did not incur any such gain during the relevant periods.

Offshore support segment

The offshore support segment did not incur any such gain during the relevant periods.

Gain on interest rate swaps

Drybulk carrier segment

There was no gain or loss on interest rate swaps for the year ended December 31, 2017, as compared to a gain of $0.9 million for the year ended December 31, 2016. The gain recorded for the year ended December 31, 2016 was mainly due to the expiration of the swaps associated with certain sold vessels and vessel owning companies.

Tanker segment

There was no gain or loss on interest rate swaps for the year ended December 31, 2017, as compared to a loss on interest rate swaps of $0.5 million realized for the year ended December 31, 2016. The decrease for the year ended December 31, 2017 is due to termination of the respective swaps associated with the vessels sold from fiscal year 2015.

Gas carrier segment

The gas carrier segment did not incur any gains or losses on interest rate swaps during the relevant periods.

Offshore support segment

The offshore support segment did not incur any gains or losses on interest rate swaps during the relevant periods.

Loss on private placement

Drybulk carrier segment

The drybulk segment incurred a loss of $5.1 million for the year ended December 31, 2017 associated with the closing of the Private Placement. No such transaction incurred during the same period in 2016.

Tanker segment

The tanker segment incurred a loss of $0.6 million for the year ended December 31, 2017 associated with the closing of the Private Placement. No such transaction incurred during the same period in 2016.

Gas carrier segment

The gas carrier segment incurred a loss of $0.1 million for the year ended December 31, 2017, associated with the closing of the Private Placement. No such transaction incurred during the same period in 2016.

88

Offshore support segment

The offshore support segment incurred a loss of $1.8 million for the year ended December 31, 2017, associated with the closing of the Private Placement. No such transaction incurred during the same period in 2016.

Other, net

Drybulk carrier segment

The drybulk carrier segment incurred a loss of $0.2 million for the year ended December 31, 2017 compared to $0.5 million for the year ended December 31, 2016. The loss for both years is mainly due to foreign currency exchange rate differences.

Tanker segment

The tanker segment incurred a loss of $0.1 million for the year ended December 31, 2017, as compared to other, net amounted to a loss of $0.1 million for the year ended December 30, 2016. The loss for both years is due to foreign currency exchange rate differences.

Gas carrier segment

The gas carrier segment did not incur any material expenses during the relevant periods.

Offshore support segment

The offshore support segment incurred a loss of $0.1 million for the year ended December 31, 2017, as compared to a gain of $0.4 million for the year ended December 31, 2016. The gain and loss for the years ended December 31, 2016 and 2017, respectively, are due to foreign currency exchange rate differences.

Income taxes

Drybulk carrier segment

The drybulk carrier segment incurred an income tax related to international shipping income of $0.1 million, as compared to $0 during the year ended December 31, 2016.

Tanker segment

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

Gas carrier segment

The gas carrier segment incurred an income tax related to international shipping income of $0.1 million for the year ended December 31, 2017, as compared to $0 during the year ended December 31, 2016.

Offshore support segment

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

Losses of affiliated companies

From June 8, 2015 (the date of its deconsolidation) through April 4, 2016, Ocean Rig was considered as an affiliated entity. On April 5, 2016, we sold all of our shares in Ocean Rig to a subsidiary of Ocean Rig and as of this date, we no longer hold any equity interest in Ocean Rig. As a result of the above transaction, our share of losses from Ocean Rig amounting to $41.5 million, including $162.2 million of impairment in the Ocean Rig investment and $0.8 million of gain due to the sale of our shares in Ocean Rig on April 5, 2016, including $0.3 million related to other comprehensive income, as a single amount in the audited consolidated statements of operations for the year ended December 31, 2016.

From August 29, 2017 and following the closing of the Private Placement, Heidmar was considered as an affiliated entity and accounted for under the fair value option. Our investment in Heidmar was recorded at $34.0 million upon the closing of the Private Placement. As of December 31, 2017, no change in the fair value of our investment in Heidmar was identified, and thus, no adjustment to its fair value was recognized in the accompanying consolidated statement of operations for the year ended December 31, 2017.

89

Year ended December 31, 2016 compared to the year ended December 31, 2015

(Expressed in thousands of U.S. Dollar)

	Year ended December 31,						Change
	2015			2016			Amount			%
REVENUES:
Revenues	$	969,825		$	51,934		$	(917,891	)	(94.6	)%
EXPENSES:
Voyage expenses		65,286			9,209			(56,077	)	(85.9	)%
Vessels and drilling units operating expenses		371,074			45,563			(325,511	)	(87.7	)%
Depreciation and amortization		227,652			3,466			(224,186	)	(98.5	)%
Loss on contract cancellation		28,241			-			(28,241	)	(100.0	)%
Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other		1,057,116			106,343			(950,773	)	(89.9	)%
Impairment on goodwill		-			7,002			7,002		-
General and administrative expenses		104,912			39,708			(65,204	)	(62.2	)%
Legal settlements and other, net		(2,948	)		(258	)		2,690		(91.2	)%
Operating loss		(881,508	)		(159,099	)		722,409		(82.0	)%
OTHER INCOME /(EXPENSES):
Interest and finance costs		(172,132	)		(8,857	)		163,275		(94.9	)%
Gain on debt restructuring		-			10,477			10,477		-
Interest income		527			81			(446	)	(84.6	)%
Gain/(Loss) on interest rate swaps		(11,601	)		403			12,004		(103.5	)%
Other, net		(9,275	)		(199	)		9,076		(97.9	)%
Total other income/(expenses), net		(192,481	)		1,905			194,386		(101.0	)%
LOSS BEFORE INCOME TAXES AND EARNINGS OF AFFILIATED COMPANIES		(1,073,989	)		(157,194	)		916,795		(85.4	)%
Loss due to deconsolidation of Ocean Rig		(1,347,106	)		-			1,347,106		(100.0	)%
Income taxes		(37,119	)		(38	)		37,081		(99.9	)%
Losses of affiliated companies		(349,872	)		(41,454	)		308,418		(88.2	)%
NET LOSS		(2,808,086	)		(198,686	)		2,609,400		(92.9	)%
Less: Net (income) attributable to non-controlling interests		(38,975	)		-			38,975		(100.0	)%
NET LOSS ATTRIBUTABLE TO DRYSHIPS INC.	$	(2,847,061	)	$	(198,686	)	$	2,648,375		(93.0	)%

Revenues

Drybulk carrier segment

Voyage revenues decreased by $84.8 million, or 73.4%, to $30.8 million for the year ended December 31, 2016, as compared to $115.6 million for the year ended December 31, 2015. A decrease of $37.3 million, or 28.2%, is attributable to lower hire rates during the year ended December 31, 2016, as compared to the relevant period in 2015, while an increase of $16.5 million, or 12.5% relates to the write-off in overdue receivables incurred during 2015. Moreover, an additional decrease of $65.4 million, or 49.5%, is attributable to the decrease in the total voyage days by 6,158 days, from 12,562 days to 6,404 days, during the year ended December 31, 2016, as compared to the year ended December 31, 2015, mainly due to the sale of 16 vessels and vessel owning companies of our fleet during 2015 and ten vessels and vessel owning companies during 2016. The decrease was partly offset by the amortization of above market acquired time charters which decreased by $1.4 million, or 1.1%, during the year ended December 31, 2016, as compared to the relevant period in 2015.

Tanker segment

Voyage revenues decreased to $0 for the year ended December 31, 2016, as compared to $120.3 million for year ended December 31, 2015. The decrease is due to the sale of our tanker fleet during 2015.

Offshore support segment

From October 21, 2015, we entered into the offshore support business segment through the acquisition of Nautilus Offshore Services Inc. which owns six offshore support vessels of which four are oil spill recovery vessels (OSRVs) and two are platform supply vessels (PSVs). As a result, revenues from the offshore support business segment amounted to $21.1 million for the year ended December 31, 2016, as compare to $8.1 million for the year ended December 31, 2015.

90

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

Revenues from drilling contracts decreased to $0 for the year ended December 31, 2016, as compared to $725.8 million for the year ended December 31, 2015. The decrease in revenues is due to the deconsolidation of the drilling segment on June 8, 2015. From June 8, 2015, Ocean Rig was considered as an affiliated entity and not as a controlled subsidiary of the Company. As a result, Ocean Rig was accounted for under the equity method and revenues were consolidated in the Company's statement of income for the period up to June 8, 2015. Furthermore, on April 5, 2016, we sold all of our shares in Ocean Rig, to a subsidiary of Ocean Rig and as a result we do not hold any equity interest in Ocean Rig any longer.

Voyage expenses

Drybulk carrier segment

Voyage expenses decreased by $16.3 million or 69.1%, to $7.3 million for the year ended December 31, 2016, as compared to $23.6 million for the year ended December 31, 2015. The decrease in voyage expenses is mainly due to the sale of 16 vessels and vessel owning companies of our fleet during 2015 and ten vessels and vessel owning companies during 2016.

Tanker segment

Voyage expenses decreased to $0 for the year ended December 31, 2016, as compared to $41.4 million for the year ended December 31, 2015. The decrease is due to the sale of our tanker fleet during the year ended December 31, 2015.

Offshore support segment

From October 21, 2015, we entered into offshore support business segment through the acquisition of Nautilus Offshore Services Inc. As a result, voyage expenses from the offshore support business segment amounted to $1.9 million for the year ended December 31, 2016, as compared to $0.3 million for the year ended December 31, 2015.

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

The offshore drilling segment did not incur any voyage expenses during the relevant periods.

Vessels and drilling units operating expenses

Drybulk carrier segment

Drybulk carrier operating expenses decreased by $56.7 million, or 64.7%, to $31.0 million for the year ended December 31, 2016, as compared to $87.7 million for the year ended December 31, 2015. The decrease is mainly due to the sale of 16 of our drybulk carriers and carrier owning companies during the year ended December 31, 2015 and ten vessels and vessel owning companies during the respective period in 2016.

Tanker segment

Tanker vessels operating expenses decreased to $0 for the year ended December 31, 2016, as compared to $19.8 million for the year ended December 31, 2015. Operating expenses for the tankers segment decreased due to the sale of our tanker fleetduringthe year ended December 31, 2015.

Offshore support segment

From October 21, 2015 we entered into offshore support business segment through the acquisition of Nautilus Offshore Services Inc. As a result, vessels operating expenses from offshore support business segment amounted to $14.6 million for the year ended December 31, 2016, as compared to $4.0 million for the year ended December 31, 2015.

91

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

Drilling units operating expenses decreased to $0 for the year ended December 31, 2016, as compared to $259.6 million for the year ended December 31, 2015. The decrease in drilling units' operating expenses is due to the deconsolidation of the drilling segment on June 8, 2015.

Depreciation and amortization expense

Drybulk carrier segment

Depreciation and amortization expense was $0 for the year ended December 31, 2016, as compared to $65.6 million for the year ended December 31, 2015. Following the classification of the drybulk fleet as held for sale on September 9, 2015, no depreciation charge was recorded for the respective vessels. As of December 30, 2016, our board of directors decided that our drybulk carriers previously classified as held for sale are not going to be sold. Therefore, as of December 31, 2016, the whole drybulk fleet was reclassified as held and used.

Tanker segment

Depreciation and amortization expense was $0 for the year ended December 31, 2016, as compared to $6.0 million for the year ended December 31, 2015. Following the classification of the tanker fleet as held for sale on March 30, 2015, no depreciation charge was recorded for the respective vessels. Furthermore, all tanker vessels were sold and delivered to their new owners during the year ended December 31, 2015.

Offshore support segment

From October 21, 2015, we entered into the offshore support business segment through the acquisition of Nautilus Offshore Services Inc. As a result, depreciation and amortization expenses from the offshore support business segment amounted to $3.5 million for the year ended December 31, 2016, as compared to $0.7 million for the year ended December 31, 2015.

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

Depreciation and amortization expense for the drilling units decreased to $0 for the year ended December 31, 2016, as compared to $155.4 million for the year ended December 31, 2015. The decrease in depreciation and amortization expenses is due to the deconsolidation of the drilling segment on June 8, 2015.

Impairment loss, (gain)/loss from sale of vessels and vessel owning companies

Drybulk carrier segment

During the year ended December 31, 2016, we recorded a charge of $35.5 million included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other", due to the gain/loss from the sale of vessels and vessel owning companies amounting to $22.1 million, the deterioration of the market values of the vessels held for sale as of March 31, 2016, which resulted in a reduction of their carrying amounts to their fair value less cost to sell amounting to $18.3 million, partially offset by the revaluation of three vessels to their values based on their agreed purchase prices amounting to $3.0 million and the gain recognized due to the reclassification of the vessels held for sale as held and used on December 31, 2016 amounting to $1.9 million. During the year ended December 31, 2015, we recorded an "Impairment loss, gain/loss from sale of vessels and vessel owning companies and other" of $1.0 billion. A loss of $83.9 million was recorded as a result of the impairment review performed, prior to the entering into agreements for the sale of our vessels and vessel owning companies. Furthermore, following the sales agreements for 14 vessel owning companies and three of our drybulk vessels and the classification of the remaining 22 vessels of our drybulk fleet as held for sale, we incurred an additional charge of $797.5 million included in "Impairment loss, gain/loss from sale of vessels and vessel owning companies and other". As a result of the further deterioration of the market values of the vessels held for sale an additional charge of $113.0 million was recorded during the three months ended December 31, 2015 and included in "Impairment loss, gain/ loss from sale of vessels and vessel owning companies and other". Finally, a charge of $6.0 million was recognized due to the sale of the vessels Byron and Galveston.

92

Tanker segment

During the year ended December 31, 2015 and following the ten Memoranda of Agreement for the sale of our tanker vessels we recorded a charge of $56.6 million as a result of the reduction of the vessels' carrying amount to their fair value less cost to sell. No such loss was recorded during the relevant period in 2016.

Offshore support segment

During the year ended December 31, 2016, we recorded a charge of $70.9 million included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other." The impairment charge recorded is mainly due to, the impairment review for the year ended December 31, 2016, which indicated that the carrying amount of the offshore support vessels' was not recoverable and, resulted in the recognition of a charge amounting to $65.7 million as well as $5.2 million write offs of the fair value of the above market acquired time charter contracts that were terminated early by Petrobras during the year ended December 31, 2016. No such loss was recorded during the relevant period in 2015.

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

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

Impairment on goodwill

Drybulk carrier segment

The drybulk carrier segment did not incur any impairment on goodwill during the relevant periods.

Tanker segment

The tanker segment did not incur any impairment on goodwill during the relevant periods.

Offshore support segment

Impairment on goodwill for the offshore support segment amounted to $7.0 million for the year ended December 31, 2016 due to the outcome of the annual review on goodwill performed. No such loss was recorded during the respective period in 2015.

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

The offshore drilling segment did not incur any impairment on goodwill during the relevant periods.

Loss on contract cancellation

Drybulk carrier segment

We did not incur any losses on contract cancellation during the year ended December 31, 2016. During the year ended December 31, 2015, we incurred $28.2 million loss on contract cancellation, due to an agreement that we concluded with one of our charterers to write-off overdue receivables in exchange of amending certain terms of the respective time charter contracts.

Tanker segment

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

Offshore support segment

The offshore support segment did not incur any loss on contract cancellation during the relevant period.

93

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

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

General and administrative expenses

Drybulk carrier segment

General and administrative expenses decreased by $14.5 million, or 32.6%, to $30.0 million for the year ended December 31, 2016, compared to $44.5 million for the year ended December 31, 2015. General and administrative expenses decreased due to the decrease in management fees by $6.6 million, due to the sale of 16 of our drybulk carriers and carrier owning companies during 2015 and ten vessels and vessel owning companies during 2016. A decrease of $2.7 million is attributable to decreased amortization expense for our stock based compensation and $3.9 million due to decreases in remuneration expenses allocated to drybulk carrier segment.

Tanker segment

General and administrative expenses decreased to approximately $0 for the year ended December 31, 2016, compared to $10.5 million for the year ended December 31, 2015. General and administrative expenses decreased mainly due to the decrease in management fees amounting to $6.4 million and resulting from the sale of our tanker fleet within 2015 and the decrease in the general and administrative expenses allocated to the tanker segment due to the sale of the vessels.

Offshore support segment

From October 21, 2015 we entered into the offshore support business segment through the acquisition of Nautilus. As a result, general and administrative expenses from the offshore support business segment amounted to $9.8 million for the year ended December 31, 2016, as compared to $2.9 million for the year ended December 31, 2015.

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

General and administrative expenses decreased to $0 for the year ended December 31, 2016, as compared to $47.0 million for year ended December 31, 2015. General and administrative expenses were $0 during the year ended December 31, 2016, due to the deconsolidation of the drilling segment on June 8, 2015.

Legal settlements and other, net

Drybulk carrier segment

Legal settlements and other, net slightly decreased for the year ended December 31, 2016 for the drybulk carrier segment amounted to a gain of $0.6 million, as compared to a gain of $1.0 million in the relevant period in 2015.

Tanker segment

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

Offshore support segment

Legal settlements and other, net amounted to a loss of $0.3 million for the offshore support segment for the year ended December 31, 2016, mainly due to expenses we incurred for our laid up vessels. We did not incur any significant such gains or losses during the relevant period in 2015.

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

Legal settlements and other, net decreased to $0 for the year ended December 31, 2016, as compared to $2.0 million for year ended December 31, 2015. Legal settlements and other, net were $0 during the year ended December 31, 2016, due to the deconsolidation of the drilling segment on June 8, 2015.

94

Interest and finance costs

Drybulk carrier segment

Interest and finance costs decreased by $31.1 million, or 78.1%, to $8.7 million for the year ended December 31, 2016, as compared to $39.8 million for the year ended December 31, 2015. The decrease is due to the repayments and transfers of the loans associated with the vessels and vessel owning companies sold during 2015 and 2016.

Tanker segment

Interest and finance costs decreased by $8.7 million, or 98.9% to $0.1 million for the year ended December 31, 2016, as compared to $8.8 for the year ended December 31, 2015. The decrease is due to the repayments of the loans associated with the sale of our tanker fleet during 2015.

Offshore support segment

The offshore support segment did not incur any material interest and finance costs during the relevant periods.

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

Interest and finance costs decreased to $0 for year ended December 31, 2016, compared to $123.5 million for the year ended December 31, 2015. Interest and finance costs were $0 during the year ended December 31, 2016, due to the deconsolidation of the drilling segment on June 8, 2015.

Interest income

Drybulk carrier segment

Interest income remained stable to $0.1 million for the years ended December 31, 2015 and 2016.

Tanker segment

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

Offshore support segment

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

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

Interest income decreased to $0 for the year ended December 31, 2016, compared to $0.4 million for the year ended December 31, 2015. Interest income was $0 during the year ended December 31, 2016, due to the deconsolidation of the drilling segment on June 8, 2015.

Gain on debt restructuring

Drybulk carrier segment

Gain on debt restructuring amounted to $10.5 million during the year ended December 31, 2016 and resulted from the agreements concluded with some of our lenders for the settlement of the respective loan facilities.

Tanker segment

The tanker segment did not incur any such gain during the relevant periods.

95

Offshore support segment

The offshore support segment did not incur any such gain during the relevant periods.

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

The offshore drilling segment did not incur any such gain during the relevant periods.

Gain /(Loss) on interest rate swaps

Drybulk carrier segment

Gains / Losses on interest rate swaps amounted to a gain of $0.9 million for the year ended December 31, 2016, as compared to a loss of $0.6 million for the year ended December 31, 2015. The gain recorded for the year ended December 31, 2016 is mainly due to the termination of the swaps associated with the vessels and vessel owning companies sold.

Tanker segment

Losses on interest rate swaps decreased by $0.9 million or 64.3% to a loss on interest rate swaps of $0.5 million for the year ended December 31, 2016, as compared to a loss of $1.4 million for the year ended December 31, 2015. The loss for the year ended December 31, 2016 was mainly due to the termination of the swaps associated with the vessels and vessel owning companies sold.

Offshore support segment

The offshore support segment did not incur any gains or losses on interest rate swaps during the relevant period.

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

Gains / Losses on interest rate swaps decreased to $0 for the year ended December 31, 2016, compared to losses of $9.6 million for the year ended December 31, 2015. Gains / Losses on interest rate swaps were $0 during the year ended December 31, 2016, due to the deconsolidation of the drilling segment on June 8, 2015.

Other, net

Drybulk carrier segment

Other, net amounted to a loss of $0.5 million for the year ended December 31, 2016, compared to a loss of $0.7 million for the year ended December 31, 2015.

Tanker segment

Other, net amounted to a loss of $0.1 million for the year ended December 31, 2016, as compared to a gain of $0.4 million for the year ended December 31, 2015. The loss recorded during 2016 is due to foreign currency exchange rate differences.

Offshore support segment

From October 21, 2015, we entered into the offshore support business segment through the acquisition of Nautilus, which owns six offshore support vessels. As a result, other, net from the Offshore support business segment amounted to $0.4 million for the year ended December 31, 2016, as compared to $2.8 million for the year ended December 31, 2015. The losses recorded for the year ended December 31, 2015, were mainly due to foreign currency exchange rate differences.

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

Other, net amounted to decreased to $0 for the year ended December 31, 2016, as compared to a loss of $6.3 million for the year ended December 31, 2015. Other, net were $0 during the year ended December 31, 2016, due to the deconsolidation of the drilling segment on June 8, 2015.

96

Loss due to deconsolidation of Ocean Rig

During the year ended December 31, 2015 and following an equity offering of Ocean Rig on June 8, 2015, we lost our controlling financial interest and deconsolidated Ocean Rig from our financial statements. As a result of the above transaction, we incurred a loss due to deconsolidation of $1.3 billion.

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 support segment

From October 21, 2015, we entered into the offshore support business segment through the acquisition of Nautilus, which owns six offshore support vessels. As a result, income taxes from the offshore support business segment amounted to approximately $0 for the year ended December 31, 2016, as compares to $0.2 million for the year ended December 31, 2015.

Offshore drilling segment- included up to June 8, 2015 (date of deconsolidation)

Income taxes decreased to $0 for the year ended December 31, 2016, compared to $36.9 million for the year ended December 31, 2015. Income taxes were $0 during the year ended December 31, 2016, due to the deconsolidation of the drilling segment on June 8, 2015.

Losses of affiliated companies

During the year ended December 31, 2015 and following an equity offering of Ocean Rig on June 8, 2015, we lost our controlling financial interest and deconsolidated Ocean Rig from our financial statements. As a result of the above transaction, we presented our share of losses from Ocean Rig, amounting to $41.5 million including $162.2 of impairment in Ocean Rig investment and a gain of $0.8 million due to the sale of all of our shares in Ocean Rig to a subsidiary of Ocean Rig for the year ended December 31, 2016, as compared to losses of $349.9 million, including $310.5 of impairment in Ocean Rig investment, for the respective period in 2015, as a single amount in the consolidated statements of operations.

Net income attributable to non-controlling interests

Net income attributable to non-controlling interests was $0 for the year ended December 31, 2016, as compared to $39.0 million for the year ended December 31, 2015. This represents the amount of consolidated income that was not attributable to DryShips Inc. Following an equity offering of Ocean Rig on June 8, 2015, we lost our controlling financial interest and deconsolidated Ocean Rig from our financial statements, thus no such income/losses exist for the year ended December 31, 2016.

Recent Accounting Pronouncements

A discussion of the recent accounting pronouncement can be found in our consolidated financial statements in Note 2.

B.          Liquidity and Capital Resources

Historically our principal source of funds has been equity provided by our shareholders through equity offerings, operating cash flows and long term borrowings. 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.

97

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. 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.

We believe that our cash flows from operations, amounts available for borrowing under our various credit facilities and finance lease arrangement and our cash balance will be sufficient to meet our existing liquidity needs for the next 12 months from the date of this annual report. A deterioration in economic conditions or a failure to refinance our debt or finance lease arrangement that is maturing could cause us to breach our financial covenants and could have a material adverse effect on our business, results of operations, cash flows and financial condition.

As of December 31, 2017, our cash balances (including restricted cash) amounted to $30.2 million. Our cash and cash equivalents (including restricted cash) decreased by $46.6 million, or 61%, to $30.2 million as of December 31, 2017, compared to $76.8 million as of December 31, 2016. The decrease in our cash and cash equivalents was mainly due to advances for vessels under construction and acquisitions of $698.2 million, loan repayments of $18.8 million, dividend payments of $10.0 million, payments of financing costs of $8.6 million and cash used in operating activities of $38.0 million, partly offset by proceeds from common stock issuances of $568.9 million, proceeds from long term debt of $150.0 million and net proceeds from a vessel sale of $8.2 million. As of December 31, 2017, we had total indebtedness excluding unamortized financing fees of $221.6 million.  Our total indebtedness increased by $83.7 million, or 61%, to $221.6 million as of December 31, 2017, from $137.9 million as of December 31, 2016, due to the $150.0 million secured credit facility dated June 22, 2017 that was partly offset with the loan repayments and settlements during 2017. As of December 31, 2017, we were in compliance with the covenants in our then existing credit facility.

Working capital is equal to current assets minus current liabilities, including the current portion of long-term debt. Our working capital surplus was $37.5 million as of December 31, 2017, compared to a working capital surplus of $70.8 million as of December 31, 2016. The surplus decrease is mainly due to vessels acquisitions and long term repayments that were partly offset with proceeds from equity offerings and new long term credit facilities.

Our practice has been to acquire our assets using a combination of funds received from equity investors and bank debt secured by mortgages on our assets. 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, 2017, we had no available borrowing capacity under our credit facilities.

Secured Credit Facilities

1. $150.0 Million Secured Credit Facility

On June 22, 2017, Gas Ships Limited entered into a $150.0 million secured credit facility to partially finance the four VLGC newbuildings in our fleet. This facility bears interest at LIBOR plus a margin, is payable in consecutive equal 24 quarterly installments of $0.8 million that commenced on June 26, 2017 and balloon payments at maturity in December 2023, has customary financial covenants, and is secured by first priority mortgages over the four VLGCs in our fleet. As of December 31, 2017, the outstanding balance on this facility was $147.7 million.

2. $90.0 Million Secured Credit Facility

On January 24, 2018, the Company entered into a secured credit facility of up to $90.0 million. The facility bears interest at LIBOR plus a margin, is repayable in twenty quarterly installments and balloon payments at maturity, has customary financial covenants, and is secured by first priority mortgages over our tankers the Shiraga, Samsara, Stamos and Balla. On January 26, 2018, we drew down the full amount of $90.0 million under the facility.

3. $35.0 Million Secured Credit Facility

On January 29, 2018, the Company entered into a secured credit facility of up to $35.0 million. The facility bears interest at LIBOR plus a margin, is repayable in twenty-four quarterly installments and balloon payments at maturity, has customary financial covenants, and is secured by first priority mortgages over our drybulk carriers the Valadon, Matisse and Rapallo. On March 7, 2018, we drew down the full amount of $35.0 million under the facility.

4. $30.0 Million Secured Credit Facility

On March 8, 2018, the Company entered into a secured credit facility of up to $30.0 million. The facility bears interest at LIBOR plus margin, is repayable in twenty-four quarterly installments and a balloon payment at maturity, has customary financial covenants, and is secured by first priority mortgages over our drybulk carriers the Judd and Raraka. On March 13, 2018, we drew down the full amount of $30.0 million under this facility.

98

Finance Lease Arrangement

On April 2, 2018, we entered into a finance lease arrangement with a major Chinese leasing company for our Kamsarmax drybulk vessel, the Kelly, pursuant to a memorandum of agreement and a bareboat charter agreement. The financing provides for the transfer of the Kelly to the buyer for 50% of the agreed purchase price, which will be calculated as the lower of (a) the vessel's net book value as of June 30, 2017 and (b) the vessel's fair value close to the delivery date, and as part of the agreement, our wholly-owned subsidiary will bareboat charter the vessel back for a period of ten years (expiry in April 2028). Charterhire under the bareboat arrangement is comprised of a fixed, quarterly repayment amount corresponding to a 15-year amortization profile plus a variable component calculated at LIBOR plus margin. We have purchase options to re-acquire the vessel during the bareboat charter period, with the first of such options exercisable on the first anniversary from the vessel's delivery date. There is also a purchase obligation upon the expiration of the agreement for 33% of the financing amount. The Company is also a guarantor under the bareboat charter, which also includes customary terms, conditions and financial covenants. The vessel is expected to be delivered and leased back to us in April 2018.

Repaid Credit Facilities/ Term Loans

1. $73.8 Million Sierra Credit Facility

On October 25, 2017, we refinanced the Sierra Credit Facility with the Loan Facility Agreement, which was secured by certain of our assets and had a loan to value ratio of 50%, a tenor of five years, no amortization and interest of LIBOR plus 4.5%. No arrangement fees or otherwise were charged in connection with the refinancing. As of December 31, 2017, the outstanding balance under the Loan Facility Agreement was $73.8 million. See "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Sifnos Shareholders Inc. and Sierra Investments Inc."

On February 1, 2018, we repaid in full the outstanding balance of $73.8 million under the Loan Facility Agreement.

2. $103.2 Million Secured Term Loan Facility

On June 20, 2008, we entered into this facility to partially finance the acquisition costs of the drybulk carriers Sorrento and Iguana. This loan bore interest at LIBOR plus a margin. The portion of the loan facility relating to the drybulk carrier Sorrento was 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 carrier 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. On November 12, 2014, we signed a supplemental agreement for relaxation of certain financial covenants. On November 18, 2016, we reached an agreement for the settlement of our outstanding obligation under the facility with the lender. Under the terms of the agreement, the lending bank agreed to a write-off of almost half of the outstanding principal and interest due. As agreed to with the lender, on November 18, 2016, we repaid $8.2 million of principal under the facility and during 2017 we fully repaid the remaining outstanding balance totaling $2.0 million.

3. $87.7 Million Secured Term Loan Facility

In March 2012, we entered into an $87.7 million secured term loan facility to partially finance the construction costs of our Panamax drybulk carrier under construction, Raraka, delivered in March, 2012, and two Capesize drybulk carriers then under construction, originally 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 bore interest at LIBOR plus a margin and was 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 under the facility.

As of December 31, 2016, we had outstanding borrowings amounting to $14.9 million under this loan facility. The facility was subsequently repaid in full April 24, 2017, including overdue interest.

Credit Facility and Finance Lease Arrangement Covenants

Our outstanding credit facilities and finance lease arrangement, as applicable, generally contain customary affirmative and negative covenants, including limitations to:

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

99

· undergo a change in control or merge or consolidate with, or transfer all or substantially all our assets to, another person;

· change the flag, class or technical or commercial management of the vessel mortgaged under such facility or terminate or materially amend the management agreement relating to such vessel;

· incur additional indebtedness, including the issuance of guarantees, or refinance or prepay any indebtedness, unless certain conditions exist;

· create or permit liens on our assets;

· acquire new or sell vessels, unless certain conditions exist;

· enter into other finance lease arrangements;

· make investments;

· change the general nature of our business;

· enter into transactions with affiliates;

· amend, modify or change our organizational documents;

· make capital expenditures; and

· sell, transfer or lease the vessel mortgaged under such facility.

Additionally, under the $150.0 million secured credit facility dated June 22, 2017, subject to certain qualifying events, we must generally continue to beneficially own at least 50% of either (i) Gas Ships Limited' issued and outstanding share capital or (ii) Gas Ships Limited's issued and outstanding voting share capital. Under the facility, Mr. Economou must also generally continue to beneficially own at least 50% of either (i) our issued and outstanding share capital or (ii) our issued and outstanding voting share capital.

Under the $90.0 million secured credit facility dated January 24, 2018, the $35.0 million secured credit facility dated January 29, 2018 and the $30.0 million secured credit facility dated March 8, 2018, subject to certain qualifying events, we must generally continue to beneficially own 100% of all issued and outstanding common stock and voting rights of our vessel-owning subsidiaries that are the borrowers under the facilities. Under the facilities, Mr. Economou must also generally continue to beneficially own at least 50% of either (i) our issued and outstanding share capital or (ii) our issued and outstanding voting share capital.

Furthermore, our credit facilities require us and our subsidiaries to satisfy certain financial covenants. In general, these financial covenants require us to maintain (i) minimum liquidity; (ii) a maximum leverage ratio; (iii) a minimum debt service cover ratio; (iv) a minimum market adjusted net worth, (v) a minimum solvency ratio and (vi) a minimum working capital level. In addition, our credit facilities, which are secured by mortgages on our vessels, require us to maintain specified financial ratios, mainly to ensure that the market value of the mortgaged vessels 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. Additionally, all of our credit facilities contain cross-acceleration or cross-default provisions that may be triggered by a default under one of our other credit facilities.

Our finance lease arrangement requires us to maintain specified financial ratios and satisfy financial covenants. These financial ratios and covenants require us, among other things, to maintain (i) minimum liquidity; (ii) a minimum working capital level and (iii) a maximum leverage ratio. In addition, our finance lease arrangement requires us to ensure that the market value of the vessel does not fall below a certain percentage of the outstanding amount of the finance lease arrangement, which we refer to as value maintenance clause or loan-to-value ratio.

Covenants contained in the $150.0 million secured credit facility dated June 22, 2017, under which we are a guarantor, also require Gas Ships Limited to meet certain financial tests. Any inability of Gas Ships Limited or its subsidiaries to meet the financial tests of the $150.0 million secured credit facility dated June 22, 2017 could negatively impact our business.

Events beyond our control, including changes in the economic and business conditions in the international shipping 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 and finance lease arrangement. Our ability to maintain compliance with such requirements also depends substantially on the value of our assets, our charter-hire and day-rates, our ability to obtain charter contracts, our success at keeping our costs low and our ability to successfully implement our overall business strategy.

100

A violation of any of the financial covenants in our credit facilities or finance lease arrangement, absent a waiver of the breach from our lenders or counterparty, as applicable, 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 and finance lease arrangement, as applicable, that would allow all amounts outstanding thereunder to be declared immediately due and payable or allow the charterer to terminate the bareboat charter and withdraw the vessel. In addition, all of our credit facilities and our finance lease arrangement contain cross-acceleration or cross-default provisions that may be triggered by a default under one of our other credit facilities or finance lease arrangement, as applicable. If the amounts outstanding under our indebtedness were to 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 counterparties.

During 2015 and 2016, we were not in compliance with several financial and other covenants in our then outstanding credit facilities. Additionally, although we have settled or refinanced all of our commercial credit facilities entered into prior December 31, 2016, we were as recently as April 24, 2017 not in compliance with the value maintenance clause in our since repaid commercial credit facility relating to our drybulk carrier segment and the various financial covenants therein. As of December 31, 2017, we were in compliance with the applicable financial and other covenants in our then outstanding credit facilities.

However, we cannot guarantee that we will be able to obtain our lenders' or counterparties' consent with respect to any future non-compliance with specified financial ratios or financial covenants under our current or future credit facilities or financing agreements, or that we will be able to refinance or restructure any such indebtedness or financing arrangement. If we fail to remedy, or obtain a waiver of, any future breaches of the covenants discussed above, our lenders or counterparties may accelerate our indebtedness or seek to repossess the vessels under the relevant credit facility or finance lease arrangement, as applicable.

Moreover, in connection with any additional amendments to our credit facilities or financing agreement that we may obtain, or if we enter into any future credit agreements or financing instruments, our lenders or counterparties 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 or counterparties 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 or finance lease arrangement.

Cash Flows

Year ended December 31, 2017 compared to year ended December 31, 2016

Our cash and cash equivalents including restricted cash decreased to $30.2 as of December 31, 2017, compared to $76.8 million as of December 31, 2016, primarily due to vessels acquisitions and long term repayments that were partly offset with proceeds from equity offerings and new long term credit facilities.

Working capital is equal to current assets minus current liabilities, including the current portion of long-term debt. Our working capital surplus was $37.5 million as of December 31, 2017, compared to working capital surplus of $70.8million as of December 31, 2016.

Net Cash Used in Operating Activities

For the year ended December 31, 2017, we used in operating activities $38.0 million, compared to $25.4 million used in operating activities for the year ended December 31, 2016. This increase is primarily attributable to the vessels' operations and working capital expenditures during 2017.

Net Cash Provided by/ (Used in) Investing Activities

Net cash used in investing activities was $705.4 million for the year ended December 31, 2017 due to (i) outflows regarding advances for vessels under construction and for vessel acquisitions amounting to $698.2 million, (ii) the increase in our restricted cash of $15.4 million and (iii) proceeds from sale of a vessel of $8.2 million.

101

Net cash provided by investing activities was $69.7 million for the year ended December 31, 2016 due to (i) the proceeds from the sale of our Ocean Rig shares amounted to $49.9 million, (ii) the net proceeds from the sale of our vessels and vessel owning companies amounted to $5.1 million and (iii) a decrease of $14.7 million in the amount of cash deposits required by our lenders.

Net Cash Provided By Financing Activities

Net cash provided by financing activities was $681.5 million for the year ended December 31, 2017, consisting of proceeds from common stock issuance of $568.9 million and proceeds from long-term debt of $150.0 million partly offset by repayments of $18.8 million of debt under our long-term credit facilities, dividend payments of $10.0 million and payments of financing fees of $8.6 million.

Net cash provided by financing activities was $32.1 million for the year ended December 31, 2016, consisting mainly of the borrowings of $28.0 million under our long-term credit facilities and the net proceeds of $123.8 million in connection with the equity offerings implemented during 2016, which were partly offset by $119.8 million in repayments of debt.

Year ended December 31, 2016 compared to year ended December 31, 2015

Our cash and cash equivalents including restricted cash increased to $76.8 as of December 31, 2016, compared to $15.0 million as of December 31, 2015, primarily due to proceeds from equity offerings, long term credit facilities, vessels and vessel-owning companies sales and the sale of our Ocean Rig shares.

Working capital is equal to current assets minus current liabilities, including the current portion of long-term debt. Our working capital surplus was $70.8million as of December 31, 2016, compared to working capital deficit of $85.6 million as of December 31, 2015.

Net Cash Provided by/(Used in) Operating Activities

For the year ended December 31, 2016, we used in operating activities $25.4 million, compared to $215.7 million provided by operating activities for the year ended December 31, 2015. This decrease is primarily attributable to the sale of our vessels and vessel owning companies, as well as to the sale of remaining interest in Ocean Rig during 2016.

Net Cash Provided by/(Used in) Investing Activities

Net cash provided by investing activities was $69.7 million for the year ended December 31, 2016, due to the proceeds from the sale of our Ocean Rig shares amounted to $49.9 million, the net proceeds from the sale of our vessels and vessel owning companies amounted to $5.1 million and a decrease of $14.7 million in the amount of cash deposits required by our lenders.

Net cash used in investing activities was $465.7 million for the year ended December 31, 2015, mainly due to the deconsolidation of Ocean Rig which resulted into a charge of $621.6 million and the outflows for acquisition of Nautilus amounted to $78.2 million. The Company made also payments of $505.7 million for fixed assets additions. These cash outflows were partly offset by the decrease of $65.9 million in the amount of cash deposits required by our lenders and $673.9 million of proceeds from sale of vessels and vessel owning companies.

Net Cash Provided By/(Used in) Financing Activities

Net cash provided by financing activities was $32.1 million for the year ended December 31, 2016, consisting mainly of the borrowings of $28.0 million under our long-term credit facilities and the net proceeds of $123.8 million in connection with the equity offerings implemented during 2016, which were partly offset by $119.8 million in repayments of debt.

Net cash used in financing activities was $316.3 million for the year ended December 31, 2015, consisting mainly of $782.4 million repayments under our long-term credit facilities, $5.4 million in payments for financing costs and $20.5 million in payments for dividends. The outflows were partly offset by the borrowings of $492.0 million under our long-term credit facilities.

102

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, 2017:

	Payments due by period
Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
(In millions of Dollars)
Long-term debt(1)	$	221.5	$	86.0	$	24.3	$	24.4	$	86.8
Interest	$	28.6	$	6.2	$	10.8	$	8.7	$	2.9
Total	$	250.1	$	92.2	$	35.1	$	33.1	$	89.7

(1) As further discussed in Notes 3 and 10 to our consolidated financial statements included herein, the outstanding balance of our long-term debt at December 31, 2017 was $147.7 million (gross of unamortized deferred financing fees of $2.4 million), included in current liabilities, and $73.8 million (gross of unamortized deferred financing fees of $2.2 million) included in "Due to related parties," in the consolidated balance sheet included in this annual report. The above amounts were used to partially finance the expansion of our fleet and for general working capital purposes. The loans bear interest at LIBOR plus a margin. The amounts in the table under "Long-term debt" do not include any projected interest payments.

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	65	Chairman, Chief Executive Officer and Class A Director
Harry Kerames	63	Class B Director
George Demathas	65	Class C Director
Andreas Argyropoulos	41	Class A Director
George Kokkodis	58	Class B Director
Anthony Kandylidis	41	Class C Director, President and Chief Financial Officer
Dimitrios Dreliozis	41	Vice President of Finance
Anastasia Pavli	36	Secretary

103

Biographical information with respect to each of our directors, executives and key personnel is set forth below:

Mr. George Economou has over 40 years of experience in the maritime industry and has served as our chairman and chief executive officer since its incorporation in 2004. Mr. Economou has overseen DryShips' growth into one of the largest U.S. listed drybulk company in fleet size and revenue and the third largest Panamax owner in the world. Mr. Economou is also the chairman of Ocean Rig and served as Ocean Rig's chief executive officer from 2010 until 2017. 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. 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.

Mr. Harry Kerames was appointed to our board of directors on July 29, 2009. Mr. Kerames has over 30 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 Azimuth Fund Management, 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, ITEL Rail Corporation, IBM and was a director at OceanFreight Inc. Mr. Kerames is a member of 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 and Nominating Committee.

Mr. 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 a Master of Science in Electrical Engineering and Computer Science from Columbia University.

Mr. Andreas Argyropoulos was appointed to our board of directors of July 26, 2017. Mr. Argyropoulos previously worked for Ocean Rig for five years in a variety of positions, including the marketing department and then serving as communications manager. Before joining Ocean Rig in 2012, Mr. Argyropoulos worked as marketing manager for Nike Greece from 2006 to 2009. He also has extensive experience in international event management. Mr. Argyropoulos received a Bachelor of Science degree from Boston University and a Master's degree from the CIES/FIFA Master in Neuchatel, Switzerland. He speaks five languages fluently.

Mr. George Kokkodis was appointed to our board of directors as of November 21, 2017. From 2009 to January 2015, Mr. Kokkodis has been an independent business introducer and independent client advisor of financial investments at BNP Paribas (Suisse) SA, where he was a senior private banker from 2003 to 2009 and the head of the Greek Private Banking Desk at BNP Paribas London from 1999 to 2003. From 1998 to 1999, Mr. Kokkodis was Vice President of Private Banking at Merrill Lynch International Bank, London UK and, from 1996 to 1998 held the same position at Merrill Lynch Bank Suisse S.A. Prior to that, he was Vice President of Private Banking at Bankers Trust International PLC, London UK from 1993 to 1996. Mr. Kokkodis holds a Bachelor of Science in Aeronautical Engineering from the Imperial College of Science and Technology and a Master of Science in Aeronautical Engineering from the University of Glasgow. Mr. Kokkodis was a member of the board of directors of MIG Real Estate from April 2011 to September 2015. Mr. Kokkodis acted as a banking consultant to the Vancouver International Maritime Centre, Vancouver, Canada (V.I.M.C) until November 2016. Mr. Kokkodis was a member of the board of directors of Ocean Rig from September 2015 to November 2017.

Mr. Anthony Kandylidis has served as our president and chief financial officer since December 2016 and was appointed a director of DryShips in July 2017. Mr. Kandylidis was previously our Executive Vice President since January 2015. Mr. Kandylidis also serves as Executive Vice Chairman and director of Ocean Rig and is also a director of the International Association of Drilling Contractors. Mr. Kandylidis also served as Ocean Rig's president from May 2016 and chief financial officer from December 2016 until December 2017. In September 2006, Mr. Kandylidis founded OceanFreight Inc., a public shipping company listed on Nasdaq, which was absorbed by DryShips through a merger in 2011. Mr. Kandylidis studied Civil Engineering at Brown University and also holds an MSc. in Ocean Systems Management from the Massachusetts Institute of Technology. Mr. Kandylidis is the nephew of Mr. George Economou, our founder, chairman, and chief executive officer.

104

Mr. Dimitris Dreliozis was appointed as our Vice President of Finance in December 2016. He had previously served as our financial controller since December 2015, and has 14 years of finance and accounting experience, including 10 years in various senior financial positions within the DryShips group, including Ocean Rig. For the period from July 2004 to May 2008, Mr. Dreliozis worked as an external auditor for Deloitte. Mr. Dreliozis is a graduate of the Athens University of Economics and Business.

Ms. 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.

B.          Compensation of Directors and Senior Management

We paid an aggregate amount of $0.1 million, $3.6 million, and $5.4 million as cash compensation to our officers and executive directors for the fiscal years ended December 31, 2017, 2016 and 2015, respectively. We do not have a retirement plan for our officers or directors.

As of January 1, 2017, the compensation to our senior executive officers constitutes part of the agreed all-in base costs provided by the TMS Entities as per the TMS Agreements. Each non-management director receives compensation for attending meetings of our board of directors, as well as committee meetings. Non-management directors also receive a director fee of $0.07 million per year. In addition, each director is reimbursed for out-of-pocket expenses in connection with attending meetings board of directors or committees. Each director is fully indemnified by us for actions associated with being a director to the extent permitted under Marshall Islands law.

Equity Incentive Plan

On January 16, 2008, our 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 were eligible to receive, with respect to shares of our common stock, awards of stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock units and unrestricted stock. The Plan expired on January 16, 2018 in accordance with its terms.

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 terms of our Class A directors, Messrs. Economou and Argyropoulos, expire at the annual general meeting of shareholders in 2020. The term of our Class B director, Messrs. Kerames and Kokkodis, expire at the annual general meeting of shareholders in 2018. The term of our Class C director, Messrs. Demathas and Kandylidis, expire at the annual general meeting of shareholders in 2019.

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 Nasdaq rules: Messrs. Kerames, Demathas, Kokkodis and Argyropoulos. Under 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.

105

Committees of the Board of Directors

Our board of directors has established an audit committee comprised of three independent directors: Messrs. Kerames, George Demathas and Argyropoulos. Mr. 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 Exchange Act and the Nasdaq corporate governance rules and fulfill the requirement of being financially literate and that Harry Kerames 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 three independent directors, Messrs. Kerames, Demathas and Argyropoulos. Mr. George Demathas 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 three independent directors, Messrs. Demathas, Kerames and Argyropoulos. Mr. Harry Kerames 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 Second Amended and Restated Bylaws.

D.          Employees

As of December 31, 2017, 2016 and 2015, we employed 1, 12, and 18 persons at its offices in Athens, Greece, respectively. As of December 31, 2017, the TMS Entities employed approximately 359 people in the aggregate. As of December 31, 2016, TMS Bulkers and TMS Offshore Services employed approximately 128 people in the aggregate. As of December 31, 2015, TMS Bulkers, TMS Tankers and TMS Offshore Services employed approximately 278 people in the aggregate.

TMS Bulkers and TMS Offshore Services since the acquisition of Nautilus on October 21, 2015, and TMS Tankers and TMS Cardiff Gas since the acquisition of our tanker and gas carrier vessels, are responsible for recruiting, either directly or through a crewing agent, the senior officers and all other crew members for our drybulk, tanker, gas and offshore support 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, tanker, gas and offshore support segments due to labor disagreements during 2017, 2016, and 2015.

106

E.          Share Ownership

For the total amount of shares of common stock owned by all of our officers and directors, individually and as a group, see "Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders."

Item 7. Major Shareholders and Related Party Transactions

A.          Major Shareholders

The following table sets forth the beneficial ownership of our common stock, as of April 4, 2018, held by:

· each person or entity that we know beneficially owns 5% or more of our common stock;

· 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, shares of our common stock subject to options held by that person that are currently exercisable or convertible, or exercisable or convertible within 60 days of April 4, 2018, 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 share of common stock held.

Name and Address of Beneficial Owner	Number of Shares Owned		Percent of Class(1)
George Economou(2)		72,421,515		71.4	%
Executive Officers, Key Employees and Directors as a Group		72,421,515		71.4	%

_____________________

(1) Based on 101,458,263 shares of common stock outstanding as of April 4, 2018.

(2) Mr. Economou may be deemed to beneficially own shares of our common stock through the following entities: Sierra Investments Inc., Mountain Investments Inc. and SPII Holdings Inc. The business address for SPII Holdings Inc. is c/o Omega Services Limited, 5/1 Merchants Street, Valletta VLT, 1171, Malta. The business address for Sierra Investments Inc. and Mountain Investments Inc. is c/o Mare Services Limited, 5/1 Merchants Street, Valletta VLT, 1171, Malta. The business address of Mr. Economou is c/o DryShips Inc., 109 Kifissias Avenue and Sina Street, 151 24, Marousi, Athens, Greece.

As of April 4, 2018, we had five shareholders of record, two of which were located in the United States. One of our U.S. shareholders of record is Cede & Co., a nominee of The Depository Trust Company, which held an aggregate of 29,036,744 shares of our common stock, representing 28.6% of our outstanding common stock. Accordingly, we believe that the shares held by Cede & Co. include shares of our common stock 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 TMS Bulkers, TMS Offshore Services, TMS Tankers and TMS Cardiff Gas

Mr. George Economou, our Chairman and Chief Executive Officer, may be deemed to be the beneficial owner of the issued and outstanding capital stock of TMS Bulkers, TMS Tankers, TMS Offshore Services, and TMS Cardiff Gas. Mr. Economou, and, under the guidance of our board of directors, manages our business, including our administrative functions, and we monitor the performance of the TMS Entities under our management agreements.

107

Management Agreement

Drybulk Carrier Segment

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 company that may be deemed to be beneficially owned by Mr. Economou, pursuant to management agreements entered into for each of our operating drybulk carriers and vessels under construction. Effective from December 31, 2016, all prior management agreements with TMS Bulkers were terminated at no cost by mutual agreement of the parties. In accordance with the terms of the New TMS Agreement, we and our subsidiaries entered into new agreements with TMS Bulkers.

Management Agreements with TMS Bulkers effective as of January 1, 2017

We and our subsidiaries entered into new management agreements with TMS Bulkers, effective January 1, 2017, to streamline the services offered by our managers. In accordance with the terms of the New TMS Agreement, the all-in base cost for providing the increased scope of services was reduced to $1,643/day per vessel, basis a minimum of 20 vessels, decreasing thereafter to $1,500/day per vessel. The management fee 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%. The New TMS Agreement also entitles the TMS Bulkers to an aggregate performance bonus for 2016 amounting of $6.0 million, as well as a one-time setup fee of $2.0 million. Under each respective agreement, TMS Bulkers will also be entitled to (i) a discretionary performance fee (up to $20.0 million, in either cash or common stock, at the discretion of our board of directors), (ii) a commission of 1.25% on charter hire agreements that are arranged by TMS Bulkers; (iii) a commission of 1% of the purchase price on sales or purchases of vessels in our fleet that are arranged by TMS Bulkers, (iv) a financing and advisory commission of 0.50% and (v) reimbursement of out of pocket and travel expenses.

Each management agreement with TMS Bulkers has a term of ten years.

In the event of a change of control of the vessel owning companies' ownership, the Company is required to pay TMS Bulkers a termination payment, representing an amount equal to the estimated remaining fees payable to TMS Bulkers under the 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 Company may terminate each agreement with TMS Bulkers for convenience at any time for a fee of $50.0 million.

During the years ended December 31, 2017, 2016 and 2015, total charges from TMS Bulkers under the management agreements amounted to $11.8 million, $19.0 million and $28.4 million, respectively.

Offshore Support Segment

Management Agreements with TMS Offshore Services prior to January 1, 2017

Since we acquired all of the issued and outstanding share capital of Nautilus in 2015, TMS Offshore Services has provided overall technical and crew management for our platform supply and oil spill recovery vessels on terms similar to those provided by TMS Bulkers prior to January 1, 2017. Effective December 31, 2016, all prior management agreements with TMS Offshore Services were terminated at no cost by mutual agreement of the parties.

Management Agreements with TMS Offshore Services effective as of January 1, 2017

We entered into new agreements with TMS Offshore Services to streamline the services offered by our managers as of January 1, 2017. In accordance with the terms of the New TMS Agreement, the all-in base cost for providing the increased scope of services was reduced to $1,643/day per vessel, basis a minimum of 20 vessels, decreasing thereafter to $1,500/day per vessel. The management fee 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%.  The New TMS Agreement also entitled the TMS Entities to an aggregate performance bonus for 2016 amounting of $6.0 million, as well as a one-time setup fee of $2.0 million. Under each respective agreement, TMS Offshore Services will also be entitled to (i) a discretionary performance fee (up to $20.0 million, in either cash or common stock, at the discretion of our board of directors), (ii) a commission of 1.25% on charter hire agreements that are arranged by TMS Offshore Services; (iii) a commission of 1% of the purchase price on sales or purchases of vessels in our fleet that are arranged by TMS Offshore Services, (iv) a financing and advisory commission of 0.50% and (v) reimbursement of out of pocket and travel expenses.

108

Each management agreement with TMS Offshore Services has a term of ten years.

In the event of a change of control of the vessel owning companies' ownership, the Company is required to pay TMS Offshore a termination payment, representing an amount equal to the estimated remaining fees payable to TMS Offshore under the 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 Company may terminate the each agreement with TMS Offshore Services for convenience at any time for a fee of $50.0 million.

For the years ended December 31, 2017 and 2016, total charges from TMS Offshore Services under the management agreements amounted to $4.7 million and $4.6 million, respectively. For the period from October 21, 2015 through December 31, 2015, total charges from TMS Offshore Services under the management agreements amounted to $0.5 million.

Tankers Segment

Management Agreements with TMS Tankers prior to January 1, 2017

Since January 1, 2011 and until the sale of our tanker fleet during 2015, TMS Tankers 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. Effective up to certain dates in 2015, all prior management agreements with TMS Tankers had expired, as all tanker vessels had been sold.

Management Agreements with TMS Tankers effective as of January 1, 2017

In connection with our acquisition of four tankers in 2017, we entered into new service agreements with TMS Tankers on similar terms as the service agreements contemplated by the New TMS Agreement with TMS Bulkers and TMS Offshore Services.

For the years ended December 31, 2017, 2016 and 2015, total charges from TMS Tankers under the management agreements amounted to $1.4 million, $0, and $13.3 million, respectively.

Gas Carrier Segment

In connection with our acquisition of four VLGC newbuildings in 2017, we entered into new service agreements with TMS Cardiff Gas on similar terms as the service agreements contemplated by the New TMS Agreement with TMS Bulkers and TMS Offshore Services.

For the year ended December 31, 2017, total charges from TMS Cardiff Gas under the management agreements amounted to $0.5 million.

Drilling Units Segment (discontinued)

Effective January 1, 2013, Ocean Rig Management Inc., or Ocean Rig Management, a wholly-owned subsidiary of our then affiliate Ocean Rig, entered into a Global Services Agreement with Cardiff Drilling Inc., or Cardiff Drilling, a company that may be deemed to be beneficially owned by Mr. Economou, our Chairman 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. Costs from the Global Services Agreement were expensed in the consolidated statements of operations or capitalized as a component of "Advances for drilling units under construction and related costs" being a directly attributable cost to the construction, as applicable.

From June 8, 2015, Ocean Rig was considered an affiliated entity and not our controlled subsidiary. As a result, Ocean Rig was accounted for under the equity method and the charges from Cardiff Drilling under the Global Services Agreement with Cardiff Drilling were consolidated in our results only up to June 8, 2015.

For the years ended December 31, 2017, 2016 and 2015, total charges from Cardiff Drilling under the Ocean Rig Services Agreement amounted to $0, $0 and $7.4 million, respectively.

109

Cardiff Tankers Inc. – Cardiff Gas Ltd.

Under certain charter agreements for our tankers and gas carrier vessels, Cardiff Tankers Inc. and Cardiff Gas Ltd., two Marshall Islands entities that may be deemed to be beneficially owned by Mr. George Economou, our Chairman and Chief Executive Officer, provide services related to the sourcing, negotiation and execution of charters, for which they are entitled to a 1.25% commission on the charter hire earned by those vessels.

Cardiff Marine Inc.

On January 2, 2014, we entered into an agreement with certain clients of Cardiff Marine, a company that may be deemed to be beneficially owned by Mr. George Economou, our Chairman 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 could exercise any one, several or all of the rights. Each right was valid until one day before the contractual date of delivery of each vessel. The newbuildings were delivered during 2017 and none of the seven rights was exercised by the Company.

Consultancy Agreements

Under the consultancy agreement effective from September 1, 2010 between the Company and Vivid Finance Limited, or Vivid Finance, a company that may be deemed to be beneficially owned by our Chairman and Chief Executive Officer, Mr. George Economou, Vivid provided us with financing-related services. Effective January 1, 2013, we amended the agreement with Vivid to limit the scope of the services provided under the agreement to us and our subsidiaries or related parties. In essence, post-amendment, our consultancy agreement with Vivid was in effect for our tanker, drybulk and offshore support shipping segments only. Effective December 31, 2016, the consultancy agreement with Vivid was terminated at no cost by mutual agreement of the parties. On October 22, 2008, we entered into a consultancy agreement with Fabiana Services S.A., a Marshall Islands entity, or Fabiana, that may be deemed to be beneficially owned by our Chairman and Chief Executive Officer, Mr. George Economou, with an effective date of February 3, 2008, as amended. Under the agreement, Fabiana provided the services of our Chairman and Chief Executive Officer. Effective December 31, 2016, the consultancy agreement with Fabiana was terminated at no cost by mutual agreement of the parties. Under the consultancy agreement effective from January 1, 2015 between the Company and Basset Holdings Inc., or Basset Holdings, a Marshall Islands company that may be deemed to be beneficially owned by our President and Chief Financial Officer Mr. Anthony Kandylidis, Basset Holdings provided the services of Mr. Kandylidis in his capacity as our Executive Vice President, and since May 2016 in his capacity as President and since December 2016 in his capacity as Chief Financial Officer. Effective December 31, 2016, the consultancy agreement with Basset Holdings was terminated at no cost by mutual agreement of the parties.

Sifnos Shareholders Inc. and Sierra Investments Inc.

On October 21, 2015, as amended on November 11, 2015, we entered the Initial Revolving Credit Facility with Sifnos, an entity that may be deemed to be beneficially owned by Mr. George Economou, our Chairman and Chief Executive Officer, for general working purposes. The loan was secured by shares that we held in Ocean Rig and in Nautilus and by a first priority mortgage over one Panamax drybulk carrier and had a tenor of three years. In addition, the lenders and the borrowers had certain conversion rights the exercise of which was approved by our board of directors on December 11, 2015. On December 30, 2015, our board of directors elected to convert $10.0 million of the outstanding principal amount of the Sifnos Loan into 8 shares of our Series B Preferred Stock (100,000,000 before the 1-for-25, 1-for-4, 1-for-15, 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits). Each preferred share had five votes and was mandatorily converted into shares of our common stock on a one to one basis within three months after the issuance thereof on a date selected by us, no later than March 30, 2016.

On March 24, 2016, we entered into an agreement to increase the Initial Revolving Credit Facility. The facility was amended to increase the maximum available amount by $10.0 million to $70.0 million, to give us an option to extend the maturity of the facility by 12 months to October 21, 2019, and to cancel the option of the lender to convert the outstanding loan to our common stock. Additionally, subject to Sifnos prior written consent, we obtained the right to convert $8.75 million of the outstanding balance of the loan into 29 of our preferred shares (3,500,000 shares before the 1-for-15, 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits shares). As part of the transaction, we also entered into a Preferred Stock Exchange Agreement to exchange the 8 Series B Preferred Shares (100,000,000 before the 1-for-25, 1-for-4, 1-for-15, 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) held by the lender for $8.75 million. We subsequently cancelled the Series B Preferred Shares previously held by Sifnos, effective March 24, 2016.

110

On April 5, 2016, the Initial Revolving Credit Facility was further amended, in connection with the sale of all of the shares we held in Ocean Rig to Ocean Rig Investments, Inc. whereby Sifnos agreed to, among other things, (i) release its lien over the Ocean Rig shares and (ii) waive any events of default, subject to a similar agreement being reached with the rest of the lenders to DryShips, in exchange for a 40% LTV maximum loan limit, being introduced under the facility. In addition, the interest rate under the loan was reduced to 4% plus LIBOR. On April 5, 2016, we paid Sifnos $45.0 million from our proceeds of the sale of the Ocean Rig shares to Ocean Rig Investments Inc.

On September 9, 2016, we entered into an agreement to convert $8.75 million of the outstanding balance of the Initial Revolving Credit Facility into 29 shares of Series D Preferred Stock (3,500,000 shares before the 1-for-15, 1-for-8, 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits shares), which shares were issued on September 13, 2016. Each shares of Series D Preferred Stock had 100,000 votes and was not convertible into our common stock.

On October 31, 2016, the Initial Revolving Credit Facility was amended to increase the maximum available amount by $5.0 million to $75.0 million and to give us an option within 365 days to convert $7.5 million of the outstanding loan into shares of our common stock. Following this transaction, the outstanding balance under the Revolving Credit Facility was $69.4 million. This transaction was approved by the independent members of our Board of Directors on the basis of vessel valuations and a fairness opinion.

On November 30, 2016, Sifnos became the lender of record under two syndicated loans previously arranged by HSH Nordbank, with outstanding balance of an aggregate $85.1 million under the ex-HSH syndicated facilities.

On December 15, 2016, we made a prepayment of $33.5 million under the Initial Revolving Credit Facility.

On December 30, 2016, Sifnos entered into a new revolving credit facility of up to $200.0 million, or the New Revolving Credit Facility, with the Company, which refinanced the majority of our outstanding debt, including the Initial Revolving Credit Facility and the ex-HSH syndicated facilities.  The New Revolving Credit Facility was secured by all of our then present and future assets except the MV Raraka. This new loan carried an interest rate of LIBOR plus 5.5%, was non-amortizing, had a tenor of three years, had no financial covenants and was arranged with a fee of 2.0%. In addition, Sifnos had the ability to participate in realized asset value increases of the collateral base in a fixed percentage of 30%. As of December 31, 2016, we had $121.0 million outstanding under the New Revolving Credit Facility.

On May 23, 2017, we were released of all of our obligations and liabilities under the New Revolving Credit Facility, through a Notice of Release from Sifnos, and entered into the Sierra Credit Facility with Sierra and a separate participation rights agreement with Mountain, both entities that may be deemed to be beneficially owned by Mr. George Economou, our Chairman and Chief Executive Officer. The Sierra Credit Facility carried an interest rate of LIBOR plus 6.5%, was non-amortizing, had a tenor of five years, had no financial covenants and was arranged with a fee of 1.0%. In addition, Mountain had the ability to participate in realized asset value increases of all of our present and future assets, except the vessel Samsara, in a fixed percentage of 30% in case of their sale and has a duration of up to the maturity of the Sierra Credit Facility. The transaction was approved by the independent members of our board of directors and a fairness opinion was obtained in connection with this transaction.

On August 29, 2017, in connection with the Private Placement, we reduced the principal outstanding balance of the Sierra Credit Facility by $27.0 million.

On October 4, 2017, in connection with the closing of the Rights Offering, we reduced the principal outstanding balance of the Sierra Credit Facility by $99.2 million.

On October 25, 2017, we refinanced the Sierra Credit Facility with the Loan Facility Agreement, which was secured by certain of our assets and had a loan to value ratio of 50%, a tenor of five years, no amortization and interest of LIBOR plus 4.5%. No arrangement fees or otherwise were charged in connection with the refinancing. As of December 31, 2017, the outstanding balance under the Loan Facility Agreement was $73.8 million.

On February 1, 2018, we repaid in full the outstanding balance of $73.8 million under the Loan Facility Agreement.

111

Other Agreements

Ocean Rig

On November 18, 2014, we entered into a $120.0 million Exchangeable Promissory Note (the "Note") with our former subsidiary Ocean Rig. The Note from Ocean Rig bore interest at a LIBOR plus margin rate and was due in May 2016. On June 4, 2015, we signed an amendment with Ocean Rig under the $120.0 million Note to, among other things, partially exchange $40.0 million of the Note for 4,444,444 of Ocean Rig's shares owned by us, amend the interest of the Note and pledge to Ocean Rig 20,555,556 of Ocean Rig's stock owned by us. On August 13, 2015, we reached an agreement with Ocean Rig and exchanged the remaining outstanding balance of $80.0 million owed to Ocean Rig under the $120.0 million Note, and transferred 17,777,778 shares of Ocean Rig previously owned by us. The remaining 2,777,778 shares of Ocean Rig, which were pledged, were released and returned to us.

On March 29, 2016, we entered into 60 day time charter agreements for the offshore support vessels Crescendo and Jubilee with a subsidiary of Ocean Rig to assist with the stacking of Ocean Rig's drilling units in Las Palmas.

Vessel Transactions

On April 30, 2015, we through our subsidiaries, entered into ten Memoranda of Agreements with entities that may be deemed to be beneficially owned by Mr. George Economou for the sale of four of our Suezmax tankers and six Aframax tankers. On September 9, 2015, we entered into sales agreements with entities that may be deemed to be beneficially owned by Mr. George Economou for the sale of 14 of our vessel owning companies (owners of ten Capesize and four Panamax carriers) and three of our Capesize bulk carriers.

On March 24, 2016, we concluded a new sales agreement with entities that may be deemed to be beneficially owned by Mr. George Economou, our Chairman and Chief Executive officer, for the sale of our Capesize vessels Rangiroa, Negonego, Fakarava, along with the associated debt, which had an outstanding balance of $102.1 million at March 24, 2016. On March 30, 2016, we received the lender's consent for the sale of the vessels and made a prepayment of $15.0 million, under the respective loan agreement. On March 31, 2016, the shares of the vessel owning companies were delivered to their new owners.

On September 16, 2016 and October 26, 2016, we entered into sales agreements with entities that may be deemed to be beneficially owned by Mr. George Economou for the sale of the shares of our owning companies of the Panamax vessel Oregon and the Panamax vessels Amalfi and Samatan, respectively.

On January 12, 2017, we entered into the LPG Option Agreement with companies that may be deemed to be beneficially owned by our Chairman and Chief Executive Officer, Mr. George Economou, to purchase up to four high specifications VLGCs capable of carrying LPG that are currently under construction at HHI. In January 2017, March 2017, and April 2017, we exercised all four of our options for $83.5 million each under the LPG Option Agreement, pursuant to which we acquired (i) the four owning companies that were parties to the four aforementioned VLGC newbuilding contracts with HHI and (ii) Cardiff LPG Ships Ltd and Cardiff LNGShips Ltd. As of the date of this annual report, all four of our VLGCs have been delivered and are currently employed on time charters that are set to expire between June 2025 (including charterers' option period) and January 2028.

On May 15, 2017, we entered into a purchase agreement with an entity that may be deemed to be beneficially owned by Mr. Economou for the purchase of the shares of the owning company of the Suezmax newbuilding vessel Samsara. The transaction was approved by the audit committee of our board of directors taking into account independent third-party broker charter free valuations certificates and the long-term employment on a fixed rate basis plus profit share, provided by the seller. The vessel was time chartered back to the seller and employed from May 24, 2017 under a five year time charter plus optional periods in charterer's option at a base rate plus profit share. The charterer was also granted purchase options at the end of each firm period.

Term Sheet, Private Placement and Rights Offering

See description of the Term Sheet, Private Placement and Rights Offering in "Item 4. Information on the Company—A. History and Development of the Company—Business Development—Developments related to Sifnos and Sierra."

112

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

Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping and drilling businesses.

The Company has 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 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.

As part of the normal course of operations, our customers may disagree on amounts due to the Company under the provision of the contracts which are normally settled through 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.

An investigation was carried out by Chinese authorities in connection with an alleged collision of the vessel Catalina with a fishing boat while enroute to Indonesia on May 7, 2016. The vessel remained detained in Ningbo, China and was released during July 2016. Following determination of the Chinese Maritime authorities on the apportionment of inter ship liability, the P&I Club proceeded with the settlement of the property damage claim of the owners of the fishing boat. Crew claims were separately settled by such club. The criminal proceedings in relation to such case are now closed.

HPOR Servicos De Consultaria Ltda ("HPOR") on September 1, 2016 commenced London arbitration references against, among others, the Company, seeking payment of certain commissions that HPOR is alleging were due by, amongst others, the Company for certain agency and marketing services provided for the Ocean Rig Mykonos and the Ocean Rig Corcovado drilling units. We are disputing such allegations and have counterclaimed repayment of the commission already paid to HPOR. On March 7, 2018, the Tribunal issued awards in each of the references disallowing HPOR's claims and allowing the counterclaims brought by the Company. HPOR has since filed an application with the Court of Appeals in the U.K. for leave to appeal the arbitration awards.

On July 4, 2017, we announced that the Company and Mr. Economou had been named as defendants in a lawsuit filed in High Court of the Republic of the Marshall Islands (Civil Action No. 2017-131) by Michael Sammons alleging, in relevant part, breaches of fiduciary duty, unjust enrichment, and conflict of interest. The plaintiff sought, among other things, a temporary restraining order and preliminary injunction to suspend any further issuances of our new shares of commons stock by the Company at a price per share below the price specified by the plaintiff in the complaint, as well as certain other compensatory and punitive damages specified in the complaint. On July 24, 2017, the High Court of the Marshall Islands (the "Court") issued an order denying plaintiff's motion for a preliminary injunction. On August 10, 2017, the plaintiff filed a first amended complaint that added a new plaintiff, and was styled as a direct action only, alleging three new counts for breach of fiduciary duties and constructive fraud, and removing certain of the counts asserted in the original complaint. The plaintiffs requested to proceed pro se and on August 16, 2017, the Court granted a motion to withdraw filed by plaintiffs' counsel. On August 22, 2017, now acting pro se, plaintiffs filed a motion for leave to file a second amended complaint, making certain changes to the allegations of the first amended complaint and propounding an additional count for breach of fiduciary duties. The most recent complaint seeks compensatory damages of $1.56 million and treble punitive damages of $4.68 million against Mr. Economou, and requests injunctive and equitable relief against the Company. We and Mr. Economou believe the complaint, as amended, to be without merit and filed motions to dismiss the second amended complaint. At the oral argument on defendants' motions to dismiss, held on February 2, 2018, the Court announced that it was inclined to grant both motions to dismiss, and directed the parties to submit proposed orders on or before February 23, 2018. The Court stated that after the Court received and reviewed all timely proposed orders, it would issue final decisions in writing.  On February 26, 2018, plaintiff filed a motion for voluntary dismissal without prejudice. On March 6, 2018, defendants filed a joint opposition to plaintiff's motion for voluntary dismissal and moved to strike plaintiff's notice of dismissal and for the entry of dismissal with prejudice, which plaintiff opposed.  The Court issued acknowledgement of voluntary dismissal without prejudice on March 8, 2018.  Plaintiff filed a new action in the Western District of Texas on February 27, 2018, styled as Sammons v. Economou, No. 5:18-cv-00194 (W.D. Tex.). Mr. Economou and we believe that the complaint is without merit and intend to contest the allegations in the Texas action.

On August 2, 2017, a purported class action complaint was filed in the United States District Court for the Eastern District of New York (No. 17-cv-04547) by Herbert Silverberg on behalf of himself and all others similarly situated against, among others, the Company and two of our executive officers. The complaint alleges that the Company and two of our executive officers violated Sections 9, 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Company will respond to the complaint by the appropriate deadline to be set in the future, which is presently set at May 25, 2018. The Company and our management believe that the complaint is without merit and plan to vigorously defend themselves against the allegations.

On August 31, 2017, a complaint was filed in the High Court of the Republic of the Marshall Islands (Civil Action No. 2017- 198) by certain Ocean Rig Creditors against, among others, the Company and two of its executive officers (who currently are directors) and TMS Offshore Services. The complaint purports to allege nine causes of action, including claims for avoidance and recovery of actual and/or constructive fraudulent conveyances under common law or 6 Del. Code §§ 1304(A)(1), 1305, 1307, and 1308; aiding and abetting fraudulent conveyances; and declaratory judgment under 30 MIRC § 202. The Company (and all other defendants) moved to dismiss the case on October 31, 2017, and the motion has been briefed. In a scheduling conference held on February 14, 2018 in the Marshall Islands, the Court scheduled oral argument to proceed on June 6, 2018. The Company is not in a position at this time to express an opinion as to the ultimate outcome of this matter, or to provide an estimate on the amount or range of any potential loss,

Ocean Rig has funded PCT.  The PCT was established to preserve, for the benefit of scheme creditors, any causes of action held by Ocean Rig, Agon Shipping Inc. and/or Ocean Rig Investments Inc. arising from the facts and circumstances identified in the draft complaint prepared by certain of Ocean Rig Creditors. If the trustees under the PCT determine that there is merit to any such claims, the trustees may take legal action for the benefit of all of the scheme creditors in the restructuring.

The Company received a subpoena from the SEC requesting certain documents and information from the Company in connection with offerings made by the Company between June 2016 and July 2017. The Company is providing the requested information to the SEC.

During September 2017, the vessels Majorca and Marbella experienced two grounding incidents with approximately total off-hire days of 82 days and 33 days, respectively, while the total recoverable cost is estimated to be $1.8 million and $0.6 million, respectively, which will be covered by the Company's H&M insurers.

Other than the cases mentioned above, the Company is not a party to any material litigation where claims or counterclaims have been filed against the Company other than routine legal proceedings incidental to its business.

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.

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 reached agreement with the customer on the amounts due.

113

Dividend Policy

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, previously suspended dividends on shares of our common stock. Beginning for the fourth quarter ended December 31, 2016, our board of directors approved a dividend policy to declare and pay quarterly dividends of $2.5 million to holders of our common stock. The dividend per share to be paid by the Company is determined based on the number of shares outstanding on the applicable record date. Accordingly, our board of directors declared quarterly dividends of $2.5 million to holders of our common stock for the quarters ended December 31, 2016, March 31, 2017, June 30, 2017, September 30, 2017, and December 31, 2017, respectively.

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 credit facilities and finance lease arrangement, the provisions of Marshall Islands law affecting the payment of distributions to shareholders and other factors.

The payment of dividends is not guaranteed or assured and may be discontinued at any time at the discretion of our board of directors. Because we are a holding company with no material assets other than the stock of our subsidiaries, our ability to pay dividends will 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, gas or offshore support charter market, our earnings would be negatively affected thus limiting our ability to pay dividends. 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.

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. In addition, other external factors, such as our lenders imposing restrictions on our ability to pay dividends under the terms of our credit facilities and finance lease arrangement, 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 credit facilities and finance lease arrangement, as applicable.

B.          Significant Changes

See note 19 of "Item 18. Financial Statements."

Item 9. The Offer and Listing

Shares of our common stock currently trade on the Nasdaq Capital Market under the symbol "DRYS." The table below sets forth the high and low prices of our common stock for each of the periods indicated, as reported by the Nasdaq Capital Market.

For the Year Ended**

	Low		High
December 31, 2013	$	19,680.00	$	56,400.00
December 31, 2014	$	9,361.20	$	51,720.00
December 31, 2015	$	1,017.60	$	13,560.00
December 31, 2016	$	29.52	$	1,923.60
December 31, 2017	$	1.02	$	29,635.21

114

For the Quarter Ended**
March 31, 2016	$	1,032.00	$	1,923.60
June 30, 2016	$	270.24	$	1,924.80
September 30, 2016	$	50.64	$	296.74
December 31, 2016	$	28.40	$	584.00
March 31, 2017	$	1,225.00	$	29,635.21
June 30, 2017	$	8.82	$	1,401.40
September 30, 2017	$	1.02	$	10.15
December 31, 2017	$	2.36	$	5.59
March 31, 2018	$	2.74	$	4.48

For the Month Ended**
October 2017	$	2.36	$	5.59
November 2017	$	3.63	$	5.01
December 2017	$	3.33	$	4.40
January 2018	$	3.21	$	4.05
February 2018	$	2.74	$	4.00
March 2018	$	3.41	$	4.48
April 2018 (through April 3, 2018)	$	3.47	$	3.71

** All share prices have been adjusted to account for all reverse stock splits, including the 1-for-25 reverse stock split on March 11, 2016, the 1-for-4 reverse stock split on August 15, 2016, the 1-for-15 reverse stock split on November 1, 2016, the 1-for-8 reverse stock split on January 23, 2017, the 1-for-4 reverse stock split on April 11, 2017, the 1-for-7 reverse stock split on May 11, 2017, the 1-for-5 reverse stock split on June 22, 2017, and the 1-for-7 reverse stock split on July 21, 2017.

We paid the following cash dividends in 2017:

Payment Date	Amount per Share
March 30, 2017	$	17.07
May 12, 2017	$	9.69
August 2, 2017	$	0.07
November 13, 2017	$	0.02

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 the Rule 424(b)(2) Prospectus Supplement to our Registration Statement on Form F-3 (Registration No. 333-202821), filed with the SEC on August 31, 2017, is incorporated by reference herein, provided that as of April 4, 2018, we had 104,274,708 shares of our common stock outstanding (including treasury shares).

The following is a description of the material terms of our Amended and Restated Articles of Incorporation and Second Amended and Restated Bylaws.

Description of Shares of Common Stock

Under our Amended and Restated Articles of Incorporation, our authorized capital stock consists of 1,000,000,000 shares of common stock, par value $0.01 per share.

115

Each of our outstanding shares of common stock 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 our common stock are entitled to receive ratably all dividends, if any, declared by our board of directors out of funds legally available for dividends. Holders of shares of our common stock do not have conversion, redemption or preemptive rights to subscribe to any of our securities. All outstanding shares of our common stock are fully paid and non-assessable. The rights, preferences and privileges of holders of shares of our common stock are subject to the rights of the holders of any preferred shares that may be outstanding. Shares of our common stock are listed on the Nasdaq Capital Market under the symbol "DRYS."

See "Item 4. Information on the Company—A. History and Development of the Company—Business Development" for a list of recent issuances and reverse-stock splits of our common stock.

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, 10,000,000 have been designated as Series A Participating Preferred Stock, 100,000,000 have been designated as Series B Convertible Preferred Stock, 10,000 shares have been designated as Series C Convertible Preferred Stock, 3,500,000 shares have been designated as Series D Preferred Stock, 50,000 shares have been designated as Series E-1 Convertible Preferred Stock, and 50,000 shares have been designated as Series E-2 Convertible Preferred Stock. As of April 4, 2018, there were no preferred shares issued and outstanding.

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 2020 annual meeting of shareholders. Class B directors serve for a term expiring at our 2018 annual meeting of shareholders. Directors designated as Class C directors serve for a term expiring at our 2019 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 Second 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 of 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.

116

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 Second Amended and Restated 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.

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.

117

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, 10,000,000 of these shares have been designated as Series A Participating Preferred Stock, 100,000,000 of those have been designated as Series B Convertible Preferred Stock, 10,000 shares designated as Series C Convertible Preferred stock, 3,500,000 shares designated as Series D Preferred stock, 50,000 shares have been designated as Series E-1 Convertible Preferred Stock, and 50,000 shares have been designated as Series E-2 Convertible Preferred Stock. As of April 4, 2018, there were no preferred shares outstanding. Our board of directors may issue additional 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.

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. Further, our Second 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 Second 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 further 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 Second 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 not more than 180 days prior to the one year anniversary of the preceding year's annual meeting of shareholders. Our Second 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.

C.          Material Contracts

We refer you to "Item 4. Information on the Company," "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources," and "Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions" 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.

118

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 and offshore support 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

(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".

119

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 2017 taxable year, the Company does not believe that it satisfied the Publicly-Traded Test.

The Treasury Regulations provide, in pertinent part, that a class of our stock will not be considered to be "regularly traded" on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class of stock are owned, actually or constructively, under specified stock attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the vote and value of the outstanding shares of such class of stock, which we refer to as the 5 Percent Override Rule.

For purposes of determining the persons that own 5% or more of our common shares, or "5% Shareholders," the Treasury Regulations permit us to rely on those persons that are identified on Schedule 13G and Schedule 13D filings with the SEC, as having a 5% or more beneficial interest in our common shares. The Treasury Regulations further provide that an investment company identified on an SEC Schedule 13G or Schedule 13D filing that is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Shareholder for such purposes. We believe that 5% Shareholders controlled more than 50% of the voting power or value of our common shares for more than half of the days in the taxable year, and therefore, we triggered the 5 Percent Override Rule.  We expect to qualify for Section 883 in future taxable years, but there can be no assurance that we will be able to satisfy the requirements of Section 883 of the Code in any taxable year.

Taxation in Absence of Exemption under Section 883 of the Code

Because the Company is not eligible for benefits of Section 883 of the Code, the Company's U.S. source shipping income is 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 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.

120

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 generally 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.

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 Capital 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.

121

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 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." In addition, if we were to be treated as a PFIC for any taxable year, a U.S. Holder that owns our common shares in that year would generally be required to file a Form 8621 with its U.S. federal income tax return for that year.

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.

122

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.

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.

123

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 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.

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.

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 support services to third parties through our wholly-owned subsidiaries. Such services may be provided in countries where the tax legislation subjects offshore support 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.

124

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 or Brazil, 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, tanker, gas and offshore support fleet and any declines that may occur in the value of our assets, which consist primarily of our drybulk, tanker, gas and offshore support vessels. 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 and bunker prices, as our employment policy for our vessels 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.

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 clearinghouses, which may require the posting of collateral by all participants. The use of a clearing house reduces our exposure to counterparty credit risk.

Under the terms of our credit facilities and finance lease arrangement, we are required to maintain compliance with minimum valuation covenants in regard to the vessels 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 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 on our books.

125

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 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, 2017, we did not have any interest rate swaps, cap or floor agreements.

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 $2.2 million based upon our debt level at December 31, 2017.

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 Petrobras Brazil for our offshore support was receivable in Brazilian Real. 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, 2017, the net effect of a 1% adverse movement in U.S. dollar/Euro exchange rates, as well as the net effect of a 1% adverse movement in U.S. dollar/currencies other than the U.S. dollar exchange rates would not have a material effect on our net loss.

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, 2017, we did not have any open foreign currency forward exchange contracts.

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.

126

PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies

None.

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

None.

Item 15. Controls and Procedures

(a) Disclosure Controls and Procedures

Management, including our 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, 2017. 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, 2017, 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 SEC'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 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 the COSO 2013 Framework, as of December 31, 2017.

127

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, 2017, based on the framework established in Internal Control—Integrated Framework issued by the COSO 2013 Framework. Based on the aforementioned assessment, management concluded that Company's internal control over financial reporting was effective as of December 31, 2017.

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, 2017, 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, 2017 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. Harry Kerames, 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 Messrs. Demathas, Kerames, Argyropoulos, and Kokkodis are independent under SEC Rule 10A-3 of the Exchange Act and Nasdaq independence rules.

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. In January 2018, we adopted a new stand-alone insider trading policy and amended our code of ethics to reflect the same. 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 Kifissias Avenue and Sina Street, 151 24 Marousi, Athens, Greece.

Item 16C. Principal Accountant Fees and Services

Audit Fees

128

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.

(U.S. Dollars in Thousands)	2016		2017
Audit and audit related fees	$	231	$	515
Tax fees		-		-
Total fees	$	231	$	515

The total fees for services performed by our independent auditors increased for the year ended December 31, 2017, as compared to the respective period in 2016, mainly due to the expansion of our seagoing operations related to vessels' acquisitions during 2017 and the F-1 registration statement for the spinoff of Gas Ships Limited. See also "B. Business Overview—Separation of Gas Ships Limited" above.

There were no audit-related or other fees billed in 2016 and 2017. Audit fees represent professional services rendered for the audit of our annual financial statements and services provided by the principal accountant in connection with statutory and regulatory fillings or engagements. Taxation fees represent fees for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning.

All audit services, including services described above, were pre-approved by our audit committee. Our audit committee is responsible for the appointment, retention, 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 our 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

Period	Total Number of Shares Purchased			Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
August 2017		36,363,636	*	$	2.75		–		–
October 2017		36,057,876	**	$	2.75		–		–

* On August 29, 2017, entities that may be deemed to be beneficially owned by Mr. Economou, our Chairman and Chief Executive Officer, acquired an aggregate of 36,363,636 shares of our common stock.

** On October 4, 2017, entities that may be deemed to be beneficially owned by Mr. Economou, our Chairman and Chief Executive Officer, acquired an aggregate of 36,057,876 shares of our common stock.

Also on February 6, 2018, our board of directors approved a stock repurchase program, under which the Company may repurchase up to $50.0 million of its outstanding common shares for a period of 12 months. We may repurchase shares in privately negotiated or open-market purchases in accordance with applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. As of April 4, 2018, we have repurchased 2,816,445 shares of our common stock for a gross consideration of $11.3 million including commission fees. As of April 4, 2018, the number of shares of our common stock outstanding is 101,458,263.

Item 16F. Changes in Registrant's Certifying Accountant

None.

129

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. Likewise, in lieu of obtaining shareholder approval prior to the issuance of securities in certain circumstances, consistent with the BCA and our amended and restated articles of incorporation and by-laws, the board of directors approves certain share issuances.

· 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.

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.

130

Item 19. Exhibits

1.1	Amended and Restated Articles of Incorporation of DryShips Inc., dated January 27, 2005, 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	Articles of Amendment to Amended and Restated Articles of Incorporation of DryShips Inc., dated September 13, 2006, 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.
1.3	Articles of Amendment to Amended and Restated Articles of Incorporation of DryShips Inc., dated January 18, 2008, 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.
1.4	Articles of Amendment to the Amended and Restated Articles of Incorporation of DryShips Inc., dated March 10, 2016, incorporated by reference to Form 6-K of DryShips Inc., filed with the SEC on March 11, 2016.
1.5	Articles of Amendment to the Amended and Restated Articles of Incorporation of DryShips Inc., dated August 12, 2016, incorporated by reference to Form 6-K of DryShips Inc., filed with the SEC on August 15, 2016.
1.6	Articles of Amendment to the Amended and Restated Articles of Incorporation of DryShips Inc., dated October 31, 2016, incorporated by reference to Form 6-K of DryShips Inc., filed with the SEC on November 1, 2016.
1.7	Articles of Amendment to the Amended and Restated Articles of Incorporation of DryShips Inc., dated January 20, 2017.
1.8	Articles of Amendment to the Amended and Restated Articles of Incorporation of DryShips Inc., dated April 10, 2017, incorporated by reference to Form 6-K of DryShips Inc., filed with the SEC on April 11, 2017.
1.9	Articles of Amendment to the Amended and Restated Articles of Incorporation of DryShips Inc., dated May 10, 2017, incorporated by reference to Form 6-K of DryShips Inc., filed with the SEC on May 11, 2017.
1.10	Articles of Amendment to the Amended and Restated Articles of Incorporation of DryShips Inc., dated July 20, 2017, incorporated by reference to Form 6-K of DryShips Inc., filed with the SEC on July 25, 2017.
1.11	Second Amended and Restated Bylaws of DryShips Inc., incorporated by reference to Exhibit 1 of the Current Report on Form 6-K of DryShips Inc., filed with the SEC on May 7, 2015.
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	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.

131

2.3	Certificate of Designations of Rights, Preferences and Privileges of Series B Convertible Preferred Stock of DryShips Inc., incorporated by reference to Exhibit 1.4 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2015, filed with the SEC on April 27, 2016.
2.4	Statement of Designations, Preferences and Rights of the Series C Convertible Preferred Stock of DryShips Inc., incorporated by reference to Exhibit 3.1 of the Current Report on Form 6-K of DryShips Inc., filed with the SEC on June 8, 2016.
2.5	Certificate of Designation of Rights, Preferences and Privileges of Series D Preferred Stock of DryShips Inc., incorporated by reference to Exhibit 2.6 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
2.6	Statement of Designations, Preferences and Rights of the Series E-1 Convertible Preferred Stock of DryShips Inc., incorporated by reference to Exhibit 3.1 of the Current Report on Form 6-K of DryShips Inc., filed with the SEC on November 17, 2016.
2.7	Statement of Designations, Preferences and Rights of the Series E-2 Convertible Preferred Stock of DryShips Inc., incorporated by reference to Exhibit 3.2 of the Current Report on Form 6-K of DryShips Inc., filed with the SEC on November 17, 2016.
2.8	Form of Rights Certificate, incorporated by reference to Exhibit 4.1 of the Current Report on Form 6-K of DryShips Inc., filed with the SEC on August 31, 2017.
4.1	Amending and Restating Loan Agreement, dated January 18, 2010, 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 4.66 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.
4.2	Supplemental Letter, dated June 10, 2010, 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 restated on 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.
4.3	Second Supplemental Agreement, dated November 12, 2014, 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, as amended and restated on January 18, 2010, incorporated by reference to Exhibit 4.183 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2014, filed with the SEC on March 10, 2015.
4.4	Settlement, Release and Supplemental Facility agreement by and between Aegean Traders Inc. as Borrower, Dryships Inc., as Guarantor and Portigon AG, as Lender, dated November 18, 2016, incorporated by reference to Exhibit 4.75 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.5	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.

132

4.6	Deed of Release of Security, dated May 3, 2017, by and among Amathus Owning Company Limited, as remaining Borrower, DryShips Inc. as the Guarantor,  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.
4.7	Sale and Transfer Deed in relation to a Junior Loan Agreement amongst DryShips Inc., as Borrower, Advice Investments S.A., as Purchaser, and HSH Nordbank AG, as Assigning Lender, Swap Bank, Lead Bookrunner, Agent, and Security Trustee, dated November 30, 2016, incorporated by reference to Exhibit 4.76 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.8	Sale and Transfer Deed in relation to a Senior Loan Agreement amongst DryShips Inc., as Borrower, Advice Investments S.A., as Purchaser, each of HSH Nordbank AG, Bank of America, N.A., Unicredit Bank AG, Nataxis and Santander Asset Finance PLC as Participating Senior Lenders, and HSH Nordbank AG, as Senior Swap Bank, Lead Bookrunner, Agent, and Security Trustee, dated November 30, 2016, incorporated by reference to Exhibit 4.77 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.9	Agency Transfer Agreement in respect of a Senior Term Loan and Junior Term Loan amongst DryShips Inc., Advice Investments S.A., as Senior and Junior Lenders, HSH Nordbank AG as Retiring Agent and Retiring Security Trustee and Advice Investments S.A. as Successor Agent and Successor Security Trustee, dated November 30, 2016, incorporated by reference to Exhibit 4.78 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.10	Sale and Transfer Deed in relation to a Senior and Junior Loan, dated November 30, 2016, incorporated by reference to Exhibit 4.79 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.11	Side Letter between Advice Investments S.A. and Sifnos Shareholders Inc., dated November 30, 2016, incorporated by reference to Exhibit 4.80 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.12	Transfer Certificate between HSH Nordbank AG and Advice Investments S.A., dated November 30, 2016, incorporated by reference to Exhibit 4.81 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.13	Transfer Certificate between Santander Asset Finance PLC and Advice Investments S.A., dated November 30, 2016, incorporated by reference to Exhibit 4.82 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.14	Transfer Certificate between Unicredit Bank AG and Advice Investments S.A., dated November 30, 2016, incorporated by reference to Exhibit 4.83 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.15	Transfer Certificate between HSH Nordbank AG and Advice Investments S.A., dated November 30, 2016, incorporated by reference to Exhibit 4.84 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.16	Transfer Certificate between Nataxis and Advice Investments S.A., dated November 30, 2016, incorporated by reference to Exhibit 4.85 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.

133

4.17	Transfer Certificate between Bank of America, N.A. and Advice Investments S.A., dated November 30, 2016, incorporated by reference to Exhibit 4.86 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.18	Notice of Sale and Transfer, dated November 30, 2016, incorporated by reference to Exhibit 4.87 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.19	Agreement, dated December 9, 2016, among Dryships Inc., TMS Bulkers Inc., and TMS Offshore Services Ltd., incorporated by reference to Exhibit 4.95 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2016 filed with the SEC on March 13, 2017.
4.20	Form of Management Agreement with TMS Bulkers Ltd.
4.21	Form of Management Agreement with TMS Tankers Ltd.
4.22	Form of Management Agreement with TMS Offshore Services Ltd.
4.23	Form of Management Agreement with TMS Cardiff Gas Ltd., incorporated by reference to Exhibit 10.2 to the Registration Statement on Form F-1 of Gas Ships Limited, filed with the SEC on February 7, 2018.
4.24	Consultancy Agreement, dated September 1, 2010, by and between DryShips Inc. and Vivid Finance Limited, incorporated by reference Exhibit 2 to the Report on Form 6-K of DryShips Inc., filed with the SEC on September 7, 2010.
4.25	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.
4.26	Termination Agreement, dated December 28, 2016, between DryShips Inc. and Vivid Finance Limited, incorporated by reference to Exhibit 4.96 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2016 filed with the SEC on March 13, 2017.
4.27	Secured Revolving Facility Agreement, dated October 21, 2015, by and between DryShips Inc. as Borrower and Sifnos Shareholders Inc. as Lender, incorporated by reference to Exhibit 4.108 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2015, filed with the SEC on April 27, 2016.
4.28	First Amendment to the Secured Revolving Facility Agreement, dated October 21, 2015 by and between DryShips Inc. as Borrower and Sifnos Shareholders Inc., as Lender, dated November 11, 2015, incorporated by reference to Exhibit 4.109 to the Annual Report on Form 20-F of DryShips Inc. for the fiscal year ended December 31, 2015, filed with the SEC on April 27, 2016.
4.29	Second Amendment to the Secured Revolving Facility Agreement dated October 21, 2015, as amended, between Dryships Inc. and Sifnos Shareholders Inc., dated March 24, 2016, incorporated by reference to Exhibit 4.50 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.30	Preferred Stock Exchange Agreement dated March 24, 2016 between DryShips Inc. and Sifnos Shareholders Inc. relating to the Secured Revolving Facility Agreement, dated October 21, 2015, as amended, incorporated by reference to Exhibit 4.51 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.

134

4.31	Amended and Restated Secured Revolving Facility Agreement by and between DryShips Inc. and Sifnos Shareholders Inc., dated as of April 5, 2016, 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, 2015, filed with the SEC on April 27, 2016.
4.32	First Amendment and Waiver between Dryships Inc. and Sifnos Shareholders Inc. relating to the Amended and Restated Secured Revolving Facility Agreement, dated September 9, 2016, as amended, incorporated by reference to Exhibit 4.62 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.33	Second Amendment and Waiver between Dryships Inc. and Sifnos Shareholders Inc. relating to the Amended and Restated Secured Revolving Facility Agreement, dated October 31, 2016, as amended, incorporated by reference to Exhibit 4.73 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.34	Secured Revolving Facility Agreement by and between DryShips Inc. and Sifnos Shareholders Inc., dated December 30, 2016, incorporated by reference to Exhibit 4.89 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.35	Revolving Facility Agreement, dated May 23, 2017, between DryShips Inc. and Sierra Investments Inc.
4.36	Agreement, dated August 29, 2017, between DryShips Inc. and Sierra Investments Inc. relating to the Revolving Facility Agreement dated May 23, 2017.
4.37	Agreement, dated October 4, 2017, between DryShips Inc. and Sierra Investments Inc. relating to the Revolving Facility Agreement dated May 23, 2017.
4.38	Secured Term Facility Agreement, dated October 25, 2017, between DryShips Inc., as Borrower, certain subsidiary guarantors party to the agreement from time to time as Guarantors, and Sierra Investments Inc., as Lender.
4.39	Deed of Participation, dated May 23, 2017, between Mountain Investments Inc. and DryShips Inc.
4.40	Deed of Release and Termination, dated August 29, 2017, between Mountain Investments Inc. and DryShips Inc.
4.41	Preferred Stock Exchange Agreement, dated August 29, 2017, between DryShips Inc. and Sifnos Shareholders Inc.
4.42	Share Purchase Agreement by and among Tidore Investments Inc., whose performance is guaranteed by TMS Bulkers Ltd., and Oceanfreight Inc., whose performance is guaranteed by DryShips Inc., dated March 24, 2016, 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, 2015, filed with the SEC on April 27, 2016.
4.43	Stock Purchase Agreement by and between DryShips Inc. and Ocean Rig Investments Inc., dated April 5, 2016, 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, 2015, filed with the SEC on April 27, 2016.
4.44	Form of Securities Purchase Agreement between DryShips Inc. and an institutional investor, incorporated by reference to Exhibit 10.1 of the Current Report on Form 6-K of DryShips Inc., filed with the SEC on June 8, 2016.

135

4.45	Form of Securities Purchase Agreement between DryShips Inc. and an institutional investor, incorporated by reference to Exhibit 10.1 of the Current Report on Form 6-K of DryShips Inc., filed with the SEC on November 17, 2016.
4.46	Common Stock Purchase Agreement between DryShips Inc. and Kalani Investments Limited dated December 23, 2016, incorporated by reference to Exhibit 1.1 of the Current Report on Form 6-K of DryShips Inc., filed with the SEC on December 27, 2016.
4.47	Common Stock Purchase Agreement between DryShips Inc. and Kalani Investments Limited, dated February 17, 2017, incorporated by reference to Exhibit 1.1 of the Current Report on Form 6-K of DryShips Inc., filed with the SEC on February 17, 2017.
4.48	Common Stock Purchase Agreement between DryShips Inc. and Kalani Investments Limited dated April 3, 2017, incorporated by reference to Exhibit 1.1 of the Current Report on Form 6-K of DryShips Inc., filed with the SEC on April 3, 2017.
4.49	Share Purchase Agreement between Evita Shareholders Limited, as buyer, and Iason Shareholdings Limited, as seller, for the sale of all of the issued and outstanding capital stock of Iason Owning Company Limited, dated September 16, 2016, incorporated by reference to Exhibit 4.63 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.50	Share Purchase Agreement between Severo Shareholders Limited, as buyer, and Boone Star Shareholders Inc., as seller, for the sale of all the issued and outstanding capital stock of Boone Star Owners Inc, dated October 26, 2016, incorporated by reference to Exhibit 4.66 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.51	Share Purchase Agreement between Aliana Shareholders Limited, as buyer, and Iokasti Shareholdings Limited, as seller, for the sale of all the issued and outstanding capital stock of Iokasti Owning Company Limited, dated October 26, 2016, incorporated by reference to Exhibit 4.67 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.52	Share Purchase Agreement between Rosalia Shareholders Limited, as buyer, and Azalea Shareholders Limited, as seller, for the sale of all the issued and outstanding capital stock of Ialysos Owning Company Limited, dated October 26, 2016, incorporated by reference to Exhibit 4.68 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.53	Side Letter dated October 26, 2016 between Evita Shareholders Limited, TMS Bulkers Ltd, Iason Shareholdings Limited and DryShips Inc. regarding a Share Purchase Agreement, dated September 16, 2016, incorporated by reference to Exhibit 4.69 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.54	Side Letter dated October 26, 2016 between Aliana Shareholders Limited, TMS Bulkers Ltd, Iokasti Shareholdings Limited and DryShips Inc. regarding a Share Purchase Agreement, dated October 26, 2016, incorporated by reference to Exhibit 4.70 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.55	Side Letter dated October 26, 2016 between Severo Shareholders Limited, TMS Bulkers Ltd, Boone Star Shareholders Inc. and DryShips Inc. regarding a Share Purchase Agreement, dated October 26, 2016, incorporated by reference to Exhibit 4.71 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.

136

4.56	Side Letter dated October 26, 2016 between Rosalia Shareholders Limited, TMS Bulkers Ltd, Azalea Shareholders Limited and DryShips Inc. regarding a Share Purchase Agreement, dated October 26, 2016, incorporated by reference to Exhibit 4.72 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.57	Option Agreement between DryShips Inc. and certain clients of TMS Cardiff Gas Ltd., dated January 12, 2017, incorporated by reference to Exhibit 4.90 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.58	Share Purchase Agreement, dated January 18, 2017, between LPG Investments Inc. and VLGC Alpha Shareholding Ltd. for the purchase of all the issued and outstanding capital stock of VLGC Alpha Owning Ltd incorporated by reference to Exhibit 4.91 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.59	Share Purchase Agreement, dated March 9, 2017, between LPG Investments Inc. and VLGC Beta Shareholding Ltd. for the purchase of all the issued and outstanding capital stock of VLGC Beta Owning Ltd, incorporated by reference to Exhibit 4.98 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.60	Share Purchase Agreement, dated April 3, 2017, between LPG Investments Inc. and VLGC Gamma Shareholding Ltd. for the purchase of all the issued and outstanding capital stock of VLGC Gamma Owning Ltd.
4.61	Share Purchase Agreement, dated April 3, 2017, between LPG Investments Inc. and VLGC Delta Shareholding Ltd. for the purchase of all the issued and outstanding capital stock of VLGC Delta Owning Ltd.
4.62	Share Purchase Agreement between LPG Investments Inc. and Entrepreneurial Spirit Holdings Inc., dated April 3, 2017, for the purchase of all of the issued and outstanding capital stock of Cardiff LNGShips Ltd.
4.63	Share Purchase Agreement between LPG Investments Inc. and Entrepreneurial Spirit Holdings Inc., dated April 3, 2017, for the purchase of all of the issued and outstanding capital stock of Cardiff LPG Ships Ltd.
4.64	Private Placement Purchase Agreement by and among Sierra Investments Inc., SPII Holdings Inc., Mountain Investments Inc., Sifnos Shareholders Inc., and DryShips Inc., dated August 29, 2017, incorporated by reference to Exhibit 10.1 of the Current Report on Form 6-K of DryShips Inc., filed with the SEC on August 29, 2017.
4.65	Purchase Agreement, between Sierra Investments, Inc. and DryShips Inc., dated August 29, 2017, incorporated by reference to Exhibit 10.1 of the Current Report on Form 6-K of DryShips Inc., filed with the SEC on August 31, 2017.
4.66	$150.0 million secured credit facility dated June 22, 2017, incorporated by reference to Exhibit 10.1 to the Registration Statement on Form F-1 of Gas Ships Limited, filed with the SEC on February 7, 2018.
4.67	$90.0 million secured credit facility dated January 24, 2018.
4.68	$35.0 million secured credit facility dated January 29, 2018.
4.69	$30.0 million secured credit facility dated March 8, 2018.

137

4.70	Memorandum of Agreement between Vega Crusader AS, as Sellers and Dianthus Maritime Ltd, as Buyers, for the sale of the vessel Crescendo (ex Vega Crusader), dated March 29, 2016, incorporated by reference to Exhibit 4.52 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.71	Memorandum of Agreement between Vega Juniz AS, as Sellers and Fiore Shipping Ltd, as Buyers, for the sale of the vessel Jubilee (ex Vega Juniz), dated March 29, 2016, incorporated by reference to Exhibit 4.53 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.72	Memorandum of Agreement between Vega Inruda AS, as Sellers and Newmont Chartering Limited, as Buyers, for the sale of the vessel Indigo (ex Vega Inruda), dated May 1, 2016, incorporated by reference to Exhibit 4.58 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.73	Memorandum of Agreement between Malvina Shipping Company Limited and Ocean Star Shipping Limited for the sale of the vessel Coronado, dated August 22, 2016, incorporated by reference to Exhibit 4.60 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.74	Memorandum of Agreement between Karmen Shipping Company Limited and Proper In Management Inc. for the sale of the vessel Sonoma, dated September 5, 2016, incorporated by reference to Exhibit 4.61 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.75	Memorandum of Agreement between Samsara Shipping Company Limited and Ningbo Zhun Xing Shipping Ltd for the sale of the vessel Ocean Crystal, dated September 27, 2016, incorporated by reference to Exhibit 4.64 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.76	Memorandum of Agreement between Aegean Traders Inc. and Synergasia Investment Corporation for the sale of the vessel Sorrento, dated October 8, 2016, incorporated by reference to Exhibit 4.65 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.77	Memorandum of Agreement between Dat Atlantic Eternity S.A. and Regina Owners Inc for the newbuilding Hull No. S811, dated February 10, 2017, incorporated by reference to Exhibit 4.92 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.78	Memorandum of Agreement between Andromeda Maritime Limited and Tortuga Owners Inc. for the vessel Orthis, dated February 14, 2017, incorporated by reference to Exhibit 4.93 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.79	Memorandum of Agreement, dated January 27, 2017, between Vega Corona AS and Darden Shipholding S.A., incorporated by reference to Exhibit 4.97 to the Annual Report on Form 20-F of DryShips for the fiscal year ended December 31, 2016, filed with the SEC on March 13, 2017.
4.80	Share Purchase Agreement, dated May 15, 2017, between Oil Tankers Investments Inc. and Cecilia Shipholding Limited.
4.81	Memorandum of Agreement dated April 2, 2018 between Orion Owners Inc. and Sea 46 Leasing Co. Limited.
4.82	Bareboat Charter dated April 2, 2018 between Orion Owners Inc. and Sea 46 Leasing Co. Limited.
8.1	Subsidiaries of DryShips Inc.

138

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, 2017, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 2016 and 2017; (ii) Consolidated Statements of Operations for the years ended December 31, 2015, 2016 and 2017; (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2016 and 2017; (iv) Consolidated Statements of Stockholders' Equity for the years ended December 31, 2015, 2016 and 2017; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2016 and 2017; and (v) the Notes to Consolidated Financial Statements.

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: April 4, 2018	By:	/s/ Anthony Kandylidis
		Name: Anthony Kandylidis
		Title: President and Chief Financial Officer

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, 2016 and 2017	F-4
Consolidated Statements of Operations for the years ended December 31, 2015, 2016 and 2017	F-6
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2015, 2016 and 2017	F-7
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2015, 2016 and 2017	F-8
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2016 and 2017	F-10
Notes to Consolidated Financial Statements	F-12

F-1

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of DryShips Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of DryShips Inc. (the "Company") as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2017, 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 April 4, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.

We have served as the Company's auditor since 2010.

Athens, Greece

April 4, 2018

F-2

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of DryShips Inc.

Opinion on Internal Control over Financial Reporting

We have audited DryShips Inc.'s internal control over financial reporting as of December 31, 2017, 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). In our opinion, DryShips Inc. (the "Company") maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and our report dated April 4, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

The Company'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 are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 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.

Definition and Limitations of Internal Control over Financial Reporting

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.

/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.

Athens, Greece

April 4, 2018

F-3

DRYSHIPS INC.

Consolidated Balance Sheets

As of December 31, 2016 and 2017

(Expressed in thousands of U.S. Dollars – except for share)

	December 31,
	2016		2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	76,414	$	14,490
Restricted cash (Note 2)		350		726
Trade accounts receivable, net of allowance for doubtful receivables of $11 and $96 at December 31, 2016 and 2017, respectively		7,528		14,526
Due from related parties (Note 3)		6,674		16,914
Above-market acquired time charter contracts (Note 7)		1,500		-
Prepayments and advances		1,158		1,125
Other current assets (Note 4)		4,546		12,279
Total current assets		98,170		60,060
FIXED ASSETS, NET:
Advances for vessels under construction and related costs (Note 5)		-		31,898
Vessels, net (Note 6)		95,550		749,088
Total fixed assets, net		95,550		780,986
OTHER NON-CURRENT ASSETS:
Investment in affiliate (Notes 9, 11)		-		34,000
Restricted cash (Note 2)		10		15,010
Other non-current assets (Note 8)		-		44,869
Total other non-current assets		10		93,879
Total assets	$	193,730	$	934,925
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt, net of deferred finance costs (Note 10)	$	16,811	$	11,635
Accounts payable and other current liabilities		1,179		5,225
Accrued liabilities (Note 3)		3,709		4,758
Due to related parties (Note 3)		5,033		72
Deferred revenue		607		865
Total current liabilities		27,339		22,555
NON-CURRENT LIABILITIES
Long-term debt, net of deferred finance costs (Note 10)		-		133,703
Due to related parties (Notes 3, 10)		116,617		71,631
Total non-current liabilities		116,617		205,334
COMMITMENTS AND CONTINGENCIES (Note 14)		-		-

F-4

STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 500,000,000 shares authorized at December 31, 2016 and 2017; 100,000,000 shares designated as Series A Convertible preferred stock; 100,000,000 shares designated as Series B Convertible preferred stock, 10,000 shares designated as Series C Convertible Preferred stock, 3,500,000 shares designated as Series D Preferred stock, 50,000 shares designated as Series E-1 Convertible Preferred Stock, and 50,000 shares designated as Series E-2 Convertible Preferred Stock; 0 shares of Series A Convertible Preferred stock issued and outstanding at December 31, 2016 and 2017; 0 shares of Series B Convertible Preferred stock issued and outstanding at December 31, 2016 and 2017; 0 shares of Series C Convertible Preferred stock issued and outstanding at December 31, 2016 and 2017; 29 and 0 shares of Series D Preferred stock issued and outstanding at December 31, 2016 and 2017;  0 shares of Series E1 Convertible Preferred stock issued and outstanding at December 31, 2016 and 2017 and 0 shares of Series E2 Convertible Preferred stock issued and outstanding at December 31, 2016 and 2017  (Note 1, 12)		-			-
Common stock, $0.01 par value; 1,000,000,000 shares authorized at December 31, 2016 and 2017; 4,711 and 104,274,708 shares issued and outstanding at December 31, 2016 and 2017, respectively (Notes 1, 12)		-			1,043
Treasury stock; $0.01 par value; 3 and 0 shares at December 31, 2016 and 2017 (Notes 1, 12)		-			-
Additional paid-in capital (Note 12)		3,360,124			4,066,083
Accumulated deficit		(3,310,350	)		(3,360,090	)
Total equity		49,774			707,036
Total liabilities and stockholders' equity	$	193,730		$	934,925

The accompanying notes are an integral part of these consolidated financial statements.

F-5

DRYSHIPS INC.

Consolidated Statements of Operations

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of U.S. Dollars – except for share and per share data)

	Year ended December 31,
	2015			2016			2017
REVENUES:
Voyage and time charter revenues (including amortization of market acquired time charters)	$	244,020		$	51,934		$	100,716
Service revenues, net		725,805			-			-
Total Revenues (Note 3 )	$	969,825		$	51,934		$	100,716
OPERATING EXPENSES/(INCOME):
Voyage expenses (Note 3)		65,286			9,209			19,704
Vessels and drilling units operating expenses		371,074			45,563			59,348
Depreciation and amortization (Note 6)		227,652			3,466			14,966
Loss on contract cancellation (Note 5 and 14.2)		28,241			-			-
Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other (Notes 3, 6, 7 and 11)		1,057,116			106,343			(4,125	)
Impairment on goodwill (Notes 2c and 7)		-			7,002			-
General and administrative expenses (Note 3)		104,912			39,708			30,972
Legal settlements and other, net (Note 14.1)		(2, 948	)		(258	)		900
Operating loss		(881,508	)		(159,099	)		(21,049	)
OTHER INCOME / (EXPENSES):
Interest and finance costs (Notes 3 and 15)		(172,132	)		(8,857	)		(14,707	)
Gain on debt restructuring (Note 10)		-			10,477			-
Interest income		527			81			1,365
Loss on Private Placement (Notes 3, 11)		-			-			(7,600	)
Gain/(Loss) on interest rate swaps (Note 11)		(11,601	)		403			-
Other, net		(9,275	)		(199	)		(401	)
Total other income/(expenses), net		(192,481	)		1,905			(21,343	)
INCOME/(LOSS) BEFORE INCOME TAXES AND EARNINGS OF AFFILIATED COMPANIES		(1,073,989	)		(157,194	)		(42,392	)
Loss due to deconsolidation of Ocean Rig (Notes 3, 11)		(1,347,106	)		-			-
Income taxes (Note 18)		(37,119	)		(38	)		(152	)
Losses of affiliated companies (Note 9)		(349,872	)		(41,454	)		-
NET LOSS		(2,808,086	)		(198,686	)		(42,544	)
Less: Net income attributable to non-controlling interests		(38,975	)		-			-
NET LOSS ATTRIBUTABLE TO DRYSHIPS INC.	$	(2,847,061	)	$	(198,686	)	$	(42,544	)
NET LOSS ATTRIBUTABLE TO DRYSHIPS INC. COMMON STOCKHOLDERS (Note 17)	$	(2,847,631	)	$	(206,381	)	$	(39,739	)
LOSS PER COMMON SHARE ATTRIBUTABLE TO DRYSHIPS INC. COMMON STOCKHOLDERS, BASIC AND DILUTED (Note 17)	$	(49,958,438.60	)	$	(455,587.20	)	$	(1.13	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES, BASIC AND DILUTED (Note 17)		57			453			35,225,784
Dividends declared per share (Note 17)		-			-		$	26.85

The accompanying notes are an integral part of these consolidated financial statements.

F-6

DRYSHIPS INC.

Consolidated Statements of Comprehensive Loss

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of U.S. Dollars)

	Year ended December 31,
	2015			2016			2017
- Net loss	$	(2,808,086	)	$	(198,686	)	$	(42,544	)
Other comprehensive income/ (loss):
- Reclassification of realized losses associated with capitalized interest to Consolidated Statement of Operations, net		466			110			-
- Actuarial gains		50			-			-
Other comprehensive income	$	516		$	110		$	-
Comprehensive loss		(2,807,570	)		(198,576	)		(42,544	)
- Less: comprehensive income attributable to non-controlling interests		(39,090	)		-			-
Comprehensive loss attributable to DryShips Inc.	$	(2,846,660	)	$	(198,576	)	$	(42,544	)

The accompanying notes are an integral part of these consolidated financial statements.

F-7

DRYSHIPS INC.

Consolidated Statements of Stockholders' Equity

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of U.S. Dollars – except for share data)

	Common Stock				Preferred stock				Treasury Stock
	Shares		Par Value		Shares		Par value		Shares			Par Value		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total DryShips Stockholders Equity			Non- controlling interests			Total Equity
BALANCE January 1, 2015		60	$	—		—	$	—		(3	)	$	—	$	3,256,075		$	(6,622	)	$	(256,632	)	$	2,992,821		$	1,297,567		$	4,290,388
- Net income/(loss)		—		—		—		—		—			—		—			—			(2,847,061	)		(2,847,061	)		38,975			(2,808,086	)
- Issuance of common stock		—		—		—		—		—			—		(228	)		—			—			(228	)		—			(228	)
- Issuance of preferred stock		—		—		8		—		—			—		10,000			—			—			10,000			—			10,000
- Issuance of non- vested shares		—		—		—		—		—			—		—			—			—			—			—			—
- Conversion of common stock to treasury stock		—		—		—		—		—			—		—			—			—			—			—			—
- Issuance of subsidiary shares to non-controlling interest		—		—		—		—		—			—		(49,444	)		169			—			(49,275	)		50,541			1,266
- Acquisition of Nautilus Offshore Services Inc.		—		—		—		—		—			—		222			—			(276	)		(54	)		54			—
- Other comprehensive income		—		—		—		—		—			—		—			401			—			401			115			516
- Amortization of stock based compensation		—		—		—		—		—			—		8,523			—			—			8,523			841			9,364
-Deconsolidation of Ocean Rig		—		—		—		—		—			—		—			6,285			—			6,285			(1,367,567	)		(1,361,282	)
-Dividends paid		—		—		—		—		—			—		—			—			—			—			(20,526	)		(20,526	)

F-8

DRYSHIPS INC.

Consolidated Statements of Stockholders' Equity

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of U.S. Dollars – except for share data)

	Common Stock					Preferred stock					Treasury Stock
	Shares			Par Value		Shares			Par Value		Shares			Par Value		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total DryShips Stockholders Equity			Non controlling interests		Total equity
BALANCE December 31, 2015		60		$	—		8		$	—		(3	)	$	—	$	3,225,148		$	233		$	(3,103,969	)	$	121,412		$	—	$	121,412
- Net loss		—			—		—			—		—			—		—			—			(198,686	)		(198,686	)		—		(198,686	)
- Issuance of common stock (Note 12)		442			—		—			—		—			—		14,434			—			—			14,434			—		14,434
- Issuance of preferred stock (Note 12)		—			—		42			—		—			—		117,981			—			—			117,981			—		117,981
- Conversion of preferred stock to common stock (Note 12)		4,209			—		(13	)		—		—			—		41			—			—			41			—		41
- Exchange of Revolving Facility with preferred shares (Note 3)		—			—		(8	)		—		—			—		(8,750	)		—			—			(8,750	)		—		(8,750	)
-Sale of investment in Ocean Rig (Note 3)		—			—		—			—		—			—		—			(343	)		—			(343	)		—		(343	)
- Other comprehensive income		—			—		—			—		—			—		—			110			—			110			—		110
- Amortization of stock based compensation		—			—		—			—		—			—		3,770			—			—			3,770			—		3,770
-Loss from common control transaction		—			—		—			—		—			—		(195	)		—			—			(195	)		—		(195	)
-Dividends paid		—			—		—			—		—			—		7,695			—			(7,695	)		—			—		—
Balance December 31, 2016		4,711		$	—		29		$	—		(3	)	$	—	$	3,360,124		$	—		$	(3,310,350	)	$	49,774		$	—	$	49,774
- Net loss		—			—		—			—		—			—		—			—			(42,544	)		(42,544	)		—		(42,544	)
- Issuance of common stock (Note 12)		104,270,000			1,043		—			—		—			—		741,542			—			—			742,585			—		742,585
- Stockholders contribution (Note  12)		—			—		—			—		—			—		—			—			2,805			2,805			—		2,805
- Cancellation of treasury shares (Note 12)		(3	)		—		—			—		3			—		—			—			—			—			—		—
- Cancellation of Series D Preferred shares (Note 12 )		—			—		(29	)		—		—			—		(8,750	)		—			—			(8,750	)		—		(8,750	)
- Gain from common control transaction		—			—		—			—		—			—		440			—			—			440			—		440
- Premium paid on common control transaction		—			—		—			—		—			—		(29,001	)		—			—			(29,001	)		—		(29,001	)
- Amortization of stock based compensation (Note 13)		—			—		—			—		—			—		1,728			—			—			1,728			—		1,728
-Dividends paid		—			—		—			—		—			—		—			—			(10,001	)		(10,001	)		—		(10,001	)
Balance December 31, 2017		104,274,708		$	1,043		—		$	—		—		$	—	$	4,066,083		$	—		$	(3,360,090	)	$	707,036		$	—	$	707,036

The accompanying notes are an integral part of these consolidated financial statements.

F-9

DRYSHIPS INC.

Consolidated Statements of Cash Flows

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of U.S. Dollars)

	Year ended December 31,
	2015			2016			2017
Cash Flows from Operating Activities:
Net loss	$	(2,808,086	)	$	(198,686	)	$	(42,544	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		227,652			3,466			14,966
Amortization and write off of deferred financing fees		26,712			736			4,218
Amortization of fair value of acquired time charters		2,840			4,346			684
Impairment loss and (gain)/loss from sale of vessels and vessel owning companies and other		1,057,116			106,343			(4,125	)
Impairment on goodwill		-			7,002			-
Net proceeds from sale in ownerships of subsidiary		1,266			-			-
Losses of affiliated company		349,872			41,454			-
Loss on change of control		1,347,106			-			-
Loss on Private Placement		-			-			7,600
Amortization of stock based compensation		7,806			3,580			1,728
Gain on debt restructuring		-			(8,652	)		-
Change in fair value of derivatives		(10,848	)		(2,193	)		-
Changes in operating assets and liabilities:
Trade accounts receivable		(12,997	)		2,531			(6,998	)
Due from related parties		19,141			10,875			(10,240	)
Other current and non-current assets		54,448			3,002			(7,700	)
Accounts payable and other current and non-current liabilities		(25,263	)		(1,434	)		4,046
Accrued liabilities		(39,590	)		(206	)		1,049
Due to related parties		(10,261	)		2,598			(961	)
Deferred revenue		28,833			(118	)		258
Net Cash Provided by/(Used in) Operating Activities		215,747			(25,356	)		(38,019	)
Cash Flows from Investing Activities:
Advance for fixed asset purchase		-			-			(44,869	)
Investment in affiliates		-			49,911			-
Cash decrease due to deconsolidation of Ocean Rig		(621,615	)		-			-
Acquisition of Nautilus, net of cash acquired		(78,203	)		-			-
Short term investments		74			-			-
Fixed assets additions		(505,670	)		-			(653,344	)
Net proceeds from sale of vessels and vessel owning companies		673,850			5,141			8,221
(Increase)/Decrease in restricted cash		65,866			14,666			(15,376	)
Net Cash Provided by/(Used in) Investing Activities		(465,698	)		69,718			(705,368	)

F-10

DRYSHIPS INC.

Consolidated Statements of Cash Flows

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of U.S. Dollars)

	Year ended December 31,
	2015			2016			2017
Cash Flows from Financing Activities:
Proceeds from short and long-term credit facilities, term loans and senior notes	$	492,000		$	28,000		$	150,000
Principal payments and repayments of long-term debt and senior notes		(782,366	)		(119,758	)		(18,780	)
Net proceeds from stock issuance		-			123,810			568,883
Dividends paid		(20,526	)		-			(10,001	)
Payment of financing costs, net		(5,399	)		-			(8,639	)
Net Cash Provided by/(Used in) Financing Activities		(316,291	)		32,052			681,463
Net increase/ (decrease) in cash and cash equivalents		(566,242	)		76,414			(61,924	)
Cash and cash equivalents at beginning of year		566,242			-			76,414
Cash and cash equivalents at end of year	$	-		$	76,414		$	14,490
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for:
Interest, net of amount capitalized	$	135,954		$	5,516		$	13,225
Income taxes		20,830			58			125
Non cash investing activities:
Fixed Assets additions (Note 3)	$	-		$	-		$	(50,340	)
Investment in affiliates (Notes 9, 11)		-			-			(34,000	)
Non cash financing activities:
Repayment of credit loan facilities (Notes 3, 10)	$	-		$	151,510		$	-
Conversion of loan into Preferred Stock (Notes 3, 12)		(10,000	)		(8,750	)		-
Exchange of Preferred Stock into loan (Notes 3, 12)		-			8,750			-
Interest write off due to the debt restructuring		-			2,111			-
Preferred Shares forfeiture with common stock issuance (Notes 3, 12)		-			-			(8,750	)
Stockholders' Contribution upon preferred shares forfeiture (Note 12)		-			-			2,805
Conversion of loan into Common Stock (Notes 3, 12)		-			-			(126,159	)
Common stock issuance (Notes 3, 12)		-			-			173,704
Loan drawdown for vessels additions (Note 3)		-			-			79,000
Capital distribution for common control transaction (Note 5)	$	-		$	-		$	(28,560	)

The accompanying notes are an integral part of these consolidated financial statements.

F-11

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(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. and its subsidiaries (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 diversified owner of ocean going cargo vessels and through June 8, 2015, also provided drilling services through Ocean Rig UDW Inc. ("Ocean Rig") (Note 3).

From June 8, 2015 through April 5, 2016, Ocean Rig was considered as an affiliated entity and not as a controlled subsidiary of the Company. As a result, Ocean Rig was accounted for under the equity method and its assets and liabilities were not consolidated in the Company's balance sheet as of December 31, 2015 and 2016. On April 5, 2016, the Company sold all of its shares in Ocean Rig, to a subsidiary of Ocean Rig and as of that date, the Company no longer holds any equity interest in Ocean Rig. Accordingly, additional disclosures for Ocean Rig have not been included, in the accompanying consolidated financial statements.

As of August 29, 2017, Heidmar Holdings LLC ("Heidmar") was considered an affiliated entity following the Company's acquisition of an entity that holds a 49% interest in Heidmar in connection with the Private Placement. Heidmar is one of the world's leading commercial tanker pool operators (Notes 3, 9).

Customers individually accounting for more than 10% of the Company's voyage revenues and drilling revenues during the years ended December 31, 2015, 2016 and 2017, were as follows:

	Year ended December 31,
	2015			2016			2017
Customer A - Drilling segment		12	%		-			-
Customer B - Drilling segment		14	%		-			-
Customer C - Drilling segment		11	%		-			-
Customer D - Drilling segment		10	%		-			-
Customer E - Drilling segment		10	%		-			-
Customer F - Drilling segment		10	%		-			-
Customer G – Offshore support segment		-			37	%		-

On March 11, 2016, the Company effected a 1-for-25 reverse stock split of its issued common stock. In connection with the reverse stock split seven fractional shares were cashed out. On August 15, 2016, the Company effected a 1-for-4 reverse stock split of its issued common stock. In connection with the reverse stock split five fractional shares were cashed out. On November 1, 2016, the Company effected a 1-for-15 reverse stock split of its issued common stock. In connection with the reverse stock split nine fractional shares were cashed out. On January 23, 2017, the Company effected a 1-for-8 reverse stock split of its issued common stock. In connection with the reverse stock split fourfractional shares were cashed out. On April 11, 2017, the Company effected a 1-for-4 reverse stock split of its issued common stock. In connection with the reverse stock split two fractional shares were cashed out. On May 11, 2017, the Company effected a 1-for-7 reverse stock split of its issued common stock. In connection with the reverse stock split three fractional shares were cashed out. On June 22, 2017, the Company effected a 1-for-5 reverse stock split of its issued common stock. In connection with the reverse stock split two fractional shares were cashed out. Finally on July 21, 2017, the Company effected a 1-for-7 reverse stock split of its issued common stock. In connection with the reverse stock split two fractional shares were cashed out.

All share and per share amounts disclosed in the consolidated financial statements and notes give effect to these reverse stock splits retroactively, for all periods presented.

F-12

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2. Significant Accounting policies:

(a)          Principles of consolidation: The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and applicable rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") and include the accounts and operating results of DryShips, its wholly-owned subsidiaries and its affiliate.

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)          Goodwill: Goodwill represents the excess of the purchase price over the estimated fair value of net assets acquired. Goodwill is reviewed for impairment whenever events or circumstances indicate possible impairment in accordance with Accounting Standard Codification ("ASC") 350 "Goodwill and Other Intangible Assets". This standard requires that goodwill and other intangible assets with an indefinite life not be amortized but instead tested for impairment at least annually. The Company tests goodwill for impairment each year on December 31. The Company tests goodwill at the reporting unit level, which is defined as an operating segment or a component of an operating segment that constitutes a business for which financial information is available and is regularly reviewed by management. The impairment of goodwill is tested by comparing the reporting unit's carrying amount, including goodwill, to the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and a second step is performed to measure the amount of the impairment loss, if any. To determine the fair value of each reporting unit, the Company uses the income approach, which is a generally accepted valuation methodology. For its offshore support reporting unit, the Company estimated the fair market value using estimated discounted cash flows. The Company discounts projected cash flows using a long-term weighted average cost of capital, which is based on the Company's estimate of the investment returns that market participants would require for each of its reporting units. To develop the projected cash flows associated with the Company's offshore support reporting unit, which are based on estimated future utilization and dayrates, the Company considered key factors that included assumptions regarding daily operating expenses, inflation and areas of future employment. For the year ended December 31, 2016, the Company concluded that the goodwill relating to its offshore support reporting unit was impaired and recorded a charge amounting to $7,002 included in "Impairment on goodwill" in the accompanying consolidated statement of operations (Note 7).

(d)          Use of estimates: The preparation of consolidated financial statements in conformity with U.S. 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.

F-13

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2. Significant Accounting policies - continued:

(e)          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".

The Company's policy is in accordance with the requirements of Accounting Standard Update ("ASU") 2013-02, "Comprehensive Income (Topic 220) - Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income". Pursuant to ASU 2013-02, an entity should 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 U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts.

(f)          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.

(g)          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 and (iii) minimum liquidity collateral requirements or minimum required cash deposits, as defined in the Company's loan agreements.

(h)          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.

(i)          Going concern:The Company has adopted the provisions of ASU No. 2014-15, "Presentation of Financial Statements - Going Concern". ASU 2014-15 provides U.S. GAAP guidance on management's responsibility in evaluating whether there is substantial doubt about a company's ability to continue as a going concern and on related required footnote disclosures. For each reporting period, management is required to evaluate whether there are conditions or events that raise substantial doubt about a company's ability to continue as a going concern within one year from the date the financial statements are issued. As of December 31, 2017, the Company reported a working capital surplus of $37,505 and had cash and cash equivalents including restricted cash amounted to $30,226. The Company also expects that it will fund its operations either with cash on hand, cash generated from operations, additional bank debt and equity offerings, or a combination thereof, in the twelve-month period ending one year after the financial statements' issuance.

(j)          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). 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's major customers are well known companies, which reduce 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 makes advances for the construction of assets to the yards. The ownership of the assets is transferred from the yard to the Company at delivery. The credit risk of the advances was, to a large extent, reduced through refund guarantees issued by financial institutions.

F-14

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2. Significant Accounting policies - continued:

(k)          Advances for vessels under construction: This represents amounts expended by the Company in accordance with the terms of the construction contracts for vessels 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 under construction ("Newbuildings") represents the accumulated costs at the balance sheet date. Cost components include payments for yard installments, acceptance tests' consumption, commissions to related party, construction supervision, and capitalized interest.

(l)          Capitalized interest: Interest expense is capitalized during the construction period of drilling units 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 and finance costs for the years ended December 31, 2015, 2016 and 2017, amounted to $12,060, $0 and $3,196 respectively (Note 15).

(m)          Insurance claims: The Company records insurance claim recoveries for insured losses incurred on damages to fixed assets, 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, or loss due to the vessel 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.

(n)          Inventories: Inventories consist of consumable bunkers (if any), propane heel (if any), lubricants and victualing stores, which were 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. Market could be the replacement cost, net realizable value or net realizable value less an approximately normal profit margin. In July 2015, the FASB issued ASU No. 2015-11 –Inventory. ASU 2015-11 is part of FASB Simplification Initiative, according to which the entities are required to measure inventory at the lower of cost or net realizable value. Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This update was effective for public entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years prospectively. During fiscal year 2017, the Company adopted the aforementioned update, which did not impact its results of operations, financial position or cash flows, in the current or previous interim and annual reporting periods.

(o)          Foreign currency translation: The functional currency of the Company is the U.S. Dollar since the Company operates in international shipping and drilling markets (through June 8, 2015) 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. The Company recorded gain due to foreign currency differences amounting to $2,763, $745 and $335 included in the accompanying consolidated statement of operations as of December 31, 2015, 2016 and 2017, respectively.

F-15

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2. Significant Accounting policies - continued:

(p) Fixed assets, net:

(i)          Drybulk, tanker carrier, gas carrier and offshore support 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 drybulk and tanker carrier vessels to be 25 years, offshore support vessels 30 years and Very Large Gas Carriers ("VLGCs") 35 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 units were stated at historical cost less accumulated depreciation. Such costs included the cost of adding or replacing parts of drilling unit machinery and equipment when the cost was incurred, if the recognition criteria were met. The recognition criteria require that the cost incurred extends the useful life of a drilling unit. The carrying amounts of those parts that were replaced were written off and the cost of the new parts was capitalized. Depreciation was 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 for the drilling units. The residual values of the drilling rigs and drillships were estimated at $35,000 and $50,000, respectively, for the year ended December 31, 2015.

(q)          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.

If circumstances arise that previously were considered unlikely and, as a result, the Company decides not to sell a long-lived asset previously classified as held for sale, the asset  shall be reclassified as held and used. A long-lived asset that is reclassified shall be measured individually at the lower of its carrying amount before the asset or disposal group was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the asset or disposal group been continuously classified as held and used and its fair value at the date of the subsequent decision not to sell.

When the Company concludes a Memorandum of Agreement for the disposal of a vesselwhich has yet to complete a time charter, it is considered that the held for sale criteria discussed in guidance are not met until the time charter has been completed as the vesselis not available for immediate sale. As a result, such vesselsare not classified as held for sale.

When the Company concludes a Memorandum of Agreement for the disposal of a vesselwhich has no time charter 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 vesselsare 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.

F-16

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2. Significant Accounting policies - continued:

(q)          Long lived assets held for sale - continued: For the years ended December 31, 2015 and 2016, the Company recognized such charges amounting to $967,144 and $13,395 (including a gain of $1,851 due to the reclassification of the drybulk vessels as held and used, effective December 31, 2016), respectively, included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other", in the accompanying consolidated statement of operations (Notes 6 and 11). For the year ended December 31, 2017, the Company had its entire fleet as held and used.

(r)          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 by obtaining vessel independent 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, vesselsales 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'future performance, with the significant assumptions being related to charter rates, fleet utilization, operating expenses, capital expenditures, residual value and the estimated remaining useful life of each vessel. 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 vesseland compares them to their carrying value. The projected net operating cash flows are determined by considering the charter revenues from existing time charters 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 of drybulk, tanker and gas carrier vessels based on the most recent ten year historical rates for similar vessels, adjusted for any outliers, and utilizing available market data for time charter and spot market rates and forward freight agreements and for offshore support vessels based on available market data, over the remaining estimated life of the vessel, net of brokerage commissions, expected outflows for vessels'maintenance and operating expenses (including planned drydocking and special survey expenditures), assuming an average annual inflation rate based on the global consumer price index ("CPI") changes and fleet utilization of 99% decreasing by 1.5% every five years after the first ten years. The salvage value used in the impairment test is estimated to be $250 per light weight ton (LWT) for vessels, 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 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'scarrying value.

F-17

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2. Significant Accounting policies - continued:

(r)          Impairment of long-lived assets - continued: As a result of the impairment review performed during 2015 and prior to the entering into the agreements for the sale of the Company's vessels and vessel owning companies, indicated that the carrying amount of one of its drybulk vessels was not recoverable and, therefore, a charge of $83,937 was recognized and included in "Impairment loss (gain)/loss from sale of vessels and vessel owning companies and other ", in the accompanying consolidated statement of operations.

Also, the impairment review for the year ended December 31, 2016, indicated that the carrying amount of the offshore support vessels' was not recoverable and, therefore, a charge of $65,712 was recognized and included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other", in the accompanying consolidated statement of operations (Note 6). As a result of the impairment review for the year ended December 31, 2017, the Company determined that the carrying amounts of its vessels were recoverable and, therefore, concluded that no impairment loss was necessary for 2017.

(s)          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 and drilling units.

(t)          Class costs: The Company follows the direct expense method of accounting for periodic class costs incurred during special surveys of drilling units, normally every five years. Class costs and other maintenance costs are expensed in the period incurred and included in "Vessels' and drilling units' operating expenses".

(u)          Deferred financing costs: Deferred financing costs include fees, commissions and legal expenses associated with the Company's long- term debt. The Company's policy is in accordance with ASU 2015-03 "Simplifying the Presentation of Debt Issuance Costs", issued in April 2015. The Company presents such costs in the balance sheet as a direct deduction from the related debt liability. 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. Amortization and write offs for each of the years ended December 31, 2015, 2016 and 2017, amounted to $23,834, $572 and $387 respectively (Note 15).

(v)          Non-monetary transactions - Exchange of the capital stock of an entity for nonmonetary assets or services: Non-monetary transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any difference between the fair value and the transaction price is considered as gain or loss for the Company. The Company determines fair value of assets and liabilities given up or received in accordance with ASC 820 "Fair Value Measurement". In cases of transactions related to an exchange of preferred shares with common ones, any difference between the fair value and the carrying value of the exchanged preferred shares is considered as shareholders dividend or capital contribution from/to the Company.

(w)          Extinguishment of Preferred Stock: In case of preferred stock extinguishment, the difference between the fair value of the consideration transferred to the holders of the preferred stock and the carrying amount of the preferred stock in the Company's balance sheet (net of issuance costs) should be subtracted from (or added to) net income/loss to arrive at income/loss available to common stockholders in the calculation of earnings/loss per share. The difference between the fair value of the consideration transferred to the holders of the preferred stock and the carrying amount of the preferred stock in the Company's balance sheet represents a return to (from) the preferred stockholder that should be treated in a manner similar to the treatment of dividends paid on preferred stock.

F-18

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2. Significant Accounting policies - continued:

(x) Revenue and related expenses:

(i) Drybulk carrier, tanker, gas carrier and offshore support 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. Revenues related to mobilization and direct incremental expenses of mobilization are initially deferred and recognized as revenues and expenses, over the duration of the time charter agreements, and to the extent that expenses exceed revenue to be recognized, they are expensed as incurred.

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.

Profit Sharing agreements: Profit-sharing revenues are calculated at an agreed percentage of the excess of the charterer's average daily income over an agreed amount and accounted for on an accrual basis based on provisional amounts and for those contracts that provisional accruals cannot be made due to the nature of the profit share elements, these are accounted for on the actual cash settlement.

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. Commissions are either paid for by the Company or are deducted from the hire revenue. 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. 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 units:

Revenues: The Company's services and deliverables, regarding its drilling units, were generally sold based upon contracts with its customers that included fixed or determinable prices. The Company recognized revenue when delivery occurred, as directed by its customer, and collectability was reasonably assured. The Company evaluated if there were multiple deliverables within its contracts and whether the agreement conveyed the right to use the drilling units for a stated period of time and met the criteria for lease accounting, in addition to providing a drilling services element, which was generally compensated for by day rates. In connection with drilling contracts, the Company could also receive revenues for preparation and mobilization of equipment and personnel or for capital improvements to the drilling units and day rate or fixed price mobilization and demobilization fees. Revenues were recorded net of agents' commissions. There are two types of drilling contracts: well contracts and term contracts.

F-19

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2. Significant Accounting policies - 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 was recognized in the period during which the services were rendered at the rates established in the contracts. All mobilization revenues, direct incremental expenses of mobilization and contributions from customers for capital improvements were initially deferred and recognized as revenues and expenses, as applicable, over the estimated duration of the drilling period. To the extent that mobilization expenses exceeded revenue to be recognized, they were expensed as incurred. Demobilization revenues and expenses were recognized over the demobilization period. All revenues for well contracts were 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 determined whether the arrangement was a multiple element arrangement containing both a lease element and drilling services element. For revenues derived from contracts that contained a lease, the lease elements were recognized as "Leasing revenues" in the consolidated statement of operations on a basis approximating straight line over the lease period. The drilling services element was recognized as "Service revenues" in the period in which the services were rendered at estimated fair value. Revenues related to the drilling element of mobilization and direct incremental expenses of drilling services were deferred and recognized over the estimated duration of the drilling period. To the extent that expenses exceeded revenue to be recognized, they were expensed as incurred. Demobilization fees and expenses were recognized over the demobilization period. Contributions from customers for capital improvements were initially deferred and recognized as revenues over the estimated duration of the drilling contract.

(y) 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.

(z)          Segment reporting: The Company determined that currently it operates under four 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 offshore support services to the global offshore energy industry (offshore support segment), as a provider of transportation services for crude and refined petroleum cargoes (tanker segment) and as a provider of transportation services for liquefied gas cargoes (gas carrier segment). The Company operated also as a provider of ultra-deep water drilling services (drilling segment) until the deconsolidation of Ocean Rig on June 8, 2015. The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company's consolidated financial statements.

(aa)          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.

F-20

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2. Significant Accounting policies - continued:

(aa) Financial instruments - continued:

(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 was party to interest swap agreements where it received a floating interest rate and paid a fixed interest rate for a certain period. All of the Company's interest swap agreements were either matured or terminated during the year ended December 31, 2016. 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.

(ab)          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 11).

F-21

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2. Significant Accounting policies - continued:

(ac)          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 13). In March 2016, the FASB issued ASU 2016-09, "Compensation-Stock Compensation – Improvements to Employee Share-Based Payment Accounting (Topic 718)" ("ASU 2016-09"), which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, all excess income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, however early adoption is permitted. The Company has adopted the provisions of ASU 2016-09, which did not impact its consolidated financial statements and notes disclosures.

(ad)          Income taxes: Income taxes are provided for based upon the tax laws and rates in effect in the countries in which the Company's drilling and ocean going cargo vessels' operations were conducted and income was 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. For the taxable year ending December 31, 2017, the Company did not qualify for an exemption from United States taxation on its U.S. source shipping. As a result, its U.S. source shipping income is subject to a 2% - 4% tax impose without allowance for deductions (Note 18).

(ae)          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.

(af)          Investments in Affiliates: Affiliates are entities over which the Company generally has between 20% and 50% of the voting rights, or over which the Company has significant influence, but over which it does not exercise control. Investments in these entities are accounted for by the equity method of accounting. Under this method the Company records an investment in the stock of an affiliate at cost or at fair value in case of a retained investment in the common stock of an investee in a deconsolidation transaction, and adjusts the carrying amount for its share of the earnings or losses of the affiliate subsequent to the date of investment and reports the recognized earnings or losses in income. Dividends received from an affiliate reduce the carrying amount of the investment. When the Company's share of losses in an affiliate equals or exceeds its interest in the affiliate, the Company does not recognize further losses, unless the Company has incurred obligations or made payments on behalf of the affiliate.

F-22

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2.          Significant Accounting policies - continued:

(af)          Investments in Affiliates - continued: At each reporting date, the Company performs an assessment in order to identify and account for any other than temporary impairment in its investment in affiliates. Specifically, the Company assesses factors indicating that a decline in the value of an investment is other-than-temporary and that a write-down of the carrying amount is required and concludes whether the impairment is other than temporary and then measures and recognizes the respective impairment charge as the difference between the carrying value and the fair value of the equity investment. In accordance with ASC 825-10 entities are allowed to elect to measure certain financial assets and financial liabilities (as well as certain non-financial instruments that are similar to financial instruments) at fair value. Equity method investments are eligible for the fair value option.

If the fair value option is applied to an investment that would otherwise be accounted for under the equity method, ASC 825-10-25-7 requires that the fair value option be applied to all of the investor's eligible interests in that investee. The fair value option election is non-revocable even if the Company loses significant influence over the investee. Under the fair value model, an investment in an affiliate is recognized initially at the fair value at the transaction date and at each reporting date, an investor shall measure its investments in affiliates at fair value, with changes recognized in profit or loss.

Affiliates included in the financial statements: In the Company's consolidated financial statements, the following

(i) Ocean Rig and its subsidiaries, accounted for under the equity method from June 8, 2015 through April 4, 2016, (ownership interest as of April 4, 2016, was 40.4%); and

(ii) Heidmar, a global tanker pool operator, accounted for under the fair value option from August 29, 2017 (ownership interest is 49%).

(ag)          Accounting for transactions under common control: A common control transaction is any transfer of net assets or exchange of equity interests between entities or businesses that are under common control by an ultimate parent or controlling shareholder before and after the transaction. Common control transactions may have characteristics that are similar to business combinations but do not meet the requirements to be accounted for as business combinations because, from the perspective of the ultimate parent or controlling shareholder, there has not been a change in control over the acquiree. Due to the fact common control transactions do not result in a change in control at the ultimate parent or controlling shareholder level, the Company does not account for that at fair value. Rather, common control transactions are accounted for at the carrying amount of the net assets or equity interests transferred.

(ah)          Troubled Debt Restructurings: A restructuring of a debt constitutes a troubled debt restructuring if the lender or creditor for economic or legal reasons related to the Company's financial difficulties grants a concession to the Company that it would not otherwise consider. Troubled debt that is fully satisfied by foreclosure, repossession, or other transfer of assets or by grant of equity securities by the Company is included in the term troubled debt restructuring and is accounted as such.

The Company, when issuing or otherwise granting an equity interest to a lender or creditor to settle fully a payable or debt, accounts for the equity interest granted at its fair value. The difference between the fair value of the equity interest granted and the carrying amount of the payable or debt settled is recognized as a gain on restructuring of payables or debt. Legal fees and other direct costs incurred in granting an equity interest to a creditor reduce the fair value of the equity interest issued. All other direct costs incurred in connection with a troubled debt restructuring are charged to expense as incurred.

F-23

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2. Significant Accounting policies - continued:

(ai)          Recent accounting pronouncements:

Leases: In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842), which requires lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The Company is currently analyzing the impact of the adoption of this new standard.

Revenue from Contracts with Customers: In May 2016, the FASB issued their final standard on revenue from contracts with customers. The standard, which was issued as ASU 2014-09 (Topic 606) by the FASB, and as amended, outlines a single comprehensive model for entities to use in accounting for revenue from contracts with customers and supersedes most legacy revenue recognition guidance. The core principle of the guidance in Topic 606, is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services by applying the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in each contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in each contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The standard is effective for public business entities from annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The new revenue standard may be applied using either of the following transition methods: (1) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (2) a modified retrospective approach with the cumulative effect of initially adopting the standard recognized at the date of adoption (which includes additional footnote disclosures). Regarding the incremental costs of obtaining a contract with a customer and contract's fulfilling costs, they should be capitalized and been amortized over the voyage duration, if certain criteria are met – for incremental costs if only they are chargeable to the customer and for contract's fulfilling costs if each of the following criteria is met: (i) they relate directly to the contract, (ii) they generate or enhance entity's resources that shall be used in performance obligation satisfaction and (iii) are expected to be recovered. Further, in case of incremental costs, entities may elect not to capitalize them in cases of amortization period (voyage period) is less than one year.

F-24

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

2. Significant Accounting policies - continued:

(ai)          Recent accounting pronouncements-continued:

Revenue from Contracts with Customers-continued: On January 1, 2018, the Company adopted the aforementioned ASU, using the modified retrospective method. As a result, the commencement date of each voyage charter shall deem to be upon the loading of the current cargo, decreasing the duration of the voyages. Further, the related incremental costs (i.e. commissions) shall continue to be expensed as incurred but over the new duration of each voyage, as Company's voyages are less than one year. Regarding voyage expenses, either during the voyage or the ballast period, no change in Company's accounting policy shall occur, as the three criteria are not met collectively. Regarding time charter and profit sharing contracts, no material changes related to Company's accounting policies were identified. As of December 31, 2017, four of the Company's vessels operate under voyage charter. The effect of the change in the voyage period due to the adoption of the new accounting standard will result to a cumulative adjustment of $1,264 in the opening balance of Company's accumulated deficit for the fiscal year 2018.

Financial Instruments: In January 2016, the FASB issued ASU No. 2016-01– Financial Instruments - Overall (Subtopic 825-10). ASU 2016-01, changes how public companies will recognize, measure, present and make disclosures about certain financial assets and financial liabilities. For public business entities, ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted. The Company is evaluating the above pronouncement. The adoption of this pronouncement is not expected to have a material impact on the Company's consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13– Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities.  For public entities, the amendments of this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.  Early application is permitted. The Company is in the process of assessing the impact of the provisions of this guidance on the Company's consolidated financial position and performance.

Statement of Cash Flows: In August 2016, the FASB issued ASU No. 2016-15- Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments which addresses certain cash flow issues with the objective of reducing the existing diversity in practice: ASU 2016-15 is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period, however early adoption is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on its consolidated financial statements and notes disclosures. In November 2016, the FASB issued ASU No. 2016-18—Statement of Cash Flows (Topic 230) - Restricted Cash, which addresses the requirement that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update apply to all entities that have restricted cash or restricted cash equivalents and are required to present a statement of cash flows under Topic 230. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period, however early adoption is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on its consolidated statement of cash flows.

Business combinations – Definition of a business: In January 2017, the FASB issued ASU No. 2017-01 – Business Combinations (Topic 805) – Clarifying the Definition of a Business which addresses business combination issues with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period. The Company is currently evaluating the provisions of this guidance and assessing its impact on its consolidated financial statements and notes disclosures.

F-25

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

3.          Transactions with Related Parties:

The amounts included in the accompanying consolidated balance sheets and consolidated statements of operations are as follows:

	December 31,
	2016			2017
Balance Sheet
Due from related parties	$	6,674		$	16,914
Due from related parties (current) - Total		6,674			16,914
Due to related parties		(5,033	)		(72	)
Due to related parties (current) - Total	$	(5,033	)	$	(72	)
Due to related parties		(116,617	)		(71,631	)
Due to related parties (non - current) - Total	$	(116,617	)	$	(71,631	)
Advances for vessels under construction and related costs		-			1,004
Accrued liabilities	$	(1,082	)	$	(350	)

	Year ended December 31,
Statement of Operations	2015			2016			2017
Time charter & Service Revenues – commission fees	$	7,366		$	1,800		$	3,988
Voyage expenses		(4,521	)		(390	)		(1,526	)
General and administrative expenses		(50,498	)		(32,397	)		(23,850	)
Commissions for assets sold		(8,133	)		(886	)		(85	)
Gain/(loss) from sale of vessel owning companies, net of commissions		-			(22,318	)		-
Interest and finance costs		(3,679	)	$	(1,789	)		(13,070	)
Loss on Private Placement	$	-			-		$	(7,600	)

(Per day and per quarter information in the note below is expressed in United States Dollars/Euros)

TMS Bulkers Ltd. - TMS Offshore Services Ltd. - TMS Tankers Ltd. – TMS Cardiff Gas Ltd. (together the "TMS Entities"): Effective January 1, 2017, the Company entered into new agreements (the "New TMS Agreements") with TMS Bulkers Ltd. ("TMS Bulkers") and TMS Offshore Services Ltd. ("TMS Offshore Services") to streamline the services offered by TMS Bulkers under the management agreements with each of the Company's drybulk vessel-owning subsidiaries and by TMS Offshore Services, pursuant to the respective management agreements with the Company's offshore support vessel–owning subsidiaries. The TMS Entities may be deemed to be beneficially owned by Mr. George Economou, the Company's Chairman and Chief Executive Officer ("CEO").

The Company also entered into new agreements with TMS Cardiff Gas Ltd. ("TMS Cardiff Gas") and TMS Tankers Ltd. ("TMS Tankers") regarding its newly acquired tanker and gas carrier vessels on similar terms as the New TMS Agreement (Notes 5 and 6). TMS Cardiff Gas and TMS Tankers may be deemed to be beneficially owned by Mr. George Economou, the Company's Chairman and CEO.

In connection with the New TMS Agreements that entail an increased scope of services, including executive management, commercial, accounting, reporting, financing, legal, manning, catering, IT, attendance, insurance, technical and operations services, the Company terminated the consulting agreements with Fabiana Services S.A. ("Fabiana"), Vivid Finance Limited ("Vivid") and Basset Holdings Inc. ("Basset"), entities that may be deemed to be beneficially owned by the Company's Chairman and CEO Mr. George Economou and by the President and Chief Financial Officer Mr. Anthony Kandylidis, effective as of December 31, 2016. The all-in base cost for providing the increased scope of services was reduced to $1,643/day per vessel, which is a 33% reduction from prior levels, based on a minimum of 20 vessels, decreasing thereafter to $1,500/day per vessel. The management fee 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%. The New TMS Agreements entitle the TMS Entities to an aggregate performance bonus for 2016 amounting to $6,000, as well as a one-time setup fee of $2,000.

F-26

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

3.          Transactions with Related Parties - continued:

TMS Bulkers Ltd. - TMS Offshore Services Ltd. - TMS Tankers Ltd. – TMS Cardiff Gas Ltd. - continued: Under the respective New TMS Agreements, the TMS Entities are also entitled to (i) a discretionary performance fee (up to $20,000, in either cash or common stock, at the discretion of the Company's board of directors), (ii) a commission of 1.25% on charter hire agreements that are arranged by the TMS Entities, (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 TMS Entities, (iv) a financing and advisory commission of 0.50% and (v) reimbursement of out of pocket and travel expenses. The New TMS Agreements have terms of ten years.

Under both the New TMS Agreements and the agreements effective up to December 31, 2016, if the TMS Entities are requested to supervise the construction of a newbuilding vessel, in lieu of the management fee, the Company will pay the TMS Entities 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 $598 based on the Euro/U.S. Dollar exchange rate at December 31, 2017) per day.

Under both the New TMS Agreements and the agreements effective up to December 31, 2016, in the event that the management agreements are terminated for any reason other than a default by TMS Bulkers and TMS Offshore or change of control of the vessel owning companies' ownership, the Company is 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 vessel owning companies' ownership, the Company is required to pay TMS Bulkers and TMS Offshore a termination payment, representing an amount equal to the estimated remaining fees payable to TMS Bulkers and TMS Offshore under the 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 Company may terminate the agreement for a convenience at any time for a fee of $50,000.

Transactions with TMS Bulkers, TMS Offshore, TMS Tankers and TMS Cardiff Gas in Euros are settled on the basis of the average U.S. Dollar rate on the invoice date.

According to the agreements effective up to December 31, 2016, TMS Bulkers provided 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 included operations, chartering, sale and purchase, post-fixture administration, accounting, freight invoicing and insurance. According to the agreements effective up to December 31, 2016, TMS Offshore Services provided overall technical and crew management to the Company's Platform Supply and Oil Spill Recovery vessels. According to the agreements effective up to certain dates in 2015, TMS Tankers provided 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 included operations, sale and purchase, post-fixture administration, accounting, freight invoicing and insurance.

F-27

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

3.          Transactions with Related Parties - continued:

TMS Bulkers Ltd. - TMS Offshore Services Ltd. - TMS Tankers Ltd. – TMS Cardiff Gas Ltd. – continued:

Each management agreement had an initial term of five years and was eligible for automatic renewal after a five-year period and thereafter extended in five-year increments, unless the Company provided notice of termination in the fourth quarter of the year immediately preceding the end of the respective term.

Cardiff Drilling Inc.: Effective January 1, 2013,Ocean Rig Management Inc. ("Ocean Rig Management"), a wholly-owned subsidiary of Ocean Rig, entered into a Global Services Agreement with Cardiff Drilling Inc. ("Cardiff Drilling") a company that may be deemed to be beneficially owned by Mr. George Economou, the Company's Chairman and CEO, 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. Costs from the Global Services Agreement were expensed in the consolidated statements of operations or capitalized as a component of "Advances for drilling units under construction and related costs" being a directly attributable cost to the construction, as applicable.

Cardiff Marine Inc: On January 2, 2014, the Company entered into an agreement with certain clients of Cardiff Marine Inc., a company that may be deemed to be beneficially owned by Mr. George Economou, the Company's Chairman and CEO, 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 could exercise any one, several or all of the rights. Each right was valid until one day before the contractual date of delivery of each vessel. The newbuildings were delivered during 2017 and none of the seven rights was exercised by the Company.

Cardiff Tankers Inc. – Cardiff Gas Ltd: Under certain charter agreements for the Company's tankers and gas carrier vessels, Cardiff Tankers Inc. ("Cardiff Tankers") and Cardiff Gas Ltd ("Cardiff Gas"), two Marshall Islands entities that may be deemed to be beneficially owned by the Company's Chairman and CEO, Mr. George Economou, provide services related to the sourcing, negotiation and execution of charters, for which they are entitled to a 1.25% commission on charter hire earned by those vessels.

George Economou: As the Company's Chairman, CEO and principal shareholder with a 69.5% shareholding of the Company's common stock as of December 31, 2017 with his beneficially ownership of 72,421,515 common shares through: (i) 12,000,000 common shares owned by SPII Holdings Inc. ("SPII"), an entity that may be deemed to be beneficially owned by Mr. Economou; (ii) 45,876,061 common shares owned by Sierra Investments Inc. ("Sierra"), an entity that may be deemed to be beneficially owned by Mr. Economou; and (iii) 14,545,454 common shares owned by Mountain Investments Inc. ("Mountain"), an entity that may be deemed to be beneficially owned by Mr. Economou, Mr. George Economou has control over the actions of the Company.

F-28

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

3.          Transactions with Related Parties - continued:

Other: On April 30, 2015, the Company through its subsidiaries, entered into ten Memoranda of Agreements with entities that may be deemed to be beneficially owned by Mr. George Economou, the Company's Chairman and CEO, for the sale of four Suezmax tankers and six Aframax tankers (Note 6). On September 9, 2015, the Company entered into sales agreements with entities that may be deemed to be beneficially owned by Mr. George Economou, the Company's Chairman and CEO, for the sale of 14 vessel owning companies (owners of ten Capesize and four Panamax carriers) and three Capesize bulk carriers (Note 6).

On February 15, 2016, the Company announced that the sale of the vessel owning companies of its Capesize vessels, the Fakarava, Rangiroa and Negonego (included in the 14 vessel owning companies discussed above) to entities that may be deemed to be beneficially owned by its Chairman and CEO Mr. George Economou had failed and on March 24, 2016, entered into new sales agreement with entities that may be deemed to be beneficially owned by Mr. George Economou, for the sale of the shares in the above vessel owning companies (Note 6).

On September 16, 2016 and October 26, 2016, the Company also entered into sales agreements with entities that may be deemed to be beneficially owned by Mr. George Economou, the Company's Chairman and CEO, for the sale of the shares of the owning companies of the Panamax vessel Oregon and the Panamax vessels Amalfi and Samatan, respectively (Note 6).

On January 12, 2017, the Company entered into a "zero cost" Option Agreement (the "LPG Option Agreement"), with companies that may be deemed to be beneficially owned by Mr. George Economou, the Company's Chairman and CEO, for the purchase of the shares of four owning companies of four high specifications VLGCs capable of carrying liquefied petroleum gas ("LPG") that were under construction at Hyundai Samho Heavy Industries Co., Ltd. ("HHI") and have long-term time charter employment agreements with major oil companies and oil traders. Under the terms of the LPG Option Agreement, the Company had until April 4, 2017, to exercise four separate options to purchase up to the four VLGCs at a price of $83,500 per vessel. The transaction was approved by the independent directors of the Company's board of directors based on third party broker valuations. On January 19, 2017 and March 10, 2017, the Company exercised the first two options and acquired two of the VLGCs under construction), and on April 6, 2017, exercised the remaining two options and acquired the two remaining VLGCs under construction. (Note 5)

On April 3, 2017, and in connection with the acquisition of the four VLGCs under construction, the Company acquired 100% of the shares of Cardiff LNG Ships Ltd. and Cardiff LPG Ships Ltd. without any cost or payment from entities that may be deemed to be beneficially owned by Mr. George Economou, the Company's Chairman and CEO.

On May 15, 2017, the Company also entered into a purchase agreement with an entity that may be deemed to be beneficially owned by Mr. George Economou for the purchase of the shares of the owning company of the Suezmax newbuilding vessel Samsara. The transaction was approved by the audit committee of the Company's Board of Directors taking into account independent third-party broker charter free valuations certificates and the long-term employment on a fixed rate basis plus profit share, provided by the seller. The vessel was time chartered back to the seller and employed from May 24, 2017 under a five year time charter plus optional periods in charterer's option at a base rate plus profit share. The charterer was also granted purchase options at the end of each firm period. (Note 6)

Fabiana Services S.A.: On October 22, 2008, the Company entered into a consultancy agreement with Fabiana, a Marshall Islands entity that may be deemed to be beneficially owned by the Company's Chairman and CEO, Mr. George Economou, with an effective date of February 3, 2008, as amended. Under the agreement, Fabiana provided the services of the Company's Chairman and CEO. Effective December 31, 2016, the consultancy agreement with Fabiana was terminated at no cost by mutual agreement of the parties.

F-29

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

3.          Transactions with Related Parties - continued:

Azara Services S.A.: Effective from January 1, 2013, Ocean Rig entered through one of its wholly owned subsidiaries into a consultancy agreement with Azara Services S.A. ("Azara"), a Marshall Islands entity that may be deemed to be beneficially owned by our Chairman and Chief Executive Officer Mr. George Economou, for the provision of consultancy services relating to the services of Mr. George Economou in his capacity as CEO of Ocean Rig. Costs from Azara's consultancy agreement were expensed in the consolidated statements of operations under general and administrative expenses.

Basset Holdings Inc.:Under the consultancy agreement effective from January 1, 2015, between the Company and Basset, a Marshall Islands company that may be deemed to be beneficially owned by the Company's President and CEO, Basset provided consultancy services relating to the services of Mr. Anthony Kandylidis in his capacity as Executive Vice President, and since May 2016 President and since December 2016 Chief Financial Officer of the Company. Effective December 31, 2016, the consultancy agreement with Basset was terminated at no cost by mutual agreement of the parties.

Effective June 1, 2012, Ocean Rig entered through one of its wholly owned subsidiaries into a consultancy agreement with Basset, for the provision of the services of Mr. Antony Kandylidis in his capacity as President of Ocean Rig. Costs from Basset's consultancy agreement with Ocean Rig were expensed in the consolidated statements of operations under general and administrative expenses.

Vivid Finance Limited: Under the consultancy agreement effective from September 1, 2010 between the Company and Vivid a company that may be deemed to be beneficially owned by the Chairman and CEO of the Company, Mr. George Economou, Vivid provided the Company with financing-related services. Effective January 1, 2013, the Company, amended the agreement with Vivid to limit the scope of the services provided under the agreement to DryShips and its subsidiaries or affiliates, except for Ocean Rig and its subsidiaries.

In essence, post-amendment, the consultancy agreement between DryShips and Vivid was in effect for the Company's tanker, drybulk and offshore support shipping segments only. Effective December 31, 2016, the consultancy agreement with Vivid was terminated at no cost by mutual agreement of the parties.

Effective January 1, 2013, Ocean Rig Management, 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 the Company and Vivid, except that under the new agreement, Ocean Rig was obligated to pay directly to Vivid an amount in consideration of the services provided by Vivid in respect of Ocean Rig's offshore drilling business, whereas under the consultancy agreement between the Company and Vivid, this fee was paid by the Company.

F-30

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

3.          Transactions with Related Parties - continued:

Ocean Rig UDW Inc.: During the year ended December 31, 2015, the Company incurred interest expense and amortization and write off of financing fees amounting to $3,281 under the $120,000 Exchangeable Promissory Note (the "Note") with a subsidiary of its former subsidiary Ocean Rig, which was fully settled on August 13 2015.

On March 29, 2016, the Company entered into 60 day time charter agreements for the offshore support vessels Crescendo and Jubilee with a subsidiary of Ocean Rig to assist with the stacking of Ocean Rig's drilling units in Las Palmas.

On April 5, 2016, the Company sold all of its shares in Ocean Rig to a subsidiary of Ocean Rig for total cash consideration of approximately $49,911. The sale proceeds were used to partly reduce the outstanding amount under the revolving credit facility provided to the Company by Sifnos Shareholders Inc. ("Sifnos"), an entity that may be deemed to be affiliated with the Company's Chairman and CEO, Mr. George Economou and for general corporate purposes. In addition, the Company reached an agreement under the revolving credit facility with Sifnos whereby the lender agreed to, among other things release its lien over the Ocean Rig shares. This transaction was approved by the disinterested members of the Company's Board of Directors on the basis of a fairness opinion. As of April 5, 2016, the Company no longer holds any equity interest in Ocean Rig.

Private Placement – Rights Offering: The Company's independent members of the board in connection with a fairness opinion obtained on August 11, 2017 approved a transaction pursuant to which the Company sold 36,363,636 of the Company's common shares to entities that may be deemed to be beneficially owned by its Chairman and CEO, Mr. George Economou, for an aggregate consideration of $100,000 at a price of $2.75 per share (the "Private Placement"). On August 11, 2017, the Company signed a binding term sheet (the "Term Sheet") pursuant to the Private Placement terms. On August 29, 2017 and following the closing of the Private Placement: (i) 9,818,182 common shares were issued to Sierra Investments Inc. ("Sierra") in exchange for the reduction of the principal outstanding balance by $27,000 of the Company's unsecured credit facility with Sierra, (ii) 14,545,454 common shares were issued to Mountain as an exchange for the termination of the participation rights agreement dated May 23, 2017 ( the "Participation Rights Agreement") and the forfeiture of all outstanding shares of Series D Preferred Stock (which carried 100,000 votes per share) and (iii) 12,000,000 common shares to SPII as consideration for the purchase of the 100% issued and outstanding equity interests of Shipping Pool Investors Inc. ("SPI"), which directly holds a 49% interest in Heidmar, a global tanker pool operator.

The Private Placement transaction was a non-cash transaction with a transfer of an exchange of assets and liabilities as a consideration for the common stock issued. The fair values of the non-cash transactions, as described above, are determined based on the fair values of assets and liabilities given up on the date that the transaction was concluded, or if more clearly evident, the fair value of the asset and liabilities received on the date that the respective transaction was concluded. The Company considered that the fair value of the shares issued as part of the transaction is considered more clearly evident and concluded that in this respect the aforementioned non-monetary transaction will be recorded based on the fair value of the shares issued as part of the Private Placement. The fair value of the Company's exchanged capital stock was valued using the quoted market price available as of the closing of the transaction according to ASC 820 "Fair Value Measurement" (Notes 9, 11).

The transaction resulted in a total loss of $7,600, as the difference between the transaction price and the fair value price of $2.05 and is included in "Loss on Private Placement" in the accompanying consolidated statement of operations for the year ended December 31, 2017. In addition, an amount of $2,805 was classified under the respective "Stockholders' Contribution" as the difference between the carrying value of the Series D Preferred Stock before its forfeiture and its fair value.

F-31

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

3.          Transactions with Related Parties - continued:

Private Placement – Rights Offering – continued: On August 11, 2017, in accordance with the Term Sheet, the Audit Committee also approved a rights offering (the "Rights Offering") that commenced on August 31, 2017 and allowed the Company's shareholders to purchase their pro rata portion of up to $100,000 of the Company's common shares at a price of $2.75 per share. On August 29, 2017 and in connection with the Rights Offering, Sierra also entered into a backstop agreement (the "Backstop Agreement") to purchase from the Company, at $2.75 per share, the number of shares of common stock offered under the Rights Offering that would not be issued to existing shareholders if these shareholders did not exercise their rights in full. On October 4, 2017 and following the closing of the Rights Offering, 36,057,876 common shares were issued to Sierra, representing the number of common shares not issued pursuant to the full exercise of rights from existing shareholders (Note 12).

Sifnos Shareholders Inc. – Sierra Investments Inc.: On October 21, 2015, as amended on November 11, 2015, the Company entered into a revolving credit facility ("Revolving Credit Facility") of up to $60,000 with Sifnos, an entity that may be deemed to be beneficially owned by Mr. George Economou, the Company's Chairman and CEO, for general working capital purposes. The Revolving Credit Facility was secured by the shares that the Company held in Nautilus Offshore Services Inc. and by a first priority mortgage over one Panamax dry-bulk carrier. The Revolving Credit Facility had a tenor of three years. Under this agreement, the lender had the right to convert a portion of the outstanding Revolving Credit Facility into shares of the Company's common stock or into shares of common stock of Ocean Rig held by the Company. The conversion would be based on the volume weighted average price of either stock plus a premium. Furthermore, the Company, as the borrower under this agreement, had the right to convert $10,000 of the outstanding Revolving Credit Facility into 8 preferred shares (8,333 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) of the Company. On October 21, 2015 and December 22, 2015 the Company drew down the amounts of $20,000 and $10,000, respectively under the Revolving Credit Facility.

On December 30, 2015, the Company exercised its right to convert $10,000 of the outstanding principal amount of the Revolving Credit Facility into 8 shares (8,333 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) of Series B Convertible Preferred Stock of the Company. Each share of Series B Convertible Preferred Stock had the right to vote with the common shares on all matters on which the common shares were entitled to vote as a single class and the shares of Series B Convertible Preferred Stock had five votes per share.  The shares of Series B Convertible Preferred Stock were to be mandatorily converted into common shares of DryShips on a one to one basis within three months after the issuance thereof or any earlier date selected by the Company in its sole discretion.

On March 24, 2016, the Company entered into an agreement to increase the Revolving Credit Facility. The Revolving Credit Facility was amended to increase the maximum available amount by $10,000 to $70,000, to give the Company an option to extend the maturity of the facility by 12 months to October 21, 2019 and to cancel the option of the lender to convert the outstanding Revolving Credit Facility to the Company's common stock.

Additionally, subject to the lender's prior written consent, the Company had the right to convert $8,750 of the outstanding balance of the Revolving Credit Facility into 29 preferred shares (29,166 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) of the Company, with a voting power of 5:1 (vis-à-vis common stock) and would mandatorily convert into common stock on a 1:1 basis within 3 months after such conversion. As part of the transaction the Company also entered into a Preferred Stock Exchange Agreement to exchange the 8 Series B Convertible Preferred Shares (8,333 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) held by the lender for $8,750. The Company subsequently cancelled the Series B Convertible Preferred Stock previously held by the lender effective March 24, 2016.

On March 29, 2016, the Company drew down the amount of $28,000 under the revolving credit facility.

F-32

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

3.          Transactions with Related Parties - continued:

Sifnos Shareholders Inc. – Sierra Investments Inc. - continued: On April 5, 2016, the Company sold all of its shares in Ocean Rig, to a subsidiary of Ocean Rig for total cash consideration of approximately $49,911 and used $45,000 from the proceeds, to partly reduce the outstanding amount under the Revolving Credit Facility. In addition, the Company reached an agreement under the Revolving Credit Facility whereby the lender agreed to, among other things (i) release its lien over the Ocean Rig shares and, (ii) waive any events of default, subject to a similar agreement being reached with the rest of the lenders to the Company, in exchange for a 40% loan to value maximum loan limit, being introduced under this facility. In addition, the interest rate under the loan was reduced to 4% plus LIBOR.

On September 9, 2016, the Company entered into an agreement to convert $8,750 of the outstanding balance of the Revolving Credit Facility into 29 Series D Preferred shares of the Company (29,166 shares before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits). Each preferred share had 100,000 votes and was not convertible into common stock of the Company. Also on September 21, 2016, the Company drew down the amount of $7,825 under the Revolving Credit Facility.

On October 31, 2016, the Company sold the shares of the owning companies of three Panamax vessels, Amalfi, Galveston and Samatan (Note 6), and as part of the transaction, entered into an agreement to increase the Revolving Credit Facility. The Revolving Credit Facility was amended to increase the maximum available amount by $5,000 to $75,000 and to give the Company an option within 365 days to convert $7,500 of the outstanding loan into the Company's common shares. As part of the sale of the vessel owning companies, the Company paid the amount of $58,619 to the new owners, being the difference between the purchase price and the outstanding balance of the respective debt facility, by increasing by the same amount the outstanding balance of the Revolving Credit Facility. Therefore, following the above transaction, the outstanding principal amount under the Revolving Credit Facility was $69,444. This transaction was approved by the independent members of the Company's Board of Directors on the basis of vessel valuations and a fairness opinion.

On November 30, 2016, Sifnos became the lender of record under two Syndicated Loans previously arranged by HSH Nordbank, with an outstanding balance of an aggregate of $85,066 under the ex-HSH syndicated facilities. (Note 10)

On December 15, 2016, the Company made a prepayment of $33,510 under the Revolving Credit Facility.

On December 30, 2016, the Company entered into a new senior secured revolving facility ("New Revolving Facility") with Sifnos for the refinancing of its outstanding debt, amounted to a total of $121,000. Under the terms of the New Revolving Facility, Sifnos extended a new loan of up to $200,000 that was secured by all of the Company's present and future assets except for the vessel Raraka. The New Revolving Facility carried an interest rate of Libor plus 5.5%, was non-amortizing, had a tenor of 3 years, had no financial covenants, was arranged with a fee of 2.0% and had a commitment fee of 1.0%. In addition, Sifnos had the ability to participate in realized asset value increases of the collateral base in a fixed percentage of 30%. The transaction was approved by the Company's independent members of the board and a fairness opinion was obtained in connection with this transaction.

On January 19, 2017 and March 10, 2017, the Company acquired two VLGCs under construction and on April 6, 2017, acquired the two remaining VLGCs pursuant to the LPG Option Agreement and partially financed the closing price of the acquisition of the vessel-owning entities of the four vessels by using the then remaining undrawn liquidity of $79,000, under the New Revolving Facility. On May 23, 2017, the Company was released by all of its obligations and liabilities under the New Revolving Facility, as amended, through a Notice of Release from Sifnos, and entered into an unsecured revolving facility agreement ("Revolving Facility") with Sierra and a separate Participation Rights Agreement with Mountain, both entities that may be deemed to be beneficially owned by Mr. George Economou, the Company's Chairman and CEO. The Revolving Facility carried an interest rate of Libor plus 6.5%, was non-amortizing, had a tenor of 5 years, had no financial covenants and was arranged with a fee of 1.0%.

F-33

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

3.          Transactions with Related Parties - continued:

Sifnos Shareholders Inc. – Sierra Investments Inc. - continued: In addition, Mountain had the ability, through the Participation Rights Agreement, to participate in realized asset value increases of all of the Company's present and future assets, except the vessel Samsara, in a fixed percentage of 30% in case of their sale and had a duration of up to the maturity of the Sierra Revolving Facility. The Participation Rights Agreement was terminated on August 29, 2017, along with the Private Placement discussed above (Note 12). The transaction was approved by the Company's independent members of the board and a fairness opinion was obtained in connection with this transaction.

On August 29, 2017, following the closing of the Private Placement, 9,818,182 common shares were issued to Sierra in exchange for the reduction of the principal outstanding balance by $27,000 of the Sierra Revolving Facility (Note 12).

On October 2, 2017, after the closing of the Rights Offering, 36,057,876 common shares were issued to Sierra in exchange for the reduction of the principal outstanding balance by $99,159 of the Sierra Revolving Facility.

This exchange constitutes a common control transaction, as Mr. Economou was deemed to have controlling interests in the Company following the closing of the Private Placement. In this respect, the total exchanged consideration net of par value, was recognized and included in "Additional paid in capital", in the accompanying consolidated balance sheet as at December 31, 2017, in accordance with the relevant U.S. GAAP guidance.

On October 25, 2017, the Company entered into a new secured loan facility ("Loan Facility Agreement") with Sierra for the refinancing of the outstanding debt under Revolving Facility, amounting to a total of $73,841. The Loan Facility Agreement carried an interest rate of LIBOR plus 4.5%, was non-amortizing, had a tenor of 5 years, had no arrangement or commitment fee and was secured by four Company's vessels, two tanker vessels Samsara, Balla and two drybulk carrier vessels Judd, Castellani. Furthermore, it contained only one financial covenant, according to which the fair market values of mortgaged vessels should be at least 200% of the Loan Facility Agreement outstanding amount. The transaction was approved by the Company's independent members of the board and a fairness opinion was obtained in connection with this transaction.

Further to the above, the outstanding balance under the above facilities as of December 31, 2016 and 2017 was $121,000 and $73,841, respectively, while the respective unamortized deferred finance costs amounted to $4,383 and $2,210, respectively. As of December 31, 2017, the Company is in compliance with the hull cover ration of the Loan Facility Agreement.

The aggregate available undrawn amount under the above outstanding facilities at December 31, 2016 and 2017 was $79,000 and $0, respectively. The weighted-average interest rates on the above outstanding facilities were: 7.24% and 8.08% for the years ended December 31, 2016 and 2017, respectively.

Dividends:  On February 24, 2015, Ocean Rig's Board of Directors declared its fourth 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. The dividend was paid in March 2015. On May 6, 2015, Ocean Rig's Board of Directors declared its fifth quarterly cash dividend with respect to the quarter ended March 31, 2015, of $0.19 per common share, to Ocean Rig shareholders of record as of May 22, 2015. The dividend was paid in May 2015.

Ocean Rig paid dividends amounting to $20,526 to shareholders other than the Company during the year ended December 31, 2015.

On July 29, 2015, Ocean Rig's Board of Directors decided to suspend its quarterly dividend until market conditions improve.

F-34

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

4.          Other Current assets

The amount of other current assets shown in the accompanying consolidated balance sheets is analyzed as follows:

	December 31,
	2016		2017
Inventories	$	3,446	$	7,790
Insurance claims (Note 14)		1,071		3,044
Other		29		1,445
Other current assets	$	4,546	$	12,279

5.          Advances for Vessels under Construction:

As of December 31, 2016 and 2017, the movement of the advances for vessels under construction and acquisitions are set forth below:

	December 31,
	2016		2017
Balance at beginning of year	$	-	$	-
Advances for vessels under construction and related costs		-		265,565
Vessels delivered		-		(233,667	)
Balance at end of year	$	-	$	31,898

On January 19, 2017, the Company acquired the first VLGC, Anderida, pursuant to the exercise of the respective options as per the LPG Option Agreement (Note 3), which was under construction at the time of acquisition at HHI, for a purchase price of $83,500. The Company paid an amount of $21,850 of the total purchase price, by using part of the undrawn liquidity under the New Revolving Facility (Note 3). An amount of $6,500 of the total amount paid, representing the value of the time charter attached acquired, was classified in "Additional Paid-in Capital", under the respective "Accounting for transactions under common control". The $61,650 balance of the purchase price for the VLGC was paid in installments until the vessel's delivery from HHI, using an amount of $37,500 under the secured credit facility dated June 22, 2017 (Note 10) and cash on hand. The Company took delivery of the vessel on June 28, 2017 while on June 29, 2017, Anderida commenced its time charter on a fixed rate with five years firm duration to an oil major company. The charterer has options to extend the firm employment period by up to three years.

On March 10, 2017, the Company acquired the second VLGC, Aisling, pursuant to the exercise of the respective option as per the LPG Option Agreement (Note 3), which was under construction at the time of acquisition at HHI, for a purchase price of $83,500. The Company paid an amount of $21,850 of the total purchase price, by using part of the undrawn liquidity under the New Revolving Facility (Note 3). An amount of $6,500 of the total amount paid, representing the value of the time charter attached acquired, was classified in "Additional Paid-in Capital", under the respective "Accounting for transactions under common control". The $61,650 balance of the purchase price for the VLGC was payable in installments until the vessel's delivery from HHI, using an amount of $37,500 under the secured credit facility dated June 22, 2017 (Note 10) and cash on hand. The Company took delivery of the vessel on September 7, 2017 while on September 12, 2017, Aisling commenced its time charter on a fixed rate with five years firm duration to an oil major company. The charterer has options to extend the firm employment period by up to three years.

On April 6, 2017, the Company acquired the remaining two VLGCs under construction at HHI, Mont Fort and Mont Gelé, pursuant to the exercise of the respective options as per the LPG Option Agreement (Note 3), for a purchase price of $83,500 each.

F-35

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

5.          Advances for Vessels under Construction - continued:

The Company paid an amount of $46,700 of the total purchase price, by using part of the undrawn liquidity under the New Revolving Facility (Note 3) and cash on hand. An amount of $16,001 of the total amount paid, representing the value of the time charter attached acquired, was classified in "Additional Paid-in Capital", under the respective "Accounting for transactions under common control". The $120,300 balance of the total purchase price for the VLGCs was payable in installments until the vessels' delivery from HHI, using an amount of $75,000 under the secured credit facility dated June 22, 2017 (Note 10) and cash on hand. As of January 4, 2018, the Company paid the last installment, including related costs of $44,869 using the $37,500 under the secured credit facility dated June 22, 2017 (Note 10) and cash on hand.

The Company took delivery of Mont Fort and Mont Gelé, on October 31, 2017 and on January 4, 2018, respectively, while on November 5, 2017 and on January 11, 2018 the vessels, respectively, commenced their time charter on a fixed rate with ten years firm duration to an oil major company (Note 19).

As of December 31, 2017, an amount of $428, relating to capitalized expenses and $770 relating to capitalized interest and finance costs, are included in the "Advances for vessels under construction and related costs".

6.          Vessels, net:

The amounts in the accompanying consolidated balance sheets are analyzed as follows:

	Cost			Accumulated Depreciation			Net Book Value
Balance, December 31, 2015	$	97,100			(672	)	$	96,428
Vessels transferred from held for sale		66,449			-			66,449
Impairment loss		(67,999	)		4,138			(63,861	)
Depreciation		-			(3,466	)		(3,466	)
Balance, December 31, 2016	$	95,550			-		$	95,550
Additions		672,300			-			672,300
Vessels sold		(3,900	)		104			(3,796	)
Depreciation		-			(14,966	)		(14,966	)
Balance, December 31, 2017	$	763,950		$	(14,862	)	$	749,088

F-36

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

6.          Vessels, net - continued:

On March 30, 2015, the Board of Directors of the Company approved the entering into sales agreements with entities that may be deemed to be beneficially owned by the Company's Chairman and Chief Executive Officer, Mr. George Economou, to sell its four Suezmax tankers, Vilamoura, Lipari, Petalidi and Bordeira, for an en-bloc sales price of $245,000. In addition, it entered into agreements with entities that may be deemed to be beneficially owned by Mr. George Economou to potentially sell its six Aframax tankers, Belmar, Calida, Alicante, Mareta, Saga and Daytona, for an en-bloc sales price of $291,000, as long as they confirmed their unconditional acceptance by June 30, 2015. The Company classified the vessels as "held for sale" as at March 31, 2015, as all criteria required for their classification as "Vessels held for sale" were met and a charge of $56,631, included in "Impairment loss, gain/ loss from sale of vessels and vessel owning companies and other" in the accompanying consolidated statement of operations for the year ended December 31, 2015, was recognized as a result of the reduction of the vessels' carrying amount to their fair value less cost to sell. On April 30, 2015, the Company concluded ten Memoranda of Agreements for an aggregate agreed sales price of $536,000.

On July 16, 2015, July 21, 2015, July 24, 2015, July 27, 2015, August 6, 2015, August 7, 2015, August 19, 2015, August 25, 2015, September 10, 2015 and October 29, 2015 the tankers Petalidi, Bordeira, Lipari, Belmar, Saga, Mareta, Vilamoura, Calida, Daytona and Alicante, respectively were delivered to their new owners, who paid the balance of the agreed sales prices to the Company.

As of June 30, 2015, the impairment review performed prior to the entering into the agreements for the sale of the Company's drybulk vessels and vessel owning companies indicated that one of the Company's vessels, with a carrying amount of $95,937, should be written down to its fair value as determined based on the valuations of the independent valuators, resulting in a charge of $83,937, which was included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" in the accompanying consolidated statement of operations for the year ended December 31, 2015 (Note 11).

On September 9, 2015, the Company entered into sales agreements with entities that may be deemed to be beneficially owned by Mr. George Economou, the Company's Chairman and CEO, for the sale of the vessel owning companies of 14 vessels (ten Capesize bulk carriers: Rangiroa, Negonego, Fakarava, Raiatea, Mystic, Robusto, Cohiba, Montecristo, Flecha and  Partagas, and four Panamax bulk carriers: Woolloomooloo, Saldanha, Topeka and Helena) and the sale of three Capesize bulk carriers (Manasota, Alameda and Capri) for an aggregate price of $377,000, including their existing employment agreements and the assumption of $236,716 of debt, associated with some of the vessels. In this respect, a charge of $375,090, included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other", in the accompanying consolidated statement of operations for the year ended December 31, 2015 was recognized.

On September 17, 2015 and October 13, 2015, the shares of the vessel owning company of the vessel Mystic andthe shares of the shareholders of the vessel owning companies of ten vessels (Raiatea, Robusto, Cohiba, Montecristo, Flecha, Partagas, Woolloomooloo, Saldanha, Topeka and Helena), respectively were delivered to their new owners. On September 22, 2015, October 1, 2015 and December 11, 2015, the vessels Capri, Manasota and Alameda, respectively, were delivered to their new owners. The assets and liabilities of the remaining three vessel owning companies (Rangiroa, Negonego and Fakarava) remained classified as "held for sale" on December 31, 2015, as all criteria required for their classification as "held for sale" were met.

In addition, on September 30, 2015, the Company classified all the remaining vessels in its fleet, comprised of 20 Panamax and two Supramax bulk carriers, as held for sale, as all criteria required for their classification were met and recognized an additional charge of $422,404, included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" in the accompanying consolidated statement of operations for the year ended December 31, 2015, as a result of the reduction of the vessels' carrying amount to their fair value less cost to sell.

F-37

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

6.          Vessels, net - continued:

On November 2, 2015, the Company concluded two Memoranda of Agreement to sell its two Supramax vessels, Byron and Galveston, for an aggregate sales price of $12,300. The vessels were delivered to their new owners on November 25, 2015 and November 30, 2015, respectively. In this respect, a charge of $6,035 was recognized in the accompanying consolidated statement of operations for the year ended December 31, 2015, included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other".

Finally for the year ended December 31, 2015, an additional charge of $113,019 was recognized and included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other", in the accompanying consolidated statement of operations, due to the reduction of the vessels' held for sale carrying amount to their fair value less cost to sell as of December 31, 2015 (Note 11).

On February 15, 2016, the Company announced that the prior sale of the vessel owning companies of its Capesize vessels, the Fakarava, Rangiroa and Negonego, to entities that may be deemed to be beneficially owned by its Chairman and CEO, Mr. George Economou, had failed. In addition, the Company reached a settlement agreement with the charterer of these vessels for an upfront lumpsum payment and the conversion of the daily rates to index-linked time charters. On March 24, 2016, the Company concluded a new sales agreement with entities that may be deemed to be beneficially owned by Mr. George Economou for the sale of the shares of the vessel owning companies of these Capesize vessels (Fakarava, Rangiroa and Negonego) for an aggregate price of $70,000, including their existing employment agreements and the assumption of the debt associated with the vessels with an outstanding balance of $102,070 at March 24, 2016. On March 30, 2016, the Company received the lender's consent for the sale of the shares of the vessels' owning companies and made a prepayment of $15,000, under the respective loan agreement dated February 14, 2012. As part of the transaction the Company also paid the amount of $12,060, being the difference between the purchase price and the outstanding balance of the respective debt facility, to the new owners. On March 31, 2016, the shares of the vessel owning companies were delivered to their new owners. In this respect, a charge of $23,018, was recognized and included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other", in the accompanying consolidated statement of operations for the year ended December 31, 2016.

On August 22, 2016, the Company concluded a Memorandum of Agreement with an unaffiliated third-party to sell its Panamax vessel, Coronado, for a gross price of $4,250. The vessel was delivered to its new owner on September 9, 2016. In this respect, a gain of $1,084 was recognized in the accompanying consolidated statement of operations for the year ended December 31, 2016, included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other".

On September 16, 2016, the Company entered into a sale agreement with an entity that may be deemed to be beneficially owned by Mr. George Economou, the Company's Chairman and CEO, for the sale of the shares of the owning company of the Panamax vessel Oregon, including the associated bank debt, for a gross price of $4,675. As part of the transaction the Company also paid the amount of $7,825 to the new owners, being the difference between the purchase price and the outstanding balance of the respective debt facility. The Company drew down the respective amount under its Revolving Credit Facility (Note 3). The shares of the vessel owning company were delivered to the new owner on September 21, 2016. Due to the controlling interests of Mr. George Economou in the Company and the buyers, this sale constitutes a common control transaction. In this respect, a gain of $281 was recognized and included in "Additional paid in capital" in the accompanying consolidated balance sheet as at December 31, 2016, in accordance with the relevant U.S. GAAP guidance.

On September 27, 2016, October 5, 2016 and October 18, 2016, the Company also concluded Memoranda of Agreement with unaffiliated third-parties for the sale of its Panamax vessels, Ocean Crystal, Sonoma and Sorrento, respectively, for gross prices of $3,720, $3,950 and $6,700, respectively.

F-38

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

6.          Vessels, net - continued:

As a result of the concluded agreements, the Company revalued the Ocean Crystal, Sonoma and Sorrento as of September 30, 2016 to their fair values with reference to their purchase prices and a gain of $3,020 was recognized in the accompanying consolidated statement of operations for year ended December 31, 2016, included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other".On November 7, 2016, November 15, 2016 and November 22, 2016, the vessels Ocean Crystal, Sonoma and Sorrento, respectively, were delivered to their new owners. In this respect, an aggregate loss of $641 was recognized in the accompanying consolidated statement of operations for the year ended December 31, 2016, included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other".

On October 26, 2016, the Company entered into sales agreement with entities that may be deemed to be beneficially owned by the Company's Chairman and CEO, Mr. George Economou, for the sale of the owning companies of three Panamax vessels the Amalfi, Galveston (the vessel Galveston was sold and delivered to its owners on November 30, 2015) and Samatan, along with the associated bank debt for an aggregate gross price of $15,000. As part of the transaction, the Company also paid the amount of $58,619, being the difference between the purchase price and the outstanding balance of the respective debt facility, to the new owners. The Company drew down the respective amount under its New Revolving Facility (Note 3). The shares of the vessel owning companies were delivered to the new owners on October 31, 2016. Due to the controlling interests of Mr. George Economou in the Company and the buyers, the above sales constitute common control transaction. In this respect, an aggregate loss of $476 was recognized and included in "Additional paid in capital", in the accompanying consolidated balance sheet as at December 31, 2016, in accordance with the relevant U.S. GAAP guidance.

During the year ended December 31, 2016, a charge of $18,266 was also recognized as "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" due to the reduction of the vessels' held for sale carrying amount to their fair value less cost to sell as of December 31, 2016.

As of December 30, 2016, and due to the improved financial condition of the Company, the Company's Board of Directors decided that the remaining 13 drybulk vessels previously classified as held for sale will not be sold. Effective December 31, 2016, the Company reclassified its drybulk fleet as held and used and a gain of $1,851 was recognized and included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" in the accompanying consolidated statement of operations. Also, the impairment review for the year ended December 31, 2016  indicated that the carrying amount of the offshore support vessels' was not recoverable and, therefore, a charge of $65,712 was recognized and included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" in the accompanying consolidated statement of operations.

According to ASU 2014-08, "Presentation of Financial Statements and Property, Plant and Equipment", the sale of the Company's vessels and vessel owning companies did not represent a strategic shift, hence no presentation of discontinued operations was required.

During the year ended December 31, 2015 and 2016, substantially all of the Company's net income, except for equity in losses in Ocean Rig and income from the offshore support segment, related to vessels sold or held for sale.

On February 10, 2017, the Company concluded a Memorandum of Agreement with an unaffiliated third party for the acquisition of one Aframax tanker under construction, Balla, for a purchase price of $44,500. The vessel was delivered on April 27, 2017.

On February 14, 2017, the Company concluded a Memorandum of Agreement with an unaffiliated third party for the acquisition of one second hand Very Large Crude Carrier, Shiraga, for a purchase price of $57,000. The Company took delivery of this vessel on June 9, 2017.

F-39

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

6.          Vessels, net - continued:

On March 1, 2017, the Company concluded a Memorandum of Agreement with an unaffiliated third party for the acquisition of one second hand Aframax tanker, Stamos, for a purchase price of $29,000. The Company took delivery of this vessel on May 15, 2017.

On March 24, 2017, the Company concluded four Memoranda of Agreement with unaffiliated third parties for the acquisition of four modern, second-hand Newcastlemax vessels Marini, Morandi, Bacon and Judd for a total purchase price of $120,540. The Company took delivery of the vessels on May 2, 2017, July 5, 2017, July 6, 2017 and July 13, 2017, respectively.

The Newcastlemax bulkers Bacon and Judd had attached to their Memoranda of Agreements time charter employment contracts until certain dates in 2018 and 2017, respectively. After determining the fair values of these time-chartered contracts as of the acquisition date, the Company recorded a liability of $516 in relation to the attached time charter employment contract of the vessel Judd on the consolidated balance sheet under "Fair value of below market acquired time charters". This is amortized into revenues using the straight-line method over the respective contract period. As at December 31, 2017, it was fully amortized and included in "Voyage and time charter revenues" in the accompanying consolidated statement of operations for the year ended December 31, 2017. For the vessel Bacon, the fair value of the attached time charter employment contract was determined to be $0.

On March 31, 2017, the Company concluded three Memoranda of Agreement with unaffiliated third parties for the acquisition of three Kamsarmax drybulk vessels, two secondhand, Matisse and Valadon, and one under construction, Kelly, for a total purchase price of $71,000. The vessels Valadon, Matisse and Kelly were delivered on May 17, 2017, June 1, 2017 and June 14, 2017, respectively.

On April 12, 2017, the Company concluded a Memorandum of Agreement with an unaffiliated third party for the acquisition of one secondhand Kamsarmax drybulk carrier, Nasaka, for a purchase price of $22,000. The Company took delivery of this vessel on May 10, 2017.

On April 27, 2017, the Company concluded a Memorandum of Agreement with an unaffiliated third party for the acquisition of one second hand Kamsarmax drybulk vessel, Castellani, for a purchase price of $23,500. The Company took delivery of this vessel on June 6, 2017.

On May 15, 2017, the Company also entered into a purchase agreement with an entity that may be deemed to be beneficially owned by Mr. George Economou for the purchase of the shares of the owning company of the Suezmax newbuilding vessel Samsara for a purchase price of $64,000. The vessel was time chartered back to the seller and employed from May 24, 2017 under a five year time charter plus optional periods in charterer's option at a base rate plus profit share and the charterer was also granted purchase options at the end of each firm period. An amount of $440 of the total amount paid, representing the excess of the carrying value of the assets of the vessel owning company acquired over the purchase price paid, was classified in "Additional Paid-in Capital", under the respective "Accounting for transactions under common control". The Company took delivery of this vessel on May 19, 2017 (Note 3). The Company accounts the abovementioned lease as an operating lease since none of the capital lease criteria are met.

On December 19, 2017, the Company concluded a Memorandum of Agreement with an unaffiliated third party to sell its Panamax vessel Ecola for a gross price of $8,500. The vessel was delivered to its new owner on December 29, 2017. In this respect, a gain of $4,425 was recognized in the accompanying consolidated statement of operations for the year ended December 31, 2017, included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other".

F-40

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

6.          Vessels, net - continued:

For the year ended December 31, 2017, an amount of $8,834 relating to capitalized expenses and $2,426 relating to capitalized interest are included in the "Vessels, net".

The VLGCs Anderida, Aisling, Mont Fort and Mont Gelé are pledged as collateral to secure the Company's long-term debt, while the vessels Samsara, Balla, Judd and Castellani are pledged as collateral to secure the Company's Loan Facility Agreement (Notes 10 and 3 respectively).

7.          Acquisition of Nautilus Offshore Services Inc.:

During 2015, the Company acquired, through the acquisition of Nautilus Offshore Services Inc. ("Nautilus"), six Offshore Supply Vessels, all of which were on time charters to Petroleo Brasileiro S.A. (Petrobras) until certain dates in 2017, and included fixed day rates that were above day rates available as of the acquisition date.

The acquisition of the common shares of Nautilus was accounted for under the acquisition method of accounting. The Company began consolidating Nautilus from October 21, 2015 (the date of acquisition), as of which date the results of operations of Nautilus are included in the accompanying consolidated statement of operations.

After determining the aggregate fair values of these time-chartered contracts as of the acquisition date, the Company recorded the respective contract fair values on the consolidated balance sheet under "Fair value of above market acquired time charters". These are amortized into revenues using the straight-line method over the respective contract periods (based on the respective contracts).

On February 15, 2016, March 3, 2016 and April 11, 2016, the Company announced that Petrobras had given notice of termination of the contracts for the vessels Crescendo, Jubilee and Indigo effective as of March 6, 2016, March 9, 2016 and April 6, 2016, respectively. The contracts of the vessels Crescendo, Jubilee and Indigo were to expire on January 8, 2017, April 25, 2017 and August 30, 2017, respectively. On December 27, 2016, and in accordance with the respective terms the contract of the vessel Colorado expired. Effective on May 3, 2017, Petrobras also gave notice of termination on the contract for the vessel Jacaranda that was expiring on July 3, 2017. On June 21, 2017, and in accordance with the respective terms, the contract of the vessel Emblem expired.

The amortization of the fair value of the above market acquired time charter contracts as of December 31, 2015, amounted to $1,467 and included to "Voyage and time charter revenue", in the accompanying consolidated statement of operations for the year ended December 31, 2015.  The amortization and write offs of the fair value of the above market acquired time charter contracts as of December 31, 2016 amounted to $4,346 and $5,161 and are included to "Voyage and time charter revenue" and "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other", respectively, in the accompanying consolidated statement of operations for the year ended December 31, 2016. The amortization and write offs of the fair value of the above market acquired time charter contracts as of December 31, 2017, amounted to $1,200 and $300 and are included to "Voyage and time charter revenue" and "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other", respectively, in the accompanying consolidated statement of operations for the year ended December 31, 2017.

Goodwill included in the offshore support segment, amounted to $7,002, constituted a premium paid by the Company over the fair value of the net assets of Nautilus, which was attributable to anticipated benefits from Nautilus's position to take advantage of the fundamentals of the offshore support market.

At December 31, 2016, the Company performed its impairment review for goodwill. As a result of its impairment testing, the Company determined that the goodwill associated with its offshore support reporting unit was impaired. Accordingly, the Company recognized an impairment charge for the full carrying amount of the goodwill associated with this reporting unit in the amount of $7,002, which had no tax effect.

F-41

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(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,
	2016			2017
Other non-current assets		$	-		$	44,869
		$	-		$	44,869

As of December 31, 2017, an amount of $44,869 was recorded as "Other non-current assets" in the accompanying consolidated balance sheets regarding the last installment due to HHI for the delivery of the VLGC Mont Gelé. The last installment, including related costs, of $44,869 was held in an escrow account and released to the HHI on January 4, 2018 upon the delivery of the vessel to the Company (Notes 5, 19).

9.          Investment in an Affiliate:

- Ocean Rig:

On June 8, 2015, following an equity offering of Ocean Rig, the Company's ownership decreased to 47.2% and accordingly, the Company lost its controlling financial interest and deconsolidated Ocean Rig from its financial statements. From that date onwards, Ocean Rig was considered as an affiliated entity and not as a controlled subsidiary of the Company and the investment in Ocean Rig was accounted for under the equity method due to the Company's significant influence over Ocean Rig.

On June 8, 2015, based on the equity method, the Company recorded an investment in Ocean Rig of $514,047, which represented the fair value of the common stock that was held by the Company on such date, with a closing market price of $6.96 per share. The Company calculated a loss due to deconsolidation of $1,347,106, which was calculated as the fair value of the Company's equity method investment in Ocean Rig less the Company's 47.2% interest in Ocean Rig's net assets on June 8, 2015.

On August 13, 2015, following the repayment of the outstanding balance of $80,000 owed to Ocean Rig under the $120,000 Note and the transfer of 17,777,778 shares of Ocean Rig previously owned by the Company to Ocean Rig as full payment of the outstanding balance, the Company's interest in Ocean Rig decreased to 40.4%.

The Company's equity in the losses and capital transactions of Ocean Rig is shown in the accompanying consolidated statements of income for the year ended December 31, 2015, as "Losses of affiliated companies" and amounted to $349,872, including $310,468 of impairment in Ocean Rig investment.

As at December 31, 2015, the Company's investment in Ocean Rig had a carrying value of $401,878, while the market value of the investment was $91,410. Based on the relevant guidance provided by U.S. GAAP, the Company concluded that the investment in Ocean Rig was impaired and that the impairment was other than temporary. Therefore the investment in Ocean Rig was written down to its fair value and a loss of $310,468 was recognized and included in the accompanying consolidated statement of operations for the year ended December 31, 2015.

As at March 31, 2016, the Company's investment in Ocean Rig had a carrying value of $208,176, while the market value of the investment was $45,985. Based on the relevant guidance provided by U.S. GAAP, the Company concluded that the investment in Ocean Rig was impaired and that the impairment was other than temporary. Therefore, the investment in Ocean Rig was written down to its fair value and a loss of $162,191 was recognized and included in the accompanying consolidated statement of operations for the year ended December 31, 2016.

On April 5, 2016, the Company sold all of its shares in Ocean Rig to a subsidiary of Ocean Rig for total cash consideration of approximately $49,911 and recognized a gain of $792 as a result of the above transaction, including $343 relating to accumulated other comprehensive income which is included in the accompanying consolidated statement of operations for the year ended December 31, 2016. As of April 5, 2016, the Company no longer holds any equity interest in Ocean Rig.

F-42

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

9.          Investment in an Affiliate - continued:

The Company's equity in the losses and capital transactions of Ocean Rig was 40.4% up to April 5, 2016 and is shown in the accompanying consolidated statement of operations for the year ended December 31, 2016, as "Losses of affiliated company" amounting to a loss of $41,454.

- Heidmar

On August 29, 2017, following the closing of the Private Placement (Note 3), the Company issued 12,000,000 common shares to SPII, an entity that may be deemed to be beneficially owned by Mr. George Economou, as a consideration for the purchase of the 100% issued and outstanding equity interests of SPI, which directly holds a 49% interest in Heidmar, a global tanker pool operator. SPI is a member of Heidmar, a Delaware limited liability company that directly owns 49% of the total issued equity interests of Heidmar. The fair value of the investment as of the acquisition date was $34,000 (Note 11).

Since August 29, 2017, Heidmar is considered an affiliated entity of the Company and qualifies as an equity method investment due to Company's significant influence over Heidmar. The Company elected to account for the investment in Heidmar under the fair value option in order to mitigate volatility in income that would affect the measurement of the investment under the equity method and achieve operational simplifications. The Company's investment in Heidmar was recorded at $34,000 upon the closing of the transaction. As of December 31, 2017, no change in the fair value of Company's investment in Heidmar was identified, as determined by third-party valuator, based on a valuation method that combines (weighs) the income and the market approach method and thus, no adjustment for the investment in Heidmar to its fair value was recognized in "Losses of affiliated companies" in the accompanying consolidated statement of operations for the year ended December 31, 2017.

The Company, considering that Heidmar is not substantially similar with the peer group, assessed as appropriate the weighing between the two approaches used in the valuation to be 80% for the income approach and 20% for the market approach. Specifically, the income approach employed in the valuation exercise is based on the discounted cash flow model that incorporates unobservable in the market place inputs (Level 3 inputs). The inputs that were used in estimating Heidmar's discounted cash flows include Heidmar's weighted average cost of capital, projected charter rates based on the most recent ten year historical rates for similar vessels as adjusted for any outliers, annual increase in Heidmar's historical wages-salaries and non-compensated general and administrative expenses, the number of vessels under management with existing fixed contracts, a long term growth factor, commission rates on projected charter rates and the number of employees as a ratio of the vessels historically managed per employee.

The market approach employed in the valuation exercise incorporates findings from utilizing adjusted data in an active marketplace for identical securities (Level 2 inputs). In particular, the market approach valuation method was based on peer group of companies which were considered fairly similar and comparable and was determined using multiples of Enterprise Value ("EV") / EBITDA of those peer group companies. Furthermore, a 10% control premium was assumed in order to factor to the valuation the control/significant influence that exits in Heidmar's equity value in comparison with minority shareholdings in peer group analysis.

Finally based on market available empirical evidences and methods, a discount factor representing the lack of marketability due to Heidmar's private status was used in estimating the total fair value of Heidmar's equity.

The significant assumptions used in the fair value measurement of the Company's investment in Heidmar are: (i) the discount factor due to lack of marketability (7.5%), (ii) the projected charter rates based on the most recent ten year historical rates for similar vessels as adjusted for any outliers, (iii) the long term growth factor (2.5%), (iv) the commission rates assumed over projected charter rates (2.5%), (v) the weighted average cost of capital (11.9%), (vi) the number of vessels under management with existing fixed contracts (80 vessels) and (vii) the weighting between the two approaches (80% and 20% for the income and market approach, respectively).

F-43

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

9.          Investment in an Affiliate - continued:

A change of: (i) discount factor due to lack of marketability by 5% would result in a change of Company's investment in Heidmar by $1,858, (ii) charter rates by 10% would result in an increase and decrease of Company's investment in Heidmar by $6,199 and $6,257, respectively, (iii) long term growth factor by 1%, would result in an increase and decrease of Company's investment in Heidmar by $1,787 and $1,443, respectively, (iv) commission rates by 0.5% would result in an increase and decrease of Company's investment in Heidmar by $10,880 and $11,418 , respectively, (v) weighted average cost of capital by 1% would result in an increase and decrease of Company's investment in Heidmar by $2,014 and $2,493, respectively, (vi) the number of vessels under management by 4% per year would result in an increase and decrease of Company's investment in Heidmar by $7,790 and $6,805, respectively and (vii) weighting of market versus income approach by 10% would result in a change of Company's investment in Heidmar by $428 (Note 11).

10.          Long-term Debt:

The amount of long-term debt shown in the accompanying consolidated balance sheets is analyzed as follows:

	December 31,
	2016			2017
Secured Credit Facilities - Drybulk Segment	$	16,935		$	-
Secured Credit Facilities - Gas Carrier Segment		-			147,716
Less: Deferred financing costs		(124	)		(2,378	)
Total debt		16,811			145,338
Less: Current portion		(16,811	)		(11,635	)
Long-term portion	$	-		$	133,703

Term bank loans and credit facilities

The bank loans are payable in U.S. Dollars in quarterly installments with balloon payments due at maturity until December 2023. Interest rates on the outstanding loans as at December 31, 2017, are based on LIBOR plus a margin.

On November 18, 2016, the Company reached an agreement for the settlement of its outstanding obligation under a loan agreement dated June 20, 2008, with the respective lender. Under the terms of the agreement, the lending bank agreed to a write-off of almost half of the outstanding principal and interest due. A gain of $8,366 was recognized as part of the transaction included in "Gain on debt restructuring" in the accompanying consolidated statement of operations for the year ended December 31, 2016. On November 18, 2016, the Company repaid $8,200 of principal, as per agreement and during 2017, it fully repaid the outstanding amount totaling $2,000, according to the agreement concluded on November 18, 2016, under its loan agreement dated June 20, 2008.

F-44

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

10.          Long-term Debt - continued:

As of December 31, 2016, the Company was in breach of certain financial covenants regarding its secured credit facility dated March 19, 2012 and had not made principal repayments and interest payments under this 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 classified the respective bank loan amounting to $14,935 as current liability at December 31, 2016. On April 24, 2017, the Company made a prepayment of $15,158 and repaid in full the outstanding amount and overdue interest under a loan agreement dated March 19, 2012.

On June 22, 2017, the Company entered into a secured credit facility of up to $150,000 to partially finance the construction costs relating to the four VLGCs Anderida, Aisling, Mont Fort and Mont Gelé. The facility bears interest at LIBOR plus a margin and is repayable in twenty-four quarterly installments. As of December 31, 2017, the Company drew the whole amount of $150,000, related to the delivery of the four VLGCs and made scheduled repayments amounted to $2,284.

The aggregate available undrawn amount under the Company's facilities at December 31, 2016 and 2017 was $0.

The weighted-average interest rates on the above outstanding debt were: 4.98%, 3.15% and 3.37% for the years ended December 31, 2015, 2016 and 2017, respectively.

The table below presents the movement for bank loans throughout 2017:

Loan	Loan agreement date	Original Amount		December 31, 2016		New Loans		Repayments			December 31, 2017
Secured Credit Facility	March 19, 2012	$	19,065	$	14,935		-		(14,935	)	$	-
Secured Credit Facility	June 20, 2008		103,200		2,000		-		(2,000	)		-
Secured Credit Facility	June 22, 2017		150,000		-		150,000		(2,284	)		147,716
				$	16,935		150,000		(19,219	)	$	147,716

F-45

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

10.          Long-term Debt - continued:

The Company's secured credit facility dated June 22, 2017 is secured by first priority mortgage over the Company's VLGCs, corporate guarantees, first priority assignments of all freights, earnings, insurances and requisition compensation. The loan contains customary financial 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. The loans also contain certain financial covenants relating to the Company's financial position and operating performance, such as maintaining liquidity above a certain level. The Company's secured credit facility imposes operating and negative covenants on the Company and its subsidiaries. These covenants may limit the ability of certain of the Company's subsidiaries 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, 2017, the Company was in compliance with the covenants regarding its secured credit facilities.

Total interest incurred on long-term debt and amortization of debt issuance costs, including capitalized interest, for the years ended December 31, 2015, 2016 and 2017, amounted to $177,537, $8,299 and $17,125, 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, 2017, including balloon payments, totaling $147,716, are as follows:

Due through December 31, 2018	$	12,179
Due through December 31, 2019		12,179
Due through December 31, 2020		12,180
Due through December 31, 2021		12,180
Due through December 31, 2022		12,180
Thereafter		86,818
Total principal payments		147,716
Less: Financing fees		(2,378	)
Total debt	$	145,338

The Loan Facility Agreement with Sierra is discussed in Note 3 herein.

F-46

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

11.          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 balance sheet.

The Company recognizes all derivative instruments as either assets or liabilities at fair value on its consolidated balance sheets.

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. All of the Company's derivative transactions are entered into for risk management purposes.

Interest rate swaps, cap and floor agreements: All of the Company's interest swap agreements were either matured or terminated during the year ended December 31, 2016. As of December 31, 2016 and December 31, 2017, the Company had no interest rate swap agreements outstanding.

Accumulated other comprehensive loss included realized losses on cash flow hedges associated with interest capitalized during prior years under "Advances for vessels under construction and related costs" 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, 2015 and 2016, the amounts of $466 and $110, respectively, were reclassified into the consolidated statement of operations.

The fair value of the interest rate swap 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 interest rate swap agreements that do not qualify for hedge accounting for the years ended December 31, 2015 and 2016 amounted to gains of $10,848 and $2,193, respectively, and are included in "Gain/ (Loss) on interest rate swaps" in the accompanying consolidated statement of operations.

		Amount of Gain/(Loss)
		Year Ended December 31,
Derivatives not designated as hedging instruments	Location of Gain or (Loss) Recognized	2015				2016			2017
Interest rate swaps	Gain/(Loss) on interest rate swaps		$	(11,601	)		$	403		$	-
Total			$	(11,601	)		$	403		$	-

The carrying amounts of cash and cash equivalents, restricted cash, trade accounts receivable, accounts payable, other current assets, other non-current assets and liabilities and due to/due from related parties reported in the consolidated balance sheets approximate their respective fair values because of the short term nature of these accounts. Assets and liabilities held for sale are stated at fair value less cost to sell. 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 fair value of the investment in Heidmar was determined based on a valuation method that combines (weighs) the income and the market approach using unobservable in the market place inputs (Level 3 inputs) and utilizing adjusted data in an active marketplace for identical securities (Level 2 inputs), respectively.

For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company has in place its valuation policies and procedures regarding the assessment of the significant inputs used for the determination of the fair value of its investment. The development and determination of the inputs for fair value measurements categorized within Level 3 and fair value calculations are the Company's responsibility with support from the third party valuator and which are approved by the Company's management.

F-47

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

11.          Financial Instruments and Fair Value Measurements - continued:

Any changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions used by the third party valuator, assessed by the Company for accuracy and reasonability, and recorded as appropriate. The significant assumptions and valuation methods that the Company used to determine the initial fair value and any subsequent change in the fair value of the Company's investment in Heidmar are discussed below and in Note 9.

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 December 31, 2017.

	Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)			Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)
Recurring measurements:
Investment in affiliate – Heidmar (Note 9)		$	-		$	-		$	34,000
Total		$	-		$	-		$	34,000

The following table summarizes the valuation of assets measured at fair value on a non-recurring basis as of December 31, 2016.

	Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)			Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)
Non-Recurring measurements:
Long-lived assets held and used		$	-		$	95,550		$	-
Total		$	-		$	95,550		$	-

F-48

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

11.          Financial Instruments and Fair Value Measurements - continued:

On June 8, 2015, the Company recognized a loss due to the deconsolidation of Ocean Rig of $1,347,106, which was calculated as the fair value of the Company's equity method investment in Ocean Rig less the Company's 47.2% interest in Ocean Rig's net assets on June 8, 2015 (Note 9).

In accordance with the provisions of relevant guidance, ten tanker vessels held for sale with a carrying amount of $587,271 were written down to their fair value as determined based on the agreed sale prices, resulting in a charge of $56,631, which was included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" in the accompanying consolidated statement of operations for the year ended December 31, 2015 (Note 6).

The impairment review performed as of June 30, 2015 indicated also that one of the Company's vessels, with a carrying amount of $95,937, should be written down to its fair value as determined based on the valuations of the independent valuators, resulting in a charge of $83,937, which was included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other"  in the accompanying consolidated statement of operations for the year ended December 31, 2015 (Note 6).

Following the sale agreements for the sale of 14 vessel owning companies (and related vessels) and three vessels (Note 6), the associated 17 vessels held for sale with a carrying amount of $748,320 were written down to their fair values as determined based on the agreed sale prices, resulting in a charge of $375,090 included in "Impairment loss (gain)/loss from sale of vessels and vessel owning companies and other" in the accompanying consolidated statement of operations for the year ended December 31, 2015.

Furthermore due to their classification as held for sale (Note 6), 22 vessels were written down to their fair value as determined based on the valuations of the independent valuators, resulting in a charge of $422,404, which was included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" in the accompanying consolidated statement of operations for the year ended December 31, 2015.

Following the sale agreements for two Supramax vessels (Note 6), the vessels, which had an aggregate carrying value of $17,820, were written down to their fair values as determined based on the agreed sale prices resulting in a charge of $6,035, included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" in the accompanying consolidated statement of operations for the year ended December 31, 2015.

During the three month period ended December 31, 2015, an additional charge of $113,019 was recognized and included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" in the accompanying consolidated statement of operations due to the reduction of the vessels' held for sale carrying amount to their fair value less cost to sell (Note 6).

During 2016, the sale of the owning companies of the Capesize vessels Fakarava, Rangiroa and Negonego resulted in a charge of $23,018 and the sale of the vessel Coronado resulted into a gain of $1,084, both included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" for the year ended December 31, 2016 (Note 6).

An additional charge of $18,266 was also recognized as "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" due to the reduction of the vessels' held for sale carrying amount to their fair value less cost to sell, as of March 31, 2016.

Due to the sale of the vessels Ocean Crystal, Sonoma and Sorrento (Note 6), the Company revalued the above vessels with reference to the purchase prices as concluded in the respective Memoranda of Agreement and recognized a gain amounting to $3,020 and included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" for the year ended December 31, 2016.

F-49

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

11.          Financial Instruments and Fair Value Measurements - continued:

Also, a loss of $641 was recognized in the accompanying consolidated statement of operations for the year ended December 31, 2016 included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" related to the delivery of those vessels to their new owners.

On December 30, 2016, the Company's Board of Directors resolved that the 13 drybulk vessels of the Company's fleet that were previously classified as held for sale will not be sold, effective December 31, 2016. Therefore, the vessels were reclassified as held and used and a gain of $1,851 was recognized and included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" based on the respective U.S. GAAP guidance, due to their measurement at their fair values as at December 31, 2016 as determined based on valuations of the independent valuators.  Also, the impairment review for the year ended December 31, 2016  indicated that the carrying amount of the offshore support vessels was not recoverable and, therefore, a charge of $65,712 was recognized and included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" in the accompanying consolidated statement of operations (Note 6).

The Company's independent members of the board, following the receipt of a fairness opinion, on August 11, 2017 approved a transaction pursuant to which the Company sold 36,363,636 of the Company's common shares to entities that may be deemed to be beneficially owned by its Chairman and CEO, Mr. George Economou, for an aggregate consideration of $100,000 at a price of $2.75 per share (i.e., the Private Placement). The Private Placement transaction was a non-cash transaction with a transfer of an exchange of assets and liabilities from entities that may be deemed to be beneficially owned by the Company's Chairman and CEO, Mr. George Economou, as a consideration for the common stock issued. The fair values of the non-cash transactions, as described above, are determined based on the fair values of assets and liabilities given up on the date that the transaction was concluded, or if more clearly evident, the fair value of the asset and liabilities received on the date that the respective transaction was concluded. The Company considered that the fair value of the shares issued as part of the transaction is considered more clearly evident and concluded that in this respect the aforementioned non-monetary transaction will be recorded based on the fair value of the shares issued as part of the Private Placement. The fair value of the Company's exchanged capital stock was valued using the quoted market price available as of the closing of the transaction according to ASC 820 "Fair Value Measurement".

The Company issued an aggregate 36,363,636 shares of its common stock in the Private Placement to: (i) Sierra in exchange for the reduction of the principal outstanding balance by $27,000 of the Company's Revolving Facility (Note 3); (ii) SPII in exchange for the indirect purchase of the 49% equity interests in Heidmar that was measured at $34,000 (Note 9); and (iii) Mountain in exchange for the termination of the Participation Rights Agreement (Note 3) and the forfeiture of the Series D Preferred Shares. The transaction resulted in a total loss of $7,600, as the difference between the transaction price and the fair value price of $2.05 and is included in "Loss on Private Placement" in the accompanying consolidated statement of operations for the year ended December 31, 2017. In addition, an amount of $2,805 was classified under the respective "Stockholders' Contribution" as the difference between the carrying value of the Series D Preferred Stock before their forfeiture and their fair value.

On December 31, 2017, based on the valuation method that combines (weighs) the income and the market approach using unobservable in the market place inputs (Level 3 inputs) and utilizing adjusted data in an active marketplace for identical securities (Level 2 inputs), respectively, no change in the fair value of the Company's investment in Heidmar was identified and thus no adjustment in the fair value of the Company's investment in Heidmar was recorded in the accompanying consolidated statement of operations for the year ended December 31, 2017 as "Losses of affiliated companies" (Note 9).

F-50

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

12.          Common Stock and Additional Paid-in Capital:

Net Loss Attributable to Dryships Inc. and Transfers to the Non-controlling Interest

The following table represents the effects of any changes in Dryships' ownership interest in a subsidiary on the equity attributable to the shareholders of Dryships.

	Year Ended December 31,
	2015			2016			2017
Net loss attributable to Dryships Inc.	$	(2,847,061	)	$	(198,686	)	$	(42,544	)
Transfers to the non-controlling interest:
Decrease in Dryships Inc. equity for reduction in subsidiary ownership		(49,444	)		-			-
Net transfers to the non-controlling interest		(49,444	)		-			-
Net loss attributable to Dryships Inc. and transfers to/from the non-controlling interest	$	(2,896,505	)	$	(198,686	)	$	(42,544	)

Issuance of common shares

On December 23, 2016, the Company entered into an agreement (the "2016 Purchase Agreement") with Kalani Investments Limited (the "Investor"), an entity organized in the British Virgin Islands that is not affiliated with the Company, under which the Company could sell up to $200,000 of its common stock to Investor over a period of 24 months, subject to certain limitations, and receive up to an aggregate of $1,500 of shares of our common stock as a commitment fee in consideration for entering into the 2016 Purchase Agreement. Proceeds from any sales of common stock were used for general corporate purposes. Kalani had no right to require any sales and was obligated to purchase the common stock as directed by the Company, subject to certain limitations set forth in the agreement. As of January 31, 2017, the Company completed the sale to the Investor of the full $200,000 worth of shares of its common stock under the 2016 Purchase Agreement, which then automatically terminated in accordance with its terms. Between the date of the 2016 Purchase Agreement, December 23, 2016, and January 30, 2017, the Company sold an aggregate of 32,681 shares (71,864,590 before the effect of the reverse stock splits) of common stock to the Investor, out of which 263 common shares (844,335 before the effect of the reverse stock splits) were commitment fees for entering into the 2016 Purchase Agreement.

On February 17, 2017, the Company entered into a common stock purchase agreement (the "February 2017 Purchase Agreement") with the Investor. The February 2017 Purchase Agreement provided that, upon the terms and subject to the conditions set forth therein, the Investor was committed to purchase up to $200,000 worth of shares of the Company's common stock over the 24-month term of the purchase agreement and receive up to an aggregate of $1,500 of shares of our common stock as a commitment fee in consideration for entering into the February 2017 Purchase Agreement. As of March 17, 2017, the Company completed the sale to the Investor of the full $200,000 worth of shares of common stock under the February 2017 Purchase Agreement, which then automatically terminated in accordance with its terms. Between the date of the February 2017 Purchase Agreement, February 17, 2017, and March 16, 2017, the Company sold an aggregate 118,165 shares of its common stock (115,801,710 before the effect of the reverse stock splits) to the Investor, out of which 872 common shares (854,631 before the effect of the reverse stock splits) were commitment fees for entering into the February 2017 Purchase Agreement.

On April 3, 2017, the Company entered into a common stock purchase agreement (the "April 2017 Purchase Agreement") with the Investor. The April 2017 Purchase Agreement provides that, upon the terms and subject to the conditions set forth therein, the Investor was committed to purchase up to $226,400 worth of shares of the Company's common stock over the 24-month term of the April 2017 Purchase Agreement and receive up to an aggregate of $1,500 of shares of the Company's common stock as a commitment fee in consideration for entering into the April 2017 Purchase Agreement.

F-51

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

12.          Common Stock and Additional Paid-in Capital - continued:

On August 11, 2017, the Company terminated the April 2017 Purchase Agreement. Between the date of the April 2017 Purchase Agreement, April 3, 2017, and August 10, 2017, the Company has sold an aggregate of 31,392,280 shares of its common stock (123,998,456 before the effect of the reverse stock splits) to the Investor, out of which 42,630 common shares (879,711 before the effect of the reverse stock splits) were commitment fees for entering into the April 2017 Purchase Agreement for a total proceeds of $193,598.

On August 11, 2017, the Company's Audit Committee approved a Term Sheet pursuant to which the Company sold 36,363,636 of the Company's common shares to entities that may be deemed to be beneficially owned by its Chairman and CEO, Mr. George Economou, for an aggregate consideration of $100,000 at a price of $2.75 per share. The Private Placement closed on August 29, 2017, when the Company issued an aggregate 36,363,636 shares of its common stock to SPII, Sierra and Mountain, entities that may be deemed to be beneficially owned by Mr. Economou (Note 3). The Company did not receive cash proceeds from the Private Placement.

Pursuant to the Term Sheet, the Audit Committee also approved a Rights Offering that commenced on August 31, 2017 and allowed the Company's shareholders to purchase their pro rata portion of up to $100,000 of the Company's common shares at a price of $2.75 per share. In connection with the Rights Offering, on August 29, 2017, Sierra also entered into a Backstop Agreement to purchase from the Company, at $2.75 per share, the number of shares of common stock offered pursuant to the Rights Offering that were not issued pursuant to existing shareholders' exercise in full of their rights. On October 4, 2017 and following the closing of the rights' subscription, the Company issued 36,363,636 shares of its common stock, of which 305,760 shares were issued to existing eligible shareholders and 36,057,876 shares were issued to Sierra as per the Backstop Agreement. The Company received $841 from the subscribed shareholders. Regarding the common shares issued to Sierra, the Company did not receive any cash proceeds (Note 3).

Issuance of preferred shares

On June 8, 2016, the Company, entered into a Securities Purchase Agreement with an institutional investor for the sale of 5,000 newly designated Series C Convertible Preferred Shares, warrants to purchase 5,000 Series C Convertible Preferred Shares and 0 common shares (310 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits). The securities were issued to the investor through a registered direct offering. The total net proceeds from the offering, after deducting offering fees and expenses, were approximately $5,000. The Company further received $5,000 due to the exercise of all warrants, and the total proceeds were $10,000. The Series C Convertible Preferred Stock accrued cumulative dividends on a monthly basis at an annual rate of 8%. Such accrued dividends were payable in shares of common stock or in cash at the Company's option, or in a combination of cash and common shares.

On July 6, 2016, August 3, 2016, September 1, 2016, October 5, 2016 and November 4, 2016, the Company issued 0 (70 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits), 0 (17 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits), 0 (278 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7reverse stock splits), 0 (328 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7reverse stock splits) and 0 (339 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7reverse stock splits) shares of Common stock, respectively, as dividend to the holders of our Series C Convertible Preferred shares.

As of November 18, 2016, the 5,000 Series C Convertible Preferred Shares issued on June 15, 2016 and their respective $400 dividends have been converted to 29 common shares (28,697 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) and, the 5,000 of the Series C Convertible Preferred Shares issued on August 10, 2016 due to the exercise of the respective warrants, and their respective $344 dividends have been converted to 152 common shares (149,187 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits).

F-52

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

12.          Common Stock and Additional Paid-in Capital – continued:

Issuance of preferred shares – continued:

On September 9, 2016, the Company entered into an agreement to convert $8,750 of the outstanding balance of the Revolving Credit Facility with Sifnos (Note 3) into 29 Series D Preferred shares (29,166 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) of the Company. Each preferred share had 100,000 votes and was not convertible into common stock of the Company. The 29 Series D Preferred shares (29,166 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) were issued on September 13, 2016.

On November 16, 2016, the Company entered into a Securities Purchase Agreement with the Investor for the sale of 20,000 newly designated Series E-1 Convertible Preferred Shares, preferred warrants to purchase 30,000 Series E-1 Convertible Preferred Shares, preferred warrants to purchase 50,000 newly designated Series E-2 Convertible Preferred Shares, prepaid warrants to initially purchase an aggregate of 47 common shares (46,609 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits - with the number of common shares issuable subject to adjustment as described therein), and 0 common shares (13 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits). The total gross proceeds from the sale of the securities and the exercise of the preferred warrants were $100,000. The Series E1 and E2 Convertible Preferred Shares were entitled to receive dividends which could be paid by the Company in shares of common stock or cash or a combination of cash and common shares and which were cumulative and accrued and compounded monthly.

As of December 31, 2016, the initial 20,000 Series E-1 Convertible Preferred Shares, which were issued on November 21, 2016, and their respective $1,400 dividends were converted to 873 common shares (856,352 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7reverse stock splits). Also, as of December 31, 2016, all preferred warrants were exercised and the 80,000 preferred shares were issued and together with their respective $5,551 dividends were converted to 3,153 common shares (3,090,405 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits). Finally, all prepaid warrants have been exercised and in this respect, 45 common shares (44,822 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) were issued.

On August 29, 2017, following the closing of the Private Placement, all outstanding shares of Series D Preferred Stock (which carried 100,000 votes per share) that Sifnos held were forfeited. An amount of $2,805, being the difference between the carrying value of the Series D Preferred Stock as of the forfeiture date and their fair value, was classified under the respective "Stockholders' Contribution" (Note 3).

Treasury stock

On September 9, 2017, 3 shares (3,009 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) of the Company's common stock, held as treasury stock, were retired. As of December 31, 2017, the Company did not hold any treasury stock.

Reverse stock splits

On February 22, 2016, the Reverse Stock Split Committee of the Company resolved to effect a 1-for-25 reverse stock split of its common shares. The reverse stock split occurred, and the Company's common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on March 11, 2016.

On July 29, 2016, the Board of Directors of the Company also determined to effect a 1-for-4 reverse stock split of its common shares. The reverse stock split occurred, and the Company's common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on August 15, 2016.

On October 27, 2016, the Reverse Stock Split Committee of the Company determined to effect a 1-for-15 reverse stock split of its common shares. The reverse stock split occurred, and the Company's common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on November 1, 2016.

F-53

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

12.          Common Stock and Additional Paid-in Capital – continued:

Reverse stock splits – continued:

On January 18, 2017, the Board of Directors of the Company determined to effect a 1-for-8 reverse stock split of its common shares. The reverse stock split occurred, and the Company's common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on January 23, 2017.

On April 6, 2017, the Company determined to effect a 1-for-4 reverse stock split of its common shares. The reverse stock split occurred, and the Company's common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on April 11, 2017.

On May 2, 2017, the Company determined to effect a 1-for-7 reverse stock split of its common shares. The reverse stock split occurred, and the Company's common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on May 11, 2017.

On June 16, 2017, the Company determined to effect a 1-for-5 reverse stock split of its common shares. The reverse stock split occurred, and the Company's common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on June 22, 2017.

On July 18, 2017, the Company determined to effect a 1-for-7 reverse stock split of its common shares. The reverse stock split occurred, and the Company's common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on July 21, 2017.

All previously reported share and per share amounts have been restated to reflect the reverse stock splits.

Dividends

On February 27, 2017, the Company's Board of Directors decided to initiate a new dividend policy. Under this policy, the Company expects to pay a regular fixed quarterly dividend of $2,500 to the holders of common stock. In addition, at its discretion, the Board may decide to pay additional amounts as dividends each quarter depending on market conditions and the Company's financial performance, over and above the fixed amount.

On February 27, 2017, the Company's Board of Directors declared a quarterly dividend of $2,500 with respect to the quarter ended December 31, 2016 to the shareholders of record as of March 15, 2017. The dividend was paid on March 30, 2017.

On April 11, 2017, the Company's Board of Directors declared a quarterly dividend of $2,500 with respect to the quarter ended March 31, 2017 to the shareholders of record as of May 1, 2017. The dividend was paid on May 12, 2017.

On July 7, 2017, the Company's Board of Directors declared a quarterly dividend of $2,500 with respect to the quarter ended June 30, 2017 to the shareholders of record as of July 20, 2017. The dividend was paid on August 2, 2017.

On October 16, 2017, the Company's Board of Directors declared a quarterly dividend of $2,500 with respect to the quarter ended September 30, 2017 to the shareholders of record as of October 27, 2017. The dividend was paid on November 13, 2017.

On February 6, 2018, the Company's Board of Directors declared a quarterly dividend of $2,500 with respect to the quarter ended December 31, 2017 to the shareholders of record as of February 20, 2018. The dividend was paid on March 6, 2018 (Note 19).

F-54

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

13. 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. The Plan expired on January 16, 2018 in accordance with its terms.

On January 12, 2011, 9,000,000 shares (1 share after all reverse stock splits) 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 (1 share after all reverse stock splits) vesting on the grant date and 1,000,000 shares (0 share after all reverse stock splits) 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 (share price before reverse stock splits). As of December 31, 2017, 8,000,000 of these shares (1 share after all reverse stock splits) have vested.

On August 20, 2013, the Compensation Committee approved that a bonus in the form of 1,000,000 shares (1 share after all reverse stock splits) 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 vested over a period of two years with 333,334 shares (1 share after all reverse stock splits) vesting on the grant date, 333,333 shares (0 share after all reverse stock splits) vesting on August 20, 2014 and 333,333 shares (0 share after all reverse stock splits) on August 20, 2015, respectively. 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 $2.01 per share (share price before reverse stock splits). As of December 31, 2016, the shares have vested in full.

On August 19, 2014, the Compensation Committee approved that a bonus in the form of 1,200,000 shares (0 share after all reverse stock splits) 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 (0 share after all reverse stock splits) vesting on December 31, 2014, 400,000 shares (0 share after all reverse stock splits) vesting on December 31, 2015, and 400,000 shares (0 share after all reverse stock splits) vesting on December 31, 2016. 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 $3.26 per share (share price before reverse stock splits). As of December 31, 2016, these shares have vested in full.

On December 30, 2014, the Compensation Committee approved that a bonus in the form of 2,100,000 shares (0 share after all reverse stock splits) 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 (0 share after all reverse stock splits) vesting on December 31, 2015, 700,000 shares (0 share after all reverse stock splits) vesting on December 31, 2016 and 700,000 shares (0 share after all reverse stock splits) 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 (share price before reverse stock splits). As of December 31, 2017, the shares have vested in full.

As of December 31, 2015, 2016 and 2017, there was $5,999, $2,419 and $691, respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost at December 31, 2017 is expected to be recognized over the following year.

The amounts of $6,590, $3,580 and $1,728 represent the stock based compensation expense for the year ended December 31, 2015, 2016 and 2017, respectively, and are recorded in "General and administrative expenses" in the accompanying consolidated statements of operations for the years ended December 31, 2015, 2016 and 2017, respectively.

14.          Commitment and contingencies:

14.1          Legal proceedings

Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping 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.

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 through 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.

An investigation was carried out by the Chinese authorities in connection with an alleged collision of the vessel Catalina with a fishing boat while enroute to Indonesia on May 7, 2016. The vessel remained detained in Ningbo, China and was released during July 2016.

Following determination of the Chinese Maritime authorities on the apportionment of inter ship liability, the P&I Club proceeded with the settlement of the property damage claim of the owners of the fishing boat. Crew claims were separately settled by such club. The criminal proceedings in relation to such case are now closed.

HPOR Servicos De Consultaria Ltda ("HPOR") on September 1, 2016 commenced London arbitration references against, among others, the Company, seeking payment of certain commissions that HPOR is alleging were due by, amongst others, the Company for certain agency and marketing services provided for the Ocean Rig Mykonos and the Ocean Rig Corcovado drilling units. The Company is disputing such allegations and has counterclaimed repayment of the commission already paid to HPOR. On March 7, 2018, the Tribunal issued awards in each of the references disallowing HPOR's claims and allowing the counterclaims brought by the Company. HPOR has since filed an application with the Court of Appeals in the U.K. for leave to appeal the arbitration awards.

F-55

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

14.          Commitment and contingencies - continued:

14.1          Legal proceedings - continued

On July 4, 2017, the Company announced that it and Mr. Economou had been named as defendants in a lawsuit filed in High Court of the Republic of the Marshall Islands (Civil Action No. 2017-131) by Michael Sammons alleging, in relevant part, breaches of fiduciary duty, unjust enrichment, and conflict of interest. The plaintiff sought, among other things, a temporary restraining order and preliminary injunction to suspend any further issuances of new shares of common stock by the Company at a price per share below the price specified by the plaintiff in the complaint, as well as certain other compensatory and punitive damages specified in the complaint. On July 24, 2017, the High Court of the Marshall Islands (the "Court") issued an order denying plaintiff's motion for a preliminary injunction.  On August 10, 2017, the plaintiff filed a first amended complaint that added a new plaintiff, and was styled as a direct action only, alleging three new counts for breach of fiduciary duties and constructive fraud, and removing certain of the counts asserted in the original complaint. The plaintiffs requested to proceed pro se and on August 16, 2017, the Court granted a motion to withdraw filed by plaintiffs' counsel. On August 22, 2017, now acting pro se, plaintiffs filed a motion for leave to file a second amended complaint, making certain changes to the allegations of the first amended complaint and propounding an additional count for breach of fiduciary duties. The most recent complaint seeks compensatory damages of $1.56 million and treble punitive damages of $4.68 million against Mr. Economou, and requests injunctive and equitable relief against the Company. The Company and Mr. Economou believe the complaint, as amended, to be without merit and filed motions to dismiss the second amended complaint.  At the oral argument on defendants' motions to dismiss, held on February 2, 2018, the Court announced that it was inclined to grant both motions to dismiss, and directed the parties to submit proposed orders on or before February 23, 2018.  The Court stated that after the Court received and reviewed all timely proposed orders, it would issue final decisions in writing.  On February 26, 2018, plaintiff filed a motion for voluntary dismissal without prejudice.  On March 6, 2018, defendants filed a joint opposition to plaintiff's motion for voluntary dismissal and moved to strike plaintiff's notice of dismissal and for the entry of dismissal with prejudice, which plaintiff opposed.  The Court issued acknowledgement of voluntary dismissal without prejudice on March 8, 2018.  Plaintiff filed a new action in the Western District of Texas on February 27, 2018, styled as Sammons v. Economou, No. 5:18-cv-00194 (W.D. Tex.). The Company and Mr. Economou believe that the complaint is without merit and intend to contest the allegations in the Texas action.

On August 2, 2017, a purported class action complaint was filed in the United States District Court for the Eastern District of New York (No. 17-cv-04547) by Herbert Silverberg on behalf of himself and all others similarly situated against, among others, the Company and two of its executive officers. The complaint alleges that the Company and two of its executive officers violated Sections 9, 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Company will respond to the complaint by the appropriate deadline to be set in the future, which is presently set at May 25, 2018. The Company and its management believe that the complaint is without merit and plan to vigorously defend themselves against the allegations.

On August 31, 2017, a complaint was filed in the High Court of the Republic of the Marshall Islands (Civil Action No. 2017-198) by certain Ocean Rig creditors against, among others, the Company and two of its executive officers (who are currently directors) and TMS Offshore Services. The complaint purports to allege nine causes of action, including claims for avoidance and recovery of actual and/or constructive fraudulent conveyances under common law or 6 Del. Code §§ 1304(A)(1), 1305, 1307, and 1308; aiding and abetting fraudulent conveyances; and declaratory judgment under 30 MIRC § 202. The Company (and all other defendants) moved to dismiss the case on October 31, 2017 and the motion has been briefed. In a scheduling conference held on February 14, 2018 in the Marshall Islands, the Court scheduled oral argument to proceed on June 6, 2018. The Company is not in a position at this time to express an opinion as to the ultimate outcome of this matter, or to provide an estimate on the amount or range of any potential loss.

Ocean Rig has funded a preserved claims trust, or PCT. The PCT was established to preserve, for the benefit of scheme creditors, any causes of action held by Ocean Rig, Agon Shipping Inc. and/or Ocean Rig Investments Inc. arising from the facts and circumstances identified in the draft complaint prepared by certain of Ocean Rig's creditors referenced above. If the trustees under the PCT determine that there is merit to any such claims, the trustees may take legal action for the benefit of all of the scheme creditors in the restructuring.

F-56

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

14.          Commitment and contingencies - continued:

14.1          Legal proceedings – continued

The Company received a subpoena from the SEC requesting certain documents and information from the Company in connection with offerings made by the Company between June 2016 and July 2017. The Company is providing the requested information to the SEC.

During September 2017, the vessels Majorca and Marbella experienced two grounding incidents with approximately total off-hire days of 82 days and 33 days, respectively, while the total recoverable cost is estimated to $1,828 and $641, respectively, which will be covered by the Company's H&M insurers.

Other than the cases mentioned above, the Company is not a party to any material litigation where claims or counterclaims have been filed against the Company other than routine legal proceedings incidental to its business.

14.2          Contractual charter revenue

Future minimum contractual charter revenue, based on vessels committed to non-cancelable, long-term time contracts as of December 31, 2017, amounts to $47,507 for the twelve months ending December 31, 2018, $37,266 for the twelve months ending December 31, 2019, $37,284 for the twelve months ending December 31, 2020, $37,266 for the twelve months ending December 31, 2021 and $72,263 for the twelve months ending December 31, 2022 and after. These amounts do not include any assumed off-hire.

Under the June 25, 2015 agreement discussed below, the Company amended 11 charter agreements with significantly lower charter rates. Under seven of the Company's charter agreements, the charterer had the option to (i) acquire the vessels at fair market value as determined by two independent brokers, at the date that the options were 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 would automatically be terminated on the date of completion of the current voyage. These options were exercisable beginning late March 2015 and throughout the term of the charter agreements, which were set to expire through 2020. On June 25, 2015, the Company concluded an agreement with the charterer under which the charterer agreed to forgo the exercise of the purchase option under the seven charter agreements in exchange for a reduction of $35,000 in overdue receivables, $5,000 cash payment to the Company and write off the remaining $16,471 in overdue receivables as of May 31, 2015 against "Voyage revenues". Out of the $35,000, the $6,759 had been amortized, while the remaining $28,241 was written off as "Loss on contract cancellation". As part of the transaction, new time charters were agreed for a period of over four years.

15.          Interest and Finance Costs:

The amounts in the accompanying consolidated statements of operations are analyzed as follows:

	Year ended December 31,
	2015			2016		2017
Interest incurred on long-term debt	$	150,061		$	6,164	$	1,499
Interest, amortization and write off of financing fees on loan from affiliate and related party		3,642			1,563		15,239
Amortization and write-off of financing fees		23,834			572		387
Discount on receivable from drilling contract		4,048			-		-
Commissions, commitment fees and other financial expenses and related party		2,607			558		778
Capitalized interest and finance costs		(12,060	)		-		(3,196	)
Total	$	172,132		$	8,857	$	14,707

F-57

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

16.          Segment information:

The Company has currently four reportable segments from which it derives its revenues: drybulk, offshore support, tanker and gas carrier segments. The Company, after selling its whole tanker fleet during 2015, re-entered the tanker market through the acquisition of four tanker vessels (Note 6) which were delivered during the six-month period ended June 30, 2017. The Company also entered during 2017 the gas carrier market through the acquisition of four VLGCs (Notes 5 and 6). Finally, the Company received earnings or losses from its investment in Ocean Rig up to April 5, 2016 (Notes 3 and 9). 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 offshore support business segment consists of offshore support services to the global offshore energy industry through the operation of a diversified fleet of offshore support vessels. The tanker business segment consists of vessels for the transportation of crude and refined petroleum cargoes. The gas carrier segment currently consists of vessels for the transportation of liquefied petroleum gas.

The tables below present information about the Company's reportable segments as of and for the years ended December 31, 2015, 2016 and 2017, and the column "Other" relates to the Company's investment in Heidmar. The years that the Company had no ownership in the drilling and gas carrier segments are not presented in the below table. 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 allocates general and administrative expenses of the parent company to its subsidiaries on a pro rata basis. The Company also measures segment performance based on net income. Summarized financial information concerning each of the Company's reportable segments is as follows:

	Drybulk Segment			Offshore Support Segment				Drilling Segment	Tanker Segment				Gas Carrier Segment		Other	TOTAL
	2015	2016	2017		2015	2016	2017	2015		2015	2016	2017	2017		2017	2015		2016	2017
Revenues	$   115,598	$ 30,777	$ 65,723		$8,118	$21,157	$3,819	$725,805		$120,304	$   -	$20,858	$ 10,316	$	-	$969,825		$51,934	$100,716
Vessels and drilling units operating expenses	(87,704)	(30,969)	(40,024)		(3,977)	(14,587)	(4,749)	(259,623)		(19,770)	(7)	(8,830)	(5,745)		-	(371,074)		(45,563)	(59,348)
Depreciation and amortization	(65,607)	-	(7,326)		(672)	(3,466)	(950)	(155,352)		(6,021)	-	(4,652)	(2,038)		-	(227,652)		(3,466)	(14,966)
Goodwill impairment	-	-	-		-	(7,002)	-	-		-	-	-	-		-	-		(7,002)	-
Loss on contract cancellation	(28,241)	-	-		-	-	-	-		-	-	-	-		-	(28,241)		-	-
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other	(1,000,485)	(35,470)	4,425		-	(70,873)	(300)	-		(56,631)	-	-	-		-	(1,057,116)	(	106,343)	4,125
General and administrative expenses	(44,519)	(29,822)	(19,095)		(2,858)	(9,849)	(7,677)	(46,989)		(10,546)	(37)	(2,384)	(1,816)		-	(104,912)		(39,708)	(30,972)
Gain/(loss) on interest rate swaps	567	(917)	-		-	-	-	9,588		1,446	514	-	-		-	(11,601)		403	-
Gain on debt restructuring	-	10,477	-		-	-	-	-		-	-	-	-		-	-		10,477	-

F-58

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

16.          Segment Information - continued:

Income taxes		-			-			(56	)		(188	)		(38	)		(20	)		(36,931	)		-			-			-			(76	)		-		(37,119	)		(38	)		(152	)
Net income/(loss)		(1,180,056	)		(69,966	)		(23,676	)		(2,711	)		(86,553	)		(13,322	)		(1,601,451	)		(23,868	)		(713	)		(4,492	)		(1,054	)		-		(2,808,086	)		(198,686	)		(42,544	)
Net income/(loss) attributable to Dryships Inc.		(1,180,056	)		(69,966	)		(23,676	)		(2,657	)		(86,553	)		(13,322	)		(1,640,480	)		(23,868	)		(713	)		(4,492	)		(1,054	)		-		(2,847,061	)		(198,686	)		(42,544	)
Interest and finance cost		(45,321	)		(8,706	)		(13,476	)		(105	)		(93	)		(24	)		(123,463	)		(8,766	)		(58	)		(4	)		(1,203	)		-		(177,655	)		(8,857	)		(14,707	)
Interest income		76			66			1,310			2			13			25			5,954			18			2			-			30			-		6,050			81			1,365
Change in fair value of derivatives (gain)/loss		(10,768	)		(1,957	)		-			(6	)		-			-			349			(422	)		(236	)		-			-			-		(10,848	)		(2,193	)		-
Total assets	$	342,287		$	162,532		$	348,657		$	131,124		$	31,191		$	26,871		$	-		$	2,641		$	7		$	202,543		$	322,854		$	34,000	$	476,052		$	193,730		$	934,925

A reconciliation of interest and finance costs with the consolidated amounts is as follows:

	December 31, 2015			December 31, 2016		December 31, 2017
Interest and finance costs
Interest for reportable segments		177,655			8,857		14,707
Elimination of intersegment interest		(5,523	)		-		-
Total consolidated Interest and finance costs	$	172,132		$	8,857	$	14,707
Interest income
Interest for reportable segments		6,050			81		1,365
Elimination of intersegment interest		(5,523	)		-		-
Total consolidated Interest income	$	527		$	81	$	1,365

F-59

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(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 and up to deconsolidation of Ocean Rig at June 8, 2015:

Country	Year ended December 31, 2015
Congo	$	31,807
Norway		101,584
Brazil		253,283
Ivory Coast		12,065
Angola		275,410
Falkland		51,656
Total leasing and service revenues	$	725,805

The revenue shown in the table below is analyzed by country based upon the location where the operation of the offshore support vessels takes place:

	Year ended December 31,
Country	2015		2016		2017
Brazil		8,118		19,312		5,018
Europe		-		1,800		-
Total revenues	$	8,118	$	21,112	$	5,018

As of December 31, 2015, all of the Company's offshore support vessels operated in Brazil while as of December 31, 2016, three of the offshore support vessels either operated or were idle in Brazil and the remaining offshore support vessels were laid up in Europe. As of December 31, 2017, all of the Company's offshore support vessels were laid up.

The Company's drybulk, tanker and gas carrier vessels operate on many trade routes throughout the world, and, therefore, the provision of geographic information is considered impractical by management.

F-60

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

17.          Losses per share:

	Year ended December 31,
	2015								2016											2017
	Loss (numerator)			Weighted- average number of outstanding shares (denominator)		Amount per share			Loss (numerator)			Weighted- average number of outstanding share (denominator)		Amount per share			Loss (numerator)			Weighted- average number of outstanding shares (denominator)		Amount per share
Net loss attributable to DryShips Inc.	$	(2,847,061	)		-	$	-		$	(198,686	)		-	$	-		$	(42,544	)		-	$	-
Plus: Contribution from Series D Preferred Stock		-			-		-			-			-		-			2,805			-		-
-Less: Convertible Preferred stock dividends		-			-		-			(7,695	)		-		-			-			-		-
-Less: Non-vested common stock dividends declared and undistributed earnings		(570	)		-		-			-			-		-			-			-		-
Basic LPS
Loss available to common stockholders	$	(2,847,631	)		57	$	(49,958,438.60	)	$	(206,381	)		453	$	(455,587.20	)	$	(39,739	)		35,225,784	$	(1.13	)
Dilutive effect of securities
Diluted LPS
Loss available to common stockholders	$	(2,847,631	)		57	$	(49,958,438.60	)	$	(206,381	)		453	$	(455,587.20	)	$	(39,739	)		35,225,784	$	(1.13	)

For the years ended December 31, 2015, 2016 and 2017 and given that the Company incurred losses, the effect of including any potential common shares in the denominator of diluted per-share computations would have been anti-dilutive and therefore, basic and diluted losses per share are the same.

F-61

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

18.          Income Taxes:

18.1          Drybulk, Offshore Support, Gas Carrier and Tanker Segments

None of the countries of incorporation of the Company and its subsidiaries impose 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 and Norway, the countries in which Dryships and the drybulk, offshore support, gas carrier and tanker 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 and Norway, 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 may be eligible to qualify for exemption from United States federal income taxation with respect to U.S. source shipping income if such companies satisfy certain ownership and documentation requirements under applicable U.S. federal income tax law and regulations. The ship-owning subsidiaries will be deemed to satisfy these certain requirements if the Company is able to satisfy such requirements.

The Company believes that it satisfied the Publicly-Traded Test for its 2015 and 2016 Taxable Years and, therefore, 100% of the stock of its Republic of the Marshall Islands and Malta ship-owning subsidiaries was treated as owned by individuals "resident" in the Republic of the Marshall Islands and Malta. However, the Company did not satisfy the ownership requirements to qualify for an exemption from United States taxation on its U.S. source shipping income for the taxable year ending December 31, 2017. Therefore, each of the Company's Republic of the Marshall Islands, Malta and Norway ship-owning subsidiaries are subject to U.S. federal income tax in respect of their U.S. source shipping income. As a result, the Company recognized the related tax expense amounted to $152, in the accompanying consolidated statement of operations for the year ended December 31, 2017.

18.2          Drilling Segment (up to June 8, 2015 – date of deconsolidation):

Ocean Rig operated through its various subsidiaries in a number of countries throughout the world. Income taxes were provided based upon the tax laws and rates in the countries in which operations were conducted and income was earned. The countries in which Ocean Rig operated have taxation regimes with varying nominal rates, deductions, credits and other tax attributes. Consequently, there was not an expected relationship between the provision for/or benefit from income taxes and income or loss before income taxes.

F-62

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(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 (up to June 8, 2015 – date of deconsolidation) - continued:

The components of Ocean Rig's income/ (losses) before taxes were as follows:

	Year ended December 31, 2015
Domestic income / (loss) (Republic of the Marshall Islands)	$	90,181
Foreign income		42,277
Total income before taxes	$	132,458

The components of the Company's tax expense were as follows:

	Year ended December 31, 2015
Current Tax expense	$	37,119
Income taxes	$	37,119
Effective tax rate		28.0	%

For fiscal year 2015, the current tax expense was mainly related to withholding tax based on total contract revenue or bareboat fees. In 2015, approximately 48% of the current tax expense was related to withholding taxes in Angola. For fiscal year 2017, the current tax expense is mainly related to U.S. federal income tax on its U.S. source shipping income.

Taxes have not been reflected in other comprehensive loss since the valuation allowances would result in no recognition of deferred tax.

Reconciliation of total tax expense:	Year ended December 31, 2015
Income tax	$	37,119
Taxes on litigation matters subject to statutory rates, including interest and penalties		-
Total	$	37,119

Ocean Rig had 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 2015, most of its activities were in the Republic of the Marshall Islands with tax rate of zero.

F-63

DRYSHIPS INC.

Notes to Consolidated Financial Statements

For the years ended December 31, 2015, 2016 and 2017

(Expressed in thousands of United States Dollars – except for share and per share data, unless otherwise stated)

19.          Subsequent Events:

19.1 On January 4, 2018, the vessel Mont Gelé was delivered to the Company and the amount paid in the escrow account was released to the HHI. On January 11, 2018, Mont Gelé commenced its time charter on a fixed rate with ten years firm duration to an oil major trading company.

19.2 On January 24, 2018, the Company entered into a secured credit facility of up to $90,000. The facility has a tenor of five years, bears interest at LIBOR plus a margin, is repayable in twenty quarterly installments and balloon payments at maturity, has customary financial covenants and is secured by first priority mortgages over the Company's four tankers. On January 26, 2018, the Company drew down the full amount of $90,000.

19.3 On January 29, 2018, the Company entered into a secured credit facility of up to $35,000. The facility has a tenor of six years, bears interest at LIBOR plus a margin, is repayable in twenty-four quarterly installments and balloon payments at maturity, has customary financial covenants and is secured by first priority mortgages over the vessels Valadon, Matisse and Rapallo. On March 7, 2018, the Company drew down the full amount of $35,000.

19.4 On February 1, 2018, the Company fully repaid the outstanding at that time balance of $73,841 under the Loan Facility Agreement with Sierra.

19.5 On February 6, 2018, the Company's board of directors declared a quarterly dividend of $2,500 with respect to the quarter ended December 31, 2017, to the shareholders of record as of February 20, 2018. The dividend was paid on March 6, 2018.

19.6 On February 6, 2018, the Company's board of directors approved a stock repurchase program under which the Company may repurchase up to $50,000 of its outstanding common shares for a period of 12 months. The Company may repurchase shares in privately negotiated or open-market purchases in accordance with applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. As of April 4, 2018, the Company has repurchased 2,816,445 shares of its common stock for a gross consideration of $11,282 including commission fees. As of April 4, 2018, the number of shares of the Company's common stock outstanding is 101,458,263.

19.7 On February 8, 2018, the Company announced the planned spinoff of its gas carrier business. In the spinoff, the Company plans to distribute to holders of its common stock 49% of the issued and outstanding shares of Gas Ships Limited's common stock, the Company's wholly-owned subsidiary. Following the spinoff, Gas Ships Limited will be a publicly-traded company, and the Company will retain a 51% ownership interest in Gas Ships Limited. The spinoff is subject to certain conditions, including the effectiveness of Gas Ships Limited's Form F-1 registration statement and final approval and declaration of the distribution by the Company's board of directors.  The Company may, at any time until the closing of the spinoff, decide to abandon, modify or change the terms of the spinoff.

19.8 On March 8, 2018, the Company entered into a secured credit facility of up to $30,000. The facility has a tenor of six years, bears interest at LIBOR plus margin, is repayable in twenty-four quarterly installments and a balloon payment at maturity, has customary financial covenants and is secured by first priority mortgages over the vessels Judd and Raraka. On March 13, 2018, the Company drew down the full amount of $30,000.

19.9 On April 2, 2018, the Company entered into a finance lease arrangement with a major Chinese leasing company for the Company's Kamsarmax drybulk vessel, the Kelly, pursuant to a memorandum of agreement and a bareboat charter agreement. The financing provides for the transfer of the Kelly to the buyer for 50% of the agreed purchase price, which will be calculated as the lower of (a) the vessel's net book value as of June 30, 2017 and (b) the vessel's fair value close to the delivery date, and as part of the agreement, the Company's wholly-owned subsidiary will bareboat charter the vessel back for a period of ten years (expiry in April 2028). Charterhire under the bareboat arrangement is comprised of a fixed, quarterly repayment amount corresponding to a 15-year amortization profile plus a variable component calculated at LIBOR plus margin. The Company has purchase options to re-acquire the vessel during the bareboat charter period, with the first of such options exercisable on the first anniversary from the vessel's delivery date. There is also a purchase obligation upon the expiration of the agreement for 33% of the financing amount. The Company is a guarantor under the bareboat charter, which also includes customary terms, conditions and financial covenants. The vessel is expected to be delivered and leased back to the Company in April 2018.

F-64

EX-1.7

Exhibit 1.7

	ARTICLES OF AMENDMENTOFDRYSHIPS INC. Reg. No. 11911
	REPUBLIC OF THE MARSHALL ISLANDS
	REGISTRAR OF CORPORATIONS
	DUPLICATE COPY
	The original of this Document was filed inaccordance with Section 5 of the Business Corporations Act on NON RESIDENT
NON RESIDENT
		January 20, 2017
		/s/ Cynthia Ro
		Deputy Registrar

ARTICLES OF AMENDMENT TO THEAMENDED AND RESTATED ARTICLES OF INCORPORATIONOFDRYSHIPS INC.PURSUANT TO SECTION 90 OF THE MARSHALL ISLANDS BUSINESS CORPORATIONS ACT

I, Anthony Kandylidis, as the President and Chief Financial Officer of DryShips Inc., a corporation incorporated under the laws of the Republic of the Marshall Islands (the "Corporation"), for the purpose of amending the Amended and Restated Articles of Incorporation of said Corporation pursuant to Section 90 of the Business Corporations Act, as amended, hereby certify that:

1. The name of the Corporation is: DRYSHIPS INC.

2. The Articles of Incorporation were filed with the Registrar of Corporations as of the 9^th day of September 2004.

3. Articles of Amendment were filed with the Registrar of Corporations on the 18^th day of October 2004.

4. Amended and Restated Articles of Incorporation were filed with the Registrar of Corporations on the 31^st day of January 2005.

5. Articles of Amendment were filed with the Registrar of Corporations on the 14^th day of September 2006.

6. Articles of Amendment were filed with the Registrar of Corporations on the 17^th day of January 2008.

7. The Statement of Designations of rights, preferences and privileges of the Corporation's Series A Participating Preferred Stock was filed with the Registrar of Corporations on the 18^th day of January 2008.

8. The Statement of Designations of rights, preferences and privileges of the Corporation's Series A Convertible Preferred Stock was filed with the Registrar of Corporations on the 15^th day of July 2009.

9. The Statement of Designations of rights, preferences and privileges of the Corporation's Series B Preferred Stock was filed with the Registrar of Corporations on the 28^th day of December 2015.

10. Articles of Amendment were filed with the Registrar of Corporations on the 10^th day of March 2016.

11. The Statement of Designations, preferences and rights of the Corporation's Series C Convertible Preferred Stock was filed with the Registrar of Corporations on the 8^th day of June 2016.

12. Articles of Amendment were filed with the Registrar of Corporations on the 12^th day of August 2016.

13. The Statement of Designations of rights, preferences and privileges of the Corporation's Series D Preferred Stock was filed with the Registrar of Corporations on the 9^th day of September 2016.

14. Articles of Amendment were filed with the Registrar of Corporations on the 31^st day of October 2016.

15. The Statement of Designations, preferences and rights of the Corporation's Series E-1 Convertible Preferred Stock was filed with the Registrar of Corporations on the 16^th day of November 2016.

16. The Statement of Designations, preferences and rights of the Corporation's Series E-2 Convertible Preferred Stock was filed with the Registrar of Corporations on the 16^th day of November 2016.

17. Section Dof the Amended and Restated Articles of Incorporation is hereby amended by adding the following paragraph:

"(f) Reverse Stock Split. Effective with the commencement of business on January 23, 2017, the Corporation shall effect a one-for-eight reverse stock split as to its issued shares of common stock, par value $0.01 per share. No fractional shares shall be issued and, in lieu thereof, holders of the Corporation's common stock, par value $0.01 per share, shall receive a cash payment. As a result of the reverse stock split, the number of issued shares of the Corporation's common stock, par value $0.01 per share, shall decrease from 69,357,841 to approximately 8,669,730 which may be further adjusted for the cancellation of fractional shares. The reverse stock split shall not change the number of registered shares of common stock, par value $0.01 per share, the Corporation is authorized to issue or the par value of the common stock. The stated capital of the Corporation shall be reduced from $693,578.41 to $86,697.30, which may be further adjusted for the cancellation of fractional shares, and the amount of $606,881.11, which may be further adjusted for the cancellation of fractional shares, is allocated to surplus."

18. All of the other provisions of the Amended and Restated Articles of Incorporation shall remain unchanged.

19. This amendment to the Amended and Restated Articles of Incorporation was authorized by vote of the holders of a majority of the voting power of the total number of shares of the Corporation issued and outstanding and entitled to vote thereon at the annual meeting of shareholders of the Corporation held on October 26, 2016, and by the Corporation's Board of Directors on January 18, 2017.

[REMAINDER OF PAGE LEFT BLANK]

IN WITNESS WHEREOF, I have executed this Amendment to the Amended and Restated Articles of Incorporation on this 20^th day of January, 2017.

/s/ Anthony Kandylidis

Name: Anthony Kandylidis

Title: President and Chief Financial Officer

EX-4.6

Exhibit 4.6

Execution Version

Date: 3 May 2017

AMATHUS OWNING COMPANY LIMITED as Remaining Borrower

-and-

DRYSHIPS INC. as Guarantor

-and-

THE BANKS AND FINANCIAL INSTITUTIONSlisted in Schedule 1 of the Loan Agreement as Lenders

-and-

HSH NORDBANKAG as Swap Bank

-and-

HSH NORDBANKAG as Mandated Lead Arranger

-and-

HSH NORDBANKAG as Agent

-and-

HSH NORDBANKAG as Security Trustee

____________________________________________

DEED OF RELEASE OF SECURITY

____________________________________________

relating to a loan facility of originally up to US$87,653,740 to provide post-delivery finance for the acquisition of two 176,000 dwt bulk carriers constructed at Shanghai Jiangnan Changxing Shipbuilding Company and one 76,000 dwt panamax bulk carrier constructed by Hudong-Zonghua Shipbuilding (Group) Co. Ltd and named m.v. "RARAKA"

WATSON FARLEY

& WILLIAMS

INDEX

Clause		Page
1	INTERPRETATION	2
2	RELEASE OF SECURITY INTERESTS	2
3	REASSIGNMENT OF ASSIGNED PROPERTY	2
4	FURTHER DOCUMENTS	2
5	IMMEDIATE EFFECT	3
6	EXPENSES	3
7	SUPPLEMENTAL	3
8	LAW AND JURISDICTION	3
SCHEDULE 1 FORM OF NOTICE OF REASSIGNMENT		4
EXECUTION PAGE		5

Execution Version

THIS DEED is made on 3 May 2017

(1) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 of the Loan Agreement, as lenders (the "Lenders");

(2) HSH NORDBANK AG, acting through its Martensdamm 6, D-24103, Kiel, Germany office as swap bank (the "Swap Bank");

(3) HSH NORDBANK AG, acting through its Gerhart-Hauptmann-Platz 50, D-20095, Hamburg, Germany office as mandated lead arranger (the "Mandated Lead Arranger"),

(4) HSH NORDBANK AG, acting through its Gerhart-Hauptmann-Platz 50, D-20095, Hamburg, Germany office as agent (the "Agent"); and

(5) HSH NORDBANK AG, acting through its Gerhart-Hauptmann-Platz 50, D-20095, Hamburg, Germany office as security trustee (the "Security Trustee").

IN FAVOUR OF,

(6) AMATHUS OWNING COMPANY LIMITED, being a company incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Islands Majuro, the Marshall Islands, MH96960, as borrower (the "Remaining Borrower"); and

(7) DRYSHIPS INC., being a company incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Islands Majuro, the Marshall Islands, MH96960, as guarantor (the "Guarantor").

BACKGROUND

(A) By a loan agreement originally dated 19 March 2012, as amended, restated and supplemented from time to time and made between, inter alíos, (i) the Remaining Borrower together with Symi Owners Inc. and Kalymnos Owners Inc. as joint and several borrowers (the "Original Borrowers"), (ii) the Lenders, (iii) the Swap Bank, (iv) the Mandated Lead Arranger, (v) the Agent and (vi) the Security Trustee, the Lenders have made available to the Original Borrowers a loan facility of up to US$87,653,740 to provide post-delivery finance for the acquisition of two 176,000 dwt bulk carriers constructed at Shanghai Jiangnan Changxing Shipbuilding Company and one 76,000 dwt panamax bulk carrier constructed by Hudong-Zonghua Shipbuilding (Group) Co. Ltd and named m.v. "RARAKA".

(B) By a supplemental agreement to the Original Loan Agreement dated 28 March 2014, the Creditor Parties consented to the release of Symi Owners Inc. and Kalymnos Owners Inc. from all their obligations and liabilities under the Original Loan Agreement and the other Finance Documents (as defined in the Original Loan Agreement) to which they were party.

(C) This Deed sets out the terms and conditions on which the Creditor Parties agree, at the request of the Remaining Borrower and the Security Parties, to the release of the Security Interests and certain other obligations created by the Released Finance Documents (as defined below).

IT IS AGREED as follows:

1 INTERPRETATION

1.1 Defined expressions. Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Deed unless the context otherwise requires.

1.2 Definitions. In this Deed, unless the contrary intention appears:

"Loan Agreement"means the Original Loan as amended by the Supplemental Agreement.

"Original Loan Agreement"means the loan agreement dated 19 March 2012 as referred to in recital (A).

"Released Finance Documents"means the Mortgage and Deed of Covenant in respect of the Ship, the General Assignment in respect of the Ship, all Account Pledges, the Master Agreement Assignment, any Charterparty Assignment and the Corporate Guarantee.

"Ship" means the 2012 built panamax bulk carrier of 76,000 dwt constructed at Hudong and currently registered in the name of the Remaining Borrower under the Maltese flag with the name "RARAKA" and IMO number 9584504.

"Supplemental Agreement"means the supplemental agreement dated 28 March 2014 referred to in recital (B).

1.3 Application of construction and interpretation provisions of Loan Agreement. Clauses 1.2 to 1.6 of the Loan Agreement apply, with any necessary modifications, to this Deed.

2 RELEASE OF SECURITY INTERESTS

2.1 Release. The Security Trustee releases all Security Interests created in its favour by the Remaining Borrower, without warranty, representation, covenant or other recourse whatsoever, under the Released Finance Documents.

2.2 Release of obligations. The Creditor Parties release the Remaining Borrower, the Guarantor and the Security Parties from ail of their obligations, liabilities, claims and demands whatsoever under the Finance Documents (including, without limitation, the Guarantee).

3 REASSIGNMENT OF ASSIGNED PROPERTY

3.1 Reassignment. The Security Trustee, without any warranty, representation, covenant or other recourse, reassigns to the Remaining Borrower, all rights, title and interest of every kind assigned to the Security Trustee by the Remaining Borrower under the Finance Documents.

4 FURTHER DOCUMENTS

4.1 Delivery of further documents. The Security Trustee shall after execution and delivery of this Deed deliver to the Remaining Borrower:

(a) evidence that the Mortgage relating to the Ship has been discharged; and

(b) an executed notice of reassignment of Insurances relating to the Ship in the form set out in Schedule 1; and

2

(c) deliver any other such notices or documents as that Security Party may require to give effect to the release and reassignment of the Security Interests contained in Clause 2 (Release of Security Interests).

5 IMMEDIATE EFFECT

5.1 Immediate effect. This Deed is of immediate effect.

6 EXPENSES

6.1 Expenses. The provisions of clause 20 (fees and expenses) of the Loan Agreement shall apply to this Deed as if they were expressly incorporated in this Deed with any appropriate modifications.

7 SUPPLEMENTAL

7.1 Counterparts. This Deed may be executed in any number of counterparts.

7.2 Third party rights. A person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed.

8 LAW AND JURISDICTION

8.1 Governing law. This Deed, and any non-contractual obligations arising under or in connection with it, shall be governed by and construed in accordance with English law.

8.2 Incorporation of Loan Agreement provisions. The provisions of clause 31 (law and jurisdiction) of the Loan Agreement shall apply to this Deed as if they were expressly incorporated in this Agreement with any necessary modifications.

IN WITNESS whereof this document has been executed as a Deed and delivered the day and year first above written.

3

SCHEDULE 1

FORM OF NOTICE OF REASSIGNMENT

NOTICE OF REASSIGNMENT OF INSURANCES

m.v. "RARAKA" (the "Ship")

We, HSH NORDBANK, the assignee of all rights and interest of every kind of AMATHUS OWNING COMPANY LIMITED (the "Assignor") to, in or in connection with all policies and contracts of insurance, including entries of the Ship in any protection and indemnity or war risks association (the "Insurances") in respect of the Ship pursuant to a first priority assignment dated 22 March 2012 (the "Assignment") GIVE NOTICE that we have reassigned to the Assignor all of our rights and interest of every kind to, in or in connection with the Insurances under the Assignment and, with effect from the date of this Notice, we have no further interest in or claim over the Insurances.

_________________________

Name:

for and on behalf of

HSH NORDBANK AG

4

EXECUTION PAGE

EXECUTED and DELIVERED as a DEED	)
by AMATHUS OWNING COMPANY LIMITED	)
acting by Evgenia Voulika	)	/s/ Evgenia Voulika
its duly authorised attorney-in-fact	)
in the presence of:	)
Eriketi Kolyva Attorney at Law 16. Ilossou Str., Nikaia 184 50, Greece tel. +30210 4285-002-3 mes. 0030 6984-676.075

EXECUTED and DELIVERED as a DEED	)
by HSH NORDBANK AG	)
in its capacity as Lender, Swap Bank,	)
Mandated Lead Arranger, Agent	)	/s/ Cameron Johnstone-Browne
and Security Trustee	)	Cameron Johnstone-Browne
acting by	)	Attorney-in-Fact
its duly authorised attorney-in-fact	)
In the presence of:	)

Jessica Rose

Trainee Solicitor

Watson Farley & Williams LLP

15 Appold Street

London EC2A 2HB

5

EX-4.20

Exhibit 4.20

1. Date of Agreement Vessel's Name:		THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO) STANDARD SHIP MANAGEMENT AGREEMENT CODE NAME: "SHIPMAN 98" Part I
2. Owners (name, place of registered office and law of registry) (Cl. 1)		3. Managers (name, place of registered office and law of registry)(Cl. 1)
	Name		Name
			TMS BULKERS LTD.
	Place of registered office		Place of registered office
			Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960
	Law of Registry		Law of Registry
			Republic of Marshall Islands
4. Day and year of commencement of Agreement (Cl. 2) DATE OF PRESENT AGREEMENT AS PER BOX 1
5. Crew Management (state "yes" or "no" as agreed) (Cl. 3.1) YES		6. Technical Management (state "yes" or "no" as agreed) (Cl. 3.2) YES
7. Commercial Management (state "yes" or "no" as agreed) (Cl. 3.3) YES		8. Insurance Arrangements (state "yes" or "no" as agreed) (Cl. 3.4) YES
9. Accounting Services (state "yes" or "no" as agreed) (Cl. 3.5) YES		10. Sale or Purchase of the Vessel (state "yes" or "no" as agreed) (Cl. 3.6) YES
11. Provisions (state "yes" or "no" as agreed) (Cl. 3.7) YES		12. Bunkering (state "yes" or "no" as agreed) (Cl. 3.8) YES
13. Chartering Services Period (only to be filled in if "yes" stated in Box 7) (Cl. 3.3(i)) Ten Years from date indicated in Box 4		14. Owners' Insurance (state alternative (i), (ii) or (iii) of Cl. 6.3) 6.3(ii)
15. Annual Management Fee (state annual amount) (Cl. 8.1) As per Agreement dated 9th December 2016 between Inter alia the Managers and Dryships Inc.		16. Severance Costs (state maximum amount) (Cl. 8.4(ii)) As per applicable Collective Bargaining Agreement (CBA)
17. Day and year of termination of Agreement (Cl. 17) Ten Years from date indicated in Box 4		18. Law and Arbitration (state alternative 19.1, 19.2 or 19.3; if 19.3 place of arbitration must be stated) (Cl. 19) 19.1
19. Notices (state postal and cable address, telex and telefax number for serving notice and communication to the Owners) (Cl. 20)		20. Notices (state postal and cable address, telex and telefax number for serving notice and communication to the Managers) (Cl. 20) TMS TANKERS LTD. Athens Shipmanagement Office 11 Frangoklissias Street, 151 24 Marousi, Greece Tel: +30 210 3440600 Fax: +30 210 3440655 Email: management@tms-tankers.com

It is mutually agreed between the party slated in Box 2 and the party slated in Box 3 that this Agreement consisting of PART I and PART II as well as Annexes "A" (Details of Vessel), "B" (Details of Crew) and "C" (Budget) and "D" (Associated vessels) attached hereto, shall be performed subject to the conditions contained herein. In the event of a conflict of conditions, the provisions of PART I and Annexes "A", "B", "C" and "D" shall prevail over those of PART II to the extent of such conflict but no further.

Signature(s) (Owners)     Signature(s) (Managers)  

ANNEX "A" (DETAILS OF VESSEL OR VESSELS) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

Date of Agreement:

Name of Vessel(s):

Particulars of Vessel(s)

ANNEX "B" (DETAILS OF CREW) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

Date of Agreement:

Details of Crew:

N/A

Numbers Rank Nationality

ANNEX "C" (BUDGET) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

See Box 15 and Clause 9

Managers' Budget for the first year with effect from the Commencement Date of this Agreement:

ITEMS		YEARLY (USD) 31/5-31/12 (215d)	MONTHLY (USD)
1	TOTAL CREW EXPENSES
2	STORES
3	SPARES
4	REPAIR. / MAINTENANCE / SURVEY
5	LUBRICANTS
6	SUPT. TRAVEL / COMM. / MISC.
7	INSURANCE (H&M, P&I, WAR, LOH)
GRAND TOTAL OPERATING COST
DAILY AVERAGE (EXCL. DOCKING COST)
PRE-DELIVERY COST

NOTE:

1. Prices basis at average of Singapore, Continent & China, otherwise, to be charged at actual

2. Crew change basis Asia, Australia and Continent ports, otherwise, to be adjusted

3. Spares costs are for routine maintenance (excluding major items)

4. Parity Euro / USD at 1,095

5. The budget for Superintendent expenses is based on 5 visits per each visit, i.e. 20 Superintendent days.  Any additional attendance will be charged extra by the day at a standard rate of Euro 500 per day.

ANNEX "D" (ASSOCIATED VESSELS) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

NOTE: PARTIES SHOULD BE AWARE THAT BY COMPLETING THIS ANNEX "D" THEY WILL BE SUBJECT TO THE PROVISIONS OF SUB-CLAUSE 18.1(i) OF THIS AGREEMENT.

Date of Agreement:

Details of Associated Vessels:

PART II

"SHIPMAN 98" Standard Ship Management Agreement

1. Definitions

In this Agreement save where the context otherwise requires, the following words and expressions shall have the meanings hereby assigned to them.

"Owners" means the party identified in Box 2.

"Managers" means the party identified in Box 3.

"Vessel" means the vessel or vessels details of which are set out in Annex "A" attached hereto.

"Crew" means the Master, officers and ratings of the numbers, rank and nationality specified in Annex "B" attached hereto.

"Crew Support Costs" means all expenses of a general nature which are not particularly referable to any individual vessel for the time being managed by the Managers and which are incurred by the Managers for the purpose of providing an efficient and economic management service and, without prejudice to the generality of the foregoing, shall include the cost of crew standby pay, training schemes for officers and ratings, cadet training schemes, sick pay, study pay, recruitment and interviews.

"Severance Costs" means the costs which the employers are legally obliged to pay to or in respect of the Crew as a result of the early termination of any employment contract for service on the Vessel.

"Crew Insurances" means insurances against crew risks which shall include but not be limited to death, sickness, repatriation, injury, shipwreck unemployment indemnity and loss of personal effects.

"Management Services" means the services specified in sub-clauses 3.1 to 3.8 as indicated affirmatively in Boxes 5 to 12.

"ISM Code" means the International Management Code for the Safe Operation of Ships and for Pollution Prevention as adopted by the International Maritime Organization (IMO) by resolution A.741(18) or any subsequent amendment thereto.

"STCW 95" means the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, as amended in 1995 or any subsequent amendment thereto.

2. Appointment of Managers

With effect from the day and year stated in Box 4 and continuing unless and until terminated as provided herein, the Owners hereby appoint the Managers and the Managers hereby agree to act as the Managers of the Vessel.

3. Basis of Agreement

Subject to the terms and conditions herein provided, during the period of this Agreement, the Managers shall carry out Management Services in respect of the Vessel as agents for and on behalf of the Owners. The Managers shall have authority to take such actions as they may from time to time in their absolute discretion consider to be necessary to enable them to perform this Agreement in accordance with sound ship management practice.

3.1 Crew Management

(only applicable if agreed according to Box 5)

The Managers shall provide suitably qualified Crew for the Vessel as required by the Owners in accordance with the STCW 95 requirements, provision of which includes but is not limited to the following functions:

(i)   selecting and engaging the Vessel's Crew, including payroll arrangements, pension administration, and insurances for the Crew other than those mentioned in Clause 6:

(ii) ensuring that the applicable requirements of the law of the flag of the Vessel are satisfied in respect of manning levels, rank, qualification and certification of the Crew and employment regulations including Crew's tax, social insurance, discipline and other requirements;

(iii) ensuring that all members of the Crew have passed a medical examination with a qualified doctor certifying that they are fit for the duties for which they are engaged and are in possession of valid medical certificates issued in accordance with appropriate flag State requirements. In the absence of applicable flag State requirements the medical certificate shall be dated not more than three months prior to the respective Crew members leaving their country of domicile and maintained for the duration of their service on board the Vessel;

(iv) ensuring that the Crew shall have a command of the English language of a sufficient standard to enable them to perform their duties safely;

(v)  arranging transportation of the Crew, including repatriation;

(vi) training of the Crew and supervising their efficiency;

(vii) conducting union negotiations;

(viii) operating the Managers' drug and alcohol policy unless otherwise agreed.

3.2 Technical Management

(only applicable if agreed according to Box 6)

The Managers shall provide technical management which includes, but is not limited to, the following functions:

(i)  provision of competent personnel to supervise the maintenance and general efficiency of the Vessel;

(ii)  arrangement and supervision of dry dockings, repairs, alterations and the upkeep of the Vessel to the standards  required by the Owners provided that the Managers shall be entitled to incur the necessary expenditure to ensure that the Vessel will comply with the law of the flag of the Vessel and of the places where she trades, and all  requirements and recommendations of the classification society;

(iii)  Arrangement of the supply of necessary stores, spares and lubricating oil;

(iv)  appointment of surveyors and technical consultants as the Managers may consider from time to time to be necessary;

(v)  development, implementation and maintenance of a Safety Management System (SMS) in accordance with the ISM Code (see sub-clauses 4.2 and 5.3);

(vi)  supervisions of vessels under construction at the specific request of the Owners and after approval by the Owner of the relevant budget submitted by the Managers.

3.3 Commercial Management

(only applicable if agreed according to Box 7)

The Managers shall provide the commercial operation of the Vessel, as required by the Owners, which includes, but is not limited to, the following functions:

(i)   providing chartering services in accordance with the Owners' instructions which include, but are not limited to, seeking and negotiating employment for the Vessel and the conclusion (including the execution thereof) of charter parties or other contracts relating to the employment of the Vessel. If such a contract exceeds the period stated in Box 13, consent thereto in writing shall first be obtained from the Owners;

(ii)  arranging of the proper payment to Owners or their nominees of all hire and/or freight revenues or other moneys of whatsoever nature to which Owners may be entitled arising out of the employment of or otherwise in connection with the Vessel;

(iii)  providing voyage estimates and accounts and calculating of hire, freights, demurrage and/or despatch moneys due from or due to the charterers of the Vessel;

(iv)   issuing of voyage instructions;

(v)    appointing agents;

(vi)   appointing stevedores;

(vii)  arranging surveys associated with the commercial operation of the Vessel.

3.4 Insurance Arrangements'

(only applicable if agreed according to Box 8)

The Managers shall arrange insurances in accordance with

Clause 6, on such terms and conditions as the Owners shall have instructed or agreed, in particular regarding conditions, insured values, deductibles and franchises.

3.5 Accounting Services

(only applicable if agreed according to Box 9)

The Managers shall:

(i)   establish an accounting system which meets the requirements of the Owners and provide regular accounting services, supply regular reports and records,

(ii) maintain the records of all costs and expenditure incurred as well as data necessary or proper for the settlement of accounts between the parties.

3.6 Sale or Purchase of the Vessel

(only applicable if agreed according to Box 10)

The Managers shall, in accordance with the Owners' instructions, supervise the sale or purchase of the Vessel, including the performance of any sale or purchase agreement, but not negotiation of the same.

3.7 Provisions (only applicable if agreed according to Box 11)

The Managers shall arrange for the supply of provisions.

3.8 Bunkering (only applicable if agreed according to Box 12) The Managers shall arrange for the provision of bunker fuel of the quality specified by the Owners as required for the Vessel's trade.

4. Managers' Obligations

4.1 The Managers undertake to use their best endeavours to provide the agreed Management Services as agents for and on behalf of the Owners in accordance with sound ship management practice and to protect and promote the interests of the Owners in all matters relating to the provision of services hereunder. Provided, however, that the Managers in the performance of their management responsibilities under this Agreement shall be entitled to have regard to their overall responsibility in relation to all vessels as may from time to time be entrusted to their management and in particular, but without prejudice to the generality of the foregoing, the Managers shall be entitled to allocate available supplies, manpower and services in such manner as in the prevailing circumstances the Managers in their absolute discretion consider to be fair and reasonable.

4.2 Where the Managers are providing Technical Management in accordance with sub-clause 3.2, they shall procure that the requirements of the law of the flag of the Vessel are satisfied and they shall in particular be deemed to be the "Company" as defined by the ISM Code, assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code when applicable.

5. Owners' Obligations

5.1 The Owners shall pay all sums due to the Managers punctually in accordance with the terms of this Agreement.

5.2 Where the Managers are providing Technical Management in accordance with sub-clause 3.2, the Owners shall:

(i)   procure that all officers and ratings supplied by them or on their behalf comply with the requirements of STCW 95;

(ii)   instruct such officers and ratings to obey all reasonable orders of the Managers in connection with the operation of the Managers' safety management system.

5.3 Where the Managers are not providing Technical Management in accordance with sub-clause 3.2, the Owners shall procure that the requirements of the law of the flag of the Vessel are satisfied and that they, or such other entity as may be appointed by them and identified to the Managers, shall be deemed to be the "Company" as defined by the ISM Code assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code when applicable.

6. Insurance Policies

The Owners shall procure, whether by instructing the Managers under sub-clause 3.4 or otherwise, that throughout the period of this Agreement:

6.1 at the Owners' expense, the Vessel is insured for not less than her sound market value or entered for her full gross tonnage, as the case may be for:

(i)  usual hull and machinery marine risks (including crew negligence) and excess liabilities;

(ii)  protection and indemnity risks (including pollution risks and Crew Insurances); and

(iii)  war risks (including protection and indemnity and crew risks) in accordance with the best practice of prudent owners of vessels of a similar type to the Vessel, with first class insurance companies, underwriters or associations ("the Owners' Insurances");

(iv)  Freight, Demurrage and Defense Insurance

(v)  Certificate of Financial Responsibility

(vi)  Crew Personal Accident and Sundries Insurance cover

(vii)  Any other insurance required by law

(viii)  Any insurance that can be arranged and not included in the above but is requested by the Owners in writing

6.2 all premiums, deductibles, supplementary calls and/or excess supplementary calls and release calls on the Owners' Insurances are paid promptly by their due date,

6.3 the Owners' Insurances name the Managers and, subject to underwriters' agreement, any third party designated by the Managers as a joint assured, with full cover, with the Owners obtaining cover in respect of each of the insurances specified in sub-clause 6.1:

(i)   on terms whereby the Managers and any such third party are liable in respect of premiums or calls arising in connection with the Owners' Insurances; or

(ii) if reasonably obtainable, on terms such that neither the Managers nor any such third party shall be under any liability in respect of premiums or calls arising in connection with the Owners' Insurances; or

(iii) on such other terms as may be agreed in writing. Indicate alternative (i), (ii) or (iii) in Box 14. If Box 14 is left blank then (i) applies.

6.4 written evidence is provided, to the reasonable satisfaction of the Managers, of their compliance with their obligations under Clause 6 within a reasonable time of the commencement of the Agreement, and of each renewal date and, if specifically requested, of each payment date of the Owners' Insurances.

7. Income Collected and Expenses Paid on Behalf of Owners

7.1 All moneys collected by the Managers under the terms of this Agreement (other than moneys payable by the Owners to the Managers) and any interest thereon shall be held to the credit of the Owners in a separate bank account.

7.2 All expenses incurred by the Managers under the terms of this Agreement on behalf of the Owners (including expenses as provided in Clause 8) may be debited against the Owners in the account referred to under sub-clause 7.1 but shall in any event remain payable by the Owners to the Managers on demand.

8. Management Fee

8.1(a)  The Owners shall pay to the Managers for their services as Managers under this Agreement an annual a daily management fee as stated in Box 15 which shall be payable by equal monthly installments in advance, the first installment being payable on the commencement of this Agreement (see Clause 2 and Box 4) and subsequent installments being payable every month.

8.1(b)  The Owners shall place with the Manager for the duration of this Agreement an amount equal to three months of management fee stated in Box 15 as security.

Upon termination of this Agreement, all moneys remaining within the security or any portion thereof, if the amounts due to the Manager pursuant with the obligations set forth in the management agreement and their addenda (if any) is less than the security amount paid as per above shall be returned to the Owner subject to the terms and conditions of this agreement.  It is being understood that in event of default from the part of the Owner is forfeited in favor of the Manager without prejudice to any rights which the Manager may have against the Owner in law or in equity.

8.2 The management fee shall be subject to an annual a review on the anniversary date of the Agreement and the for each calendar year and will be automatically adjusted to the Greek CPI index for the previous year.  It is understood that any such increase will not be less than 3% and not more than 5%.  The proposed fee shall be presented in the annual budget referred to in sub-clause 9.1 clause 9.1

8.3 The Managers shall, at no extra cost to the Owners, provide their own office accommodation, office staff, facilities and stationery. Without limiting the generality of Clause 7 the Owners shall reimburse the Managers for postage and communication expenses, travelling expenses, and other out of pocket expenses properly incurred by the Managers in pursuance of the Management Services.

8.4 In the event of the appointment of the Managers being terminated for any reason other than clause 18.2by the Owners or the Managers in accordance with the provisions of Clauses 17 and 18 other than by reason of default by the Managers, or if the Vessel is lost, sold or otherwise disposed of, the "management fee" shall be payable to the Managers according to the provisions of sub-clause 8.1 shall continue to be payable for a further period of three (3) calendar months as from the termination date. In addition, provided that the Managers provide Crew for the Vessel in accordance with sub-clause 3.1:

(i)   the Owners shall continue to pay Crew Support Costs during the said further period of three calendar months and

(ii) the Owners shall pay an equitable proportion of any Severance Costs which may materialize, not exceeding the amount stated in Box 16.

8.5 If the Owners decide to lay-up the Vessel whilst this Agreement remains in force and such lay-up lasts for more than three months, an appropriate reduction of the management fee for the period exceeding three months until one month before the Vessel is again put into service shall be mutually agreed between the parties.

8.6 Unless otherwise agreed in writing all discounts and commissions obtained by the Managers in the course of the management of the Vessel shall be credited to the Owners.  For the avoidance of doubt, it is understood that insurance is charged on a gross rate basis.

8.7 In case of vessels under construction, no management fee will be charged by the Managers until the vessel's delivery to the Owners.  However, in case Owners instruct the Managers to supervise vessels under construction as per Clause 3.2(vi) then the Managers will be due an upfront fee equal to 10% of the budget approved by the Owners.  Such fee, will be payable in USD.  For the avoidance of any doubt the rest of the paragraphs of Clause 8 to remain in force.

9. Budgets and Management of Funds

9.1 On or before November 30 of each calendar year Tthe Managers shall present to the Owners annually a budget (see Annex "C") for the following twelve monthsnext calendar year in such form as the Owners reasonably require. The budget for the first year hereof is set out in Annex "C" hereto.  Subsequent annual budgets shall be prepared by the Managers and submitted to the Owners not less than three months before the anniversary date of the commencement of this Agreement (see Clause 2 and Box 4).

9.2 The Owners shall indicate to the Managers their acceptance and approval of the annual budget within one month of presentation and in the absence of any such indication the Managers shall be entitled to assume that the Owners have accepted the proposed budget.

9.3 The Owner shall place with the Manager for the duration of this Agreement an amount equal to three months running expenses as working capital reserve.  For calculation purposes the reserve will be based on the agreed budgeted daily average cost as per the respective management agreement.  Upon termination of this Agreement all moneys remaining within the working capital reserve shall be returned to the Owner subject to the terms and conditions of this agreement. Following the agreement of the budget, the Managers shall prepare and present to the Owners their estimate of the working capital requirement of the Vessel and the Managers shall each month up-date this estimate. Based thereon, the Managers shall each month request the Owners in writing for the funds required to run the Vessel for the ensuing month, including the payment of any occasional or extraordinary item of expenditure, such as emergency repair costs, additional insurance premiums, bunkers or provisions. Such funds shall be received by the Managers within ten running days after the receipt by the Owners of the Managers' written request and shall be held to the credit of the Owners in a separate bank account.

9.4 The Managers shall produce a comparison between budgeted and actual income and expenditure of the Vessel in such form as required by the Owners monthly on a yearly basis or at such other intervals as mutually agreed.

9.5 Notwithstanding anything contained herein to the contrary, the Managers shall in no circumstances be required to use or commit their own funds to finance the provision of the Management Services.

10. Managers' Right to Sub-Contract

The Managers shall not have the right to sub-contract any of their obligations hereunder, including those mentioned in sub- clause 3.1 without the prior written consent of the Owners which shall not be unreasonably withheld. In the event of such a sub- contract the Managers shall remain fully liable for the due performance of their obligations under this Agreement.

11. Responsibilities

11.1 Force Majeure - Neither the Owners nor the Managers shall be under any liability for any failure to perform any of their obligations hereunder by reason of any cause whatsoever of any nature or kind beyond their reasonable control.  For the avoidance of any doubt financial force majeure does not apply.

11.2 Liability to Owners  - (i) Without prejudice to sub-clause 11.1, the Managers shall be under no liability whatsoever to the  Owners for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect, (including but not limited to loss of profit arising out of or in connection with detention of or delay to the Vessel) and howsoever arising in the course of performance of the Management Services UNLESS same is proved to have resulted solely from the negligence, gross negligence or wilful default of the Managers or their employees, or agents or sub-contractors employed by them in connection with the Vessel, in which case (save where loss, damage, delay or expense has resulted from the Managers' personal act or omission committed with the intent to cause same or recklessly and with knowledge that such loss, damage, delay or expense would probably result) the Managers' liability for each incident or series of incidents giving rise to a claim or claims shall never exceed a total of ten times the annual management fee payable hereunder.

(ii) Notwithstanding anything that may appear to the contrary in this Agreement, the Managers shall not be liable for any of the

actions of the Crew, even if such actions are negligent, grossly negligent or wilful, except only to the extent that they are shown to have resulted from a failure by the Managers to discharge their obligations under sub-clause 3.1, in which case their liability shall be limited in accordance with the terms of this Clause 11.

11.3 Indemnity - Except to the extent and solely for the amount therein set out that the Managers would be liable under sub- clause 11.2, the Owners hereby undertake to keep the Managers and their employees, agents and sub-contractors indemnified and to hold them harmless against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of the Agreement, and against and in respect of all costs, losses, damages and expenses (including legal costs and expenses on a full indemnity basis) which the Managers may suffer or incur (either directly or indirectly) in the course of the performance of this Agreement.

11.4 "Himalaya" - It is hereby expressly agreed that no employee or agent of the Managers (including every sub- contractor from time to time employed by the Managers) shall in any circumstances whatsoever be under any liability whatsoever to the Owners for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Clause 11, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defence and immunity of whatsoever nature applicable to the Managers or to which the Managers are entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Managers acting as aforesaid and for the purpose of all the foregoing provisions of this Clause 11 the Managers are or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be their servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.

12. Documentation

Where the Managers are providing Technical Management in accordance with sub-clause 3.2 and/or Crew Management in accordance with sub-clause 3.1, they shall make available, upon Owners' request, all documentation and records related to the Safety Management System (SMS) and/or the Crew which the Managers need in order to demonstrate compliance with the ISM Code and STCW 95 or to defend a claim against a third party.

13. General Administration

13.1 The Managers shall handle and settle all claims arising out of the Management Services hereunder and keep the Owners informed regarding any incident of which the Managers become aware which gives or may give rise to claims or disputes involving third parties.

13.2 The Managers shall, as instructed by the Owners, bring or defend actions, suits or proceedings in connection with matters entrusted to the Managers according to this Agreement.

13.3 The Managers shall also have power to obtain legal or technical or other outside expert advice in relation to the handling and settlement of claims and disputes or all other matters affecting the interests of the Owners in respect of the Vessel.

13.4 The Owners shall arrange for the provision of any necessary guarantee bond or other security.

13.5 Any costs reasonably incurred by the Managers in carrying out their obligations according to Clause 13 shall be reimbursed by the Owners.

14. Auditing

The Managers shall at all times maintain and keep true and correct accounts in accordance with sound accounting practice and an adequate and effective system of internal controls and procedures and shall make the same available for permit the inspection and auditing by the Owners and their Auditors at such times as may be mutually agreed. On the termination, for whatever reasons, of this Agreement, the Managers shall release to the Owners, if so requested, the originals where possible, or otherwise certified copies, of all such accounts and all documents specifically relating to the Vessel and her operation.

15. lnspection of Vessel

The Owners shall have the right at any time after giving reasonable notice to the Managers to inspect the Vessel for any reason they consider necessary.

16. Compliance with Laws and Regulations

The Managers will not do or permit to be done anything which might cause any breach or infringement of the laws and regulations of the Vessel's flag, or of the places where she trades.

17. Duration of the Agreement

This Agreement shall come into effect on the day and year stated in Box 4 and shall continue until the date stated in Box 17. Thereafter it shall automatically renew for a five-year period and shall thereafter be extended in additional five-year increments if notice of termination is not provided by the Owners in the fourth quarter of the year immediately preceding the end of the respective term.continue until terminated by either party giving to the other notice in writing, in which event the Agreement shall terminate upon the expiration of a period of  two twelve months from the date upon which such notice was given.

18. Termination

18.1 Owners' default

(i)  The Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing if any moneys payable by the Owners under this Agreement and/or the Owners of any associated vessel, details of which are listed in Annex "D", shall not have been received in the Managers' nominated account within ten running days of receipt by the Owners of the Managers written request or if the Vessel is repossessed by the Mortgagees.

(ii) If the Owners:

(a) fail to meet their obligations under sub-clauses 5.2 and 5.3 of this Agreement for any reason within their control, or

(b) proceed with the employment of or continue to employ the Vessel in the carriage of contraband, blockade running, or in an unlawful trade, or on a voyage which in the reasonable opinion of the Managers is unduly hazardous or improper,

the Managers may give notice of the default to the Owners, requiring them to remedy it as soon as practically possible. In the event that the Owners fail to remedy it within a reasonable time to the satisfaction of the Managers, the Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing.

18.2 Managers' Default

If the Managers fail to meet their obligations under Clauses 3 and 4 of this Agreement for any reason within the control of the Managers, the Owners may give notice to the Managers of the default, requiring them to remedy it as soon as practically possible. In the event that the Managers fail to remedy it within a reasonable time to the satisfaction of the Owners, the Owners shall be entitled to terminate the Agreement with immediate effect by notice in writing.

18.3 Extraordinary Termination

This Agreement shall be deemed to be terminated in the case of the sale of the Vessel or if the Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisitioned.

18.4 For the purpose of sub-clause 18.3 hereof

(i)  the date upon which the Vessel is to be treated as having been sold or otherwise disposed of shall be the date on which the Owners cease to be registered as Owners of the Vessel;

(ii) the Vessel shall not be deemed to be lost unless either she has become an actual total loss or agreement has been reached with her underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with her underwriters is not reached it is adjudged by a competent tribunal that a constructive loss of the Vessel has occurred.

18.5 This Agreement shall terminate forthwith in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of either party (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver is appointed, or if it suspends payment, ceases to carry on business or makes any special arrangement or composition with its creditors.

18.6 The termination of this Agreement shall be without prejudice to all rights accrued due between the parties prior to the date of termination.

18.7 Termination after Change of Control

This Agreement will terminate automatically immediately after a change of control (as defined below) of the Owners and/or of the Owners ultimate parent.  Upon such termination, the Owners will be required to pay the Manager the Termination Payment in a single installment.

For the purpose of this Agreement, "Change of Control" means the occurrence of any of the following:

(i) The acquisition by any individual, entity or group of beneficial ownership of fifty (50) percent (%) or more of either (A) the then-outstanding shares of stock of the Owner and/or of the Owners ultimate parent or (B) the combined voting power of the then-outstanding voting securities of the Owner and/or the Owners ultimate parent entitled to vote generally in the election of directors;

(ii) The consummation of a reorganization, merger or consolidation of Owner and/or the Owners ultimate parent or the sale or other disposition of all or substantially all of the assets of Owner and/or Owners ultimate parent.

(iii) The approval by the shareholders of Owner and/or the Owners ultimate parent of a complete liquidation or dissolution of Owner and/or the Owners ultimate parent.

Further, for the purpose of this Agreement "Termination Payment" means a payment to be received by the Manager in the event of a Change of Control.  Such payment shall be equal to the estimated remaining fees payable to the Manager under the then current term of the Agreement but in any case shall not be less than for period of 36 months and not more than a period of 48 months.

19. Law and Arbitration

19.1 This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.

The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement. Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

In cases where neither the claim nor any counterclaim exceeds the sum of USD50.000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

19.2 This Agreement shall be governed by and construed in accordance with Title 9 of the United States Code and the Maritime Law of the United States and any dispute arising out of or in connection with this Agreement shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for the purposes of enforcing any award, judgement may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc.

In cases where neither the claim nor any counterclaim exceeds the sum of USD50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced.

19.3 This Agreement shall be governed by and construed in accordance with the laws of the place mutually agreed by the parties and any dispute arising out of or in connection with this Agreement shall be referred to arbitration at a mutually agreed place, subject to the procedures applicable there.

19.4 If Box 18 in Part I is not appropriately filled in, sub- clause 19.1 of this Clause shall apply.

Note: 19.1, 19.2 and 19.3 are alternatives; indicate alternative agreed in Box 18.

20. Notices

20.1 Any notice to be given by either party to the other party shall be in writing and may be sent by fax, telex, registered or recorded mail or by personal service.

20.2 The address of the Parties for service of such communication shall be as stated in Boxes 19 and 20, respectively.

21. Other Fees

21.1 Incentive Fee

At their sole discretion the Owners on an annual basis in order to provide the Managers with a performance incentive, may make a payment to the Managers of an incentive fee in addition to the management fee.

21.2 Chartering

One and a quarter per cent (1.25%) of all monies earned by the Vessel.  Such fee will be payable in USD.  For the avoidance of any doubt and regardless of Clause 8.5, chartering commissions shall survive the termination of this agreement under all circumstances until the termination of the charter party in force at the time or termination of any other employment arranged previous to the termination date.

21.3 Sale and Purchase

One percent (1%) of any sale of the Vessel including 1% for the initial purchase of the Vessel, including vessels under construction.  Such fee will be payable in USD.

EX-4.21

Exhibit 4.21

1. Date of Agreement Vessel's Name:		THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO) STANDARD SHIP MANAGEMENT AGREEMENT CODE NAME: "SHIPMAN 98" Part I
2. Owners (name, place of registered office and law of registry) (Cl. 1)		3. Managers (name, place of registered office and law of registry)(Cl. 1)
	Name		Name
			TMS TANKERS LTD.
	Place of registered office		Place of registered office
			Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960
	Law of Registry		Law of Registry
			Republic of Marshall Islands
4. Day and year of commencement of Agreement (Cl. 2) DATE OF PRESENT AGREEMENT AS PER BOX 1
5. Crew Management (state "yes" or "no" as agreed) (Cl. 3.1) YES		6. Technical Management (state "yes" or "no" as agreed) (Cl. 3.2) YES
7. Commercial Management (state "yes" or "no" as agreed) (Cl. 3.3) YES		8. Insurance Arrangements (state "yes" or "no" as agreed) (Cl. 3.4) YES
9. Accounting Services (state "yes" or "no" as agreed) (Cl. 3.5) YES		10. Sale or Purchase of the Vessel (state "yes" or "no" as agreed) (Cl. 3.6) YES
11. Provisions (state "yes" or "no" as agreed) (Cl. 3.7) YES		12. Bunkering (state "yes" or "no" as agreed) (Cl. 3.8) YES
13. Chartering Services Period (only to be filled in if "yes" stated in Box 7) (Cl. 3.3(i)) Ten Years from date indicated in Box 4		14. Owners' Insurance (state alternative (i), (ii) or (iii) of Cl. 6.3) 6.3(ii)
15. Annual Management Fee (state annual amount) (Cl. 8.1) As per Agreement dated 9th December 2016 between Inter alia the Managers and Dryships Inc.		16. Severance Costs (state maximum amount) (Cl. 8.4(ii)) As per applicable Collective Bargaining Agreement (CBA)
17. Day and year of termination of Agreement (Cl. 17) Ten Years from date indicated in Box 4		18. Law and Arbitration (state alternative 19.1, 19.2 or 19.3; if 19.3 place of arbitration must be stated) (Cl. 19) 19.1
19. Notices (state postal and cable address, telex and telefax number for serving notice and communication to the Owners) (Cl. 20)		20. Notices (state postal and cable address, telex and telefax number for serving notice and communication to the Managers) (Cl. 20) TMS TANKERS LTD. Athens Shipmanagement Office 80 Kifissias Avenue, 151 25 Marousi Tel: +30 210 8090400 Fax: +30 210 8090405 Email: management@tms-tankers.com
It is mutually agreed between the party slated in Box 2 and the party slated in Box 3 that this Agreement consisting of PART I and PART II as well as Annexes "A" (Details of Vessel), "B" (Details of Crew) and "C" (Budget) and "D" (Associated vessels) attached hereto, shall be performed subject to the conditions contained herein. In the event of a conflict of conditions, the provisions of PART I and Annexes "A", "B", "C" and "D" shall prevail over those of PART II to the extent of such conflict but no further.
Signature(s) (Owners)		Signature(s) (Managers)
Director:

ANNEX "A" (DETAILS OF VESSEL OR VESSELS) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

Date of Agreement:

Name of Vessel(s):

Particulars of Vessel(s)

ANNEX "B" (DETAILS OF CREW) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

Date of Agreement:

Details of Crew:

N/A

Numbers Rank Nationality

ANNEX "C" (BUDGET) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

See Box 15 and Clause 9

Managers' Budget for the first year with effect from the Commencement Date of this Agreement:

ITEMS		(249-days) (USD)	MONTHLY (USD)
1	TOTAL CREW EXPENSES
2	STORES
3	SPARES
4	REPAIR. / MAINTENANCE / SURVEY
5	LUBRICANTS
6	SUPT. TRAVEL / COMM. / MISC.
7	INSURANCE (H&M, P&I, WAR, LOH)
GRAND TOTAL OPERATING COST
DAILY AVERAGE (EXCL. DOCKING COST)
PRE-DELIVERY COST

NOTE:

1. Prices basis at average of Singapore, Continent & China, otherwise, to be charged at actual

2. Crew change basis Asia, Australia and Continent ports, otherwise, to be adjusted

3. Spares costs are for routine maintenance (excluding major items)

4. Parity Euro / USD at 1,10

5. The budget for Superintendent expenses is based on 5 visits per each visit, i.e. 20 Superintendent days.  Any additional attendance will be charged extra by the day at a standard rate of Euro 500 per day.

ANNEX "D" (ASSOCIATED VESSELS) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

NOTE: PARTIES SHOULD BE AWARE THAT BY COMPLETING THIS ANNEX "D" THEY WILL BE SUBJECT TO THE PROVISIONS OF SUB-CLAUSE 18.1(i) OF THIS AGREEMENT.

Date of Agreement:

Details of Associated Vessels:

PART II

"SHIPMAN 98" Standard Ship Management Agreement

1. Definitions

In this Agreement save where the context otherwise requires, the following words and expressions shall have the meanings hereby assigned to them.

"Owners" means the party identified in Box 2.

"Managers" means the party identified in Box 3.

"Vessel" means the vessel or vessels details of which are set out in Annex "A" attached hereto.

"Crew" means the Master, officers and ratings of the numbers, rank and nationality specified in Annex "B" attached hereto.

"Crew Support Costs" means all expenses of a general nature which are not particularly referable to any individual vessel for the time being managed by the Managers and which are incurred by the Managers for the purpose of providing an efficient and economic management service and, without prejudice to the generality of the foregoing, shall include the cost of crew standby pay, training schemes for officers and ratings, cadet training schemes, sick pay, study pay, recruitment and interviews.

"Severance Costs" means the costs which the employers are legally obliged to pay to or in respect of the Crew as a result of the early termination of any employment contract for service on the Vessel.

"Crew Insurances" means insurances against crew risks which shall include but not be limited to death, sickness, repatriation, injury, shipwreck unemployment indemnity and loss of personal effects.

"Management Services" means the services specified in sub- clauses 3.1 to 3.8 as indicated affirmatively in Boxes 5 to 12.

"ISM Code" means the International Management Code for the Safe Operation of Ships and for Pollution Prevention as adopted by the International Maritime Organization (IMO) by resolution A.741(18) or any subsequent amendment thereto.

"STCW 95" means the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, as amended in 1995 or any subsequent amendment thereto.

2. Appointment of Managers

With effect from the day and year stated in Box 4 and continuing unless and until terminated as provided herein, the Owners hereby appoint the Managers and the Managers hereby agree to act as the Managers of the Vessel.

3. Basis of Agreement

Subject to the terms and conditions herein provided, during the period of this Agreement, the Managers shall carry out Management Services in respect of the Vessel as agents for and on behalf of the Owners. The Managers shall have authority to take such actions as they may from time to time in their absolute discretion consider to be necessary to enable them to perform this Agreement in accordance with sound ship management practice.

3.1 Crew Management

(only applicable if agreed according to Box 5)

The Managers shall provide suitably qualified Crew for the Vessel as required by the Owners in accordance with the STCW 95 requirements, provision of which includes but is not limited to the following functions:

(i)   selecting and engaging the Vessel's Crew, including payroll arrangements, pension administration, and insurances for the Crew other than those mentioned in Clause 6:

(ii) ensuring that the applicable requirements of the law of the flag of the Vessel are satisfied in respect of manning levels, rank, qualification and certification of the Crew and employment regulations including Crew's tax, social insurance, discipline and other requirements;

(iii) ensuring that all members of the Crew have passed a medical examination with a qualified doctor certifying that they are fit for the duties for which they are engaged and are in possession of valid medical certificates issued in accordance with appropriate flag State requirements. In the absence of applicable flag State requirements the medical certificate shall be dated not more than three months prior to the respective Crew members leaving their country of domicile and maintained for the duration of their service on board the Vessel;

(iv) ensuring that the Crew shall have a command of the English language of a sufficient standard to enable them to perform their duties safely;

(v)  arranging transportation of the Crew, including repatriation;

(vi) training of the Crew and supervising their efficiency;

(vii) conducting union negotiations;

(viii) operating the Managers' drug and alcohol policy unless otherwise agreed.

3.2 Technical Management

(only applicable if agreed according to Box 6)

The Managers shall provide technical management which includes, but is not limited to, the following functions:

(i)  provision of competent personnel to supervise the maintenance and general efficiency of the Vessel;

(ii)  arrangement and supervision of dry dockings, repairs, alterations and the upkeep of the Vessel to the standards  required by the Owners provided that the Managers shall be entitled to incur the necessary expenditure to ensure that the Vessel will comply with the law of the flag of the Vessel and of the places where she trades, and all  requirements and recommendations of the classification society;

(iii)  Arrangement of the supply of necessary stores, spares and lubricating oil;

(iv)  appointment of surveyors and technical consultants as the Managers may consider from time to time to be necessary;

(v)  development, implementation and maintenance of a Safety Management System (SMS) in accordance with the ISM Code (see sub-clauses 4.2 and 5.3).

(vi)  supervisions of vessels under construction at the specific request of the Owners and after approval by the Owner of the relevant budget submitted by the Managers.

3.3 Commercial Management

(only applicable if agreed according to Box 7)

The Managers shall provide the commercial operation of the Vessel, as required by the Owners, which includes, but is not limited to, the following functions:

(i)   providing chartering services in accordance with the Owners' instructions which include, but are not limited to, seeking and negotiating employment for the Vessel and the conclusion (including the execution thereof) of charter parties or other contracts relating to the employment of the Vessel. If such a contract exceeds the period stated in Box 13, consent thereto in writing shall first be obtained from the Owners.

(ii)  arranging of the proper payment to Owners or their nominees of all hire and/or freight revenues or other moneys of whatsoever nature to which Owners may be entitled arising out of the employment of or otherwise in connection with the Vessel.

(iii)  providing voyage estimates and accounts and calculating of hire, freights, demurrage and/or despatch moneys due from or due to the charterers of the Vessel;

(iv)   issuing of voyage instructions;

(v)    appointing agents;

(vi)   appointing stevedores;

(vii)  arranging surveys associated with the commercial operation of the Vessel.

3.4 Insurance Arrangements'

(only applicable if agreed according to Box 8)

The Managers shall arrange insurances in accordance with

Clause 6, on such terms and conditions as the Owners shall have instructed or agreed, in particular regarding conditions, insured values, deductibles and franchises.

3.5 Accounting Services

(only applicable if agreed according to Box 9)

The Managers shall:

(i)   establish an accounting system which meets the requirements of the Owners and provide regular accounting services, supply regular reports and records,

(ii) maintain the records of all costs and expenditure incurred as well as data necessary or proper for the settlement of accounts between the parties.

3.6 Sale or Purchase of the Vessel

(only applicable if agreed according to Box 10)

The Managers shall, in accordance with the Owners' instructions, supervise the sale or purchase of the Vessel, including the performance of any sale or purchase agreement, but not negotiation of the same.

3.7 Provisions

(only applicable if agreed according to Box 11)

The Managers shall arrange for the supply of provisions.

3.8 Bunkering (only applicable if agreed according to Box 12) The Managers shall arrange for the provision of bunker fuel of the quality specified by the Owners as required for the Vessel's trade.

4. Managers' Obligations

4.1 The Managers undertake to use their best endeavours endeavours to provide the agreed Management Services as agents for and on behalf of the Owners in accordance with sound ship management practice and to protect and promote the interests of the Owners in all matters relating to the provision of services hereunder. Provided, however, that the Managers in the performance of their management responsibilities under this Agreement shall be entitled to have regard to their overall responsibility in relation to all vessels as may from time to time be entrusted to their management and in particular, but without prejudice to the generality of the foregoing, the Managers shall be entitled to allocate available supplies, manpower and services in such manner as in the prevailing circumstances the Managers in their absolute discretion consider to be fair and reasonable.

4.2 Where the Managers are providing Technical Management in accordance with sub-clause 3.2, they shall procure that the requirements of the law of the flag of the Vessel are satisfied and they shall in particular be deemed to be the "Company" as defined by the ISM Code, assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code when applicable.

5. Owners' Obligations

5.1 The Owners shall pay all sums due to the Managers punctually in accordance with the terms of this Agreement.

5.2 Where the Managers are providing Technical Management in accordance with sub-clause 3.2, the Owners shall:

(i)   procure that all officers and ratings supplied by them or on their behalf comply with the requirements of STCW 95;

(ii)   instruct such officers and ratings to obey all reasonable orders of the Managers in connection with the operation of the Managers' safety management system.

5.3 Where the Managers are not providing Technical Management in accordance with sub-clause 3.2, the Owners shall procure that the requirements of the law of the flag of the Vessel are satisfied and that they, or such other entity as may be appointed by them and identified to the Managers, shall be deemed to be the "Company" as defined by the ISM Code assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code when applicable.

6. Insurance Policies

The Owners shall procure, whether by instructing the Managers under sub-clause 3.4 or otherwise, that throughout the period of this Agreement:

6.1 at the Owners' expense, the Vessel is insured for not less than her sound market value or entered for her full gross tonnage, as the case may be for:

(i)  usual hull and machinery marine risks (including crew negligence) and excess liabilities;

(ii)  protection and indemnity risks (including pollution risks and Crew Insurances); and

(iii)  war risks (including protection and indemnity and crew risks) in accordance with the best practice of prudent owners of vessels of a similar type to the Vessel, with first class insurance companies, underwriters or associations ("the Owners' Insurances");

(iv)  Freight, Demurrage and Defense Insurance

(v)  Certificate of Financial Responsibility

(vi)  Crew Personal Accident and Sundries Insurance cover

(vii)  Any other insurance required by law

(viii)  Any insurance that can be arranged and not included in the above but is requested by the Owners in writing

6.2 all premiums, deductibles, supplementary calls and/or excess supplementary calls and release calls on the Owners' Insurances are paid promptly by their due date,

6.3 the Owners' Insurances name the Managers and, subject to underwriters' agreement, any third party designated by the Managers as a joint assured, with full cover, with the Owners obtaining cover in respect of each of the insurances specified in sub-clause 6.1:

(i)   on terms whereby the Managers and any such third party are liable in respect of premiums or calls arising in connection with the Owners' Insurances; or

(ii) if reasonably obtainable, on terms such that neither the Managers nor any such third party shall be under any liability in respect of premiums or calls arising in connection with the Owners' Insurances; or

(iii) on such other terms as may be agreed in writing. Indicate alternative (i), (ii) or (iii) in Box 14. If Box 14 is left blank then (i) applies.

6.4 written evidence is provided, to the reasonable satisfaction of the Managers, of their compliance with their obligations under Clause 6 within a reasonable time of the commencement of the Agreement, and of each renewal date and, if specifically requested, of each payment date of the Owners' Insurances.

7. Income Collected and Expenses Paid on Behalf of Owners

7.1 All moneys collected by the Managers under the terms of this Agreement (other than moneys payable by the Owners to the Managers) and any interest thereon shall be held to the credit of the Owners in a separate bank account.

7.2 All expenses incurred by the Managers under the terms of this Agreement on behalf of the Owners (including expenses as provided in Clause 8) may be debited against the Owners in the account referred to under sub-clause 7.1 but shall in any event remain payable by the Owners to the Managers on demand.

8. Management Fee

8.1(a)  The Owners shall pay to the Managers for their services as Managers under this Agreement an annual a daily management fee as stated in Box 15 which shall be payable by equal monthly installments in advance, the first installment being payable on the commencement of this Agreement (see Clause 2 and Box 4) and subsequent installments being payable every month.

8.1(b)  The Owners shall place with the Manager for the duration of this Agreement an amount equal to three months of management fee stated in Box 15 as security.

Upon termination of this Agreement, all moneys remaining within the security or any portion thereof, if the amounts due to the Manager pursuant with the obligations set forth in the management agreement and their addenda (if any) is less than the security amount paid as per above shall be returned to the Owner subject to the terms and conditions of this agreement.  It is being understood that in event of default from the part of the Owner is forfeited in favor of the Manager without prejudice to any rights which the Manager may have against the Owner in law or in equity.

8.2 The management fee shall be subject to an annual a review on the anniversary date of the Agreement and the for each calendar year and will be automatically adjusted to the Greek CPI index for the previous year.  It is understood that any such increase will not be less than 3% and not more than 5%.  The proposed fee shall be presented in the annual budget referred to in sub-clause 9.1clause 9.1

8.3 The Managers shall, at no extra cost to the Owners, provide their own office accommodation, office staff, facilities and stationery. Without limiting the generality of Clause 7 the Owners shall reimburse the Managers for postage and communication expenses, travelling expenses, and other out of pocket expenses properly incurred by the Managers in pursuance of the Management Services.

8.4 In the event of the appointment of the Managers being terminated for any reason other than clause 18.2 by the Owners or the Managers in accordance with the provisions of Clauses 17 and .18 other than by reason of default by the Managers, or if the Vessel is lost, sold or otherwise disposed of, the "management fee" shall be payable to the Managers according to the provisions of sub-clause 8.1 shall continue to be payable for a further period of three (3) calendar months as from the termination date. In addition, provided that the Managers provide Crew for the Vessel in accordance with sub-clause 3.1:

(i)   the Owners shall continue to pay Crew Support Costs during the said further period of three calendar months and

(ii) the Owners shall pay an equitable proportion of any Severance Costs which may materialize, not exceeding the amount stated in Box 16.

8.5 If the Owners decide to lay-up the Vessel whilst this Agreement remains in force and such lay-up lasts for more than three months, an appropriate reduction of the management fee for the period exceeding three months until one month before the Vessel is again put into service shall be mutually agreed between the parties.

8.6 Unless otherwise agreed in writing all discounts and commissions obtained by the Managers in the course of the management of the Vessel shall be credited to the Owners.  For the avoidance of doubt, it is understood that insurance is charged on a gross rate basis.

8.7 In case of vessels under construction, no management fee will be charged by the Managers until the vessel's delivery to the Owners.  However, in case Owners instruct the Managers to supervise vessels under construction as per Clause 3.2(vi) then the Managers will be due an upfront fee equal to 10% of the budget approved by the Owners.  Such fee, will be payable in USD.  For the avoidance of any doubt the rest of the paragraphs of Clause 8 to remain in force.

9. Budgets and Management of Funds

9.1 On or before November 30 of each calendar year Tthe Managers shall present to the Owners annually a budget (see Annex "C") for the following twelve monthsnext calendar year in such form as the Owners reasonably require. The budget for the first year hereof is set out in Annex "C" hereto.  Subsequent annual budgets shall be prepared by the Managers and submitted to the Owners not less than three months before the anniversary date of the commencement of this Agreement (see Clause 2 and Box 4).

9.2 The Owners shall indicate to the Managers their acceptance and approval of the annual budget within one month of presentation and in the absence of any such indication the Managers shall be entitled to assume that the Owners have accepted the proposed budget.

9.3 The Owner shall place with the Manager for the duration of this Agreement an amount equal to three months running expenses as working capital reserve.  For calculation purposes the reserve will be based on the agreed budgeted daily average cost as per the respective management agreement.  Upon termination of this Agreement all moneys remaining within the working capital reserve shall be returned to the Owner subject to the terms and conditions of this agreement. Following the agreement of the budget, the Managers shall prepare and present to the Owners their estimate of the working capital requirement of the Vessel and the Managers shall each month up-date this estimate. Based thereon, the Managers shall each month request the Owners in writing for the funds required to run the Vessel for the ensuing month, including the payment of any occasional or extraordinary item of expenditure, such as emergency repair costs, additional insurance premiums, bunkers or provisions. Such funds shall be received by the Managers within ten running days after the receipt by the Owners of the Managers' written request and shall be held to the credit of the Owners in a separate bank account.

9.4 The Managers shall produce a comparison between budgeted and actual income and expenditure of the Vessel in such form as required by the Owners monthly on a yearly basis or at such other intervals as mutually agreed.

9.5 Notwithstanding anything contained herein to the contrary, the Managers shall in no circumstances be required to use or commit their own funds to finance the provision of the Management Services.

10. Managers' Right to Sub-Contract

The Managers shall not have the right to sub-contract any of their obligations hereunder, including those mentioned in sub- clause 3.1 without the prior written consent of the Owners which shall not be unreasonably withheld. In the event of such a sub- contract the Managers shall remain fully liable for the due performance of their obligations under this Agreement.

11. Responsibilities

11.1 Force Majeure - Neither the Owners nor the Managers shall be under any liability for any failure to perform any of their obligations hereunder by reason of any cause whatsoever of any nature or kind beyond their reasonable control.  For the avoidance of any doubt financial force majeure does not apply.

11.2 Liability to Owners - (i) Without prejudice to sub-clause 11.1, the Managers shall be under no liability whatsoever to the  Owners for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect, (including but not limited to loss of profit arising out of or in connection with detention of or delay to the Vessel) and howsoever arising in the course of performance of the Management Services UNLESS same is proved to have resulted solely from the negligence, gross negligence or wilful default of the Managers or their employees, or agents or sub-contractors employed by them in connection with the Vessel, in which case (save where loss, damage, delay or expense has resulted from the Managers' personal act or omission committed with the intent to cause same or recklessly and with knowledge that such loss, damage, delay or expense would probably result) the Managers' liability for each incident or series of incidents giving rise to a claim or claims shall never exceed a total of ten times the annual management fee payable hereunder.

(ii) Notwithstanding anything that may appear to the contrary in this Agreement, the Managers shall not be liable for any of the

actions of the Crew, even if such actions are negligent, grossly negligent or wilful, except only to the extent that they are shown to have resulted from a failure by the Managers to discharge their obligations under sub-clause 3.1, in which case their liability shall be limited in accordance with the terms of this Clause 11.

11.3 Indemnity - Except to the extent and solely for the amount therein set out that the Managers would be liable under sub- clause 11.2, the Owners hereby undertake to keep the Managers and their employees, agents and sub-contractors indemnified and to hold them harmless against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of the Agreement, and against and in respect of all costs, losses, damages and expenses (including legal costs and expenses on a full indemnity basis) which the Managers may suffer or incur (either directly or indirectly) in the course of the performance of this Agreement.

11.4 "Himalaya" - It is hereby expressly agreed that no employee or agent of the Managers (including every sub- contractor from time to time employed by the Managers) shall in any circumstances whatsoever be under any liability whatsoever to the Owners for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Clause 11, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defence and immunity of whatsoever nature applicable to the Managers or to which the Managers are entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Managers acting as aforesaid and for the purpose of all the foregoing provisions of this Clause 11 the Managers are or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be their servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.

12. Documentation

Where the Managers are providing Technical Management in accordance with sub-clause 3.2 and/or Crew Management in accordance with sub-clause 3.1, they shall make available, upon Owners' request, all documentation and records related to the Safety Management System (SMS) and/or the Crew which the Managers need in order to demonstrate compliance with the ISM Code and STCW 95 or to defend a claim against a third party.

13. General Administration

13.1 The Managers shall handle and settle all claims arising out of the Management Services hereunder and keep the Owners informed regarding any incident of which the Managers become aware which gives or may give rise to claims or disputes involving third parties.

13.2 The Managers shall, as instructed by the Owners, bring or defend actions, suits or proceedings in connection with matters entrusted to the Managers according to this Agreement.

13.3 The Managers shall also have power to obtain legal or technical or other outside expert advice in relation to the handling and settlement of claims and disputes or all other matters affecting the interests of the Owners in respect of the Vessel.

13.4 The Owners shall arrange for the provision of any necessary guarantee bond or other security.

13.5 Any costs reasonably incurred by the Managers in carrying out their obligations according to Clause 13 shall be reimbursed by the Owners.

14. Auditing

The Managers shall at all times maintain and keep true and correct accounts in accordance with sound accounting practice and an adequate and effective system of internal controls and procedures and shall make the same available for permit the inspection and auditing by the Owners and their Auditors at such times as may be mutually agreed. On the termination, for whatever reasons, of this Agreement, the Managers shall release to the Owners, if so requested, the originals where possible, or otherwise certified copies, of all such accounts and all documents specifically relating to the Vessel and her operation.

15. lnspection of Vessel

The Owners shall have the right at any time after giving reasonable notice to the Managers to inspect the Vessel for any reason they consider necessary.

16. Compliance with Laws and Regulations

The Managers will not do or permit to be done anything which might cause any breach or infringement of the laws and regulations of the Vessel's flag, or of the places where she trades.

17. Duration of the Agreement

This Agreement shall come into effect on the day and year stated in Box 4 and shall continue until the date stated in Box 17. Thereafter it shall automatically renew for a five-year period and shall thereafter be extended in additional five-year increments if notice of termination is not provided by the Owners in the fourth quarter of the year immediately preceding the end of the respective term.continue until terminated by either party giving to the other notice in writing, in which event the Agreement shall terminate upon the expiration of a period of  two twelve months from the date upon which such notice was given.

18. Termination

18.1 Owners' default

(i)  The Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing if any moneys payable by the Owners under this Agreement and/or the Owners of any associated vessel, details of which are listed in Annex "D", shall not have been received in the Managers' nominated account within ten running days of receipt by the Owners of the Managers written request or if the Vessel is repossessed by the Mortgagees.

(ii) If the Owners:

(a) fail to meet their obligations under sub-clauses 5.2 and 5.3 of this Agreement for any reason within their control, or

(b) proceed with the employment of or continue to employ the Vessel in the carriage of contraband, blockade running, or in an unlawful trade, or on a voyage which in the reasonable opinion of the Managers is unduly hazardous or improper,

the Managers may give notice of the default to the Owners, requiring them to remedy it as soon as practically possible. In the event that the Owners fail to remedy it within a reasonable time to the satisfaction of the Managers, the Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing.

18.2 Managers' Default

If the Managers fail to meet their obligations under Clauses 3 and 4 of this Agreement for any reason within the control of the Managers, the Owners may give notice to the Managers of the default, requiring them to remedy it as soon as practically possible. In the event that the Managers fail to remedy it within a reasonable time to the satisfaction of the Owners, the Owners shall be entitled to terminate the Agreement with immediate effect by notice in writing.

18.3 Extraordinary Termination

This Agreement shall be deemed to be terminated in the case of the sale of the Vessel or if the Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisitioned.

18.4 For the purpose of sub-clause 18.3 hereof

(i)  the date upon which the Vessel is to be treated as having been sold or otherwise disposed of shall be the date on which the Owners cease to be registered as Owners of the Vessel;

(ii) the Vessel shall not be deemed to be lost unless either she has become an actual total loss or agreement has been reached with her underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with her underwriters is not reached it is adjudged by a competent tribunal that a constructive loss of the Vessel has occurred.

18.5 This Agreement shall terminate forthwith in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of either party (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver is appointed, or if it suspends payment, ceases to carry on business or makes any special arrangement or composition with its creditors.

18.6 The termination of this Agreement shall be without prejudice to all rights accrued due between the parties prior to the date of termination.

18.7 Termination after Change of Control

This Agreement will terminate automatically immediately after a change of control (as defined below) of the Owners and/or of the Owners ultimate parent.  Upon such termination, the Owners will be required to pay the Manager the Termination Payment in a single installment.

For the purpose of this Agreement, "Change of Control" means the occurrence of any of the following:

(i) The acquisition by any individual, entity or group of beneficial ownership of fifty (50) percent (%) or more of either (A) the then-outstanding shares of stock of the Owner and/or of the Owners ultimate parent or (B) the combined voting power of the then-outstanding voting securities of the Owner and/or the Owners ultimate parent entitled to vote generally in the election of directors;

(ii) The consummation of a reorganization, merger or consolidation of Owner and/or the Owners ultimate parent or the sale or other disposition of all or substantially all of the assets of Owner and/or Owners ultimate parent.

(iii) The approval by the shareholders of Owner and/or the Owners ultimate parent of a complete liquidation or dissolution of Owner and/or the Owners ultimate parent.

Further, for the purpose of this Agreement "Termination Payment" means a payment to be received by the Manager in the event of a Change of Control.  Such payment shall be equal to the estimated remaining fees payable to the Manager under the then current term of the Agreement but in any case shall not be less than for period of 36 months and not more than a period of 48 months.

19. Law and Arbitration

19.1 This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.

The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.

Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

In cases where neither the claim nor any counterclaim exceeds the sum of USD50.000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

19.2 This Agreement shall be governed by and construed in accordance with Title 9 of the United States Code and the Maritime Law of the United States and any dispute arising out of or in connection with this Agreement shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for the purposes of enforcing any award, judgement may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc.

In cases where neither the claim nor any counterclaim exceeds the sum of USD50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced.

19.3 This Agreement shall be governed by and construed in accordance with the laws of the place mutually agreed by the parties and any dispute arising out of or in connection with this Agreement shall be referred to arbitration at a mutually agreed place, subject to the procedures applicable there.

19.4 If Box 18 in Part I is not appropriately filled in, sub- clause 19.1 of this Clause shall apply.

Note: 19.1, 19.2 and 19.3 are alternatives; indicate alternative agreed in Box 18.

20. Notices

20.1 Any notice to be given by either party to the other party shall be in writing and may be sent by fax, telex, registered or recorded mail or by personal service.

20.2 The address of the Parties for service of such communication shall be as stated in Boxes 19 and 20, respectively.

21. Other Fees

21.1Incentive Fee

At their sole discretion the Owners on an annual basis in order to provide the Managers with a performance incentive, may make a payment to the Managers of an incentive fee in addition to the management fee.

21.2 Chartering

One and a quarter per cent (1.25%) of all monies earned by the Vessel.  Such fee will be payable in USD.  For the avoidance of any doubt and regardless of Clause 8.5, chartering commissions shall survive the termination of this agreement under all circumstances until the termination of the charter party in force at the time or termination of any other employment arranged

previous to the termination date.

21.3 Sale and Purchase

One percent (1%) of any sale of the Vessel including 1% for the initial purchase of the Vessel, including vessels under construction.  Such fee will be payable in USD.

EX-4.22

Exhibit 4.22

1. Date of Agreement Vessel's Name:		THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO) STANDARD SHIP MANAGEMENT AGREEMENT CODE NAME: "SHIPMAN 98" Part I
2. Owners (name, place of registered office and law of registry) (Cl. 1)		3. Managers (name, place of registered office and law of registry)(Cl. 1)
	Name		Name
			TMS OFFSHORE SERVICES LTD.
	Place of registered office		Place of registered office
			Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960
	Law of Registry		Law of Registry
			Republic of Marshall Islands
4. Day and year of comencement of Agreement (Cl. 2) DATE OF PRESENT AGREEMENT AS PER BOX 1
5. Crew Management (state "yes" or "no" as agreed) (Cl. 3.1) YES		6. Technical Management (state "yes" or "no" as agreed) (Cl. 3.2) YES
7. Commercial Management (state "yes" or "no" as agreed) (Cl. 3.3) YES		8. Insurance Arrangements (state "yes" or "no" as agreed) (Cl. 3.4) YES
9. Accounting Services (state "yes" or "no" as agreed) (Cl. 3.5) YES		10. Sale or Purchase of the Vessel (state "yes" or "no" as agreed) (Cl. 3.6) YES
11. Provisions (state "yes" or "no" as agreed) (Cl. 3.7) YES		12. Bunkering (state "yes" or "no" as agreed) (Cl. 3.8) YES
13. Chartering Services Period (only to be filled in if "yes" stated in Box 7) (Cl. 3.3(i)) Ten Years from date indicated in Box 4		14. Owners' Insurance (state alternative (i), (ii) or (iii) of Cl. 6.3) 6.3(ii)
15. Annual Management Fee (state annual amount) (Cl. 8.1) As per Agreement dated 9th December 2016 between Inter alia the Managers and Dryships Inc.		16. Severance Costs (state maximum amount) (Cl. 8.4(ii)) As per applicable Collective Bargaining Agreement (CBA)
17. Day and year of termination of Agreement (Cl. 17) Ten Years from date indicated in Box 4		18. Law and Arbitration (state alternative 19.1, 19.2 or 19.3; if 19.3 place of arbitration must be stated) (Cl. 19) 19.1
19. Notices (state postal and cable address, telex and telefax number for serving notice and communication to the Owners) (Cl. 20)		20. Notices (state postal and cable address, telex and telefax number for serving notice and communication to the Managers) (Cl. 20) TMS OFFSHORE SERVICES LTD. Athens Shipmanagement Office 11 Fragkokklisias Street, 151 25 Marousi Tel: +30 216 2002900 Email: operations@tms-offshore.com
It is mutually agreed between the party slated in Box 2 and the party slated in Box 3 that this Agreement consisting of PART I and PART II as well as Annexes "A" (Details of Vessel), "B" (Details of Crew) and "C" (Budget) and "D" (Associated vessels) attached hereto, shall be performed subject to the conditions contained herein. In the event of a conflict of conditions, the provisions of PART I and Annexes "A", "B", "C" and "D" shall prevail over those of PART II to the extent of such conflict but no further.
Signature(s) (Owners)		Signature(s) (Managers)

ANNEX "A" (DETAILS OF VESSEL OR VESSELS) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

Date of Agreement:

Name of Vessel(s):

Particulars of Vessel(s)

ANNEX "B" (DETAILS OF CREW) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

Date of Agreement:

Details of Crew:

N/A

Numbers Rank Nationality

ANNEX "C" (BUDGET) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

See Box 15 and Clause 9

Managers' Budget for the first year with effect from the Commencement Date of this Agreement:

DAILY AMOUNT DURING LAY-UP

NOTE:

ANNEX "D" (ASSOCIATED VESSELS) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT – CODE NAME: "SHIPMAN 98"

NOTE: PARTIES SHOULD BE AWARE THAT BY COMPLETING THIS ANNEX "D" THEY WILL BE SUBJECT TO THE PROVISIONS OF SUB-CLAUSE 18.1(i) OF THIS AGREEMENT.

Date of Agreement:

Details of Associated Vessels:

PART II

"SHIPMAN 98" Standard Ship Management Agreement

1. Definitions

In this Agreement save where the context otherwise requires, the following words and expressions shall have the meanings hereby assigned to them.

"Owners" means the party identified in Box 2.

"Managers" means the party identified in Box 3.

"Vessel" means the vessel or vessels details of which are set out in Annex "A" attached hereto.

"Crew" means the Master, officers and ratings of the numbers, rank and nationality specified in Annex "B" attached hereto.

"Crew Support Costs" means all expenses of a general nature which are not particularly referable to any individual vessel for the time being managed by the Managers and which are incurred by the Managers for the purpose of providing an efficient and economic management service and, without prejudice to the generality of the foregoing, shall include the cost of crew standby pay, training schemes for officers and ratings, cadet training schemes, sick pay, study pay, recruitment and interviews.

"Severance Costs" means the costs which the employers are legally obliged to pay to or in respect of the Crew as a result of the early termination of any employment contract for service on the Vessel.

"Crew Insurances" means insurances against crew risks which shall include but not be limited to death, sickness, repatriation, injury, shipwreck unemployment indemnity and loss of personal effects.

"Management Services" means the services specified in sub- clauses 3.1 to 3.8 as indicated affirmatively in Boxes 5 to 12.

"ISM Code" means the International Management Code for the Safe Operation of Ships and for Pollution Prevention as adopted by the International Maritime Organization (IMO) by resolution A.741(18) or any subsequent amendment thereto.

"STCW 95" means the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, as amended in 1995 or any subsequent amendment thereto.

2. Appointment of Managers

With effect from the day and year stated in Box 4 and continuing unless and until terminated as provided herein, the Owners hereby appoint the Managers and the Managers hereby agree to act as the Managers of the Vessel.

3. Basis of Agreement

Subject to the terms and conditions herein provided, during the period of this Agreement, the Managers shall carry out Management Services in respect of the Vessel as agents for and on behalf of the Owners. The Managers shall have authority to take such actions as they may from time to time in their absolute discretion consider to be necessary to enable them to perform this Agreement in accordance with sound ship management practice.

3.1 Crew Management

(only applicable if agreed according to Box 5)

The Managers shall provide suitably qualified Crew for the Vessel as required by the Owners in accordance with the STCW 95 requirements, provision of which includes but is not limited to the following functions:

(i) selecting and engaging the Vessel's Crew, including payroll arrangements, pension administration, and insurances for the Crew other than those mentioned in Clause 6;

(ii) ensuring that the applicable requirements of the law of the flag of the Vessel are satisfied in respect of manning levels, rank, qualification and certification of the Crew and employment regulations including Crew's tax, social insurance, discipline and other requirements;

(iii) ensuring that all members of the Crew have passed a medical examination with a qualified doctor certifying that they are fit for the duties for which they are engaged and are in possession of valid medical certificates issued in accordance with appropriate flag State requirements. In the absence of applicable flag State requirements the medical certificate shall be dated not more than three months prior to the respective Crew members leaving their country of domicile and maintained for the duration of their service on board the Vessel;

(iv) ensuring that the Crew shall have a command of the English language of a sufficient standard to enable them to perform their duties safely;

(v)  arranging transportation of the Crew, including repatriation;

(vi) training of the Crew and supervising their efficiency;

(vii) conducting union negotiations;

(viii) operating the Managers' drug and alcohol policy unless otherwise agreed.

3.2 Technical Management

(only applicable if agreed according to Box 6)

The Managers shall provide technical management which includes, but is not limited to, the following functions:

(i)  provision of competent personnel to supervise the maintenance and general efficiency of the Vessel;

(ii) arrangement and supervision of dry dockings, repairs, alterations and the upkeep of the Vessel to the standards  required by the Owners provided that the Managers shall be entitled to incur the necessary expenditure to ensure that the Vessel will comply with the law of the flag of the Vessel and of the places where she trades, and all  requirements and recommendations of the classification society;

(iii) Arrangement of the supply of necessary stores, spares and lubricating oil;

(iv) appointment of surveyors and technical consultants as the Managers may consider from time to time to be necessary;

(v) development, implementation and maintenance of a Safety Management System (SMS) in accordance with the ISM Code (see sub-clauses 4.2 and 5.3).

(vi) supervisions of vessels under construction at the specific request of the Owners and after approval by the Owner of the relevant budget submitted by the Managers.

3.3 Commercial Management

(only applicable if agreed according to Box 7)

The Managers shall provide the commercial operation of the Vessel, as required by the Owners, which includes, but is not limited to, the following functions:

(i) providing chartering services in accordance with the Owners' instructions which include, but are not limited to, seeking and negotiating employment for the Vessel and the conclusion (including the execution thereof) of charter parties or other contracts relating to the employment of the Vessel. If such a contract exceeds the period stated in Box 13, consent thereto in writing shall first be obtained from the Owners.

(ii) arranging of the proper payment to Owners or their nominees of all hire and/or freight revenues or other moneys of whatsoever nature to which Owners may be entitled arising out of the employment of or otherwise in connection with the Vessel.

(iii) providing voyage estimates and accounts and calculating of hire, freights, demurrage and/or despatch moneys due from or due to the charterers of the Vessel;

(iv) issuing of voyage instructions;

(v) appointing agents;

(vi) appointing stevedores;

(vii) arranging surveys associated with the commercial operation of the Vessel.

3.4 Insurance Arrangements

(only applicable if agreed according to Box 8)

The Managers shall arrange insurances in accordance with

Clause 6, on such terms and conditions as the Owners shall have instructed or agreed, in particular regarding conditions, insured values, deductibles and franchises.

3.5 Accounting Services

(only applicable if agreed according to Box 9)

The Managers shall:

(i) establish an accounting system which meets the requirements of the Owners and provide regular accounting services, supply regular reports and records,

(ii) maintain the records of all costs and expenditure incurred as well as data necessary or proper for the settlement of accounts between the parties.

3.6 Sale or Purchase of the Vessel

(only applicable if agreed according to Box 10)

The Managers shall, in accordance with the Owners' instructions, supervise the sale or purchase of the Vessel, including the performance of any sale or purchase agreement, but not negotiation of the same.

3.7 Provisions (only applicable if agreed according to Box 11)

The Managers shall arrange for the supply of provisions.

3.8 Bunkering (only applicable if agreed according to Box 12)

The Managers shall arrange for the provision of bunker fuel of the quality specified by the Owners as required for the Vessel's trade.

4. Managers' Obligations

4.1 The Managers undertake to use their best endeavours to provide the agreed Management Services as agents for and on behalf of the Owners in accordance with sound ship management practice and to protect and promote the interests of the Owners in all matters relating to the provision of services hereunder. Provided, however, that the Managers in the performance of their management responsibilities under this Agreement shall be entitled to have regard to their overall responsibility in relation to all vessels as may from time to time be entrusted to their management and in particular, but without prejudice to the generality of the foregoing, the Managers shall be entitled to allocate available supplies, manpower and services in such manner as in the prevailing circumstances the Managers in their absolute discretion consider to be fair and reasonable.

4.2 Where the Managers are providing Technical Management in accordance with sub-clause 3.2, they shall procure that the requirements of the law of the flag of the Vessel are satisfied and they shall in particular be deemed to be the "Company" as defined by the ISM Code, assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code when applicable.

5. Owners' Obligations

5.1 The Owners shall pay all sums due to the Managers punctually in accordance with the terms of this Agreement.

5.2 Where the Managers are providing Technical Management in accordance with sub-clause 3.2, the Owners shall:

(i)   procure that all officers and ratings supplied by them or on their behalf comply with the requirements of STCW 95;

(ii)   instruct such officers and ratings to obey all reasonable orders of the Managers in connection with the operation of the Managers' safety management system.

5.3 Where the Managers are not providing Technical Management in accordance with sub-clause 3.2, the Owners shall procure that the requirements of the law of the flag of the Vessel are satisfied and that they, or such other entity as may be appointed by them and identified to the Managers, shall be deemed to be the "Company" as defined by the ISM Code assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code when applicable.

6. Insurance Policies

The Owners shall procure, whether by instructing the Managers under sub-clause 3.4 or otherwise, that throughout the period of this Agreement:

6.1 at the Owners' expense, the Vessel is insured for not less than her sound market value or entered for her full gross tonnage, as the case may be for:

(i) usual hull and machinery marine risks (including crew negligence) and excess liabilities;

(ii) protection and indemnity risks (including pollution risks and Crew Insurances); and

(iii) war risks (including protection and indemnity and crew risks) in accordance with the best practice of prudent owners of vessels of a similar type to the Vessel, with first class insurance companies, underwriters or associations ("the Owners' Insurances");

(iv)  Freight, Demurrage and Defense Insurance

(v)  Certificate of Financial Responsibility

(vi)  Crew Personal Accident and Sundries Insurance cover

(vii)  Any other insurance required by law

(viii)  Any insurance that can be arranged and not included in the above but is requested by the Owners in writing

6.2 all premiums, deductibles, supplementary calls and/or excess supplementary calls and release calls on the Owners' Insurances are paid promptly by their due date,

6.3 the Owners' Insurances name the Managers and, subject to underwriters' agreement, any third party designated by the Managers as a joint assured, with full cover, with the Owners obtaining cover in respect of each of the insurances specified in sub-clause 6.1:

(i)   on terms whereby the Managers and any such third party are liable in respect of premiums or calls arising in connection with the Owners' Insurances; or

(ii) if reasonably obtainable, on terms such that neither the Managers nor any such third party shall be under any liability in respect of premiums or calls arising in connection with the Owners' Insurances; or

(iii) on such other terms as may be agreed in writing. Indicate alternative (i), (ii) or (iii) in Box 14. If Box 14 is left blank then (i) applies.

6.4 written evidence is provided, to the reasonable satisfaction of the Managers, of their compliance with their obligations under Clause 6 within a reasonable time of the commencement of the Agreement, and of each renewal date and, if specifically requested, of each payment date of the Owners' Insurances.

7. Income Collected and Expenses Paid on Behalf of Owners

7.1 All moneys collected by the Managers under the terms of this Agreement (other than moneys payable by the Owners to the Managers) and any interest thereon shall be held to the credit of the Owners in a separate bank account.

7.2 All expenses incurred by the Managers under the terms of this Agreement on behalf of the Owners (including expenses as provided in Clause 8) may be debited against the Owners in the account referred to under sub-clause 7.1 but shall in any event remain payable by the Owners to the Managers on demand.

8. Management Fee

8.1(a) The Owners shall pay to the Managers for their services as Managers under this Agreement an annual a daily management fee as stated in Box 15 which shall be payable by equal monthly installments in advance, the first installment being payable on the commencement of this Agreement (see Clause 2 and Box 4) and subsequent installments being payable every month.

8.1(b)  The Owners shall place with the Manager for the duration of this Agreement an amount equal to three months of management fee stated in Box 15 as security.

Upon termination of this Agreement, all moneys remaining within the security or any portion thereof, if the amounts due to the Manager pursuant with the obligations set forth in the management agreement and their addenda (if any) is less than the security amount paid as per above shall be returned to the Owner subject to the terms and conditions of this agreement.  It is being understood that in event of default from the part of the Owner is forfeited in favor of the Manager without prejudice to any rights which the Manager may have against the Owner in law or in equity.

8.2 The management fee shall be subject to an annual a review on the anniversary date of the Agreement and the for each calendar year and will be automatically adjusted to the Greek CPI index for the previous year.  It is understood that any such increase will not be less than 3% and not more than 5%.  The proposed fee shall be presented in the annual budget referred to in sub-C clause 9.1 clause 9.1

8.3 The Managers shall, at no extra cost to the Owners, provide their own office accommodation, office staff, facilities and stationery. Without limiting the generality of Clause 7 the Owners shall reimburse the Managers for postage and communication expenses, travelling expenses, and other out of pocket expenses properly incurred by the Managers in pursuance of the Management Services.

8.4 In the event of the appointment of the Managers being terminated for any reason other than clause 18.2 by the Owners or the Managers in accordance with the provisions of Clauses 17 and .18 other than by reason of default by the Managers, or if the Vessel is lost, sold or otherwise disposed of, the "management fee" shall be payable to the Managers according to the provisions of sub-clause 8.1 shall continue to be payable for a further period of three (3) calendar months as from the termination date. In addition, provided that the Managers provide Crew for the Vessel in accordance with sub- clause 3.1:

(i) the Owners shall continue to pay Crew Support Costs during the said further period of three (3) calendar months and

(ii) the Owners shall pay an equitable proportion of any Severance Costs which may materialize, not exceeding the amount stated in Box 16.

8.5 If the Owners decide to lay-up the Vessel whilst this Agreement remains in force and such lay-up lasts for more than three months, an appropriate reduction of the management fee for the period exceeding three months until one month before the Vessel is again put into service shall be mutually agreed between the parties.

8.6 Unless otherwise agreed in writing all discounts and commissions obtained by the Managers in the course of the management of the Vessel shall be credited to the Owners.  For the avoidance of doubt, it is understood that insurance is charged on a gross rate basis.

8.7 In case of vessels under construction, no management fee will be charged by the Managers until the vessel's delivery to the Owners.  However, inc ase Owners instruct the Managers to supervise vessels under construction as per Clause 3.2(vi) then the Managers will be due an upfront fee equal to 10% of the budget approved by the Owners.  Such fee, will be payable in USD.  For the avoidance of any doubt the rest of the paragraphs of Clause 8 to remain in force.

9. Budgets and Management of Funds

9.1 On or before November 30 of each calendar year Tthe Managers shall present to the Owners annually a budget (see Annex "C") for the following twelve monthsnext calendar year in such form as the Owners reasonably require. The budget for the first year hereof is set out in Annex "C" hereto.  Subsequent annual budgets shall be prepared by the Managers and submitted to the Owners not less than three months before the anniversary date of the commencement of this Agreement (see Clause 2 and Box 4).

9.2 The Owners shall indicate to the Managers their acceptance and approval of the annual budget within one month of presentation and in the absence of any such indication the Managers shall be entitled to assume that the Owners have accepted the proposed budget.

9.3 The Owner shall place with the Manager for the duration of this Agreement an amount equal to three months running expenses as working capital reserve.  For calculation purposes the reserve will be based on the agreed budgeted daily average cost as per the respective management agreement.  Upon termination of this Agreement all moneys remaining within the working capital reserve shall be returned to the Owner subject to the terms and conditions of this agreement. Following the agreement of the budget, the Managers shall prepare and present to the Owners their estimate of the working capital requirement of the Vessel and the Managers shall each month up-date this estimate. Based thereon, the Managers shall each month request the Owners in writing for the funds required to run the Vessel for the ensuing month, including the payment of any occasional or extraordinary item of expenditure, such as emergency repair costs, additional insurance premiums, bunkers or provisions. Such funds shall be received by the Managers within ten running days after the receipt by the Owners of the Managers' written request and shall be held to the credit of the Owners in a separate bank account.

9.4 The Managers shall produce a comparison between budgeted and actual income and expenditure of the Vessel in such form as required by the Owners monthly on a yearly basis or at such other intervals as mutually agreed.

9.5 Notwithstanding anything contained herein to the contrary, the Managers shall in no circumstances be required to use or commit their own funds to finance the provision of the Management Services.

10. Managers' Right to Sub-Contract

The Managers shall not have the right to sub-contract any of their obligations hereunder, including those mentioned in sub- clause 3.1 without the prior written consent of the Owners which shall not be unreasonably withheld. In the event of such a sub- contract the Managers shall remain fully liable for the due performance of their obligations under this Agreement.

11. Responsibilities

11.1 Force Majeure - Neither the Owners nor the Managers shall be under any liability for any failure to perform any of their obligations hereunder by reason of any cause whatsoever of any nature or kind beyond their reasonable control.  For the avoidance of any doubt financial force majeure does not apply.

11.2 Liability to Owners  - (i) Without prejudice to sub-clause 11.1, the Managers shall be under no liability whatsoever to the  Owners for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect, (including but not limited to loss of profit arising out of or in connection with detention of or delay to the Vessel) and howsoever arising in the course of performance of the Management Services UNLESS same is proved to have resulted solely from the negligence, gross negligence or wilful default of the Managers or their employees, or agents or sub-contractors employed by them in connection with the Vessel, in which case (save where loss, damage, delay or expense has resulted from the Managers' personal act or omission committed with the intent to cause same or recklessly and with knowledge that such loss, damage, delay or expense would probably result) the Managers' liability for each incident or series of incidents giving rise to a claim or claims shall never exceed a total of ten times the annual management fee payable hereunder.

(ii) Notwithstanding anything that may appear to the contrary in this Agreement, the Managers shall not be liable for any of the

actions of the Crew, even if such actions are negligent, grossly negligent or wilful, except only to the extent that they are shown to have resulted from a failure by the Managers to discharge their obligations under sub-clause 3.1, in which case their liability shall be limited in accordance with the terms of this Clause 11. XXX

11.3 Indemnity - Except to the extent and solely for the amount therein set out that the Managers would be liable under sub- clause 11.2, the Owners hereby undertake to keep the Managers and their employees, agents and sub-contractors indemnified and to hold them harmless against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of the Agreement, and against and in respect of all costs, losses, damages and expenses (including legal costs and expenses on a full indemnity basis) which the Managers may suffer or incur (either directly or indirectly) in the course of the performance of this Agreement.

11.4 "Himalaya" - It is hereby expressly agreed that no employee or agent of the Managers (including every sub- contractor from time to time employed by the Managers) shall in any circumstances whatsoever be under any liability whatsoever to the Owners for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Clause 11, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defence and immunity of whatsoever nature applicable to the Managers or to which the Managers are entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Managers acting as aforesaid and for the purpose of all the foregoing provisions of this Clause 11 the Managers are or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be their servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.

12. Documentation

Where the Managers are providing Technical Management in accordance with sub-clause 3.2 and/or Crew Management in accordance with sub-clause 3.1, they shall make available, upon Owners' request, all documentation and records related to the Safety Management System (SMS) and/or the Crew which the Managers need in order to demonstrate compliance with the ISM Code and STCW 95 or to defend a claim against a third party.

13. General Administration

13.1 The Managers shall handle and settle all claims arising out of the Management Services hereunder and keep the Owners informed regarding any incident of which the Managers become aware which gives or may give rise to claims or disputes involving third parties.

13.2 The Managers shall, as instructed by the Owners, bring or defend actions, suits or proceedings in connection with matters entrusted to the Managers according to this Agreement.

13.3 The Managers shall also have power to obtain legal or technical or other outside expert advice in relation to the handling and settlement of claims and disputes or all other matters affecting the interests of the Owners in respect of the Vessel.

13.4 The Owners shall arrange for the provision of any necessary guarantee bond or other security.

13.5 Any costs reasonably incurred by the Managers in carrying out their obligations according to Clause 13 shall be reimbursed by the Owners.

14. Auditing

The Managers shall at all times maintain and keep true and correct accounts in accordance with sound accounting practice and an adequate and effective system of internal controls and procedures and shall make the same available for permit the inspection and auditing by the Owners at such times as may be mutually agreed. On the termination, for whatever reasons, of this Agreement, the Managers shall release to the Owners, if so requested, the originals where possible, or otherwise certified copies, of all such accounts and all documents specifically relating to the Vessel and her operation.

15. lnspection of Vessel

The Owners shall have the right at any time after giving reasonable notice to the Managers to inspect the Vessel for any reason they consider necessary.

16. Compliance with Laws and Regulations

The Managers will not do or permit to be done anything which might cause any breach or infringement of the laws and regulations of the Vessel's flag, or of the places where she trades.

17. Duration of the Agreement

This Agreement shall come into effect on the day and year stated in Box 4 and shall continue until the date stated in Box 17. Thereafter it shall automatically renew for a five-year period and shall thereafter be extended in additional five-year increments if notice of termination is not provided by the Owners in the fourth quarter of the year immediately proceeding the end of the respective term. continue until terminated by either party giving to the other notice in writing, in which event the Agreement shall terminate upon the expiration of a period of  two twelve months from the date upon which such notice was given.

18. Termination

18.1 Owners' default

(i) The Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing if any moneys payable by the Owners under this Agreement and/or the Owners of any associated vessel, details of which are listed in Annex "D", shall not have been received in the Managers' nominated account within ten (10) running days of receipt by the Owners of the Managers written request or if the Vessel is repossessed by the Mortgagees.

(ii) If the Owners:

(a) fail to meet their obligations under sub-clauses 5.2 and 5.3 of this Agreement for any reason within their control, or

(b) proceed with the employment of or continue to employ the Vessel in the carriage of contraband, blockade  running, or in an unlawful trade, or on a voyage which in the reasonable opinion of the Managers is unduly hazardous or improper, the Managers may give notice of the default to the Owners, requiring them to remedy it as soon as practically possible. In the event that the Owners fail to remedy it within a reasonable time to the satisfaction of the Managers, the Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing.

18.2 Managers' Default

If the Managers fail to meet their obligations under Clauses 3 and 4 of this Agreement for any reason within the control of the Managers, the Owners may give notice to the Managers of the default, requiring them to remedy it as soon as practically possible. In the event that the Managers fail to remedy it within a reasonable time to the satisfaction of the Owners, the Owners shall be entitled to terminate the Agreement with immediate effect        by notice in writing.

18.3 Extraordinary Termination

This Agreement shall be deemed to be terminated in the case of the sale of the Vessel or if the Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisitioned.

18.4 For the purpose of sub-clause 18.3 hereof

(i)  the date upon which the Vessel is to be treated as having been sold or otherwise disposed of shall be the date on which the Owners cease to be registered as Owners of the Vessel;

(ii) the Vessel shall not be deemed to be lost unless either she has become an actual total loss or agreement has been reached with her underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with her underwriters is not reached it is adjudged by a competent tribunal that a constructive loss of the Vessel has occurred.

18.5 This Agreement shall terminate forthwith in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of either party (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver is appointed, or if it suspends payment, ceases to carry on business or makes any special arrangement or composition with its creditors.

18.6 The termination of this Agreement shall be without prejudice to all rights accrued due between the parties prior to the date of termination.

18.7 Termination After Change or Control

This Agreement will terminate automatically immediately after a change of control (as defined below) of the Owners and/or of the Owners ultimate parent. Upon such termination, the Owners will be required to pay the Manager the Termination Payment in a single installment.

For the purpose of this Agreement "Change of Control" means the occurrence of any of the following:

(i) The acquisition by any individual, entity or group beneficial ownership of fifty (50) percent (%) or more of either (A) the then-outstanding shares of stock of the Owner and/or the Owners ultimate parent or (B) the combined voting power of the then-outstanding voting securities of the Owner and/or the Owners ultimate parent entitled to vote generally in the election of directors;

(ii) The consummation of a reorganization, merger or consolidation of Owner and/or the Owners ultimate parent or the sale or other disposition of all or substantially all of the assets of Owner and/or Owners ultimate parent.

(iii) The approval by the shareholders of Owner and/or the Owners and/or the Owners ultimate parent of a complete liquidation or dissolution of Owner and/or the Owners ultimate parent.

19. Law and Arbitration

19.1 This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.

The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.

Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

In cases where neither the claim nor any counterclaim exceeds the sum of USD50.000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

19.2 This Agreement shall be governed by and construed in accordance with Title 9 of the United States Code and the Maritime Law of the United States and any dispute arising out of or in connection with this Agreement shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for the purposes of enforcing any award, judgement may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc.

In cases where neither the claim nor any counterclaim  exceeds the sum of USD50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced.

19.3 This Agreement shall be governed by and construed  in accordance with the laws of the place mutually agreed by the parties and any dispute arising out of or in connection with this Agreement shall be referred to arbitration at a mutually agreed place, subject to the procedures applicable there.

19.4 If Box 18 in Part I is not appropriately filled in, sub-clause 19.1 of this Clause shall apply.

Note: 19.1, 19.2 and 19.3 are alternatives; indicate alternative agreed in Box 18.

20. Notices

20.1 Any notice to be given by either party to the other party shall be in writing and may be sent by fax, telex, registered or recorded mail or by personal service.

20.2 The address of the Parties for service of such communication shall be as stated in Boxes 19 and 20, respectively.

21. Other Fees

21.1Incentive Fee

At their sole discretion the Owners on an annual basis in order to provide the Managers with a performance incentive, may make a payment to the Managers of an incentive fee in addition to the management fee.

21.2 Chartering

One and a quarter per cent (1.25%) of all monies earned by the Vessel.  Such fee will be payable in USD.  For the avoidance of any doubt and regardless of Clause 8.5, chartering commissions shall survive the termination of this agreement under all circumstances until the termination of the charter party in force at the time or termination of any other employment arranged

previous to the termination date.

21.3 Sale and Purchase

One percent (1%) of any sale of the Vessel uncluding 1% for the initial purchase of the Vessel, including vessels under construction.  Such fee will be payable in USD.

EX-4.35

Exhibit 4.35

REVOLVING FACILITY AGREEMENT

Among

DRYSHIPS INC., as Borrower

and

SIERRA INVESTMENTS INC., as Lender

Dated as of 23^rd May 2017

REVOLVING FACILITY AGREEMENT

THIS REVOLVING FACILITY AGREEMENT (this "Agreement"), dated as of 23rd May 2017 (the "Effective Date"), is made by and among DRYSHIPS INC., a corporation organized under the laws of the Republic of the Marshall Islands (the "Borrower") and SIERRA INVESTMENTS INC., a corporation organized under the laws of the Republic of the Marshall Islands (the "Lender").

W I T N E S S E T H:

WHEREAS, the Lender is willing to make available to the Borrower a facility not exceeding the Commitment as defined below in order to provide the Borrower with working capital for its general working purposes.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Borrower and the Lender hereby agree as follows:

1. DEFINITIONS

Capitalized terms used herein but not otherwise defined herein shall have the meanings specified in this Section 1.

"Agreement" has the meaning specified in the preamble hereof.

"Borrower" has the meaning specified in the preamble hereof.

"Business Day" means any day (other than a Saturday or Sunday) on which banks are open for general business in London, Athens, Malta and New York.

"Change of Control" means the occurrence of any of the following:

(a)          the sale, transfer, conveyance or other disposition (other than by way of amalgamation, merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Borrower, in either case, to any "person", other than to a Permitted Holder;

(b)          the Borrower is liquidated or dissolved or adopts a plan relating to the liquidation or dissolution of the Borrower; or

(c)          the consummation of any transaction or any series of transactions (including, without limitation, any merger, consolidation or other business combination), the result of which is that any "person", other than a Permitted Holder, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the voting stock of the Borrower, measured by voting power rather than number of shares.

"Commitment" means, on any date, Two Hundred Million Dollars (US$200,000,000).

"Commitment Termination Date" has the meaning specified in Section 2.01 hereof.

"Default" means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

"Effective Date" has the meaning specified in the preamble hereof.

"Equity Interests" shall mean shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any Person, and any option, warrant or other right entitling the holder thereof to purchase or otherwise acquire any such equity interest.

"Event of Default" has the meaning specified in Section 9 hereof.

"Facility Documents" means this Agreement and the Note.

"Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business), (t) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all guarantees by such Person of Indebtedness of others, (h) all capital lease obligations of such Person, (i) all synthetic lease obligations of such Person, (j) net obligations of such Person under any hedging agreements, (k) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any equity interests of such Person or any other Person or any warrants, rights or options to acquire such equity interests, valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (I) all obligations of such Person as an account party in respect of letters of credit and (m) all obligations of such Person in respect of bankers' acceptances.  The Indebtedness of any Person shall include the Indebtedness of any partnership in which such Person is a general partner.

"Lender" has the meaning specified in the preamble hereof.

"LIBOR Rate" means, in relation to any Loan, (a) the applicable Screen Rate, (b) if no Screen Rate is available for the Interest Period of such Loan, the applicable Interpolated Screen Rate; or (c) if no Screen Rate is available for the currency or the Interest Period of such Loan and it is not possible to calculate an Interpolated Screen Rate for such Loan, then the Reference Bank Rate, each as of 11:00 a.m., London time, on the Quotation Day for dollars for such Loan

and for a period equal in length to the Interest Period of such Loan and, if any such rate is below zero, LIBOR Rate shall be deemed to be zero; provided that notwithstanding the foregoing, for purposes of this Agreement, the LIBOR Rate for any Loan shall not ever be less than one percent (1.00%).

"Lien" means a mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having the effect of conferring security.

"Loans" has the meaning specified in Section 2.01 hereof.

"Interpolated Screen Rate" means, in relation to LIBOR Rate for any Loan, 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 such Loan; and

(b) the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of such Loan,

each as of 11:00 a.m., London time, on the Quotation Day for the currency of such Loan.

"Interest Period" means, as to any Loan, the period beginning on (and including) the date on which such Loan is made or continued and shall end on (but exclude) the day which numerically corresponds to such date six months thereafter (or, if such month has no numerically corresponding day, on the last Business Day of such month); provided that:

(a) Loans shall have one Interest Period only at any time;

(b) if such Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next following Business Day (unless such next following Business Day is the first Business Day of a calendar month, in which case such Interest Period shall end on the Business Day next preceding such numerically corresponding day); and

(c)          no Interest Period for any Loan may end later than the Maturity Date.

"Material Adverse Effect" means (a) a material adverse effect on the operations, business, properties or financial condition of the Borrower, (b) a material impairment of the rights and remedies of the Lender under any Facility Document, or of the ability of the Borrower to perform its obligations under any Facility Document to which it is a party or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Borrower of any Facility Document to which it is a party.

"Maturity Date" has the meaning specified in Section 3.01 hereof.

"Note" has the meaning specified in Section 2.03 hereof.

"Obligations" means, collectively, (a) all Indebtedness, debts, liabilities, indemnities, covenants, and other obligations of the Borrower (including interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) under or in connection with (i) this Agreement and any Loans hereunder, (ii) any Note or other evidence of Indebtedness of the Borrower now or hereafter issued in connection with this Agreement or (iii) the other Facility Documents, in each case with respect to this clause (a) whether now existing or hereafter arising, due or to become due, direct or indirect, matured or unmatured, liquidated or unliquidated, absolute or contingent, and howsoever evidenced, held or acquired, of any kind or nature, each as may be amended, restated, supplemented or otherwise modified from time to time, and (b) all reasonable out-of-pocket expenses and charges, legal and otherwise, incurred by the Lender in collecting or enforcing any of such amounts set forth in clause (a).

"Permitted Holder" means Mr. George Economou, Mr. Anthony Kandylidis, or any spouse or member of their respective immediate families, any of his or their Affiliates, or any Person that is controlled, directly or indirectly, by any such Permitted Holder.

"Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, limited liability company or government or other entity.

"Quotation Day" means, in relation to any Interest Period for which an interest rate is to be determined, the first day of that period.

"Reference Bank Rate" means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Lender 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 any bank or financial institutions as may be appointed by the Lender in consultation with the Borrower.

"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 Interest 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 that 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 Borrower.

"Semi-Annual Payment Date" means the last day of June and December, or, if any such day is not a Business Day, the next succeeding Business Day.

"Subsidiary" means, with respect to any specified Person, (i) any corporation, limited liability company, association or other business entity (other than a partnership) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders' agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, limited liability company, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and (ii) any partnership of which (a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof), whether in the form of general, special or limited partnership interests or otherwise, or (b) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

"Vessel" shall mean one or more shipping or drilling vessels or drilling rigs, whose primary purpose is the maritime transportation of cargo or the exploration and production drilling for crude oil or hydrocarbons, or which are otherwise engaged, used or useful in the Borrower's business, in each case together with all related spares, equipment and any additions or improvements.

2. COMMITMENT AND LOANS; BORROWING PROCEDURES; NOTES

Section 2.01  Commitment.  Subject to the terms of this Agreement and from time to time on any Business Day occurring from and after the Effective Date until one month prior to the Maturity Date (the "Commitment Termination Date"), the Lender agrees that it will make loans ("Loans") to the Borrower on such Business Day in such amount as requested by the Borrower that shall not exceed the then available amount of the Commitment.  The Lender shall not be permitted or required to make any Loan if, after giving effect thereto, the aggregate principal amount of all outstanding Loans would exceed the amount of the Commitment.  On the terms and subject to the conditions hereof, the Borrower may from time to time borrow, prepay and reborrow Loans up to the then available amount of the Commitment.

Section 2.02  Method of Advances.  The Borrower shall request each Loan by delivering to the Lender a written borrowing request by 10:00 a.m., London time, not less than one (1) Business Day prior to the requested Business Day of disbursement, or such other period as may be agreed between the Borrower and the Lender, in a minimum amount of $5,000,000 and an integral multiple of $1,000,000 or, if less, in the then available amount of the Commitment (or in any other amount as may be agreed between the Borrower and the Lender from time to time).  Such borrowing request shall specify an Interest Period applicable to such Loan.  On or before 11:00 a.m. on the date of each disbursement, and so long as such borrowing request complies with the requirements under this Agreement (including, but not limited to, the aggregate principal borrowing limit set forth in Section 2.01), the Lender shall make available the amount of the Loan by depositing by wire transfer the same in immediately available funds

by in the bank account of the Borrower or such other account, as specified in such borrowing request.

Section 2.03  Notes.  The Borrower agrees that, upon the request by the Lender, the Borrower will execute and deliver to the Lender a promissory note in the form attached hereto as Exhibit A (the "Note") evidencing the Loans made by, and payable to, the Lender in a maximum principal amount equal to the Commitment.  The Borrower hereby irrevocably authorizes the Lender to make (or cause to be made) appropriate notations on the grid attached to the Note (or on any continuation of such grid), which notations, if made, shall evidence, among others, the date of, the outstanding principal amount of, and the interest rate and applicable Interest Period of each Loan.  Such notations shall be conclusive and binding on the Borrower absent manifest error; provided that the failure of the Lender to make any such notations shall not limit or otherwise affect any obligations of the Borrower.

3. MATURITY, PAYMENT AND PREPAYMENT; FEES

Section 3.01  Maturity.  The Borrower shall repay the aggregate principal amount of all outstanding Loans, together with interest as calculated in accordance with Section 4.01, to the Lender on 31'^t December 2021 (the "Maturity Date").  With 7 days' prior written notice to the Lender, the Borrower shall have the option to extend the Maturity Date until 31^s` December 2022 .

Section 3.02  Optional Prepayment.  The Borrower may, at its option, at any time prepay in whole or in part any Loan without any premium or penalty, together with interest as calculated in accordance with Section 4.01, in a minimum amount of $5,000,000 and an integral multiple of $1,000,000, or in any other amount as may be agreed between the Borrower and the Lender from time to time.

Section 3.03  Mandatory Prepayment.

(a)          Upon the occurrence of a Change of Control, the Borrower shall, substantially simultaneously with such occurrence (and in any event not later than the first Business Day next following), pay all Loans and other amounts outstanding hereunder (the "Prepaid Amount") in full, plus 20% of such Prepaid Amount.

Section 3.04  Arrangement Fee.  The Borrower shall pay to the Lender on the Effective Date an arrangement fee of 1.0% of the initial Commitment in effect on the Effective Date.

Section 3.05  Commitment Fee.  The Borrower agrees to pay to the Lender, for the period commencing on the Effective Date and continuing through the Commitment Termination Date, a commitment fee in an amount equal to 1.00% per annum on the sum of the average daily unused portion of the Commitment.  All commitment fees payable pursuant to this Section 3.05 shall be calculated on a year comprised of 360 days and payable by the Borrower in arrears on the Effective Date and thereafter on each Semi-Annual Payment Date, commencing

with the first Semi-Annual Payment Date following the Effective Date, and on the Commitment Termination Date.

Section 3.06  Termination Fees.  In the event the Borrower refinances and terminates (the "Termination") the facility under this Agreement by entering into a new agreement with a different lender and applying the proceeds thereof to pay off all Loans and other amounts outstanding hereunder (the "Paid-off Amount") in full, in addition to the Paid-off Amount, the Borrower shall pay to the Lender (i) 5% of the Paid-off Amount if the Termination occurs during the first year after the Effective Date, (ii) 3% of the Paid-off Amount if the Termination occurs during the second year after the Effective Date and (iii) 1% of the Paid-off Amount if the Termination occurs during the third year after the Effective Date (collectively, the "Termination Fees").

Section 3.07  Payment.  Except to the extent otherwise agreed between the Borrower and the Lender, all payments of principal of, and interest on, the Loans to be made by the Borrower under this Agreement shall be made in United States Dollars, in immediately available funds, without set-off or counterclaim, to the Lender.

4. INTEREST

Section 4.01  Interest Rate.  The unpaid principal of each Loan shall bear interest, during each Interest Period applicable thereto, equal to the sum of the LIBOR Rate for such Interest Period plus six and a half percent (6.50%) per annum until the date upon which all amounts owing under such Loan have been repaid in full.  All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days and be payable in arrears on each Semi-annual Payment Date.  Payments due on other than a Business Day shall (except as otherwise required by clause (b) of the definition of "Interest Period") be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees in connection with that payment.

Section 4.02  Default Rate.  On and after the date any Event of Default has occurred and for so long as such Event of Default is continuing, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on all outstanding Loans at a rate per annum equal to the rate of interest that otherwise would be applicable to such Loan plus 2% per annum.

5. CONDITIONS PRECEDENT TO THE EFFECTIVE DATE.

Section 5.01  Effective Date.  The effectiveness of this Agreement shall be subject to the satisfaction of each of the following conditions precedent:

(a)          The Lender shall have received executed counterparts of this Agreement, duly executed and delivered by an authorized officer of the Borrower.

(b)          The Lender shall have received any fees, costs and expenses due from the Borrower pursuant to Section 3.04 and 10 hereof.

Section 5.02  All Loans.  The obligation of the Lender to make any Loan shall be subject to the satisfaction of each of the following conditions precedent:

(a)          Both before and after giving effect to any Loan, (i) the representations and warranties set forth in each Facility Document shall be true and correct in all material respects with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date), in each case other than representations and warranties that are subject to a Material Adverse Effect or a materiality qualifier, in which case such representations and warranties shall be (or shall have been) true and correct in all respects, and (ii) no Default shall have then occurred and be continuing.

(b)          The Lender shall have received a borrowing request in accordance with Section 2.02, executed and delivered by an authorized officer or attorney-in-fact of the Borrower.  Each of the delivery of a borrowing request and the acceptance by the Borrower of the proceeds of such Loan shall constitute a representation and warranty by the Borrower that on the date of such Loan (both immediately before and after giving effect to such Loan and the application of the proceeds thereof) the statements made in Section 6 hereof are true and correct.

6. REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lender that, as of the Effective Date and as of the date of each disbursement:

Section 6.01  Existence and Power.  It is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has full power, authority and legal right to execute, deliver and perform this Agreement and each of the Facility Documents to which it is a party.

Section 6.02  Authority.  The execution and delivery by it of this Agreement and each of the other Facility Documents to which it is or will be a party, and the performance by it of its obligations hereunder and thereunder (a) have been duly authorized by all necessary corporate action on its part; (b) do not violate any provision of its organizational documents or any laws of the Marshall Islands or any other applicable jurisdiction, or any governmental rule, regulation or order thereunder, or of any indenture, agreement or other instrument, license, judgment or order applicable to it or by which its properties are bound; and (c) do not breach, create a default under (with or without any passage of time or giving of notice or both) or result in the creation or imposition of any Lien upon any of its revenues, assets or properties under, any agreement, contract or instrument by which any of its revenues, assets or properties may be bound or affected.

Section 6.03  Governmental Approvals.  No authorization, consent, approval, order, license or permit from, or filing registration or qualification with, any governmental

agency is required to authorize or permit the execution, deliver and performance by it of the Facility Documents.

Section 6.04  Binding Obligations.  Each Facility Document constitutes the legal, valid and binding obligations of the Borrower enforceable in accordance with its terms, enforceable against the Borrower in accordance with its terms.

Section 6.05  Trade names and Place of Business.  (a) The Borrower has no trade names, fictitious names, assumed names or "doing business as" names or other names under which it has done or is doing business and (ii) the registered office of the Borrower is the address set forth on the signature pages hereto or such other address of which the Borrower has notified the Lender.

7. COVENANTS OF THE BORROWER

Section 7.01  Use of Proceeds.  The Borrower will apply the proceeds of each Loan for the purposes referred in the Recitals of this Agreement.

Section 7.02  Notices.  As soon as possible and in any event within three (3) Business Days after the Borrower obtains knowledge thereof, the Borrower will notify the Lender of:

(a)          the occurrence of a Default or an Event of Default, along with a detailed description thereof and the action that the Borrower has taken and proposes to take with respect thereto; and

(b)          the occurrence of any default or event of default under any agreement or other contractual obligation to which the Borrower is a party, which could reasonably be expected to have a material adverse effect on the rights and remedies of the Lender under any Facility Document or the ability of the Borrower to perform its obligations under any Facility Document.

Section 7.03  Maintenance of Existence; Compliance with Contracts, Laws, etc.  The Borrower will preserve and maintain its legal existence, perform in all material respects their obligations under material agreements to which the Borrower is a party, and comply in all material respects with all applicable laws, rules, regulations and orders, including the payment (before the same become delinquent), of all taxes, imposed upon the Borrower or upon its property except to the extent being diligently contested in good faith by appropriate proceedings.

Section 7.04  Maintenance of Properties.  The Borrower will maintain, preserve, protect and keep its respective properties in good repair, working order and condition (ordinary wear and tear excepted), and make necessary repairs, renewals and replacements so that the business carried on by the Borrower may be properly conducted at all times, unless the Borrower determines in good faith that the continued maintenance of such property is no longer

economically desirable, necessary or useful to the business of the Borrower or any of its Subsidiaries.

8. WITHHOLDING; GROSS-UP

Section 8.01 Withholding.  If any withholding or deduction from any payment to be made by the Borrower under this Agreement is required in respect of any taxes pursuant to any applicable law, rule or regulation, the Borrower will: (a) pay to the relevant authority the full amount required to be so withheld or deducted; (b) promptly forward to the Lender an official receipt or other documentation satisfactory to the Lender evidencing such payment to such authority; and (c) make such payment to the Lender net of any such withholding deduction.

Section 8.02 Gross-Up.  If the Borrower makes a payment under Section 8.01,and the Lender is subsequently unable to obtain a credit or a refund in the full amount of such withholding or deduction, the Lender will so notify the Borrower.  In that case, the Borrower must pay to the Lender, on demand, such additional amount as is necessary to ensure that the net amount received by the Lender with respect of such payment is equal to the full amount the Lender would have received had no such withholding or deduction been required.  If the Lender is entitled to an exemption from or reduction of withholding tax with respect to payments made under any this Agreement, the Lender shall deliver to the Borrower, at the time or times reasonably requested by the Borrower, such properly completed and executed documentation reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate of withholding.  No additional amounts shall be payable under this Section 8.02 with respect to (a) taxes imposed on or measured by net income (however denominated), franchise taxes, and branch profits taxes, in each case, imposed as a result of the Lender being organized under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing such tax (or any political subdivision thereof), (b) any taxes imposed on the Lender by reason of its failure to deliver documentation to the Borrower pursuant to the immediately preceding sentence or (c) any U.S. federal withholding taxes imposed under Sections 1471 through 1474 of the United States Internal Revenue Code of 1986, as amended.

9. EVENTS OF DEFAULT

Each of the following events or occurrences described in this Section 9 shall constitute an "Event of Default":

(a)          Non-payment.  Failure of the Borrower to pay when due any principal, interest or fee amount payable under this Agreement or the Note at the place at and in the currency in which it is expressed to be payable, unless such failure is cured within three (3) Business Days of its due date.

(b)          Cross-Acceleration.  The occurrence of any event or condition that results in any indebtedness of the Borrower in excess of $10,000,000 under any agreement of the Borrower becoming due prior to its scheduled maturity or requires the prepayment, repurchase, redemption or defeasance thereof prior to its scheduled maturity.

(c)          Bankruptcy, Insolvency, etc.  The Borrower shall:

(i)          become insolvent or generally fail to pay, or admit in writing its inability or unwillingness generally to pay, debts as they become due;

(ii)          apply for, consent to, or acquiesce in the appointment of a trustee, receiver, sequestrator or other custodian for any substantial part of the property of any thereof, or make a general assignment for the benefit of creditors;

(iii)          in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for a substantial part of the property of any thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 60 days; provided that the Borrower hereby expressly authorizes the Lender to appear in any court conducting any relevant proceeding during such 60-day period to preserve, protect and defend their rights under the Facility Documents;

(iv)          permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law or any dissolution, winding up or liquidation proceeding, in respect thereof, and, if any such case or proceeding is not commenced by the Borrower, such case or proceeding shall be consented to or acquiesced in by the Borrower or shall result in the entry of an order for relief or shall remain for 60 days undismissed; provided that the Borrower hereby expressly authorizes the Lender to appear in any court conducting any such case or proceeding during such 60-day period to preserve, protect and defend their rights under the Facility Documents; or

(v)          take any action authorizing, or in furtherance of, any of the foregoing.

(d)          Others.  Failure by the Borrower to duly perform or observe any agreement contained in any Facility Document unless such failure is cured after 30 days after the earlier to occur of notice thereof given to the Borrower by the Lender or the date on which the Borrower has knowledge of such default.

Upon the occurrence and continuation of any Event of Default, the Lender may by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Lender to enforce its claims against the Borrower:

(x)          declare the Lender's obligation to make Loans terminated, whereupon such obligation shall forthwith terminate immediately; and

(y)          declare the principal of, and any accrued interest in respect of, the Loans and all obligations and damages owing by the Borrower to the Lender under this Agreement to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower;

Provided that if any Event of Default described in clause (c) of Section 9 with respect to the Borrower shall occur, the Commitment (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of all outstanding Loans and all other obligations under this Agreement shall automatically be and become immediately due and payable, without notice or demand to any Person.

10. PAYMENT OF COSTS AND EXPENSES

Until all of the obligations of the Borrower are satisfied in full, the Borrower agrees to pay on demand all expenses of the Lender in connection with:

(a)          the negotiation, preparation, execution and delivery of each Facility Document, including schedules and exhibits, and any amendments, waivers, consents, supplements or other modifications to any Facility Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated;

(b)          the filing, registration or recording of any Facility Document and all amendments, supplements, amendment and restatements and other modifications to any thereof, searches made following the Effective Date in jurisdictions have been recorded and any and all other documents or instruments of further assurance required to be filed or recorded by the terms of any Facility Document;

(c)          the preparation and review of the form of any document or instrument relevant to any Facility Document; and

(d)          any fees and expenses that the Lender incurs on the Effective Date and will incur thereafter with respect to any Facility Document.

The Borrower further agrees to pay, and to hold the Lender harmless from all liability for, any stamp or other taxes that may be payable in connection with the execution or delivery of each Facility Document, the Loans or the issuance of the Note.  The Borrower also agrees to reimburse the Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys' fees and expenses of counsel to the Lender) incurred by the Lender in connection with (x) the negotiation of any restructuring or "work-out" with the Borrower, whether or not consummated, of any obligations under the Facility Documents and (y) the enforcement of any obligations under the Facility Documents

11. OTHER ACTIONS

Each of the parties hereby undertakes to the other that it will do all such acts and things and execute all such instruments and documents as may be necessary to carry into effect or to give legal effect to the provisions of this Agreement and the other Facility Documents.

12. NOTICES

All notices under this Agreement shall be in writing and shall be deemed effective when delivered via courier, or transmitted by any standard form of telecommunication to the applicable address or facsimile number set forth below (or such other addresses as one party identifies to the other in writing):

If to the Lender:

Sierra Investments Inc.

do MARE SERVICES LIMITED

5/1 Merchants Stree, Valletta VLT

1171, Malta

Attn: Mare Services Limited

Tel: (+356) 21 222 097

Fax: (+356) 21 249 950

E-mail: info@cefaiadvocater.com

If to the Borrower:

DryShips Inc.

Athens licenced shipping office

109 Kifissias Avenue and Sina Street

151 24, Marousi

Athens, Greece

Attention: Dimitris Dreliozis

Facsimile^. (+30) 216 2006 241

Email: finance@dryships.com

13. PARTIAL INVALIDITY AND WAIVER

The illegality, or unenforceability of any provision of this Agreement under the law of any jurisdiction shall not affect its legality, validity or enforceability under the law of any other jurisdiction nor the legality, validity or enforceability of any other provision.

14. ASSIGNMENT

Neither party is permitted to transfer any of its rights, benefits and obligations hereunder without the prior written consent of the other party except that the Lender may assign this Agreement, or any portion of this Agreement to Lender's lender or other financing party in connection with a credit facility of Lender.

15. AMENDMENTS; NO WAIVER

(a)          Except as otherwise provided in this Agreement, the terms and conditions of this Agreement may only be changed, modified or altered by a written agreement signed by each of the parties to this Agreement.

(b)          No delay, failure or discontinuance of the Lender in exercising any right, power or remedy under any of the Facility Documents shall affect or operate as a waiver of such right, power or remedy; nor shall any single or partial exercise of any such right, power or remedy preclude, waive or otherwise affect any other or further exercise thereof or the exercise of any other right, power or remedy.  Any waiver, permit, consent or approval of any kind by the Lender of any breach of or default under any of the Facility Documents must be in writing and shall be effective only to the extent set forth in such writing.

16. COUNTERPARTS

This Agreement may be executed in any number of counterparts, and all such counterparts taken together shall be deemed to constitute one and the same instrument.

17. GOVERNING LAW

This Agreement and the Notes shall be governed by and construed in accordance with the laws of England State

18. SUBMISSION TO JURISDICTION

Any disputes which may arise out of or in connection with this Agreement shall be referred to arbitration in London, United Kingdom in accordance with the rules of London Maritime Arbitrators Association (LMAA).

The remainder of this page was left blank intentionally

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and date first set forth above.

DRYSHIPS INC., as Borrower
By:	/s/ Dimitris Dreliozis
	Name:	Dimitris Dreliozis
	Title:	Vice President of Finance

SIERRA INVESTMENTS INC., as Lender
By:	/s/ Savas Tournis
	Name:	Savas Tournis
	Title:	Attorney in Fact

EXIIIBIT A

FORM OF PROMISSORY NOTE

$200,000,000 Dated:________, 201_

FOR VALUE RECEIVED, the undersigned, DryShips Inc., a Marshall Islands corporation (the "Borrower") HEREBY PROMISES TO PAY to Sierra Investments Inc., a Marshall Islands corporation, and its registered assigns (the "Lender"), the principal sum of TWO HUNDRED MILLION U.S. DOLLARS ($200,000,000) or, if less, the principal amount that is outstanding on the Maturity Date; provided, however, that such payment shall be in the amount necessary to repay in full the unpaid principal amount hereof together with interest on the principal amount hereof from time to time outstanding from the date hereof until such principal amount is paid in full.  Both principal and interest are payable to the Lender in U.S. Dollars.

This Promissory Note is one of the Notes issued pursuant to the Revolving Facility Agreement, dated      May 2017 among the Borrower and the Lender (as amended, restated, supplemented or otherwise modified from time to time, the "Agreement") and is subject to and entitled to the benefits of the Facility Agreement.  Capitalized terms that are not defined in this Promissory Note have the meanings given to them in the Agreement.

The principal amount of indebtedness evidenced hereby shall be payable in the amounts and on the dates specified in the Facility Agreement, the terms of which are incorporated herein by reference.  Interest thereon shall be paid until such principal amount is paid in full at such interest rates and at such times, and pursuant to such calculations, as are specified in the Agreement.

During the continuance of any one or more Events of Default as specified in the Agreement, all amounts then remaining unpaid on this Promissory Note shall become, or may be declared to be, immediately due and payable, all as provided in the Agreement.

Upon the failure of the Borrower to pay the Lender when due and payable any and all amounts payable by the Borrower to the Lender under the provisions of this Promissory Note, the entire unpaid amount of this Promissory Note then outstanding shall become immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are expressly waived, and without any action on the part of the Lender.  If this Promissory Note is referred to an attorney for collection or enforcement, the Borrower shall pay all costs and expenses of collection or enforcement, including attorneys' fees.

Any disputes which may arise out of or in connection with this Agreement shall be referred to arbitration in London, United Kingdom in accordance with the rules of London Maritime Arbitrators Association (LMAA).  By execution and delivery of this Promissory Note, the Borrower consents, for itself and in respect of its property, to the jurisdiction referred above.

The Borrower irrevocably waives any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any action or proceeding in such jurisdiction in respect of this Promissory Note or other document related thereto.

No failure on the part of the Lender to exercise, and no delay in exercising, any right, power or privilege hereunder shall operate as a waiver thereof or a consent thereto; nor shall a single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

THIS PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF ENGLAND.

DRYSHIPS INC.

By:

Name:

Its:

Date Principal Amount of Loans Interest Period and Interest Rate with Respect Thereto Principal Amount of Loans Repaid Unpaid Principal Amount of Loans Notation Made By

EX-4.36

Exhibit 4.36

AGREEMENT

THIS AGREEMENT (this "Agreement") is dated as of August 29, 2017 by and between DRYSHIPS INC., a corporation incorporated under the laws of the Republic of the Marshall Islands (the "Borrower"), and SIERRA INVESTMENTS INC., a corporation incorporated under the laws of the Republic of the Marshall Islands (the "Lender").

W I T N E S S E T H:

WHEREAS, the Borrower and Lender have entered into that certain Revolving Facility Agreement, dated as of 23^rd May 2017, pursuant to which the Lender has made available to the Borrower a loan facility of $200,0000,000 (the "Facility Agreement"); and

WHEREAS, the Borrower desires to repay $27,000,000 of the Loans in common equity of the Borrower and the Lender desires to accept such repayment.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Borrower and the Lender hereby agree as follows:

1. DEFINITIONS

Capitalized terms herein have the meanings specified in the Revolving Facility Agreement.

2. ACKNOWLEDGEMENT OF REPAYMENT

Notwithstanding any provision in the Facility Agreement, including Section 3.07 thereof, the Lender hereby accepts 9,818,182 common shares in the Borrower as repayment for $27,000,000 of the Loans.  As of the Effective Date, the outstanding principal amount of the Loans referred in the Facility Agreement, being in an amount of $200,000,000, will be reduced by $27,000,000 to $173,000,000.

3. CONDITION TO EFFECTIVENESS

This Agreement shall become effective only upon the satisfaction of each of the following conditions precedent (such satisfaction date being referred to herein as the "EffectiveDate"):

(a)          The Lender shall have received a counterpart signature page to this Agreement duly executed and delivered by an authorized officer or representative of the Borrower;

(b)          As of the Effective Date and immediately after giving effect to this Agreement, no Default or Event of Default has occurred and is continuing; and

(c)          The Lender through its participation in a private placement in the Borrower's common shares shall have received 9,818,182 common shares in the Borrower.

4. REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lender that, as of the Effective Date:

(a)          This Agreement has been duly authorized, executed and delivered by the Borrower, and constitutes a legal, valid and binding obligation of the Borrower in accordance with its terms.  The Facility Agreement and each other Facility Document constitutes a legal, valid and binding obligation of the Borrower in accordance with its terms;

(b)          immediately prior to and after giving effect to this Agreement, no Default or Event of Default shall exist; and

(c)          at the time of and immediately after giving effect to this Agreement, (i) all representations and warranties of the Borrower set forth in the Facility Documents shall be true and correct in all material respects on and as of the date of this Agreement before and after giving effect thereto (unless stated to relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date), in each case other than representations and warranties that are subject to a Material Adverse Effect or a materiality qualifier, in which case such representations and warranties shall be (or shall have been) true and correct in all respects, and (ii) no Default shall have then occurred and be continuing.

5. EXPENSES

In accordance with Section 10(a) of the Facility Agreement, the Borrower shall reimburse the Lender upon demand for all out-of-pocket expenses (including counsel's fees) incurred by the Lender in connection with this Agreement.

6. MISCELLANEOUS

Section 6.01  Reference to and Effect on the Facility Agreement and the Other Facility Documents.

(a)          This Agreement shall constitute a Facility Document for purposes of the Facility Agreement and the other Facility Documents.  On and after the Effective Date, each reference in the Facility Agreement to "this Agreement", "herein", "hereunder", "hereto", "hereof' and words of similar import shall, unless the context otherwise requires, refer to the Facility Agreement as amended hereby, and each reference to the Facility Agreement in any other Facility Document shall be deemed to be a reference to the Facility Agreement as amended hereby; and

(b)          Except as specifically modified by this Agreement, the Facility Agreement and the other Facility Documents shall remain unchanged and shall remain in full force and effect and are hereby ratified and confirmed.

Section 6.02  Headings.  Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.

Section 6.03  Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of England.

Section 6.04  Counterparts.  This Agreement may be executed in counterparts, and all such counterparts taken together shall be deemed to constitute one and the same instrument.

Section 6.05  Successors and Assigns.  This Agreement shall be binding upon the Borrower and the Lender and their respective successors and assigns.

[Remainder of this page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

DRYSHIPS INC., as Borrower
By:	/s/ Dimitris Dreliozis
	Name:	Dimitris Dreliozis
	Title:	Vice President of Finance

SIERRA INVESTMENTS INC., as Lender
By:	/s/ Dr. Adriano Cefai
	Name:	Dr. Adriano Cefai
	Title:	Director of Mare Services Limited, Sole Director Mare Services Ltd. 5/1 Merchants Street Valletta, 1171

EX-4.37

Exhibit 4.37

AGREEMENT

THIS AGREEMENT (this "Agreement") is dated as of October 4, 2017 by and between DRYSHIPS INC., a corporation incorporated under the laws of the Republic of the Marshall Islands (the "Borrower"), and SIERRA INVESTMENTS INC., a corporation incorporated under the laws of the Republic of the Marshall Islands (the "Lender").

W I T N E S S E T H:

WHEREAS, the Borrower and Lender have entered into that certain Revolving Facility Agreement, dated as of 23^rd May 2017, pursuant to which the Lender has made available to the Borrower a loan facility of $200,0000,000 (as amended, modified or supplemented from time to time, the "Facility Agreement");

WHEREAS, the Borrower has repaid $27,000,000 of the Loans in common equity of the Borrower pursuant to an agreement dated August 29, 2017 between the Borrower and the Lender; and

WHEREAS, the Borrower desires to repay an additional $99,159,160 of the Loans in common equity of the Borrower and the Lender desires to accept such repayment.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Borrower and the Lender hereby agree as follows:

1. DEFINITIONS

Capitalized terms herein have the meanings specified in the Facility Agreement.

2. ACKNOWLEDGEMENT OF REPAYMENT

Notwithstanding any provision in the Facility Agreement, including Section 3.07 thereof, the Lender hereby accepts 36,057,876 common shares of the Borrower as repayment for $99,159,160 of the Loans.  As of the Effective Date, the outstanding principal amount of the Loans referred in the Facility Agreement, being in an amount of $173,000,000, will be reduced by $99,159,160 to $73,840,840.

3. CONDITION TO EFFECTIVENESS

This Agreement shall become effective only upon the satisfaction of each of the following conditions precedent (such satisfaction date being referred to herein as the "Effective Date"):

(a)          The Lender shall have received a counterpart signature page to this Agreement duly executed and delivered by an authorized officer or representative of the Borrower;

(b)          As of the Effective Date and immediately after giving effect to this Agreement, no Default or Event of Default has occurred and is continuing; and

(c)          As of the Effective Date and immediately after giving effect to this Agreement, the Lender, in accordance with the Purchase Agreement dated August 29, 2017 by and between the Lender and the Borrower, receives 36,057,876 common shares of the Borrower.

4. REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lender that, as of the Effective Date:

(a)          This Agreement has been duly authorized, executed and delivered by the Borrower, and constitutes a legal, valid and binding obligation of the Borrower in accordance with its terms.  The Facility Agreement and each other Facility Document constitutes a legal, valid and binding obligation of the Borrower in accordance with its terms;

(b)          immediately prior to and after giving effect to this Agreement, no Default or Event of Default shall exist; and

(c)          at the time of and immediately after giving effect to this Agreement, (i) all representations and warranties of the Borrower set forth in the Facility Documents shall be true and correct in all material respects on and as of the date of this Agreement before and after giving effect thereto (unless stated to relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date), in each case other than representations and warranties that are subject to a Material Adverse Effect or a materiality qualifier, in which case such representations and warranties shall be (or shall have been) true and correct in all respects, and (ii) no Default shall have then occurred and be continuing.

5. EXPENSES

In accordance with Section 10(a) of the Facility Agreement, the Borrower shall reimburse the Lender upon demand for all out-of-pocket expenses (including counsel's fees) incurred by the Lender in connection with this Agreement.

6. MISCELLANEOUS

Section 6.01  Reference to and Effect on the Facility Agreement and the Other Facility Documents.

(a)          This Agreement shall constitute a Facility Document for purposes of the Facility Agreement and the other Facility Documents.  On and after the Effective Date, each reference in the Facility Agreement to "this Agreement", "herein", "hereunder", "hereto", "hereof' and words of similar import shall, unless the context otherwise requires, refer to the Facility Agreement as amended hereby, and each reference to the Facility Agreement in any other Facility Document shall be deemed to be a reference to the Facility Agreement as amended hereby; and

(b)          Except as specifically modified by this Agreement, the Facility Agreement and the other Facility Documents shall remain unchanged and shall remain in full force and effect and are hereby ratified and confirmed.

Section 6.02 Headings.  Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.

Section 6.03 Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of England.

Section 6.04 Counterparts.  This Agreement may be executed in counterparts, and all such counterparts taken together shall be deemed to constitute one and the same instrument.

Section 6.05 Successors and Assigns.  This Agreement shall be binding upon the Borrower and the Lender and their respective successors and assigns.

[Remainder of this page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

DRYSHIPS INC., as Borrower
By:	/s/ Dimitris Dreliozis
	Name:	Dimitris Dreliozis
	Title:	Vice President of Finance

SIERRA INVESTMENTS INC., as Lender
By:	/s/ Dr. Adriano Cefai
	Name:	Dr. Adriano Cefai
	Title:	Director of Mare Services Limited, Sole Director Mare Services Ltd. 5/1 Merchants Street Valletta, 1171

EX-4.38

Exhibit 4.38
 

SECURED TERM FACILITY AGREEMENT

Among

DRYSHIPS INC., as Borrower

CERTAIN SUBSIDIARY GUARANTORS PARTY HERETO FROM TIME TO TIME

And

SIERRA INVESTMENTS INC., as Lender

Dated as of October 25, 2017

SECURED FACILITY AGREEMENT

THIS SECURED TERM FACILITY AGREEMENT (this "Agreement"), dated as of October 25, 2017, is made by and among DRYSHIPS INC., a corporation organized under the laws of the Republic of the Marshall Islands (the "Borrower"), certain Subsidiary Guarantors party hereto from time to time and SIERRA INVESTMENTS INC., a corporation organized under the laws of the Republic of the Marshall Islands (the "Lender").

W I T N E S S E T H:

WHEREAS, the Borrower and the Lender previously entered into that certain Revolving Facility Agreement dated as of 23^nd May, 2017 (the "Existing Facility Agreement"), pursuant to which the Lender agreed to make loans to the Borrower and under which U.S.$.73,840,840.00 is outstanding (the "Outstanding Revolver Amount") immediately prior to the Effective Date.

WHEREAS, the Borrower wishes to pay off all of its outstanding obligations under the Existing Facility Agreement by applying the proceeds of the loans available under this Agreement; and

WHEREAS, the Lender is willing, on the terms and subject to the conditions hereinafter set forth, to extend the Commitment and make a Loan to the Borrower, all as more fully set forth below.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Borrower and the Lender hereby agree as follows:

1. DEFINITIONS

Capitalized terms used herein but not otherwise defined herein shall have the meanings specified in this Section 1.

"Agreement" has the meaning specified in the preamble hereof.

"Borrower" has the meaning specified in the preamble hereof.

"Business Day" means any day (other than a Saturday or Sunday) on which banks are open for general business in London, Athens, Malta and New York.

"Change of Control" means the occurrence of any of the following:

(a)          the sale, transfer, conveyance or other disposition (other than by way of amalgamation, merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Borrower and the Subsidiary Guarantors taken as a whole, in either case, to any person other than to a Permitted Holder;

(b)          the Borrower is liquidated or dissolved or adopts a plan relating to the liquidation or dissolution of the Borrower; or

(c)          the consummation of any transaction or any series of transactions (including, without limitation, any merger, consolidation or other business combination), the result of which is that any person other than a Permitted Holder, becomes the beneficial owner, directly or indirectly, of more than 50% of the voting stock of the Borrower, measured by voting power rather than number of shares.

"Collateral" has the meaning specified in Section 4.03(a) hereof

"Collateral Vessels" means (i) the Vessels described in Annex A to this Agreement and (ii) each other Vessel owned or to be owned by the Credit Parties from time to time that shall be required to join this Agreement in accordance with Section 7.10 hereof;

"Commitment" means, on any date, Seventy Three Million Eight Hundred Forty Thousand and Eight Hundred Forty Dollars (US$.73,840,840.00).

"Credit Parties" means the Borrower and each Subsidiary Guarantor designated by the Borrower as Credit Party.

"Default" means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

"Drawdown Date" means in respect of the Loan, the date on which the Loan is advanced to the Borrower under Section 2 hereof.

"Effective Date" means the date all conditions set forth in Section 5.01 shall have been satisfied.

"Equity Interests" shall mean shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any Person, and any option, warrant or other right entitling the holder thereof to purchase or otherwise acquire any such equity interest.

"Event of Default" has the meaning specified in Section 10 hereof.

"Existing Facility Agreement" has the meaning specified in the recitals hereof.

"Facility Documents" means this Agreement, , each Joinder Agreement and the Security Documents.

"Fair Market Value" means the fair market value of the Collateral Vessels to be determined by one charter-free valuation provided by an independent first class broker appointed by the Borrower at the sole expense of the Borrower, on a date not more than 30 days prior to the borrowing request or any other date as provided in Section 7 hereof.

"FATCA" means:

(a)          sections 1471 to 1474 of the United States Internal Revenue Code of 1986, as amended, or any associated regulations;

(b)          any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the U.S. 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 paragraph (a) or (b) above with the Internal Revenue Service, the U.S. government or any governmental or taxation authority in any other jurisdiction.

"Guaranties" means the Guaranty by each Subsidiary Guarantor to the Lender as set forth in Section 11 hereof, as amended, amended and restated, supplemented or otherwise modified from time to time.

"Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all guarantees by such Person of Indebtedness of others, (h) all capital lease obligations of such Person, (i) all synthetic lease obligations of such Person, (j) net obligations of such Person under any hedging agreements, (k) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any equity interests of such Person or any other Person or any warrants, rights or options to acquire such equity interests, valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (l) all obligations of such Person as an account party in respect of letters of credit and (m) all obligations of such Person in respect of bankers' acceptances.  The Indebtedness of any Person shall include the Indebtedness of any partnership in which such Person is a general partner.

"Interpolated Screen Rate" means, in relation to LIBOR Rate for the Loan, 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 relevant Interest Period or relevant part of it; and

(b) the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the relevant Interest Period or relevant part of,

each as of 11:00 a.m., London time, on the Quotation Day for the currency of the Loan.

"Interest Period" means (1) with respect to the first period following the Drawdown Date, the period beginning on (and including) the date on which the Loan is actually made and ending on December 31, 2017 or such other period as may be mutually agreed between the Borrower and the Lender and (2) with respect to the subsequent periods, the period shall be for a duration of six (6) months calculated semi-annually on June 30 and December 31 of each calendar year; provided that:

(a)  if an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next following Business Day (unless such next following Business Day is the first Business Day of a calendar month, in which case such Interest Period shall end on the Business Day next preceding such numerically corresponding day); and

(b)  no Interest Period may end later than the Maturity Date.

"Joinder Agreement" means a Joinder Agreement to this Agreement substantially in the form and substance of Exhibit B attached hereto, duly executed by a Subsidiary Guarantor made a party hereto pursuant to Section 7.10 hereof

"Lender" has the meaning specified in the preamble hereof

"LIBOR Rate" means, in relation to any Interest Period, (a) the applicable Screen Rate, (b) if no Screen Rate is available for the currency or the relevant Interest Period or relevant part of it, the applicable Interpolated Screen Rate; or (c) if no Screen Rate is available for the currency or the relevant Interest Period or relevant part of it and it is not possible to calculate an Interpolated Screen Rate for such currency or relevant Interest Period or relevant part of it, then the Reference Bank Rate, each as of 11:00 a.m., London time, on the Quotation Day for the offering of deposits in the currency of the Loan and for a period equal in length to the relevant Interest Period or relevant part of it and, if any such rate is below zero, LIBOR Rate shall be deemed to be zero.

"Lien" means a mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having the effect of conferring security.

"Loan" means the amount of the loan advanced by the Lender to the Borrower under Section 2.01 hereof or, where the context permits, the principal amount advanced and for the time being outstanding.

"Material Adverse Effect" means (a) a material adverse effect on the operations, business, properties or financial condition of the Credit Parties, taken as a whole or (b) a material

impairment of the rights and remedies of the Lender under any Facility Document, or of the ability of any Credit Party to perform its obligations under any Facility Document to which it is a party.

"Maturity Date" has the meaning specified in Section 3.01 hereof.

"Obligations" means, collectively, (a) all Indebtedness, debts, liabilities, indemnities, covenants, and other obligations of the Borrower and the other Credit Parties (including interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower or the other Credit Parties, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) under or in connection with (i) this Agreement and the Loan hereunder, (ii) any note or other evidence of Indebtedness of the Borrower now or hereafter issued in connection with this Agreement or (iii) the other Facility Documents, in each case with respect to this clause (a) whether now existing or hereafter arising, due or to become due, direct or indirect, matured or unmatured, liquidated or unliquidated, absolute or contingent, and howsoever evidenced, held or acquired, of any kind or nature, each as may be amended, restated, supplemented or otherwise modified from time to time, and (b) all reasonable out-of-pocket expenses and charges, legal and otherwise, incurred by the Lender in collecting or enforcing any of such amounts set forth in clause (a) or in realizing on or protecting any security therefor, including the Collateral.

"Permitted Holder" means Mr. George Economou, Mr. Anthony Kandylidis, or any spouse or member of their respective immediate families, any of his or their Affiliates, or any Person that is controlled, directly or indirectly, by any such Permitted Holder.

"Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, limited liability company or government or other entity.

"Purposes" means repayment of the Borrower's obligations under the Existing Facility Agreement in full

"Quotation Day" means, in relation to any Interest Period for which an interest rate is to be determined, the first day of that period.

"Reference Bank Rate" means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Lender 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 any bank or financial institutions as may be appointed by the Lender in consultation with the Borrower.

"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 Interest 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 that 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 Borrower.

"Security Documents" means each Ship Mortgage, each Guaranty, all security agreements and documents that may be reasonably required by the Lender with respect to any Collateral Vessel, any other document (whether or not it creates a Lien) that may be executed from time to time as security for, or for the purpose of establishing any priority or subordination arrangement in relation to, the obligations hereunder, and any other document designated as such by the Lender and the Borrower, each as amended, amended and restated, supplemented or otherwise modified from time to time, each as not released from the Lien granted in favor of the Lender.

"Ship Mortgages" means each first priority mortgage on each Collateral Vessel, as may be amended, supplemented or otherwise modified from time to time.

"Subsidiary" means, with respect to any specified Person, (i) any corporation, limited liability company, association or other business entity (other than a partnership) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders' agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, limited liability company, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and (ii) any partnership of which (a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof), whether in the form of general, special or limited partnership interests or otherwise, or (b) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

"Subsidiary Guarantor" means each Subsidiary of the Borrower designated by the Borrower that shall become a party hereto as a Subsidiary Guarantor in accordance with Section 7.10 hereof and described in Annex B hereof;

"Total Loss" means in relation to a vessel:

(a) actual, constructive, compromised, agreed 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 thirty (30) days.

"Vessel" shall mean one or more shipping or drilling vessels or drilling rigs, whose primary purpose is the maritime transportation of cargo or the exploration and production drilling for crude oil or hydrocarbons, or which are otherwise engaged, used or useful in the Borrower's business, in each case together with all related spares, equipment and any additions or improvements.

2. COMMITMENT AND LOANS; BORROWING PROCEDURES;

Section 2.01  Commitment.  Subject to the terms of this Agreement, the Lender agrees to make available to the Borrower the Loan          in an amount not exceeding the Commitment on such Business Day as requested by the Borrower..

Section 2.02  Method of Advances.  The Borrower shall request the Loan by delivering to the Lender a written borrowing request (the "Drawdown Request") by 10:00 a.m., London time, not less than one (1) Business Day prior to the requested Business Day of disbursement, or such other period as may be agreed between the Borrower and the Lender, identifying the amount of the Loan.  Upon receipt of the Drawdown Request, and on or before 11:00 a.m. on the date of the disbursement, and so long as such borrowing request complies with the requirements under this Agreement, the Lender shall make the Loan available to the Borrower.

Section 2.03  Existing Facility Agreement.  The Borrower and the Lender hereby agree that as of the Drawdown Date, the Existing Facility Agreement shall be deemed to immediately terminate and shall no longer be in effect.

3. MATURITY, PAYMENT AND PREPAYMENT; FEES

Section 3.01  Maturity.  The Borrower shall repay the amount of the Loan which has actually been advanced, together with interest as calculated in accordance with Section 4.01, to the Lender on the fifth anniversary of the Drawdown Date (the "Maturity Date").

Section 3.02  Optional Prepayment.  The Borrower may, at its option, at any time prepay in whole or in part the Loan without any premium or penalty, together with interest as calculated in accordance with Section 4.01, in a minimum amount of $5,000,000 and an integral multiple of $1,000,000, or in any other amount as may be agreed between the Borrower and the Lender from time to time.

Section 3.03  Mandatory Prepayment.

(a)          Not later than the first Business Day following the receipt of any net cash proceeds by any Credit Party with respect to any sale, transfer or other disposition (by way of merger, casualty, condemnation or otherwise) by any Credit Party to any Person of any

Collateral Vessel of such Credit Party in a single transaction or series of related transactions, the Borrower shall, as mutually agreed with the Lender, prepay to the Lender 100% of the net cash proceeds of such sale or offer as Collateral a Vessel or Vessels with at least the same Fair Market Value as the Collateral Vessel sold.  In any case, immediately after such prepayment or provision of additional Collateral, the Borrower must be in compliance with Section 7.11.

(b)          In the event that any Credit Party other than the Borrower or any affiliate of any Credit Party shall receive net cash proceeds from the issuance or incurrence of Indebtedness for money borrowed from any Credit Party (other than any Indebtedness permitted under Section 7.02), the Borrower shall, as mutually agreed with the Lender, prepay to the Lender 100% of the net cash proceeds or offer as Collateral a Vessel or Vessels with at least the same Fair Market Value as the Collateral Vessel that has been refinanced.  In any case, immediately after such prepayment or provision of additional Collateral, the Borrower must be in compliance with Section 7.11.

(c)          In the event of a Total Loss of a Collateral Vessel, the Borrower shall on the earlier of the date falling ninety (90) days after any such Total Loss and the date on which the proceeds of any such Total Loss are realized, the Borrower shall, as mutually agreed with the Lender, prepay to the Lender 100% of the net proceeds of any such Total Loss or offer as Collateral a Vessel or Vessels with at least the same Fair Market Value as the Collateral Vessel deemed to be a Total Loss.  In any case, immediately after such prepayment or provision of additional Collateral, the Borrower must be in compliance with Section 7.11.

(d)          Upon the occurrence of a Change of Control, the Borrower shall, substantially simultaneously with such occurrence (and in any event not later than the first Business Day next following), pay the Loan and other amounts outstanding hereunder (the "Prepaid Amount") in full.

Section 3.04  Payment.  Except to the extent otherwise agreed between the Borrower and the Lender, all payments of principal of, and interest on, the Loan to be made by the Borrower under this Agreement shall be made in United States Dollars, in immediately available funds, without set-off or counterclaim, to the Lender.

4. INTEREST AND SECURITY

Section 4.01  Interest Rate.  The unpaid principal of the Loan shall bear interest, during each Interest Period applicable thereto, equal to the sum of the LIBOR Rate for such Interest Period plus four and a half percent (4.50%) per annum until the date upon which all amounts owing under the Loan have been repaid in full.  All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days and be payable in arrears on each semi-annual payment date, being June 30^th and December 31^st.  Payments due on other than a Business Day shall (except as otherwise required by clause (a) of the definition of "Interest Period") be made on the next succeeding Business Day

and such extension of time shall be included in computing interest and fees in connection with that payment.

Section 4.02  Default Rate.  On and after the date any Event of Default has occurred and for so long as such Event of Default is continuing, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on the Loan at a rate per annum equal to the rate of interest that otherwise would be applicable to the Loan plus two percent (2%) per annum.

Section 4.03  Security.  The Loan shall be secured by the Ship Mortgages and the Pledge of the Equity Interests in accordance with the terms thereof (collectively, the "Collateral"), for the prompt and complete payment and performance when due of the Obligations.

Section 4.04  Pledge of Equity Interests in Subsidiary Guarantors.

(a)          Pledge.  As security for the payment or performance, as the case may be, in full of the Obligations, each Credit Party hereby assigns and pledges to the Lender, its successors and assigns, and hereby grants to the Lender, its successors and assigns, a security interest in, all of such Credit Party's right, title and interest in, to and under (i) the Equity Interests in any Subsidiary Guarantor owned by such Credit Party, (ii) any other Equity Interests obtained in the future by such Credit Party in any Subsidiary Guarantor and (iii) the promissory notes, stock certificates, securities, instruments or other documents representing or evidencing all such Equity Interests (all the foregoing collectively referred to herein as the "Pledged Securities"), (iii) all other property that may be delivered to and held by the Lender pursuant to the terms of this Section 4.04(a), (iv) subject to Section 4.04(e), all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the securities referred to in clause (iv ) above, (v) subject to Section 4.04(e), all rights and privileges of such Credit Party with respect to the securities and other property referred to in clauses (i), (Hi) and (iv) above, and (vi) subject to Section 4.04(e), all Proceeds of any of the foregoing (the items referred to in clauses (i) through (vi) above being collectively referred to as the "Pledged Collateral").

(b)          Delivery of Pledged Collateral.

(i)          Each Credit Party designated by the Borrower agrees promptly but no later than thirty (30) Business Days from (i) the Effective Date (in the case of the Credit Parties in existence as of the Effective Date) or any other later date as agreed between the parties and (ii) if any Credit Party, designated by the Borrower, is subsequently formed, acquired or otherwise becomes in existence, no later than thirty (30) Business Days from the date on which such Credit Party is formed, acquired or otherwise becomes in existence, to deliver or cause to be delivered to the Lender any and all certificates, instruments or other documents representing or evidencing Pledged Securities.

(ii)          Upon delivery to the Lender, (i) any certificate, instrument or document representing or evidencing Pledged Securities shall be accompanied by

undated stock powers duly executed in blank or other undated instruments of transfer reasonably satisfactory to the Lender and duly executed in blank and by such other instruments and documents as the Lender may reasonably request and (ii) all other property comprising part of the Pledged Collateral shall be accompanied by proper instruments of assignment duly executed by the applicable Credit Party and such other instruments or documents as the Lender may reasonably request.  Each delivery of Pledged Securities shall be accompanied by a schedule describing the applicable securities, which schedule shall be made a part hereof upon such delivery; provided that failure to attach any such schedule hereto shall not affect the validity of the pledge of such Pledged Securities.  Each schedule so delivered shall supplement any prior schedules so delivered.

(iii)          The Borrower shall deliver promptly but no later than thirty (30) Business Days after the Effective Date or any other later date as agreed between the parties a schedule setting forth the percentage of the issued and outstanding shares of each class of the Equity Interests of each Subsidiary Guarantor.

(c)          Representations, Warranties and Covenants.  The Credit Parties jointly and severally represent, warrant and covenant to and with the Lender that:

(i)          Upon delivery in accordance with Section 4.04(b)(iii) hereof, such schedule correctly sets forth the percentage of the issued and outstanding shares of each class of the Equity Interests of each Subsidiary Guarantor represented by such Pledged Securities and includes all Equity Interests required to be pledged hereunder;

(ii)          the Pledged Securities have been duly and validly authorized and issued by the issuers thereof and are fully paid and nonassessable;

(iii)          except for the security interests granted hereunder (or otherwise permitted under this Agreement), each Credit Party (i) is and, subject to any transfers made in compliance with this Agreement, will continue to be the direct owner, beneficially and of record, of the Pledged Securities as owned by such Credit Party, (ii) holds the same free and clear of all Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Pledged Collateral, other than transfers made in compliance with this Agreement, and (iv) subject to Section 4.04(e), will cause any and all Pledged Collateral, whether for value paid by such Credit Party or otherwise, to be forthwith deposited with the Lender and pledged or assigned hereunder;

(iv)          except for restrictions and limitations imposed by the Facility Documents or securities laws generally, the Pledged Collateral is and will continue to be freely transferable and assignable, and none of the Pledged Collateral is or will be subject to any option, right of first refusal, shareholders agreement, charter or by-law provisions or contractual restriction of any nature that might prohibit, impair, delay or otherwise affect the pledge of such Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or the exercise by the Lender of rights and remedies hereunder;

(v)          each Credit Party (i) has the power and authority to pledge the Pledged Collateral pledged by it hereunder in the manner hereby done or contemplated and (ii) will defend its title or interest thereto or therein against any and all Liens (other

than any Lien created or permitted by the Facility Documents), however arising, of all persons whomsoever;

(vi)          no consent or approval of any governmental authority, any securities exchange or any other person was or is necessary to the validity of the pledge effected hereby (other than such as have been obtained and are in full force and effect);

(vii)          by virtue of the execution and delivery by each Credit Party of this Agreement, when any Pledged Securities are delivered to the Lender in accordance with this Agreement along with the other deliverables required pursuant to Sections 4.04(b)(ii) and 4.04(b)(iii), the Lender will obtain a legal, valid and perfected first priority lien upon and security interest in such Pledged Securities as security for the payment and performance of the Obligations; and

(viii)          the pledge effected hereby is effective to vest in the Lender the rights of the Lender in the Pledged Collateral as set forth herein and all action by any Credit Party necessary or desirable to protect and perfect the Lien on the Pledged Collateral has been duly taken.

(d)          Registration in Nominee Name; Denominations.  The Lender shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the applicable Credit Party, endorsed or assigned in blank or in favor of the Lender.  Each Credit Party will promptly give to the Lender copies of any notices or other communications received by it with respect to Pledged Securities in its capacity as the registered owner thereof The Lender shall at all times have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement.

(e)          Voting Rights; Dividends and Interest, Etc.

(i)          Unless and until an Event of Default shall have occurred and be continuing and the Lender shall have given the Credit Parties written notice of its intent to exercise its rights under this Agreement (which notice shall be deemed to have been given immediately upon the occurrence of an Event of Default under Section 9(c) of this Agreement):

(1)          Each Credit Party shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof for any purpose consistent with the terms of this Agreement and the other Facility Documents; provided, however, that such rights and powers shall not be exercised in any manner that could materially and adversely affect the rights inuring to a holder of any Pledged Securities or the rights and remedies of any of the Lender under this Agreement or any other Facility Document unless expressly permitted pursuant to the terms of this Agreement or any of the other Facility Documents.

(2)          The Lender shall execute and deliver to each Credit Party, or cause to be executed and delivered to each Credit Party, all such proxies, powers of attorney and other instruments as such Credit Party may reasonably request for the

purpose of enabling such Credit Party to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to paragraph (1) above.

(3)          Each Credit Party shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Securities to the extent and only to the extent that such dividends and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of this Agreement, the other Facility Documents and applicable law; provided, however,that any noncash dividends or other distributions that would constitute Pledged Securities, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and, if received by any Credit Party, shall not be commingled by such Credit Party with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the Lender and shall be forthwith delivered to the Lender in the same form as so received (with any necessary endorsement or instrument of assignment).  This paragraph (3) shall not apply to dividends between or among the Borrower, the Subsidiary Guarantors and any Subsidiaries only of property subject to a perfected security interest under this Agreement; provided that the Borrower notifies the Lender in writing, specifically referring to this Section 4.04(e) at the time of such dividend and takes any actions the Lender specifies to ensure the continuance of its perfected security interest in such property under this Agreement.

(ii)          Upon the occurrence and during the continuance of an Event of Default, after the Lender shall have notified (or shall be deemed to have notified pursuant to Section 4.04(e)(i) hereof) the Credit Parties in writing of the suspension of their rights under Section 4.04(e)(i)(3) hereof, then all rights of any Credit Party to dividends or other distributions that such Credit Party is authorized to receive pursuant to Section 4.04(e)(i)(3) hereof shall cease, and all such rights shall thereupon become vested in the Lender, which shall have the sole and exclusive right and authority to receive and retain such dividends or other distributions.  All dividends or other distributions received by any Credit Party contrary to the provisions of this Section 4.04(e) shall be held in trust for the benefit of the Lender, shall be segregated from other property or funds of such Credit Party and shall be forthwith delivered to the Lender upon demand in the same form as so received (with any necessary endorsement or instrument of assignment).  Any and all money and other property paid over to or received by the Lender pursuant to the provisions of this paragraph (ii) shall be retained by the Lender in an account to be established by the Lender upon receipt of such money or other property.  After all Events of Default have been cured or waived and each applicable Credit Party has delivered to the Lender certificates to that effect, the Lender shall, promptly after all such Events of Default have been cured or waived, repay to each applicable Credit Party (without interest) all dividends or other distributions that such Credit Party would otherwise be permitted to retain pursuant to the terms of 4.04(e)(i)(3) hereof and that remain in such account.

(iii)          Upon the occurrence and during the continuance of an Event of Default, after the Lender shall have notified (or shall be deemed to have notified pursuant to Section 4.04(e)(i) hereof) the Credit Parties in writing of the suspension of their rights under Section 4.04(e)(i)(3) hereof, then all rights of any Credit Party to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to Section 4.04(e)(i)(1) hereof, and the obligations of the Lender under Section 4.04(e)(i)(1) hereof, shall cease, and all such rights shall thereupon become vested in the Lender, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers; provided that the Lender shall have the right from time to time following and during the continuance of an Event of Default to permit the Credit Parties to exercise such rights.

(iv)          Any notice given by the Lender to the Credit Parties exercising its rights under Section 4.04(e)(i) hereof (x) must be given in writing, (y) may be given to one or more of the Credit Parties at the same or different times and (z) may suspend the rights of the Credit Parties under Section 4.04(e)(i)(1) or Section 4.04(e)(i)(3) hereof in part without suspending all such rights (as specified by the Lender in its sole and absolute discretion) and without waiving or otherwise affecting the Lender's rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.

5. CONDITIONS PRECEDENT TO THE EFFECTIVE DATE.

Section 5.01  Effective Date.  The effectiveness of this Agreement shall be subject to the satisfaction of each of the following conditions precedent:

(a)          The Lender shall have received executed counterparts of this Agreement, duly executed and delivered by an authorized officer of the Borrower and the other Credit Parties.

(b)          The Lender shall have received any fees, costs and expenses due from the Borrower pursuant to Section 10 hereof.

Section 5.02  Loan.  The obligation of the Lender to make the Loan shall be subject to the satisfaction of each of the following conditions precedent:

(a)          Both before and after giving effect to the Loan, (i) the representations and warranties set forth in each Facility Document shall be true and correct in all material respects with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date), in each case other than representations and warranties that are subject to a Material Adverse Effect or a materiality qualifier, in which case such representations and warranties shall be (or shall have been) true and correct in all respects,(ii) the Borrower is in compliance with Section 7.11 hereof and (iii) no Default shall have then occurred and be continuing.

(b)          The Lender shall have received a Drawdown Request in accordance with Section 2.02, executed and delivered by an authorized officer of the Borrower.  The delivery of a

Drawdown Request and the acceptance by the Borrower of the proceeds of the Loan shall constitute a representation and warranty by the Borrower that on the date of the Loan (both immediately before and after giving effect to the Loan and the application of the proceeds thereof) the statements made in Section 6 hereof are true and correct.

6. REPRESENTATIONS AND WARRANTIES

Each Credit Party represents and warrants to the Lender that, as of the Effective Date and as of the date of the disbursement of the Loan:

Section 6.01  Existence and Power.  It is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has full power, authority and legal right to execute, deliver and perform this Agreement and each of the Facility Documents to which it is a party.

Section 6.02  Authority.  The execution and delivery by it of this Agreement and each of the other Facility Documents to which it is or will be a party, and the performance by it of its obligations hereunder and thereunder (a) have been duly authorized by all necessary corporate action on its part; (b) do not violate any provision of its organizational documents or any laws of the Marshall Islands or any other applicable jurisdiction, or any governmental rule, regulation or order thereunder, or of any indenture, agreement or other instrument, license, judgment or order applicable to it or by which its properties are bound; and (c) do not breach, create a default under (with or without any passage of time or giving of notice or both) or result in the creation or imposition of any Lien upon any of its revenues, assets or properties under, any agreement, contract or instrument by which any of its revenues, assets or properties may be bound or affected.

Section 6.03  Governmental Approvals.  No authorization, consent, approval, order, license or permit from, or filing registration or qualification with, any governmental agency is required to authorize or permit the execution, deliver and performance by it of the Facility Documents.

Section 6.04  Binding Obligations.  Each Facility Document constitutes the legal, valid and binding obligations of such Credit Party enforceable in accordance with its terms, enforceable against such Credit Party in accordance with its terms.

7. COVENANTS OF THE BORROWER

Section 7.01  No Liens.  No Credit Party will create, incur, assume or permit to exist any Lien on any Collateral without the prior written consent of the Lender, except for:

(a)          Liens securing payment of their Obligations under the Facility Documents;

(b)          unless a Default is continuing, any ship repairer's or outfitter's possessory lien in respect of a Collateral Vessel for an amount not exceeding $1,000,000 or the equivalent in any other currency;

(c)          any lien on a Collateral Vessel for master's, officer's or crew's wages outstanding in the ordinary course of its trading and in accordance with usual maritime practice;

(d)          liens for salvage or general average;

(e)          liens for master's disbursements incurred in the ordinary course of trading;

(f)          any other lien arising by operation of law in the ordinary course of the operation of that Vessel, provided that such lien (or the aggregate of such liens at any time) does not secure an amount greater than $1,000,000 and secures obligations not more than thirty (30) days overdue; or

(g)          security arising by operation of law in respect of taxes, assessments or governmental charges or levies which are not overdue for payment or in respect of taxes, assessments or governmental charges or levies being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made.

Section 7.02  No Indebtedness.  No Subsidiary Guarantor will create, incur, assume or permit to exist any unsecured indebtedness without the prior written consent of the Lender, except

(a)          indebtedness in respect of its obligations under the Facility Documents; and

(b)          intercompany indebtedness among the Credit Parties.

Section 7.03  No Disposition.  No Credit Party will dispose of any of their respective assets to any person in one transaction or series of transactions unless such disposition is in the ordinary course of its business except any Credit Party which owns or operates a Collateral Vessel may sell, lease or otherwise dispose of any vessel (or 100% of the equity interests of the Subsidiary that owns such vessel), provided that, with respect to a sale or other disposition of a Collateral Vessel (or 100% of the equity interests of the Subsidiary that owns such Collateral Vessel), (i) such sale is made at fair market value, (ii) 100% of the consideration in respect of such sale shall consist of cash or cash equivalents received by the Credit Party which owned such Collateral Vessel, on the date of consummation of such sale, (iii) the net cash proceeds of such sale or other disposition shall be applied as required by Section 3.03 to repay the Loan and (iv) no Default or Event of Default shall exist at such time.

Section 7.04  Use of Proceeds.  The Borrower will apply the proceeds of the Loan exclusively for the Purposes.

Section 7.05  Notices.  As soon as possible and in any event within three (3) Business Days after any Credit Party obtains knowledge thereof, such Credit Party will notify the Lender of:

(a)          the occurrence of a Default or an Event of Default, along with a detailed description thereof and the action that such Credit Party has taken and proposes to take with respect thereto; and

(b)          the occurrence of any default or event of default under any agreement or other contractual obligation to which such Credit Party is a party, which could reasonably be expected to have a Material Adverse Effect.

Section 7.06  Maintenance of Existence; Compliance with Contracts, Laws, etc.  Each Credit Party will preserve and maintain its legal existence, perform in all material respects their obligations under material agreements to which such Credit Party is a party, and comply in all material respects with all applicable laws, rules, regulations and orders, including the payment (before the same become delinquent), of all taxes, imposed upon such Credit Party or upon their property except to the extent being diligently contested in good faith by appropriate proceedings.

Section 7.07  Maintenance of Properties.  Each Credit Party will maintain, preserve, protect and keep its respective properties in good repair, working order and condition (ordinary wear and tear excepted), and make necessary repairs, renewals and replacements so that the business carried on by the Borrower may be properly conducted at all times, unless such Credit Party determines in good faith that the continued maintenance of such property is no longer economically desirable, necessary or useful to the business of such Credit Party or any of its Subsidiaries.

Section 7.08  Future Security, etc.  In the event any Credit Party and the Lender enter into any Security Document after the Effective Date, promptly, and in any event within fifteen (15) Business Days, following the request of the Lender, such Credit Party will execute any documents, agreements and instruments, and take all further action that may be required under applicable law, and do all things reasonably requested by the Lender, in order to effectuate the transactions contemplated by the Facility Documents in order to grant, preserve, protect and perfect the validity and first priority (subject to Liens permitted by Section 7.01 hereof) of the Liens created or intended to be created by the Facility Documents.

Section 7.09  Ship Mortgages, and Pledged Securities.  Each Credit Party designated by the Borrower will deliver to the Lender, within (a) thirty (30) Business Days from the Effective Date (in the case of the Credit Parties in existence as of the Effective Date) or within any other later time as agreed by the Parties and (b) if any Subsidiary of the Borrower designated by the Borrower is subsequently foiled, acquired or otherwise becomes in existence, within thirty (30) Business Days from the date on which such Subsidiary is formed, acquired or otherwise becomes in existence, (a) duly executed copies of the Ship Mortgages and documentary evidence of the registration of the Ship Mortgages in relevant jurisdictions and the execution and delivery of all other security agreements and documents that may be reasonably

required by the Lender with respect to the Collateral Vessels, (b ) each item required to be delivered in accordance with Section 4.04(b) hereof and (c ) any agreements, documents and instruments satisfactory to the Lender to perfect or otherwise evidence the Lender's security interests hereunder.

Section 7.10  Joinder Agreement.  The Borrower will take all steps necessary, within thirty (30) Business Days from (a) the Effective Date (in the case of the Subsidiaries of the Borrower in existence as of the Effective Date and designated by the Borrower as Credit Party) or within any other time as agreed by the Parties and (b) if any Subsidiary of the Borrower is subsequently formed, acquired or otherwise becomes in existence and designated by the Borrower as Credit Party, within thirty (30) Business Days from the date on which such Subsidiary is formed, acquired or otherwise becomes in existence, to cause each such Subsidiary that shall be reasonably acceptable to the Lender to (i) become a party to this Agreement as a Credit Party through the execution and delivery of a Joinder Agreement and (ii) satisfy its obligations set forth in Section 7.09 hereof;

Section 7.11  Security Shortfall If at any time the Fair Market Value of the Collateral Vessels is less than 200% of the principal amount of the outstanding Loan, the Lender by notice to the Borrower may require that such deficiency be remedied.  The Borrower shall then within thirty (30) days of receipt of such notice ensure that the Fair Market Value of the Collateral Vessels equals or exceeds 200% of the principal amount of the outstanding Loan.  For this purpose, the Borrower may:

a. provide additional security over other assets approved by the Lender; and/or

b. prepay part of the outstanding Loan.  Any such amount prepaid shall be applied in reduction of the principal amount of the outstanding Loan.

8. WITHHOLDING; GROSS-UP

Section 8.01  Withholding.  If any withholding or deduction from any payment to be made by the Borrower under this Agreement is required in respect of any taxes pursuant to any applicable law, rule or regulation, the Borrower will: (a) pay to the relevant authority the full amount required to be so withheld or deducted; (b) promptly forward to the Lender an official receipt or other documentation satisfactory to the Lender evidencing such payment to such authority; and (c) make such payment to the Lender net of any such withholding deduction.

Section 8.02  Gross-Up.  If the Borrower makes a payment under Section 8.01, and the Lender is subsequently unable to obtain a credit or a refund in the full amount of such withholding or deduction, the Lender will so notify the Borrower.  In that case, the Borrower must pay to the Lender, on demand, such additional amount as is necessary to ensure that the net amount received by the Lender with respect of such payment is equal to the full amount the Lender would have received had no such withholding or deduction been required.  If the Lender is entitled to an exemption from or reduction of withholding tax with respect to payments made under any this Agreement, the Lender shall deliver to the Borrower, at the time or times reasonably requested by the Borrower, such properly completed and executed documentation reasonably requested by the Borrower as will permit such payments to be made without

withholding or at a reduced rate of withholding, including any documentation necessary to establish the FATCA status of the Lender.  No additional amounts shall be payable under this Section 8.02 with respect to (a) taxes imposed on or measured by net income (however denominated), franchise taxes, and branch profits taxes, in each case, imposed as a result of the Lender being organized under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing such tax (or any political subdivision thereof), (b) any taxes imposed on the Lender by reason of its failure to deliver documentation to the Borrower pursuant to the immediately preceding sentence, or (c) any taxes imposed under FATCA.

9. EVENTS OF DEFAULT

Each of the following events or occurrences described in this Section 9 shall constitute an "Event of Default":

(a)          Non-payment.  Failure of the Borrower to pay when due any principal, interest or fee amount payable under this Agreement at the place at and in the currency in which it is expressed to be payable, unless such failure is cured within three (3) Business Days of its due date.

(b)          Cross-Acceleration.  The occurrence of any event or condition that results in any indebtedness of the Borrower in excess of $7,000,000 under any agreement of the Borrower becoming due prior to its scheduled maturity or requires the prepayment, repurchase, redemption or defeasance thereof prior to its scheduled maturity.

(c)          Bankruptcy, Insolvency, etc.  The Borrower shall:

(i)          become insolvent or generally fail to pay, or admit in writing its inability or unwillingness generally to pay, debts as they become due;

(ii)          apply for, consent to, or acquiesce in the appointment of a trustee, receiver, sequestrator or other custodian for any substantial part of the property of any thereof, or make a general assignment for the benefit of creditors;

(iii)          in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for a substantial part of the property of any thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged within sixty (60) days; provided that the Borrower hereby expressly authorizes the Lender to appear in any court conducting any relevant proceeding during such 60-day period to preserve, protect and defend their rights under the Facility Documents;

(iv)          permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law or any dissolution, winding up or liquidation proceeding, in respect thereof, and, if any such case or proceeding is not commenced by the Borrower, such case or proceeding shall be consented to or acquiesced in by the Borrower or shall result in the entry of an order for relief or shall remain for sixty (60) days undismissed;

provided that the Borrower hereby expressly authorizes the Lender to appear in any court conducting any such case or proceeding during such 60-day period to preserve, protect and defend their rights under the Facility Documents; or

(v)          take any action authorizing, or in furtherance of, any of the foregoing.

(d)          Others.  Failure by the Borrower to duly perform or observe any agreement or covenant contained in any Facility Document unless such failure is cured after thirty (30) days after the earlier to occur of notice thereof given to the Borrower by the Lender or the date on which the Borrower has knowledge of such default.

Upon the occurrence and continuation of any Event of Default, the Lender may by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Lender to enforce its claims against the Borrower:

(i)          declare the Lender's obligation to make the Loan terminated, whereupon such obligation shall forthwith terminate immediately; and

(ii)          declare the principal of, and any accrued interest in respect of, the Loan and all obligations and damages owing by the Borrower to the Lender under this Agreement to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower;

Provided that if any Event of Default described in clause (c) of Section 9 with respect to the Borrower shall occur, the Commitment (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of the outstanding Loan and all other obligations under this Agreement shall automatically be and become immediately due and payable, without notice or demand to any Person.

10. MISCELLANEOUS INDEMNITIES — PAYMENT OF COSTS & EXPENSES

Section 10.01 The Borrower shall within ten (10) days of demand (and it is hereby expressly undertaken by the Borrower to) indemnify the Lender, without prejudice to any of the other rights of the Lender under any of the Facility Documents, against any loss or expense which the Lender shall certify with supporting documentation as sustained or incurred as a consequence of:

(a)          any default in payment by any of the Credit Parties of any sum under any of the Finance Documents when due;

(b)          the occurrence of any Default;

(c)          any prepayment of the Loan or part thereof being made or any other repayment of the Loan or part thereof being made otherwise than on an Interest Payment Date relating to the part of the Loan prepaid or repaid; or

(d)          the Commitment not being advanced for any reason (excluding any default by the Lender) after the Drawdown Request has been given, including, in any such case, but not limited to, any claim, expense, liability or loss, including a loss of a prospective profit, incurred by the Lender 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)..

Without prejudice to its generality, this Section 10.1 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, any environmental law and any sanctions.

Section 10.02  The Borrower shall within ten (10) days of demand (and it is hereby expressly undertaken by the Borrower to) indemnify the Lender for losses, claims, damages, liability actions, proceedings (whether civil or criminal) judgements and expenses (including reasonable costs of defense and investigation and all reasonable attorneys' fees) to which Lender may become subject insofar as such losses, claims, damages, liabilities and expenses arise out of or are based upon:

(a) any violation of U.S. federal or state securities laws or the rules and regulations of Nasdaq in connection with the transactions contemplated by this Agreement by the Borrower or any of its subsidiaries, affiliates, officers, directors or employees;

(b) any untrue statement of a material fact contained, or incorporated by reference, in the Registration Statements made by the Borrower or any amendment thereto or any omission or alleged omission to state therein, or in any document incorporated by reference therein, a material fact required to be stated therein or necessary to make the statements therein not misleading;

(c) any untrue statement of a material fact contained, or incorporated by reference, in each prospectus related to this Agreement, any free writing prospectus related to this Agreement, or in any amendment thereof or supplement thereto, or any omission to state therein, or in any document incorporated by reference therein, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(d) any misrepresentation or breach of any representation or warranty made by the Borrower in this Agreement;

(e) any breach of any covenant, agreement or obligation of the Borrower or any Subsidiary contained in this Agreement; or

(f) any cause of action, suit, proceeding or claim brought or made against Lender or its agents by a third party or which otherwise involves such individual or entity that arises out of or results from the following:

o the execution, delivery, performance or enforcement of any of this Agreement and any amendments thereof

o

Upon ten (10) days of demand, the Borrower shall reimburse the Lender for all legal and other costs and expenses reasonably incurred by Lender in investigating, defending against, or preparing to defend against any of the aforementioned claims, actions, suits or proceedings with respect to which they are entitled to indemnification

Section 10.3  Environmental Indemnity.  The Borrowers shall indemnify the Lender within ten (10) days of demand and hold the Lender harmless from and against all costs, expenses, payments, charges, losses, demands, liabilities, actions, proceedings (whether civil or criminal) penalties, fines, damages, judgements, orders, sanctions or other outgoings of whatever nature which may be suffered, incurred or paid by, or made or asserted against the Lender at any time, whether before or after the repayment in full of principal and interest under this Agreement, relating to, or arising directly or indirectly in any manner or for any cause or reason out of an environmental claim made or asserted against the Lender if such environmental claim would not have been, or been capable of being, made or asserted against the Lender if it had not entered into any of the Facility Documents and/or exercised any of its rights, powers and discretions thereby conferred and/or performed any of its obligations thereunder and/or been involved in any of the transactions contemplated by the Facility Documents.

Section 10.4  Maintenance of the Indemnities.  The indemnities contained in this Clause 10 shall apply irrespective of any indulgence granted to the Borrower or any other party from time to time and shall continue to be in full force and effect notwithstanding any payment in favour of the Lender and any sum due from the Borrower under this Clause 10 will be due as a separate debt and shall not be affected by judgement being obtained for any other sums due under any one or more of this Agreement, the other Facility Documents and any other documents executed pursuant hereto or thereto.

Section 10.5  Costs and ExpensesUntil all of the obligations of the Borrower are satisfied in full, the Borrower agrees to pay on demand all reasonable and out-of-pocket expenses of the Lender in connection with:

(e)          the negotiation, preparation, execution and delivery of each Facility Document, including schedules and exhibits, and any amendments, waivers, consents, supplements or other modifications to any Facility Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated;

(f)          the filing, registration or recording of any Facility Document and all amendments, supplements, amendment and restatements and other modifications to any thereof,

searches made following the Effective Date and any and all other documents or instruments of further assurance required to be filed or recorded by the terms of any Facility Document;

(g)          the preparation and review of the form of any document or instrument relevant to any Facility Document; and

(h)          any fees and expenses that the Lender incurs on the Effective Date and will incur thereafter with respect to any Facility Document.

The Borrower further agrees to pay, and to hold the Lender harmless from all liability for, any stamp or other taxes that may be payable in connection with the execution or delivery of each Facility Document or the Loan.  The Borrower also agrees to reimburse the Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys' fees and expenses of counsel to the Lender) incurred by the Lender in connection with (i) the negotiation of any restructuring or "work-out" with the Borrower, whether or not consummated, of any obligations under the Facility Documents and (ii) the enforcement of any obligations under the Facility Documents.

11. GUARANTY

(a)          Each Subsidiary Guarantor jointly and severally hereby irrevocably and unconditionally guarantees to the Lender the due and punctual payment in full of all Obligations when the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (collectively, the "Guaranteed Obligations").

(b)          Each Subsidiary Guarantor hereby jointly and severally agrees, in furtherance of the foregoing and not in limitation of any other right which the Lender may have at law or in equity against any Subsidiary Guarantor by virtue hereof, that upon the failure of Borrower to pay any of the Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise, Subsidiary Guarantors will upon demand pay, or cause to be paid, in cash, to the Lender an amount equal to the sum of the unpaid principal amount of all Guaranteed Obligations then due as aforesaid, accrued and unpaid interest on such Guaranteed Obligations and all other Guaranteed Obligations then owed to the Lender as aforesaid.

(c)          Each Subsidiary Guarantor agrees that its obligations hereunder are irrevocable, absolute, independent and unconditional and shall not be affected by any circumstance which constitutes a legal or equitable discharge of a guarantor or surety other than payment in full of the Guaranteed Obligations.  In furtherance of the foregoing and without limiting the generality thereof, each Subsidiary Guarantor agrees as follows:

(i)          this Guaranty is a guaranty of payment when due and not of collectability.  This Guaranty is a primary obligation of each Subsidiary Guarantor and not merely a contract of surety;

(ii)          the Lender may enforce this Guaranty upon the occurrence and continuation of an Event of Default notwithstanding the existence of any dispute between the Borrower and the Lender with respect to the existence of such Event of Default;

(iii)          the obligations of each Subsidiary Guarantor hereunder are independent of the obligations of the Borrower and the obligations of any other guarantor (including any other Subsidiary Guarantor) of the obligations of the Borrower, and a separate action or actions may be brought and prosecuted against such Subsidiary Guarantor whether or not any action is brought against the Borrower or any of such other guarantors and whether or not the Borrower is joined in any such action or actions;

(iv)          payment by any such Subsidiary Guarantor of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge any such Subsidiary Guarantor's liability for any portion of the Guaranteed Obligations which has not been paid.  Without limiting the generality of the foregoing, if the Lender is awarded a judgment in any suit brought to enforce any Subsidiary Guarantor's covenant to pay a portion of the Guaranteed Obligations, such judgment shall not be deemed to release such Subsidiary Guarantor from its covenant to pay the portion of the Guaranteed Obligations that is not the subject of such suit, and such judgment shall not, except to the extent satisfied by such Subsidiary Guarantor, limit, affect, modify or abridge any other Subsidiary Guarantor's liability hereunder in respect of the Guaranteed Obligations;

(v)          the Lender, upon such terms as it deems appropriate, without notice or demand and without affecting the validity or enforceability hereof or giving rise to any reduction, limitation, impairment, discharge or termination of any Subsidiary Guarantor's liability hereunder, from time to time may (i) settle, compromise, release or discharge, or accept or refuse any offer of performance with respect to, or substitutions for, the Guaranteed Obligations or any agreement relating thereto and/or subordinate the payment of the same to the payment of any other obligations; (ii) request and accept other guaranties of the Guaranteed Obligations and take and hold security for the payment hereof or the Guaranteed Obligations; (iii) enforce and apply any security now or hereafter held by or for the benefit of the Lender in respect hereof or the Guaranteed Obligations and direct the order or manner of sale thereof, or exercise any other right or remedy that the Lender may have against any such security, in each case as the Lender in its discretion may determine consistent herewith and any applicable security agreement, including foreclosure on any such security pursuant to one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable, and even though such action operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Subsidiary Guarantor against any other Credit Party or any security for the Guaranteed Obligations; and (iv) exercise any other rights available to it under the Facility Documents;

(vi)          this Guaranty and the obligations of Subsidiary Guarantors hereunder shall be valid and enforceable and shall not be subject to any reduction, limitation, impairment, discharge or termination for any reason (other than payment in full of the Guaranteed Obligations), including the occurrence of any of the following, whether or not any such Subsidiary Guarantor shall have had notice or knowledge of any of them: (i) any failure or omission to assert or enforce or agreement or election not to assert or enforce, or the stay or enjoining, by order of court, by operation of law or otherwise, of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether arising under the Facility Documents, at law, in equity or otherwise) with respect to the Guaranteed Obligations or any agreement relating thereto, or with

respect to any other guaranty of or security for the payment of the Guaranteed Obligations; (ii) any rescission, waiver, amendment or modification of, or any consent to departure from, any of the terms or provisions (including provisions relating to events of default) hereof, any of the other Facility Documents or any agreement or instrument executed pursuant thereto, or of any other guaranty or security for the Guaranteed Obligations, in each case whether or not in accordance with the terms hereof or such Facility Document or any agreement relating to such other guaranty or security; (iii) the Guaranteed Obligations, or any agreement relating thereto, at any time being found to be illegal, invalid or unenforceable in any respect; (iv) the application of payments received from any source (other than payments received pursuant to the other Facility Documents or from the proceeds of any security for the Guaranteed Obligations, except to the extent such security also serves as collateral for indebtedness other than the Guaranteed Obligations) to the payment of indebtedness other than the Guaranteed Obligations, even though the Lender might have elected to apply such payment to any part or all of the Guaranteed Obligations; (v) any failure to perfect or continue perfection of a security interest in any collateral which secures any of the Guaranteed Obligations; (vi) any defenses, set-offs or counterclaims which Borrower may allege or assert against the Lender in respect of the Guaranteed Obligations, including failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury; and (vii) any other act or thing or omission, or delay to do any other act or thing, which may or might in any manner or to any extent vary the risk of any Subsidiary Guarantor as an obligor in respect of the Guaranteed Obligations.

(d)          Each Subsidiary Guarantor designated by the Borrower as Credit Party hereby waives, for the benefit of the Lender: (a) any right to require the Lender, as a condition of payment or performance by such Subsidiary Guarantor, to (i) proceed against Borrower, any other guarantor (including any other Subsidiary Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed against or exhaust any security held from Borrower, any such other guarantor or any other Person, (iii) proceed against or have resort to any balance of any deposit account or credit on the books of the Lender in favor of any Credit Party or any other Person, or (iv) pursue any other remedy in the power of the Lender whatsoever; (b) any defense arising by reason of the incapacity, lack of authority or any disability or other defense of Borrower or any other Subsidiary Guarantor including any defense based on or arising out of the lack of validity or the unenforceability of the Guaranteed Obligations or any agreement or instrument relating thereto or by reason of the cessation of the liability of Borrower or any other Subsidiary Guarantor from any cause other than payment in full of the Guaranteed Obligations; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (d) any defense based upon the Lender's errors or omissions in the administration of the Guaranteed Obligations, except behavior which amounts to bad faith; (e) (i) any principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms hereof and any legal or equitable discharge of such Subsidiary Guarantor's obligations hereunder, (ii) the benefit of any statute of limitations affecting such Subsidiary Guarantor's liability hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv) promptness, diligence and any requirement that the Lender protect, secure, perfect or insure any security interest or lien or any property subject thereto; (f) notices, demands, presentments,

protests, notices of protest, notices of dishonor and notices of any action or inaction, including acceptance hereof, notices of default hereunder or any agreement or instrument related thereto, notices of any renewal, extension or modification of the Guaranteed Obligations or any agreement related thereto, notices of any extension of credit to the Borrower and notices of any of the matters referred to in Section 7.05 and any right to consent to any thereof; and (g) any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms hereof.

(e)          Until the Guaranteed Obligations shall have been indefeasibly paid in full, each Subsidiary Guarantor hereby waives any claim, right or remedy, direct or indirect, that such Subsidiary Guarantor now has or may hereafter have against Borrower or any other Subsidiary Guarantor designated by the Borrower as Credit Party or any of its assets in connection with this Guaranty or the performance by such Subsidiary Guarantor of its obligations hereunder, in each case whether such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise and including (a) any right of subrogation, reimbursement or indemnification that such Subsidiary Guarantor now has or may hereafter have against Borrower with respect to the Guaranteed Obligations, (b) any right to enforce, or to participate in, any claim, right or remedy that the Lender now has or may hereafter have against Borrower, and (c) any benefit ot; and any right to participate in, any collateral or security now or hereafter held by the Lender.  In addition, until the Guaranteed Obligations shall have been indefeasibly paid in full, each Subsidiary Guarantor shall withhold exercise of any right of contribution such Subsidiary Guarantor may have against any other guarantor (including any other Subsidiary Guarantor) of the Guaranteed Obligations.  Each Subsidiary Guarantor further agrees that, to the extent the waiver or agreement to withhold the exercise of its rights of subrogation, reimbursement, indemnification and contribution as set forth herein is found by a court of competent jurisdiction to be void or voidable for any reason, any rights of subrogation, reimbursement or indemnification such Subsidiary Guarantor may have against Borrower or against any collateral or security, and any rights of contribution such Subsidiary Guarantor may have against any such other guarantor, shall be junior and subordinate to any rights the Lender may have against Borrower, to all right, title and interest the Lender may have in any such collateral or security, and to any right the Lender may have against such other guarantor.  If any amount shall be paid to any such Subsidiary Guarantor on account of any such subrogation, reimbursement, indemnification or contribution rights at any time when all Guaranteed Obligations shall not have been finally and indefeasibly paid in full, such amount shall be held in trust for the Lender and shall forthwith be paid over to the Lender to be credited and applied against the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms hereof.

(f)          Any Indebtedness of Borrower or any Subsidiary Guarantor now or hereafter held by any such Subsidiary Guarantor (the "Obligee Subsidiary Guarantor") is hereby subordinated in right of payment to the Guaranteed Obligations, and any such Indebtedness collected or received by the Obligee Subsidiary Guarantor after an Event of Default has occurred and is continuing shall be held in trust for the Lender and shall forthwith be paid over to the Lender to be credited and applied against the Guaranteed Obligations but without affecting, impairing or limiting in any manner the liability of the Obligee Subsidiary Guarantor under any other provision hereof.

(g)          This Guaranty is a continuing guaranty and shall remain in effect until all of the Guaranteed Obligations shall have been paid in full .  Each Subsidiary Guarantor hereby irrevocably waives any right to revoke this Guaranty as to future transactions giving rise to any Guaranteed Obligations.

(h)          It is not necessary for the Lender to inquire into the capacity or powers of any Subsidiary Guarantor or Borrower or the officers, directors or any agents acting or purporting to act on behalf of any of them.

(i)          The Loan may be advanced to the Borrower or continued from time to time, without notice to or authorization from any Subsidiary Guarantor designated by the Borrower as Credit Party regardless of the financial or other condition of the Borrower at the time of such advance.  The Lender shall not have any obligation to disclose or discuss with any such Subsidiary Guarantor its assessment, or any such Subsidiary Guarantor's assessment, of the financial condition of the Borrower.  Each Subsidiary Guarantor designated by the Borrower as Credit Party has adequate means to obtain information from the Borrower on a continuing basis concerning the financial condition of the Borrower and its ability to perform its obligations under the Facility Documents, and each Subsidiary Guarantor designated by the Borrower as Credit Party assumes the responsibility for being and keeping informed of the financial condition of Borrower and of all circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations.  Each Subsidiary Guarantor hereby waives and relinquishes any duty on the part of the Lender to disclose any matter, fact or thing relating to the business, operations or conditions of Borrower now known or hereafter known by the Lender.

(j) (i)          In the event that all or any portion of the Guaranteed Obligations are paid by Borrower, the obligations of Subsidiary Guarantors hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) are rescinded or recovered directly or indirectly from the Lender as a preference, fraudulent transfer or otherwise, and any such payments which are so rescinded or recovered shall constitute Guaranteed Obligations for all purposes hereunder.

(ii)          If all of the Equity Interests of any Subsidiary Guarantor or any of its successors in interest hereunder shall be sold or otherwise disposed of (including by merger or consolidation) in accordance with the terms and conditions hereof, the Guaranty of such Subsidiary Guarantor or such successor in interest, as the case may be, hereunder shall automatically be discharged and released without any further action by the Lender or any other Person effective as of the time of such asset sale.

12. OTHER ACTIONS

Each of the parties hereby undertakes to the other that it will do all such acts and things and execute all such instruments and documents as may be necessary to carry into effect or to give legal effect to the provisions of this Agreement and the other Facility Documents.

13. NOTICES

All notices under this Agreement shall be in writing and shall be deemed effective when delivered via courier, or transmitted by any standard form of telecommunication to the applicable address or facsimile number set forth below (or such other addresses as one party identifies to the other in writing):

If to the Lender:

Sierra Investments Inc.

do MARE SERVICES LIMITED

5/1 Merchants Street, Valletta VLT

1171, Malta

Attn: Mare Services Limited

Tel: (+356) 21 222 097

Fax: (+356) 21 249 950

E-mail: info@cefaiadvocater.com

If to the Borrower:

DryShips Inc.Athens Licenced Shipping Office109 Kifissias Avenue and Sina Street151 24, Marousi Athens, GreeceAttention: Dimitris DreliozisFacsimile: (+30) 216 2006 241Email^. CFO@dryships.com

14. PARTIAL INVALIDITY AND WAIVER

The illegality, or unenforceability of any provision of this Agreement under the law of any jurisdiction shall not affect its legality, validity or enforceability under the law of any other jurisdiction nor the legality, validity or enforceability of any other provision.

15. ASSIGNMENT

Neither party is permitted to transfer any of its rights, benefits and obligations hereunder without the prior written consent of the other party except that the Lender may assign (including collaterally) this Agreement, or any portion of this Agreement to Lender's lender or other financing party in connection with a credit facility of Lender.

16. AMENDMENTS; NO WAIVER

(a)          Except as otherwise provided in this Agreement, the terms and conditions of this Agreement may only be changed, modified or altered by a written agreement signed by each of the parties to this Agreement.

(b)          No delay, failure or discontinuance of the Lender in exercising any right, power or remedy under any of the Facility Documents shall affect or operate as a waiver of such right, power or remedy; nor shall any single or partial exercise of any such right, power or remedy preclude, waive or otherwise affect any other or further exercise thereof or the exercise of any other right, power or remedy.  Any waiver, permit, consent or approval of any kind by the Lender of any breach of or default under any of the Facility Documents must be in writing and shall be effective only to the extent set forth in such writing.

17. COUNTERPARTS

This Agreement may be executed in any number of counterparts, and all such counterparts taken together shall be deemed to constitute one and the same instrument.

18. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of England.

19. SUBMISSION TO JURISDICTION

Any dispute which may arise out of or in connection with this Agreement shall be referred to arbitration in London, United Kingdom in accordance with the rules of London Maritime Arbitrators Association (LMAA) applicable at the date of the commencement of the arbitration proceedings.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and date first set forth above.

DRYSHIPS INC., as Borrower
By:	/s/ Dimitris Dreliozis
	Name:	Dimitris Dreliozis
	Title:	Vice President - Finance

SIERRA INVESTMENTS INC., as Lender
By:	/s/ Savvas Tournis
	Name:	Savvas Tournis
	Title:	Attorney-in-Fact

ANNEX A

COLLATERAL VESSELS

No	Name of Vessel	Type	DWT	Flag	Year built	IMO No.
1.	SAMSARA	CRUDE/DPP/DH	158,000	MALTA	2017	9792228
2.	BALLA	CRUDE/DPP/DH	113,600	MALTA	2017	9749556
3.	JUDD	NEWCASTLEMAX	205,000	MALTA	2015	9639476
4.	CASTELLANI	KAMSARMAX	82,129	MALTA	2014	9602409

ANNEX B

LIST OF SUBSIDIARY GUARANTORS

1. CECILIA OWNING COMPANY LIMITED OF MARSHALL ISLANDS

2. REGINA OWNERS INC OF MARSHALL ISLANDS

3. NOUFARO OWNERS INC OF MARSHALL ISLANDS

4. KAHUNA OWNERS INC OF MARSHALL ISLANDS

Exhibit B

FORM OF JOINDER AGREEMENT

JOINDER AGREEMENT

This Joinder Agreement, dated as of [•], is delivered pursuant to Section 7.10 of the Secured Term Facility Agreement, dated as of ………. 2017, among DryShips Inc., a Marshall Islands corporation (the "Borrower"),certain Subsidiary Guarantors party thereto from time to time designated by the Borrower as Credit Party and Sierra Investments Inc., a Marshall Islands corporation (the "Lender")(as amended, restated, supplemented or otherwise modified, the "Facility Agreement").Capitalized terms used herein but not defined herein are used herein with the meaning given them in the Facility Agreement.

By executing and delivering this Joinder Agreement, the undersigned, as provided in Section 7.10 of the Facility Agreement, hereby becomes a party to the Facility Agreement as a Credit Party thereunder (including without limitation as a Subsidiary Guarantor under the Guaranty set forth in Section 11 of the Facility Agreement and as a grantor under Sections 4.03 and 4.04 thereof) with the same force and effect as if originally named as a Credit Party therein.

The Borrower and the undersigned, though separate legal entities, comprise, together with the other Credit Parties, one integrated financial enterprise, and all Loans to the Borrower will inure, directly or indirectly to the benefit of the undersigned and each other Subsidiary Guarantor.

The undersigned hereby represents and warrants that each representation and warranty contained in Section 6 of the Facility Agreement relating to it is true and correct as if made by the undersigned herein.

This Joinder Agreement and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Joinder Agreement and the transaction contemplated hereby shall be governed by, and construed in accordance with, laws of England.

This Joinder Agreement may be executed in any number of identical counterparts, any set of which signed by all the parties hereto shall be deemed to constitute a complete, executed original for all purposes.  Transmission by facsimile, "PDF" or similar electronic format of an executed counterpart of this Joinder Agreement shall be deemed to constitute due and sufficient delivery of such counterpart

[The remainder of this page is intentionally left blank]

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and delivered as of the date first above written.

[—], as a Subsidiary Guarantor and a Credit Party
By:
	Name:
	Title:

[Signature Page to Joinder Agreement]

ACKNOWLEDGED AND AGREED as of the date of this Joinder Agreement first above written. SIERRA INVESTMENTS INC., as Lender
By:
	Name:
	Title:

EX-4.39

Exhibit 4.39

DEED OF PARTICIPATION

THIS DEED OF PARTICIPATION (this "Deed") is issued as of the 23^rd day of May, 2017, by Dryships Inc., a corporation incorporated under the laws of the Republic of the Marshall Islands ("Dryships") pursuant to which certain participation rights are granted to Mountain Investments Inc., a corporation incorporated under the laws of the Republic of the Marshall Islands ("Mountain").

1.          Definitions.  In this Deed, the words and expressions specified below shall have the meanings attributed to them below:

"Permitted Holder" means Mr. George Economou, Mr. Anthony Kandylidis, or any spouse or member of their respective immediate families, any of his or their Affiliates, or any Person that is controlled, directly or indirectly, by any such Permitted Holder

2.          Participation Rights.  Dryships agrees that upon receipt of the net cash proceeds with respect to any sale, transfer or other disposition (by way of merger, casualty, condemnation or otherwise) by it to any Person of any of its assets in a single transaction or series of related transactions, it shall pay to Mountain an amount equal to 30.00% of the difference (if positive) between such net cash proceeds and the applicable value of the relevant assets (as annexed to this Deed) or at the cost such asset was delivered to Dryships by it after the date of this agreement, depreciated by 2.50% quarterly from and after the three month anniversary after the date of this agreement, or the date of acquisition, as applicable.  For the avoidance of doubt the participation rights described in this Section do not apply in case of sale of MT SAMSARA ex Hull 1393.

3.          Term.  The participation rights described in Section 2 above shall terminate on 31 December 2021, and will be automatically extended in case there is an outstanding loan with any lender which is being ultimately owned by a Permitted Holder.

4.          Governing Law.  This Deed shall be governed by, and construed in accordance with, the laws of England.

This Deed has been executed as a Deed, and it has been delivered on the date stated at the beginning of this Deed

EXECUTED as a Deed By Dimitrios Dreliozis for and on behalf of DRYSHIPS INC. in the presence of /s/ Evgenia Th. Voulika Witness		) ) ) ) )	/s/ Dimitrios Dreliozis Authorised Signatory
Name:	Evgenia Th. Voulika
Address:	52 Ag. Konstantinou Street – 151 24 Marousi Athens, Greece Tel.: + 30 210 6140580
Occupation:	Attorney-at-Law

APPENDIX A

Applicable asset values

No	Name of Vessel	Description	DWT	Flag	Year built	Applicable Value
1	Raraka	Panamax Bulk Carrier	76,037	Malta	2012	$9.994m
2	Rapallo	Panamax Bulk Carrier	75,123	Malta	2009	$8.288m
3	Majorcaa	Panamax Bulk Carrier	74,477	Malta	2005	$4.997m
4	Catalina	Panamax Bulk Carrier	74,432	Malta	2005	$4.997m
5	Ligari	Panamax Bulk Carrier	75,583	Malta	2004	$5.728m
6	Bargara	Panamax Buik Carrier	74,832	Malta	2002	$4.144m
7	Mendocino	Panamax Bulk Carrier	76,623	Malta	2002	$4.851m
8	Maganari	Panamax Bulk Carrier	75,941	Malta	2001	$4.509m
9	Capitola	Panamax Bulk Carrier	74,816	Malta	2001	$3.803m
10	Ecola	Panamax Bulk Carrier	73,931	Malta	2001	$3.803m
11	Levanto	Panama Bulk Carrier	73,925	Malta	2001	$3.803m
12	Redondo	Panamax Rusk Carrier	74,716	Malta	2000	$3.413m
13	Marbella	Panamax Bulk Carrier	72,561	Malta	2000	$4.266m
14	Vega Emtoll	OSRV	1,400	NIS	2013	$4.875m
15	Indigo	OSRV	1,400	Malta	2013	$4.875m
16	Jubilee	OSRV	1,400	Malta	2012	$4.875m
17	Vega Jaanca	OSRV	1,400	NIS	2012	$4.875m
18	Crescendo	PSV	1,400	Malta	2012	$3.534m
19	Colorado	PSV	1,400	Malta	2012	$3.534m
20	Marini	Newcastlemax	205,000	Malta	2014	$31.67m
21	Valadon	Kamsamax	81,128	MI	2014	$22.95m
22	Nasaka	Kamsamax	82,134	Malta	2014	$22.44m
23	Balla	Crude/DPP/DH	113,600	Malta	2017	$44.95m
24	Stamos	Crude/DPP/DH	115,666	Malta	2012	$29.29m
	TOTAL		1,578,925			$244.46m

EX-4.40

Exhibit 4.40

Deed of Release and Termination

This Deed is made on August 29, 2017 and is made between MOUNTAIN INVESTMENTS INC. of Marshall Islands ("Mountain")and DRYSHIPS INC. of Marshall Islands ("DryShips").

Reference is made to the Deed of Participation dated May 23, 2017 pursuant to which certain participation rights described therein were granted by DryShips to Mountain.

NOW THIS DEED HEREBY WITNESSES as follows:

In connection with a private placement of DryShips shares to certain entities affiliated with the Company's Chairman and Chief Executive Officer, Mr. George Economou, including Mountain, with a closing date as of the date hereof (the "Private Placement")and upon receipt by Mountain of 14,545,454 common shares of Dryships in the Private Placement, the Deed of Participation shall be considered terminated by mutual consent and all obligations, duties and liabilities of each of Mountain and DryShips to the other under the Deed of Participation and applicable laws, whether accrued or not, would be irrevocably, unconditionally, totally and completely discharged and released. Further, Mountain and Dryships waive any and all present losses, liabilities, claims or other causes of action (including costs of suit and attorney fees and expenses) of any nature whatsoever, contingent or otherwise, which either Mountain or Dryships may have up to and as of the date of such receipt against the other party and/or its subsidiaries, affiliates, shareholders, directors, officers, employees, advisors or any other representatives (as applicable) in connection with the Deed of Participation including but not limited to any claims in connection with any breach of the Deed of Participation.

This Deed may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

This Deed and any disputes or claims arising out of or in connection with its subject matter or formation (including non-contractual disputes or claims) are governed by and construed in accordance with the law of England.

IN WITNESS whereof this Deed has been duly executed and delivered as a deed on the day and year first above written.

SIGNED and DELIVERED	)
as a DEED	)
by  Dimitrios Dreliozis	)	/s/ Dimitrios Dreliozis
	)
for and on behalf of	)
DRYSHIPS INC.	)
in the presence of:
/s/ Evgenia Th. Voulika
Witness
Name: Evgenia Th. Voulika
Attorney-at-Law
Address: 52 Ag. Konstantinou Street – 151 24                 Marousi                Athens, Greece                Tel.: + 30 210 6140580
SIGNED and DELIVERED	)
as a DEED	)
by  Dr. Adriano Cefai	)	/s/ Dr. Adriano Cefai
Director of Mare Services Limited	)	DIRECTOR
	)	MARE SERVICES LTD.
for and on behalf of	)	5/1 MERCHANTS STREET
MOUNTAIN INVESTMENTS INC.	)	VALETTA 1171
in the presence of:
/s/ John Mayl
Witness
Name: John Mayl
Address: 5/1 Merchants Street, Valetta, VLT 1171

SK 23113 0002 7847085

EX-4.41

Exhibit 4.41

PREFERRED STOCK EXCHANGE AGREEMENT

This Preferred Stock Exchange Agreement (this "Agreement") is made as of August 29, 2017 by and between DRYSHIPS INC., a Marshall Islands corporation (the "Company"), and SIFNOS SHAREHOLDERS INC., a Marshall Islands corporation (the "Seller").

WHEREAS, on August 11, 2017, the Company and the Seller, together with other parties affiliated with the Company's Chairman and Chief Executive Officer, Mr. George Economou (the "Other Transaction Parties"), entered into a binding term sheet (the "Term Sheet") pursuant to which the Seller agreed to cancel all remaining outstanding Series D Preferred Shares, par value $0.01 per share, of the Company (the "Preferred Shares") that Seller currently holds in exchange for such number of common shares, par value $0.01 per share, of the Company (the "Common Shares") as is contemplated in the Term Sheet.

NOW THEREFORE, in consideration of the following mutual agreements and covenants, the parties hereto hereby agree as follows:

1.          Exchange of the Preferred Shares. Subject to the terms and conditions of this Agreement, on the Exchange Date (as defined below), the Company shall issue such number of Common Shares to the Seller or its designee as is contemplated in the Term Sheet in exchange (the "Exchange") for all Preferred Shares currently held by the Seller. The Exchange shall occur at the principal office of the Company simultaneously with the execution of this Agreement by the parties or on such other date as the Company and the Seller shall agree (the "Exchange Date"). On the Exchange Date, (i) the Seller shall deliver to the Company (or its designee) all Preferred Shares it currently holds and (ii) the Company shall reflect the Exchange in its respective books and records.

2.          Termination of Rights. The Seller agrees that upon the Exchange and in accordance with Section 1 hereof, the Company shall become (i) the legal and beneficial owner of the Preferred Shares being exchanged and (ii) entitled to any rights and interest therein or related thereto, and that the Seller shall immediately cease to be a stockholder of the Company with respect to the Preferred Shares.

3.          Miscellaneous.

(a)          Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York.

(b)          Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(c)          Severability.  If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(d)          Construction. This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

(e)          Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

[Signature Page Follows]

2

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

COMPANY:
	DRYSHIPS INC.
	By:	/s/ Dimitris Dreliozis
		Name: Dimitris Dreliozis Title:   Vice President of Finance
SELLER:
	SIFNOS SHAREHOLDERS INC.
	By:	/s/ Dr. Adriano Cefai
		Name: Dr. Adriano Cefai Title:   Director of Mare Services Limited, Sole Director Mare Services Ltd. 5/1 Merchants Street Valletta, 1171

3

EX-4.60

Exhibit 4.60

SHARE PURCHASE AGREEMENT

This Share Purchase Agreement ("Agreement"), dated as of 3^rd day of April 2017, is made by and between LPG INVESTMENTS INC. of Marshall Islands (the "Buyer"), whose performance is hereby guaranteed by Dryships Inc. and VLGC Gamma Shareholding Ltd, a corporation organized under the laws of the Republic of the Marshall Islands (the "Seller") whose performance is hereby guaranteed by TMS Cardiff Gas Ltd.

RECITALS

WHEREAS, the Seller directly owns shares, constituting all of the issued and outstanding capital stock of VLGC Gamma Owning Ltd, a corporation organized under the laws of the Republic of Marshall Islands (the "Owner");

WHEREAS, the Owner has entered into a shipbuilding contract dated 10^th September 2015 with Hyundai Samho Heavy Industries Co. Ltd. as Builder (the "Shipbuilding Contract") to construct one high specification very large Gas Carrier with hull number S883 (the "Vessel") which is going to be employed on a long term charter party with Clearlake Shipping Pte Ltd (the "Charter Party").

WHEREAS, the Seller wishes to sell and Buyer wishes to buy, all of the issued outstanding capital stock of the Owner (the "Shares"), on the terms and conditions contained herein;

NOW, THEREFORE, in consideration of the premises and the respective representations, warranties, covenants and agreements stated herein, the parties agree as follows:

ARTICLE I DEFINITIONS

Capitalized terms used in this Agreement have the meanings specified in (a) the  preamble, (b) the recitals, (c) this Article I or (d) elsewhere in this Agreement, as the case may  be:

Banking Day means a day other than Saturday, Sunday or other day on which commercial banks located in London, Piraeus and New York City are authorized or required by applicable law to close.

Claim means any claim, demand, assessment, judgment, order, decree, action, cause of action, litigation, suit, investigation or other Proceeding.

Laws means all statutes, treaties, codes, ordinances, decrees, rules, regulations, municipal bylaws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards, policies, certificates, codes, licenses, permits, approvals, guidelines, voluntary restraints, inspection reports, or any provisions of such laws, including general principles of common law and equity and the requirements of all

Governmental Bodies, binding or affecting the Person referred to in the context in which such word is used; and "Law" means any one of them.

Lien means (whether the same is consensual or nonconsensual or arises by contract, operation of law, legal process or otherwise): (i) any mortgage, lien, security interest, pledge, attachment, levy or other charge or encumbrance of any kind thereupon or in respect thereof; or (ii) any other arrangement under which the same is transferred, sequestered or otherwise identified with the intention of subjecting the same to, or making the same available for, the payment or performance of any liability in priority to the payment of the ordinary, unsecured creditors, and which under applicable law has the foregoing effect, including any adverse Claim.

Orders means judgments, writs, decrees, compliance agreements, injunctions, rules, awards, settlement agreements or orders of any governmental body or arbitrator.

Person means any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, government or agency or subdivision thereof or any other entity.

Proceeding means an action, suit, litigation, claim, investigation, legal, administrative or arbitration proceeding.

ARTICLE II PURCHASE OF SHARES; CLOSING

Section 2.1          Purchase of Shares. Upon the terms and subject to the conditions of this Agreement, and on the basis of the representations and warranties hereinafter set forth, the Seller agrees to sell, transfer, convey, assign and deliver to the Buyer, and the Buyer agrees to acquire end buy from the Seller, the Shares.

Section 2.2          Closing. Against receipt of the Purchase Price for the Shares or upon such other date as may be agreed in writing by the parties hereto (the "Closing Date"), the transfer of the Shares shall take place and the Seller shall deliver to the Buyer original share certificates representing all the Shares of the Seller to the order of the Buyer.

Section 2.3

Purchase Price. The purchase price for the Shares that shall be paid by the Buyer to the Seller shall consist of an amount United States Dollars Twenty Three Millions Three Hundred Fifty Thousand Three Hundred Thirty Four (US$ 23,350,334). Any adjustment of the Purchase Price shall be mutually agreed by the Seller and the Buyer and the Purchase Price will be adjusted accordingly.

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER

The Seller hereby represents and warrants to the Buyer on the date hereof and as of the Closing Date as follows:

Section 3.1          Organization of the Seller. The Seller is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.

Section 3.2          Organization of the Owner. (a) The Owner is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted. (b) The Seller has heretofore delivered to the Buyer complete and correct copies of the constitutional documents of the Owner as currently in effect and the other corporate records. The corporate records are accurate in all material respects and all corporate proceedings and actions reflected therein have been conducted or taken in compliance with all applicable Laws and in compliance with the constitutional documents.

Section 3.3          Authority of the Seller. (a) The Seller has full legal capacity, right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; (b) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action taken on the part of the Seller and no other corporate proceedings on the part of the Seller is necessary to authorize this Agreement or to consummate the transactions contemplated hereby; and (c) that this Agreement has been duly and validly executed and delivered by the Seller and constitutes a valid and binding obligation of the Seller, enforceable against it in accordance with its terms.

Section 3.4           Capitalization. (a)Schedule 1 sets forth the amount of authorized capital stock and the amount of the issued and outstanding shares of capital stock of the Owner. The. Shares constitute all of the issued and outstanding common shares of the Owner; all such common shares are duly authorized, validly issued, fully paid and non-assessable and are owned legally and beneficially by the Seller, as set forth on Schedule 1. Other than this Agreement, there is no subscription, option, warrant, preemptive right, call right or other right, agreement or commitment of any nature relating to the voting, issuance, sale, delivery or transfer (including any right of conversion or exchange under any outstanding security or other instruments) by the Seller of the Shares, and there is no obligation on the part of the Seller to grant, extend or enter into any of the foregoing.

Section 3.5          Ownership of Purchased Shares. The Seller owns the Shares free and clear of all Liens or other limitations affecting the Seller's ability to vote such shares or to transfer such shares to the Buyer.

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to the Sellers as of the date hereof and as of the Closing Date as follows:

Section 4.1          Organization. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the Republic of the Marshall Islands and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.

Section 4.2          Authority. (a) Buyer has the full legal capacity, right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; (b) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action taken on the part of the Buyer and no other corporate proceedings on the part of the Buyer is necessary to authorize this Agreement or to consummate the transactions contemplated hereby; and (c) this Agreement has been duly and validly executed and delivered by the Buyer and constitutes a valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms.

ARTICLE V COVENANTS

Section 5.1          Conduct of Business Pending Closing. Buyer and Seller agree that between the date of the execution of this Agreement and the Closing Date, (i) the Seller shall conduct the business and maintain and preserve the assets of the Seller in the ordinary course of business; and (ii) the Buyer and the Seller shall use their reasonable efforts to cause all of the representations and warranties in Article III hereof to continue to be true and correct.

ARTICLE VI CONDITIONS TO CLOSING

Section 6.1          Conditions to Obligations of Buyer. The obligations of the Buyer to consummate the transactions contemplated herein are subject to satisfaction of the following conditions:

(a)          Consents. All consents and approvals required in connection with the execution, delivery and performance of this Agreement shall have been obtained.

(b)          Compliance. The Seller shall have complied with its covenants and agreements contained herein, and the representations and warranties contained in Article III hereof shall be true and correct in all material respects (except those representations and warranties qualified by materiality shall be true and correct in all respects) on the date hereof and as of the Closing Date.

Section 6.2          Conditions to Obligations of the Seller. The obligations of the Seller to consummate the transactions contemplated herein are subject to satisfaction of the following conditions:

(a)          Purchase Price. Subject to the fulfillment of the conditions of Section 6.1, the Buyer shall advance to the Seller the Purchase Price under Section 2.3.

(b)          Corporate records. The Seller shall have delivered to the Buyer all resolutions passed by the Board of Directors since the incorporation.

(c)          Compliance. Buyer shall have complied with its covenants and agreements contained herein, and the representations and warranties contained in Article IV hereof shall be true and correct in all material respects (except those representations and warranties qualified by materiality shall be true and correct in all respects) on the date hereof and as of the Closing Date.

(d)          Consents. All consents and approvals required in connection with the execution, delivery and performance of this Agreement shall have been obtained.

ARTICLE VII TERMINATION

Section 7.1          Grounds for Termination. This Agreement may be terminated at any time prior to the Closing Date:

(a)          By the mutual written agreement of the Buyer and the Seller;

(b)          By the Buyer if any of the conditions set forth in Section 6.1 hereof shall have become incapable of fulfillment and shall not have been waived by Buyer;

(c)          By the Seller if any of the conditions set forth in Section 6.2 hereof shall have become incapable of fulfillment and shall not have been waived by the Seller;

(d)          In the event that the Closing is not affected by 18^th April 2017, then this Agreement shall become null and void, having no effect whatsoever. No party shall be liable to the other for any loss and/or damage.

ARTICLE VIII GENERAL PROVISIONS

Section 8.1          Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof. This Agreement may not be modified, amended or terminated except by a written instrument specifically referring to this Agreement signed by all the parties hereto.

Section 8.2          Execution of Further Documents. Each party agrees to execute all documents necessary to carry out the purpose of this Agreement and to cooperate with each other for the expeditious fulfilment of the terms of this Agreement.

Section 8.3          Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been received only if and when (a) personally delivered, (b) on the fifth day after mailing, by mail, first class, postage prepaid or by certified mail return receipt requested, addressed in each case as follows (or to such other address as may be specified by like notice), (c) at the time receipt is acknowledged when delivered by private mail or courier service or (d) received by facsimile at the phone number listed below:

(a)          If to Buyer to:

c/o Dryships Inc.Athens licensed shipping office109 Kifissias Avenue and Sina street GR 151 24, Marousi, Athens, Greece

(b)          If to Seller to:

c/o TMS Cardiff Gas Ltd.Athens licensed shipping office80 Kifisias Avenue GR 151 25, Marousi, Athens, Greece

Section 8.4           Counter guarantee(s) Dryships Inc. undertakes to provide its counter guarantee within 90 days or any other date mutually agreed in relation to the guarantee provided under the Shipbuilding Contract and/or the Charter Party of the Vessel.

Section 8.5          Choice of Law; Resolution of Disputes. This Agreement shall be governed by and construed under the laws of England and Wales. All disputes, differences, controversies or claims arising out of or in connection with this Agreement shall be referred to arbitration in London, England in accordance with the rules of the London Maritime Arbitrators Association (LMAA).

Section 8.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

For the Buyer
By:	/s/ Dimitrios Dreliozis
Name:	Dimitrios Dreliozis
Title:	Attorney-in-fact
For the Seller
By:	/s/ Georgios Kourelis
Name:	Georgios Kourelis
Title:	Attorney-in-fact
For the Seller's guarantor
By:	/s/ Georgios Kourelis
Name:	Georgios Kourelis
Title:	Attorney-in-fact
For the Buyer's guarantor
By:	/s/ Dimitrios Dreliozis
Name:	Dimitrios Dreliozis
Title:	Vice President - Finance

Schedule 1

CAPITALIZATION

VLGC GAMMA OWNING LID

Total authorized share capital:

500 registered shares with par value $20.00 per share

Total issued and outstanding share capital:

500 common shares, par value $20.00 per share, registered in the name of VLGC GAMMA SHAREHOLDING LTD

EX-4.61

Exhibit 4.61

SHARE PURCHASE AGREEMENT

This Share Purchase Agreement ("Agreement"), dated as of 3^rd day of April 2017, is made by and between LPG INVESTMENTS INC. of Marshall Islands (the "Buyer"), whose performance is hereby guaranteed by Dryships Inc. and VLGC Delta Shareholding Ltd, a corporation organized under the laws of the Republic of the Marshall Islands (the "Seller") whose performance is hereby guaranteed by TMS Cardiff Gas Ltd.

RECITALS

WHEREAS, the Seller directly owns shares, constituting all of the issued and outstanding capital stock of VLGC Delta Owning Ltd, a corporation organized under the laws of the Republic of Marshall Islands (the "Owner");

WHEREAS, the Owner has entered into a shipbuilding contract dated 10^1h September 2015 with Hyundai Samho Heavy Industries Co. Ltd. as Builder (the "Shipbuilding Contract") to construct one high specification very large Gas Carrier with hull number S884 (the "Vessel") which is going to be employed on a long term charter party with Clearlake Shipping Pte Ltd (the "Charter Party").

WHEREAS, the Seller wishes to sell and Buyer wishes to buy, all of the issued outstanding capital stock of the Owner (the "Shares"), on the terms and conditions contained herein;

NOW, THEREFORE, in consideration of the premises and the respective representations, warranties, covenants and agreements stated herein, the parties agree as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used in this Agreement have the meanings specified in (a) the preamble, (b) the recitals, (c) this Article I or (d) elsewhere in this °Agreement, as, the  case may be:

Banking Day means a day other than Saturday, 'Sunday or other day on which commercial banks located in London, Piraeus and New York City are authorized or required by applicable law to close.

Claim means any claim, demand, assessment, judgment, order, decree, action, cause of action, litigation, suit, investigation or other Proceeding.

Laws means all statutes, treaties, codes, ordinances, decrees, rules, regulations, municipal bylaws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards, policies, certificates, codes, licenses, permits, approvals, guidelines, voluntary restraints, inspection reports, or any provisions of such laws, including general principles of common law and equity and the requirements of all

Governmental Bodies, binding or affecting the Person referred to in the context in which such word is used; and "Law" means any one of them.

Lien means (whether the same is consensual or nonconsensual or arises by contract, operation of law, legal process or otherwise): (i) any mortgage, lien, security interest, pledge, attachment, levy or other charge or encumbrance of any kind thereupon or in respect thereof; or (ii) any other arrangement under which the same is transferred, sequestered or otherwise identified with the intention of subjecting the same to, or making the same available for, the payment or performance of any liability in priority to the payment of the ordinary, unsecured creditors, and which under applicable law has the foregoing effect, including any adverse Claim.

Orders means judgments, writs, decrees, compliance agreements, injunctions, rules, awards, settlement agreements or orders of any governmental body or arbitrator.

Person means any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, government or agency or subdivision thereof or any other entity.

Proceeding means an action, suit, litigation, claim, investigation, legal, administrative or arbitration proceeding.

ARTICLE II

PURCHASE OF SHARES; CLOSING

Section 2.1          Purchase of Shares.  Upon the terms and subject to the conditions of this Agreement, and on the basis of the representations and warranties hereinafter set forth, the Seller agrees to sell, transfer, convey, assign and deliver to the Buyer, and the Buyer agrees to acquire and buy from the Seller, the Shares.

Section 2.2          Closing.  Against receipt of the Purchase Price for the Shares or upon such other date as may be agreed in writing by the parties hereto (the "Closing Date"), the transfer of the Shares shall take place and the Seller shall deliver to -the Buyer original share certificates representing all the Shares of the Seller to the order of the Buyer.

Section 2.3

Purchase Price.  The purchase price for the Shares that shall be paid by the Buyer to the Seller shall consist of an amount United States Dollars Twenty Three Millions Three Hundred Fifty Thousand Three Hundred Thirty Four (US$ 23,350,334).  Any adjustment of the Purchase Price shall be mutually agreed by the Seller and the Buyer and the Purchase Price will be adjusted accordingly.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

The Seller hereby represents and warrants to the Buyer on the date hereof and as of the Closing Date as follows:

Section 3.1          Organization of the Seller.  The Seller is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.

Section 3.2          Organization of the Owner.  (a) The Owner is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted; (b) The Seller has heretofore delivered to the Buyer complete and correct copies of the constitutional documents of the Owner as currently in effect and the other corporate records.  The corporate records are accurate in all material respects and all corporate proceedings and actions reflected therein have been conducted or taken in compliance with all applicable Laws and in compliance with the constitutional documents.

Section 3.3          Authority of the Seller.  (a) The Seller has full legal capacity, right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; (b) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action taken on the part of the Seller and no other corporate proceedings on the part of the Seller is necessary to authorize this Agreement or to consummate the transactions contemplated hereby; and (c) that this Agreement has been duly and validly executed and delivered by the Seller and constitutes a valid and binding obligation of the Seller, enforceable against it in accordance with its terms.

Section 3.4          Capitalization.  (a) Schedule 1 sets forth the amount of authorized capital stock and the amount of the issued and outstanding shares of capital stock of the Owner.  The Shares constitute all of the issued and outstanding common shares'^.of the Owner; all such common shares are duly authorized, validly issued, fully paid and non-assessable and are owned legally and beneficially by the Seller, as set forth on Schedule 1.  Other than this Agreement, there is no subscription, option, warrant, preemptive right, call right or other right, agreement or commitment of any nature relating to the voting, issuance, sale, delivery or transfer (including any right of conversion or exchange under any outstanding security or other instruments) by the Seller of the Shares, and there is no obligation on the part of the Seller to grant, extend or enter into any of the foregoing.

Section 3.5          Ownership of Purchased Shares.  The Seller owns the Shares free and clear of all Liens or other limitations affecting the Seller's ability to vote such shares or to transfer such shares to the Buyer.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to the Sellers as of the date hereof and as of the Closing Date as follows:

Section 4.1          Organization.  Buyer is a corporation duly organized, validly existing and in good standing under the laws of the Republic of the Marshall Islands and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.

Section 4.2          Authority.  (a) Buyer has the full legal capacity, right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; (b) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action taken on the part of the Buyer and no other corporate proceedings on the part of the Buyer is necessary to authorize this Agreement or to consummate the transactions contemplated hereby; and (c) this Agreement has been duly and validly executed and delivered by the Buyer and constitutes a valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms.

ARTICLE V

COVENANTS

Section 5.1          Conduct of Business Pending Closing.  Buyer and Seller agree that between the date of the execution of this Agreement and the Closing Date, (i) the Seller shall conduct the business and maintain and preserve the assets of the Seller in the ordinary course of business; and (ii) the Buyer and the Seller shall use their reasonable efforts to cause all of the representations and warranties in Article III hereof to continue to be true and correct.

ARTICLE VI

CONDITIONS TO CLOSING

Section 6.1          Conditions to Obligations of Buyer.  The obligations of the Buyer to consummate the transactions contemplated herein are subject to satisfaction of the following conditions:

(a)          Consents.  All consents and approvals required in connection with the execution, delivery and performance of this Agreement shall have been obtained.

(b)          Compliance.  The Seller shall have complied with its covenants and agreements contained herein, and the representations and warranties contained in Article III hereof shall be true and correct in all material respects (except those representations and warranties qualified by materiality shall be true and correct in all respects) on the date hereof and as of the Closing Date,

Section 6.2          Conditions to Obligations of the Seller.  The obligations of the Seller to consummate the transactions contemplated herein are subject to satisfaction of the following conditions:

(a)          Purchase Price.  Subject to the fulfillment of the conditions of Section 6.1, the Buyer shall advance to the Seller the Purchase Price under Section 2.3.

(b)          Corporate records.  The Seller shall have delivered to the Buyer all resolutions passed by the Board of Directors since the incorporation.

(c)          Compliance.  Buyer shall have complied with its covenants and agreements contained herein, and the representations and warranties contained in Article IV hereof shall be true and correct in all material respects (except those representations and warranties qualified by materiality shall be true and correct in all respects) on the date hereof and ás of the Closing Date.

(d)          Consents.  All consents and approvals required in connection with the execution, delivery and performance of this Agreement shall have been obtained.

ARTICLE VII

TERMINATION

Section 7.1          Grounds for Termination.  This Agreement may be terminated at any time prior to the Closing Date:

(a)          By the mutual written agreement of the Buyer and the Seller;

(b)          By the Buyer if any of the conditions set forth in Section 6.1 hereof shall have become incapable of fulfillment and shall not have been waived by Buyer;

(c)          By the Seller if any of the conditions set forth in Section 6.2 hereof shall have become incapable of fulfillment and shall not have been waived by the Seller;

(d)          In the event that the Closing is not affected by 18^th April 2017, then this Agreement shall become null and void, having no effect whatsoever.  No party shall be liable to the other for any loss and/or damage.

ARTICLE VIII

GENERAL PROVISIONS

Section 8.1          Entire Agreement.  This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof.  This Agreement may not be modified, amended or terminated except by a written instrument specifically referring to this Agreement signed by all the parties hereto.

Section 8.2          Execution of Further Documents.  Each party agrees to execute all documents necessary to carry out the purpose of this Agreement and to cooperate With each other for the expeditious fulfilment of the terms of this Agreement.

Section 8.3          Notices.  All notices and other communications hereunder shall be in writing and shall be deemed to have been received only if and when (a) personally delivered, (b) on the fifth day after mailing, by mail, first class, postage prepaid or by certified mail return receipt requested, addressed in each case as follows (or to such other address as may be specified by like notice), (c) at the time receipt is acknowledged when delivered by private mail or courier service or (d) received by facsimile at the phone number listed below:

(a)          If to Buyer to:

c/o Dryships Inc.Athens licensed shipping office109 Kifissias Avenue and Sina street GR 15 24, Marousi,Athens, Greece

(b)          If to Seller to:

c/o TMS Cardiff Gas Ltd.Athens licensed shipping office80 Kifisias Avenue GR 151 25, Marousi, Athens, Greece

Section 8.4          Counter guarantee(s)  Dryships Inc. undertakes to provide its counter guarantee within 90 days or any other date mutually agreed in relation to the guarantee provided under the Shipbuilding Contract and/or the Charter Party of the Vessel.

Section 8.5          Choice of Law; Resolution of Disputes.  This Agreement shall be governed by and construed under the laws of England and Wales.  All disputes, differences, controversies or claims arising out of or in connection with this Agreement shall be referred to arbitration in London, England in accordance with the rules of the London Maritime Arbitrators Association (LMAA).

Section 8.6          Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

For the Buyer

By:	/s/ Dimitrios Dreliozis
Name:	Dimitrios Dreliozis
Title:	Attorney-in-fact

For the Seller
By:	/s/ Georgios Kourelis
Name:	Georgios Kourelis
Title:	Attorney-in-fact

For the Seller's guarantor
By:	/s/ Georgios Kourelis
Name:	Georgios Kourelis
Title:	Attorney-in-fact

For the Buyer's guarantor
By:	/s/ Dimitrios Dreliozis
Name:	Dimitrios Dreliozis
Title:	Vice President-Finance

Schedule 1

CAPITALIZATION

VLGC DELTA OWNING LTD

Total authorized share capital:

500 registered shares with par value $20.00 per share Total issued and outstanding share capital:

500 common shares, par value $20.00 per share, registered in the name of VLGC DELTA SHAREHOLDING LTD

EX-4.62

Exhibit 4.62

SHARE PURCHASE AGREEMENT

This Share Purchase Agreement ("Agreement"), dated as of 3^rd day of April 2017, is made by and between LPG INVESTMENTS INC. of Marshall Islands (the "Buyer"), whose performance is hereby guaranteed by Dryships Inc. ("Dryships") and Entrepreneurial Spirit Holding Inc. a corporation organized under the laws of the Republic of Liberia (the "Seller") whose performance is hereby guaranteed by TMS Cardiff Gas Ltd.

RECITALS

WHEREAS, the Seller directly owns shares, constituting all of the issued and outstanding capital stock of Cardiff LNGShips Ltd. ("Cardiff LNGShips"), a corporation organized under the laws of the Republic of Marshall Islands;

WHEREAS, Dryships has entered into an option agreement dated 12^th January 2017 (the "Option Agreement") with Certain Clients of TMS CARDIFF GAS LTD. ("Clients of TMS") according to which Clients of TMS granted to Dryships four options to acquire the vessels described in the Option Agreement, on the terms and conditions contained therein;

WHEREAS, according to clause 3 of the Option Agreement, in case two (2) or more Options have been exercised then Dryships or a company nominated by Dryships could acquire the shares, among others, of Cardiff LNGShips;

WHEREAS, the Buyer exercised all four (4) options and respective share purchase agreements were executed, on the terms and conditions contained therein;

WHEREAS the Buyer wishes to acquire all of the issued outstanding capital stock of Cardiff LNGShips (the "Shares"), on the terms and conditions contained herein;

NOW, THEREFORE, in consideration of the premises and the respective representations, warranties, covenants and agreements stated herein, the parties agree as follows:

ARTICLE I ACQUISITION OF SHARES; CLOSING

Section 1.1          Acquisition of Shares. Upon the terms and subject to the conditions of this Agreement, and on the basis of the representations and warranties hereinafter set forth, the Seller agrees to transfer, convey, assign and deliver to the Buyer, and the Buyer agrees to acquire from the Seller, the Shares, without any cost or payment.

Section 1.2        Closing. As directed by the Buyer on date of closing (the "Closing Date") the transfer of Shares shall take place and the Seller shall deliver to the Buyer original share certificates representing all the Shares of the Seller to the order of the Buyer.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SELLER

The Seller hereby represents and warrants to the Buyer on the date hereof and as of the Closing Date as follows:

Section 2.1          Organization of the Seller. The Seller is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.

Section 2.2          Authority of the Seller. (a) The Seller has full legal capacity, right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; (b) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action taken on the part of the Seller and no other corporate proceedings on the part of the Seller is necessary to authorize this Agreement or to consummate the transactions contemplated hereby; and (c) that this Agreement has been duly and validly executed and delivered by the Seller and constitutes a valid and binding obligation of the Seller, enforceable against it in accordance with its terms.

Section 2.3          Organization of Cardiff LNGShips. (a) Cardiff LNGShips is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted. (b) The Seller has heretofore delivered to the Buyer complete and correct copies of the constitutional documents of Cardiff LNGShips as currently in effect and the other corporate records. The corporate records are accurate in all material respects and all corporate proceedings and actions reflected therein have been conducted or taken in compliance with all applicable Laws and in compliance with the constitutional documents.

Section 2.4          Capitalization. (a)Schedule 1 sets forth the amount of authorized capital stock and the amount of the issued and outstanding shares of capital stock of Cardiff LNGShips. The Shares constitute all of the issued and outstanding common shares of Cardiff LNGShips; all such common shares are duly authorized, validly issued, fully paid and non-assessable and are owned legally and beneficially by the Seller, as set forth on Schedule 1. Other than this Agreement, there is no subscription, option, warrant, preemptive right, call right or other right, agreement or commitment of any nature relating to the voting, issuance, sale, delivery or transfer (including any right of conversion or exchange under any outstanding security or other instruments) by the Seller of the Shares, and there is no obligation on the part of the Seller to grant, extend or enter into any of the foregoing.

Section 2.5          Ownership of Purchased Shares. The Seller owns the Shares free and clear of all Liens or other limitations affecting the Seller's ability to vote such shares or to transfer such shares to the Buyer.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to the Sellers as of the date hereof as follows:

Section 3.1          Organization. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the Republic of the Marshall Islands and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.

Section 3.2          Authority. (a) Buyer has the full legal capacity, right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; (b) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action taken on the part of the Buyer and no other corporate proceedings on the part of the Buyer is necessary to authorize this Agreement or to consummate the transactions contemplated hereby; and (c) this Agreement has been duly and validly executed and delivered by the Buyer and constitutes a valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms.

ARTICLE IV

COVENANTS

Section 4.1          Conduct of Business Pending Closing. Buyer and Seller agree that between the date of the execution of this Agreement and the Closing Date, (i) the Seller shall conduct the business and maintain and preserve the assets of the Seller in the ordinary course of business; and (ii) the Buyer arid the Seller shall use their reasonable efforts to cause ail of the representations and warranties in Articles H & III hereof to continue to be true and correct.

ARTICLE V

CONDITIONS TO CLOSING

Section 5.1          Conditions to Obligations of Buyer. The obligations of the Buyer to consummate the transactions contemplated herein are subject to satisfaction of the following conditions:

(a)          Consents. All consents and approvals required in connection with the execution, delivery and performance of this Agreement shall have been obtained.

(b)          Compliance. The Seller shall have complied with its covenants and agreements contained herein, and the representations and warranties contained in Article II hereof shall be true and correct in all material respects (except those representations and warranties qualified by materiality shall be true and correct in all respects) on the date hereof and as of the Closing Date.

Section 5.2          Conditions to Obligations of the Seller. The obligations of the Seller to consummate the transactions contemplated herein are subject to satisfaction of the following conditions:

(a)          Corporate records. The Seller shall have delivered to the Buyer all resolutions passed by the Board of Directors since the incorporation.

(b)          Compliance. Buyer shall have complied with its covenants and agreements contained herein, and the representations and warranties contained in Article III hereof shall be true and correct in all material respects (except those representations and warranties qualified by materiality shall be true and correct in all respects) on the date hereof and as of the Closing Date.

(c)          Consents. All consents and approvals required in connection with the execution, delivery and performance of this Agreement shall have been obtained.

ARTICLE VI

TERMINATION

Section 6.1          Grounds for Termination. This Agreement may be terminated at any time prior to the Closing Date:

(a)          By the mutual written agreement of the Buyer and the Seller;

(b)          By the Buyer if any of the conditions set forth in Section 5.1 hereof shall have become incapable of fulfillment and shall not have been waived by Buyer;

(c)          By the Seller if any of the conditions set forth in Section 5.2 hereof shall have become incapable of fulfillment and shall not have been waived by the Seller;

(d)          In the event that the Closing is not affected by 18^th April 2017, then this Agreement shall become null and void, having no effect whatsoever. No party shall be liable to the other for any loss and/or damage.

ARTICLE VII GENERAL PROVISIONS

Section 7.1          Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof. This Agreement may not be modified, amended or terminated except by a written instrument specifically referring to this Agreement signed by all the parties hereto.

Section 7.2          Execution of Further Documents. Each party agrees to execute all documents necessary to carry out the purpose of this Agreement and to cooperate with each other for the expeditious fulfilment of the terms of this Agreement.

Section 7.3          Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been received only if and when (a) personally delivered, (b) on the fifth day after mailing, by mail, first class, postage prepaid or by certified mail return receipt requested, addressed in each case as follows (or to such other address as may be specified by like notice), (c) at the time receipt is acknowledged when delivered by private mail or courier service or (d) received by facsimile at the phone number listed below:

If to Buyer to:

c/o Dryships Inc.

Athens licensed shipping office

109 Kifissias Avenue and Sina street

GR 151 24, Marousi, Athens, Greece

If to Seller to:

c/o TMS Cardiff Gas Ltd.

Athens licensed shipping office

80 Kifisias Avenue

GR 151 25, Marousi, Athens, Greece

Section 7.4          Choice of Law; Resolution of Disputes. This Agreement shall be governed by and construed under the laws of England and Wales. All disputes, differences, controversies or claims arising out of or in connection with this Agreement shall be referred to arbitration in London, England in accordance with the rules of the London Maritime Arbitrators Association (LMAA).

Section 7.5          Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

For the Buyer
By:	/s/ Dimitrios Dreliozis
Name:	Dimitrios Dreliozis
Title:	Attorney-in-fact

For the Seller
By:	/s/ Georgios Kourelis
Name:	Georgios Kourelis
Title:	Attorney-in-fact

For the Seller's guarantor
By:	/s/ Georgios Kourelis
Name:	Georgios Kourelis
Title:	Attorney-in-fact

For the Buyer's guarantor
By:	/s/ Dimitrios Dreliozis
Name:	Dimitrios Dreliozis
Title:	Vice President-Finance

Schedule 1

CAPITALIZATION

CARDIFF LNGSHIPS LTD.

Total authorized share capital:

500 registered shares without par value Total issued and outstanding share capital:

500 common shares, without par value, registered in the name of ENTREPRENEURIAL SPIRIT HOLDING INC.

EX-4.63

Exhibit 4.63

SHARE PURCHASE AGREEMENT

This Share Purchase Agreement ("Agreement"), dated as of 3^rd day of April 2017, is made by and between LPG INVESTMENTS INC. of Marshall Islands (the "Buyer"), whose performance is hereby guaranteed by Dryships Inc. ("Dryships") and Entrepreneurial Spirit Holding Inc. a corporation organized under the laws of the Republic of Liberia (the "Seller") whose performance is hereby guaranteed by TMS Cardiff Gas Ltd.

RECITALS

WHEREAS, the Seller directly owns shares, constituting all of the issued and outstanding capital stock of Cardiff LPG Ships Ltd ("Cardiff LPG"), a corporation organized under the laws of the Republic of Marshall Islands;

WHEREAS, Dryships has entered into an option agreement dated 12^th January 2017 (the "Option Agreement") with Certain Clients of TMS CARDIFF GAS LTD. ("Clients of TMS") according to which Clients of TMS granted to Dryships four options to acquire the vessels described in the Option Agreement, on the terms and conditions contained therein;

WHEREAS, according to clause 3 of the Option Agreement, in case two (2) or more Options have been exercised then Dryships or a company nominated by Dryships could acquire the shares, among others, of Cardiff LPG;

WHEREAS, the Buyer exercised all four (4) options and respective share purchase agreements were executed, on the terms and conditions contained therein;

WHEREAS the Buyer wishes to acquire all of the issued outstanding capital stock of Cardiff LPG (the "Shares"), on the terms and conditions contained herein;

NOW, THEREFORE, in consideration of the premises and the respective representations, warranties, covenants and agreements stated herein, the parties agree as follows:

ARTICLE IACQUISITION OF SHARES; CLOSING

Section 1.1          Acquisition of Shares.  Upon the terms and subject to the conditions of this Agreement, and on the basis of the representations and warranties hereinafter set forth, the Seller agrees to transfer, convey, assign and deliver to the Buyer, and the Buyer agrees to acquire from the Seller, the Shares, without any cost or payment.

Section 1.2          Closing.  As directed by the Buyer on date of closing (the "Closing Date") the transfer of Shares shall take place and the Seller shall deliver to the Buyer original share certificates representing all the Shares of the Seller to the order of the Buyer.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SELLER

The Seller hereby represents and warrants to the Buyer on the date hereof and as of the Closing Date as follows;

Section 2.1          Organization of the Seller.  The Seller is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.

Section 2.2          Authority of the Seller.  (a) The Seller has full legal capacity, right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; (b) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action taken on the part of the Seller and no other corporate proceedings on the part of the Seller is necessary to authorize this Agreement or to consummate the transactions contemplated hereby; and (c) that this Agreement has been duly and validly executed and delivered by the Seller and constitutes a valid and binding obligation of the Seller, enforceable against it in accordance with its terms.

Section 2.3          Organization of Carder LPG.  (a) Cardiff LPG is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.  (b) The Seller has heretofore delivered to the Buyer complete and correct copies of the constitutional documents of Cardiff LPG as currently in effect and the other corporate records.  The corporate records are accurate in all material respects and all corporate proceedings and actions reflected therein have been conducted or taken in compliance with all applicable Laws and in compliance with the constitutional documents.

Section 2.4          Capitalization.  (a) Schedule 1 sets forth the amount of authorized capital stock and the amount of the issued and outstanding shares of capital stock of Cardiff LPG.  The Shares constitute all of the issued and outstanding common shares of Cardiff LPG; all such common shares are duly authorized, validly issued, fully paid and non-assessable and are owned legally and beneficially by the Seller, as set forth on Schedule 1.  Other than this Agreement, there is no subscription, option, warrant, preemptive right, call right or other right, agreement or commitment of any nature relating to the voting, issuance, sale, delivery or transfer (including any right of conversion or exchange under any outstanding security or other instruments) by the Seller of the Shares, and there is no obligation on the part of the Seller to grant, extend or enter into any of the foregoing.

Section 2.5          Ownership of Purchased Shares.  The Seller owns the Shares free and clear of all Liens or other limitations affecting the Seller's ability to vote such shares or to transfer such shares to the Buyer.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to the Sellers as of the date hereof as follows:

Section 3.1          Organization.  Buyer is a corporation duly organized, validly existing and in good standing under the laws of the Republic of the Marshall Islands and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.

Section 3.2          Authority.  (a) Buyer has the full legal capacity, right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; (b) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action taken on the part of the Buyer and no other corporate proceedings on the part of the Buyer is necessary to authorize this Agreement or to consummate the transactions contemplated hereby; and (c) this Agreement has been duly and validly executed and delivered by the Buyer and constitutes a valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms.

ARTICLE IV

COVENANTS

Section 4.1          Conduct of Business Pending Closing.  Buyer and Seller agree that between the date of the execution of this Agreement and the Closing Date, (i) the Seller shall conduct the business and maintain and preserve the assets of the Seller in the ordinary course of business; and (ii) the Buyer and the Seller shall use their reasonable efforts to cause all of the representations and warranties in Articles II &  III hereof to continue to be true and correct.

ARTICLE V

CONDITIONS TO CLOSING

Section 5.1          Conditions to Obligations of Buyer.  The obligations of the Buyer to consummate the transactions contemplated herein are subject to satisfaction of the following conditions:

(a)          Consents.  All consents and approvals required in connection with the execution, delivery and performance of this Agreement shall have been obtained.

(b)          Compliance.  The Seller shall have complied with its covenants and agreements contained herein, and the representations and warranties contained in Article II hereof shall be true and correct in all material respects (except those representations and warranties qualified by materiality shall be true and correct in all respects) on the date hereof and as of the Closing Date.

Section 5.2          Conditions to Obligations of the Seller.  The obligations of the Seller to consummate the transactions contemplated herein are subject to satisfaction of the following conditions:

(a)          Corporate records.  The Seller shall have delivered to the Buyer all resolutions passed by the Board of Directors since the incorporation.

(b)          Compliance.  Buyer shall have complied with its covenants and agreements contained herein, and the representations and warranties contained in Article III hereof shall be true and correct in all material respects (except those representations and warranties qualified by materiality shall be true and correct in all respects) on the date hereof and as of the Closing Date.

(c)          Consents.  All consents and approvals required in connection with the execution, delivery and performance of this Agreement shall have been obtained.

ARTICLE VI

TERlirtINATIDllT

Section 6.1          Grounds for Termination.  This Agreement may be terminated at any time prior to the Closing Date:

(a)          By the mutual written agreement of the Buyer and the Seller;

(b)          By the Buyer if any of the conditions set forth in Section 5.1 hereof shall have become incapable of fulfillment and shall not have been waived by Buyer;

(c)          By the Seller if any of the conditions set forth in Section 5.2 hereof shall have become incapable of fulfillment and shall not have been waived by the Seller;

(d)          In the event that the Closing is not affected by 18^th April 2017, then this Agreement shall become null and void, having no effect whatsoever.  No party shall be liable to the other for any loss and/or damage.

ARTICLE VII GENERAL PROVISIONS

Section 7.1          Entire Agreement.  This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof.  This Agreement may not be modified, amended or terminated except by a written instrument specifically referring to this Agreement signed by all the parties hereto.

Section 7.2          Execution of Further Documents.  Each party agrees to execute all documents necessary to carry out the purpose of this Agreement and to cooperate with each other for the expeditious fulfilment of the terms of this Agreement.

Section 7.3          Notices.  All notices and other communications hereunder shall be in writing and shall be deemed to have been received only if and when (a) personally delivered, (b) on the fifth day after mailing, by mail, first class, postage prepaid or by certified mail return receipt requested, addressed in each case as follows (or to such other address as may be specified by like notice), (c) at the time receipt is acknowledged when delivered by private mail or courier service or (d) received by facsimile at the phone number listed below:

If to Buyer to:

c/o Dryships Inc.Athens licensed shipping office109 Kifissias Avenue and Sina street GR 151 24, Marousi,Athens, Greece

If to Seller to:

c/o TMS Cardiff Gas Ltd.Athens licensed shipping office80 Kifisias Avenue GR 151 25, Marousi, Athens, Greece

Section 7.4          Choice of Law; Resolution of Disputes.  This Agreement shall be governed by and construed under the laws of England and Wales.  All disputes, differences, controversies or claims arising out of or in connection with this Agreement shall be referred to arbitration in London, England in accordance with the rules of the London Maritime Arbitrators Association (LMAA).

Section 7.5          Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

For the Buyer
By:	/s/ Dimitrios Dreliozis
Name:	Dimitrios Dreliozis
Title:	Attorney-in-fact

For the Seller
By:	/s/ Georgios Kourelis
Name:	Georgios Kourelis
Title:	Attorney-in-fact

For the Seller's guarantor
By:	/s/ Georgios Kourelis
Name:	Georgios Kourelis
Title:	Attorney-in-fact

For the Buyer's guarantor
By:	/s/ Dimitrios Dreliozis
Name:	Dimitrios Dreliozis
Title:	Vice President-Finance

Schedule 1

CAPITALIZATION

CARDIFF LPG SHIPS LTD

Total authorized share capital:

500 registered shares with par value $20.00 per share

Total issued and outstanding share capital:

500 common shares, par value $20.00 per share, registered in the name of ENTREPRENEURIAL SPIRIT HOLDING INC.

EX-4.67

Exhibit 4.67

Dated 24 January 2018

TORTUGA OWNERS INC.CECILIA OWNING COMPANY LIMITEDFAROS OWNERS INC. andREGINA OWNERS INC.

as joint and several Borrowers

and

THE BANKS AND FINANCIAL INSTITUTIONSlisted in Schedule 1 as Lenders

and

CREDIT SUISSE AG as Agent, Security Trustee and Swap Bank

LOAN AGREEMENT

relating toa senior secured term loan facility of up to $90,000,000to refinance part of the acquisition costs of m.ts. "SHIRAGA", "SAMSARA", "STAMOS" and "BALLA"

WATSON FARLEY& WILLIAMS

Index

Clause		Page
1	Interpretation	1
2	Facility	19
3	Position of the Lenders and the Swap Bank	20
4	Drawdown	21
5	Interest	22
6	Interest Periods	24
7	Default Interest	25
8	Repayment, Prepayment, Deferral and Cash sweep	27
9	Conditions Precedent	32
10	Representations and Warranties	33
11	General Undertakings	35
12	Corporate Undertakings	41
13	Insurance	43
14	Ship Covenants	48
15	Security Cover	53
16	Payments and Calculations	55
17	Application of Receipts	57
18	Application of Earnings, Swap Payments	58
19	Events of Default	59
20	Fees and Expenses	66
21	Indemnities	67
22	No Set-Off or Tax Deduction	69
23	Illegality, etc	72
24	Increased Costs	73
25	Set-Off	75
26	Transfers and Changes in Lending Offices	76
27	Variations and Waivers	80
28	Notices	81
29	Joint and Several Liability	84
30	Supplemental	85
31	Bail In	86
32	Law and Jurisdiction	86
Schedules
Schedule 1 Lenders and Commitments		88
Schedule 2 Drawdown Notice		89
Schedule 3 Condition Precedent Documents		91
Part A		91
Part B		92
Execution
Execution Pages		98

THIS LOAN AGREEMENT is made on 24 January 2018

PARTIES

(1) TORTUGA OWNERS INC., CECILIA OWNING COMPANY LIMITED, FAROS OWNERS INC., and REGINA OWNERS INC., each a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960, as joint and several Borrowers.

(2) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Lenders.

(3) CREDIT SUISSE AG, as Agent, Security Trustee and Swap Bank.

BACKGROUND

(A) The Lenders have agreed to make available to the Borrowers a senior secured term loan facility of up to the lesser of (i) $90,000,000 and (ii) 50% of the aggregate Initial Market Value of the Ships, in four Advances as follows:

(i) an advance in an amount of up to $28,000,000 to refinance part of the acquisition cost of Ship A by Borrower A;

(ii) an advance in an amount of up to $26,000,000 to refinance part of the acquisition cost of Ship B by Borrower B;

(iii) an advance in an amount of up to $15,000,000 to refinance part of the acquisition cost of Ship C by Borrower C; and

(iv) an advance in an amount of up to US$21,000,000 to refinance part of the acquisition cost of Ship D by Borrower D.

(B) The Swap Bank has also entered or may enter into a master agreement pursuant to which it may enter into Transactions (as hereinafter defined) with the Borrowers from time to time.

OPERATIVE PROVISIONS

IT IS AGREED as follows:

1 INTERPRETATION

1.1 Definitions

Subject to Clause 1.5, in this Agreement:

"Account Security Deed"means a deed creating security, in respect of, inter alia, each Earnings Account and each Minimum Liquidity Account in the Agreed Form and in the plural means all of them;

"Advance"means the principal amount of each borrowing by the Borrowers under this Agreement and includes each of Advance A, Advance B, Advance C and Advance D or, as the context may require, the principal amount thereof outstanding at any relevant time;

"Advance A" means the amount which may be drawn by the Borrowers in accordance with Clause 2.1(a) to refinance part of the acquisition cost of Ship A or, as the context may require, the principal amount thereof outstanding at any relevant time;

"Advance B"means the amount which may be drawn by the Borrowers in accordance with Clause 2.1(b) to refinance part of the acquisition cost of Ship B or, as the context may require, the principal amount thereof outstanding at any relevant time;

"Advance C"means the amount which may be drawn by the Borrowers in accordance with Clause 2.1(c) to refinance the acquisition cost of Ship C or, as the context may require, the principal amount thereof outstanding at any relevant time;

"Advance D"means the amount which may be drawn by the Borrowers in accordance with Clause 2.1(d) to refinance part of the acquisition cost of Ship D or, as the context may require, the principal amount thereof outstanding at any relevant time;

"Affected Lender"has the meaning given to it in Clause 5.7;

"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;

"Agency and Trust Agreement"means the agency and trust agreement dated the same date as this Agreement and made between the same parties;

"Agent"means Credit Suisse AG, with its registered office at Paradeplatz 8, 8001 Zurich, Switzerland and acting in such capacity through its office at St. Alban-Graben 1-3, Basel 4051, Switzerland, or any successor of it appointed under clause 5 of the Agency and Trust Agreement;

"Agreed Form"means in relation to any document, that document in the form approved in writing by the Agent (acting on the instructions of the Majority Lenders) or as otherwise approved in accordance with any other approved procedure specified in any relevant provision of any Finance Document;

"Approved Flag"means the Maltese flag or, as at the date of this Agreement, the Marshall Islands flag or the Cayman Islands flag or any other flag the Majority Lenders may, in their absolute discretion, approve as the flag on which a Ship may be registered;

"Approved Flag State"means the Republic of Malta or, as at the date of this Agreement, the Republic of the Marshall Islands and the Republic of Cayman Islands or any other country in which the Majority Lenders may, in their absolute discretion, approve that a Ship may be registered;

"Approved Manager"means, in relation to a Ship, TMS Tankers Ltd., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960, or any other company which is a member of the Group, or any other company nominated by the Borrowers and approved by the Agent (acting on the instructions of the Majority Lenders) or any other company which the Agent (with the authorisation of the Majority Lenders) may, at the request of the Borrowers, approve from time to time (it being agreed that company which is in the same ultimate beneficial ownership and having technical management skills and expertise of similar levels as TMS Tankers Ltd. shall be deemed to be approved by the Majority Lenders) as the technical and/or commercial manager of that Ship;

2

"Approved Manager's Undertaking"means, in respect of a Ship, a letter of undertaking executed by the Approved Manager in favour of the Security Trustee and agreeing certain matters in relation to the Approved Manager serving as the manager of that Ship and subordinating the rights of the Approved Manager against that Ship and the Borrower owning that Ship to the rights of the Creditor Parties under the Finance Documents and assigning the interests of the Approved Manager in that Ship's Insurances in favour of the Security Trustee, in the Agreed Form;

"Approved Valuer"means each of Clarksons Valuations Limited of London, Arrow Shipbroking Group of London, Lorentzen & Stemoco of Oslo, Galbraiths Limited of London, Braemar ACM Shipbroking of London, Simpsons, Spence and Young of London and Fearnleys A/S of Oslo (subject to periodical review by the Agent in respect of any of these companies becoming a Restricted Party) or any other firm or firms of reputable and independent sale and purchase shipbrokers nominated by the Borrowers and approved in writing by the Agent, acting with the authorisation of the Majority Lenders;

"Assignable Charter"means, in relation to a Ship, any charterparty or other contract of employment in relation to that Ship for a term exceeding 12 months or capable of exceeding 12 months in duration (including any optional extensions);

"Availability Period"means, in relation to each Advance, the period commencing on the date of this Agreement and ending on:

(a) 31 March 2018 (or such later date as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrowers); or

(b) if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated;

"Balloon Instalment"has the meaning given to it in Clause 8.1;

"Bail-In Action"means the exercise of any Write-down and Conversion Powers;

"Bail-In Legislation" means:

(a) in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

(b) in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation;

"Borrower"means each of Borrower A, Borrower B, Borrower C and Borrower D and, in the plural, means all of them;

"Borrower A"means Tortuga Owners Inc., a corporation incorporated and existing under the laws of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

3

"Borrower B"means Cecilia Owning Company Limited, a corporation incorporated and existing under the laws of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Borrower C"means Faros Owners Inc., a corporation incorporated and existing under the laws of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Borrower D"means Regina Owners Inc., a corporation incorporated and existing under the laws of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Business Day"means a day (other than a Saturday or a Sunday) (i) which is not a public holiday in Athens and (ii) on which banks are open for general business in London, Zurich, Basel and, only in respect of the Drawdown Date, Malta and, in respect of a day on which a payment in Dollars is required to be made under a Finance Document, also in New York City;

"Charterparty Assignment"means, in relation to an Assignable Charter, an assignment of the rights of the Borrower who is a party to that Assignable Charter and any guarantee of the obligations of the charterer under such Assignable Charter, executed or to be executed by that Borrower in favour of the Security Trustee in the Agreed Form and, in the plural, means all of them;

"Code"means the US Internal Revenue Code of 1986;

"Commitment"means, in relation to a Lender, the amount set opposite its name in Schedule 1, or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and "Total Commitments"means the aggregate of the Commitments of all the Lenders);

"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 21.4;

"Contribution"means, in relation to a Lender, the part of the Loan which is owing to that Lender;

"Corporate Guarantor"means Dryships Inc., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Creditor Party"means the Agent, the Security Trustee, the Swap Bank or any Lender, whether as at the date of this Agreement or at any later time and, in the plural, means any or all of them;

"Defaulting Party"shall have the meaning given in the Master Agreement;

"Deferred Amount"has the meaning given in Clause 8.13;

"Dollars"and "$" means the lawful currency for the time being of the United States of America;

4

"Drawdown Date"means, in relation to an Advance, the date requested by the Borrowers for that Advance to be made, or (as the context requires) the date on which that Advance is actually made;

"Drawdown Notice"means a notice in the form set out in Schedule 2 (or in any other form which the Agent approves or reasonably requires);

"Earnings"means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower owning that Ship or the Security Trustee and which arise out of the use or operation of that Ship, including (but not limited to):

(a) except to the extent that they fall within paragraph (b):

(i) all freight, hire and passage moneys;

(ii) compensation payable to any Borrower or the Security Trustee in the event of requisition of a Ship for hire;

(iii) remuneration for salvage and towage services;

(iv) demurrage and detention moneys;

(v) damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of a Ship;

(vi) all moneys which are at any times payable under Insurances in respect of loss of hire; and

(vii) contributions of any nature whatsoever in respect of general average; and

(b) if and whenever a Ship is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vii) 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 the Ship;

"Earnings Account"means, in relation to a Ship, an account in the name of the Borrower owning that Ship with the Agent in Basel and designated "Earnings Account" or any other account (with that or another office of the Agent or with a bank or financial institution other than the Agent) which is designated by the Agent as the Earnings Account in relation to that Ship for the purposes of this Agreement and, in the plural means, any of them;

"EEA Member Country"means any member state of the European Union, Iceland, Lichtenstein and Norway;

"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,

5

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 that 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 any Borrower and/or any Security Party 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 that Ship is actually or potentially liable to be arrested and/or where any Borrower and/or any Security Party 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;

"EU Bail-In Legislation Schedule"means the document described as such and published by the Loan Market Association (or any successor person) from time to time;

"Event of Default"means any of the events or circumstances described in Clause 19.1;

"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 Deduction"means a deduction or withholding from a payment under any Finance Document required by FATCA;

6

"FATCA Exempt Party"means a party to a Finance Document that is entitled to receive payments free from any FATCA Deduction;

"Final Maturity Date"means, in relation to each Advance, the earlier of (i) the date falling on the fifth anniversary of the Drawdown Date of that Advance and (ii) 31 March 2023;

"Finance Documents" means:

(a) this Agreement;

(b) the Agency and Trust Agreement;

(c) the Guarantees;

(d) the Master Agreement;

(e) the Master Agreement Assignment;

(f) the Mortgages;

(g) the General Assignments;

(h) the Account Security Deeds;

(i) the Approved Manager's Undertakings;

(j) any Negative Pledge;

(k) any Charterparty Assignment; and

(l) any other document (whether creating a Security Interest or not) which is executed at any time by any Borrower, a Shareholder, any Approved Manager, 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 Lenders and/or the Swap Bank 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 or dematerialised equivalent 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

7

(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 paragraphs (a) to (e) if the references to the debtor referred to the other person;

"GAAP" means generally accepted international accounting principles as from time to time set forth by the statements of International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Committee;

"General and Administrative Expenses"means, in relation to a Borrower, the general and administrative expenses incurred by that Borrower during any 6-month period commencing on 1 January or 1 July in any financial year of that Borrower as disclosed at any relevant time to the Agent, such expenses to be in all respects acceptable to the Agent;

"General Assignment"means, in relation to a Ship, a general assignment of the Earnings, the Insurances and any Requisition Compensation of that Ship, in the Agreed Form and, in the plural means, all of them;

"Group" means (a) the Corporate Guarantor and its subsidiaries for the time being or (b) following the release of the Corporate Guarantor from the Guarantee to which it is a party pursuant to a Qualified IPO, the Shareholder and its subsidiaries for the time being or (c) following the release of the Corporate Guarantor from the Guarantee to which it is a party pursuant to a Permitted Ultimate Beneficial Ownership Change, the Approved Manager and those entities whose ships are managed by the Approved Manager for the time being (to the extent beneficially owned by the same persons as the Borrowers) and "member of the Group"shall be construed accordingly;

"Guarantee"means an irrevocable and unconditional guarantee of the Borrowers' liabilities under this Agreement and the other Finance Documents executed or to be executed by each of the Corporate Guarantor and the Shareholder (including, in respect of a Guarantee provided by the Shareholder, a negative pledge in respect of the shares of each Borrower) and, following a Permitted Ultimate Beneficial Ownership Change in accordance with this Agreement, the Approved Manager in the Agreed Form, and, in the plural, means all of them;

"Guarantor"means the Corporate Guarantor, the Shareholder and, following a Permitted Ultimate Beneficial Ownership Change in accordance with this Agreement, the Approved Manager and, in the plural, means all of them;

"Holding Company"means, in relation to a person, any other person in relation to which it is a subsidiary;

"IACS" means the International Association of Classification Societies;

"Initial Market Value"means, in relation to a Ship, the Market Value thereof determined by the valuations of that Ship referred to in paragraph 7 of Part B, Schedule 3;

"Insurances"means, in relation to a Ship:

(a) all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, which are effected in respect of that Ship, the Earnings or otherwise in relation to it, whether before, on or after the date of this Agreement, the Ship; and

8

(b) all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement;

"Interest Period"means a period determined in accordance with Clause 6;

"ISM Code" means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation as the same may be amended, supplemented or suspended from time to time (and the terms "safety management system", "Safety Management Certificate"and "Document of Compliance"have the same meanings as are given to them in the ISM Code);

"ISPS Code"means the International Ship and Port Facility Security Code as adopted by the International Maritime Organisation, as the same may be amended, supplemented from time to time;

"ISSC" means a valid and current International Ship Security Certificate issued under the ISPS Code;

"Lender"means, subject to Clause 26.6, a bank or financial institution listed in Schedule 1 and acting through its branch indicated in Schedule 1 (or through another branch notified to the Agent under Clause 26.14) or its transferee, successor or assign;

"LIBOR"means in relation to a particular period:

(a) the applicable Screen Rate at or about 11:00 a.m. (London time) on the Quotation Date for such period; or

(b) if no Screen Rate is available for that period, LIBOR for such period shall be the arithmetic mean (rounded upwards to four decimal places) of the rates quoted to the Agent by the Reference Banks at the request of the Agent as the Reference Banks' offered rates for deposits of Dollars in an amount equal or approximately equal to the amount in relation to which LIBOR is to be determined and for a period equivalent to such period to prime banks in the London Interbank Market at or about 11:00 a.m. (London time) on the Quotation Date for such period,

provided however that, for all purposes under this Agreement, if the applicable of the rates referred to under (a) and (b) above is below zero (0), LIBOR shall be deemed to be zero (0), except where the following circumstances exist:

(i) no Event of Default has occurred under Clause 19.1(a); and

(ii) there is only one Lender and that Lender is also the Swap Bank (or an Affiliate of the Swap Bank); and

(iii) one or more Transactions for the purposes of interest rate hedging have been entered into with the Swap Bank and are then in effect,

in which case this proviso shall not apply to a part of the Loan which is equal to the notional amount in Dollars of all such Transactions at any relevant time;

"Loan" means the principal amount for the time being outstanding under this Agreement;

9

"Major Casualty"means, in relation to a Ship, any casualty to that 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, in relation to Ship A, $1,000,000 and, in relation to Ship B, Ship C and Ship D, $500,000 or the equivalent in any other currency;

"Majority Lenders" means:

(a) before an Advance has been made, Lenders whose Commitments total 66.67 per cent. of the Total Commitments; and

(b) after an Advance has been made, Lenders whose Contributions total 66.67 per cent. of the Loan;

"Mandatory Cost"means the cost as determined by the Lenders of complying with applicable regulatory requirement(s) of the Swiss National Bank, the Swiss Financial Market Supervisory Authority (FINMA) or any other relevant regulatory authority;

"Margin"means two point five per cent. (2.5%) per annum;

"Market Value"means, in relation to a Ship, at any time the market value determined from time to time in accordance with Clause 15.5;

"Master Agreement"means the ISDA master agreement (in the form of the 2002 version, as amended and supplemented from time to time by the schedules and annexes thereto), to be signed between the Borrowers and the Swap Bank, including all Transactions from time to time entered into and Confirmations from time to time exchanged under such master agreement;

"Master Agreement Assignment"means, the assignment of the Borrowers' rights under the Master Agreement in the Agreed Form;

"Minimum Liquidity"means the amount required to be maintained in the Minimum Liquidity Accounts pursuant to Clause 12.4;

"Minimum Liquidity Account"means an account in the name of each Borrower with the Agent in Basel and designated "Minimum Liquidity Account" or any other account (with that or another office of the Agent or with a bank or financial institution other than the Agent) which is designated by the Agent (acting on the instructions of the Lenders) as a Minimum Liquidity Account for the purposes of this Agreement and, in the plural, means all of them;

"Mortgage"means, in relation to a Ship, a first preferred or, as the case may be, priority ship mortgage on that Ship under the applicable Approved Flag (and, if required pursuant to the laws of the applicable Approved Flag State, a deed of covenant collateral thereto) executed or to be executed by the Borrower owning that Ship in favour of the Security Trustee, in the Agreed Form and, in the plural, means all of them;

"Mortgaged Ship"means any Ship which is subject to a Mortgage at the relevant time;

"Negative Pledge"means, in respect of a Borrower, a negative pledge in respect of the shares of that Borrower to be executed by the direct and legal holder of all the issued share capital of each Borrower following either a Qualified IPO or a Permitted Ultimate Beneficial Ownership Change unless, in each case, the Shareholder remains the direct and legal holder of all the issued share capital of each Borrower, in the Agreed Form;

10

"Negotiation Period"has the meaning given in Clause 5.10;

"Non-US Person Representation Letter"means the Non-US Person Transactions Representation Letter to be executed by the Borrowers in the such form as the Swap Bank may require;

"Notifying Lender"has the meaning given in Clause 23.1 or Clause 24.1 as the context requires;

"Operating Expenses"means, in respect of each Ship, the aggregate expenditure necessarily incurred by the Borrower which is the owner of that Ship in operating, insuring, maintaining, repairing and generally trading its Ship (including, without limitation, any expenses in respect of any dry-docking and special survey paid in respect of that Ship);

"Payment Currency"has the meaning given in Clause 21.4;

"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 Borrower owing that Ship in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.14(g); and

(f) 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;

"Permitted Ultimate Beneficial Ownership Change"means the Ultimate Beneficial Owner becoming the ultimate legal, direct or indirect, beneficial owner of the total issued share capital of each Borrower and/or the Shareholder by way of a transfer of all the shares of each Borrower and/or the Shareholder to entities which are wholly beneficially owned by the Ultimate Beneficial Owner.

"Pertinent Document"means:

(a) any Finance Document;

(b) any policy or contract of insurance contemplated by or referred to in Clause 13 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

11

(c) any document which has been or is at any time sent by or to a Servicing Bank 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 has the centre of its main interests or 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 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 branch or 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, whether as a main or territorial or ancillary proceedings or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c) above;

"Pertinent Matter"means:

(a) any transaction or matter contemplated by, arising out of, or 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;

"Potential Event of Default"means an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default;

"Qualified IPO"means the first public offering in respect of the issued share capital of the Shareholder on The Nasdaq Stock Market or a stock exchange acceptable to the Agent (acting on the instructions of the Majority Lenders) effected in accordance with clause 12.4 of the Guarantee entered into by the Shareholder.

"Quotation Date"means, in relation to any period for which an interest rate is to be determined under any provision of a Finance Document, the day which is 2 Business Days before the first day of that period, unless market practice differs in the London Interbank Market for a currency, in which case the Quotation Date will be determined by the Agent in accordance with market practice in the London Interbank Market (and if quotations would

12

normally be given by leading banks in the London Interbank Market on more than one day, the Quotation Date will be the last of those days);

"Reference Banks"means, subject to Clause 26.16, the Lenders and such other banks as may be designated as Reference Banks by all the Lenders from time to time;

"Relevant Person"has the meaning given to it in Clause 19.9;

"Repayment Date"means a date on which a repayment is required to be made under Clause 8;

"Repayment Instalment"has the meaning given to it in Clause 8.1;

"Requisition Compensation"includes 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";

"Resolution Authority"means any body which has authority to exercise any Write-down and Conversion Powers;

"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 for LIBOR) for Dollars for the relevant period displayed on page LIBOR01 of the Thomson 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 Thomson Reuters. If such page or service ceases to be available, the Agent (acting with the authorisation of the Majority Lenders) may specify another page or service displaying the relevant rate;

"Secured Liabilities"means all liabilities which the Borrowers, the Security Parties or any of them have, at the date of this Agreement or at any later time or times as the same may be transferred or novated, under or in connection with any Finance Document (including without limitation, any overdraft balance in any Earnings Account) 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, at any relevant time, the aggregate of (i) the aggregate of the Market Value of the Mortgaged Ships and (ii) the net realisable value of any additional security provided at that time under Clause 15, at that time expressed as a percentage of the aggregate amount of the Loan and any Swap Exposure;

"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 the 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

13

(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 Shareholder, any Approved Manager and any other person (except a Creditor Party) 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 Agent notifies the Borrowers, the Security Parties and the Lenders that:

(a) all amounts which have become due for payment by any 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 any Borrower nor any Security Party has any future or contingent liability under Clause 20, 21 or 22 or any other provision of this Agreement or another Finance Document; and

(d) the Agent, the Security Trustee and the Majority Lenders do 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 a 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;

"Security Trustee"means Credit Suisse AG, with its registered office at Paradeplatz 8, 8001 Zurich, Switzerland and acting in such capacity through its office at St. Alban-Graben 1-3, Basel 4051, Switzerland, or any successor of it appointed under clause 5 of the Agency and Trust Agreement;

"Servicing Bank"means the Agent or the Security Trustee;

"Shareholder"means Oil Tankers Investments Inc., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;

"Ship" means each of Ship A, Ship B, Ship C and Ship D and, in the plural means, all of them;

"Ship A"means the 2011-built, 320,137 metric tons deadweight VLCC tanker registered in the ownership Borrower A under an Approved Flag (which, at the date of this Agreement, is the Maltese flag) with the name "SHIRAGA";

"Ship B"means the 2017-built, 159,855 metric tons deadweight Suezmax oil tanker registered in the ownership of Borrower B under an Approved Flag (which, at the date of this Agreement, is the Maltese flag) with the name "SAMSARA";

"Ship C" means the 2012-built, 115,666 metric tons deadweight Aframax oil tanker registered in the ownership Borrower C under an Approved Flag (which, at the date of this Agreement, is the Maltese flag) with the name "STAMOS";

14

"Ship D"means the 2017-built, 113,293 metric tons deadweight Aframax oil tanker registered in the ownership Borrower D under an Approved Flag (which, at the date of this Agreement, is the Maltese flag) with the name "BALLA";

"SMC" means a safety management certificate issued in respect of a Ship in accordance with Rule 13 of the ISM Code;

"Swap Bank"means Credit Suisse AG, with its registered office at Paradeplatz 8, 8001 Zurich, Switzerland and acting in such capacity through its office Uetlibergstrasse 231, 8070 Zurich, Switzerland;

"Swap Exposure"means, as at any relevant date, the amount determined and certified by the Swap Bank to be the aggregate net amount in Dollars which would be payable by the Borrowers to the Swap Bank under the Master Agreement (and calculated in accordance with) Section 6 (e)(ii)(1) (Payments on Early Termination) (but without reference to clause (3) of Section 6(e)(ii) of the Master Agreement if an Early Termination Date (as defined in the Master Agreement) had occurred on the relevant date in relation to all outstanding Transactions, the Borrowers being considered for this purposes as the Affected Party (as defined in the Master Agreement) and all Transactions being considered as Affected Transactions (as defined in the Master Agreement). For the purposes of this provision the Termination Currency (as defined in the Master Agreement) will deemed to be the Dollar;

"Total Loss"means, in relation to a Ship:

(a) actual, constructive, compromised, agreed or arranged total loss of that Ship;

(b) any expropriation, confiscation, requisition or acquisition of that 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 45 days redelivered to the full control of the Borrower owning that Ship);

(c) any condemnation of that Ship by any tribunal or by any person or person claiming to be a tribunal whose decision or judgement is enforceable; and

(d) any arrest, capture, seizure, piracy or detention of that Ship (including any hijacking or theft or act of piracy) unless it is within 45 days redelivered to the full control of the Borrower owning that Ship;

"Total Loss Date"means, in relation to a Ship:

(a) in the case of an actual loss of a Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;

(b) in the case of a constructive, compromised, agreed or arranged total loss of a Ship, the earliest of:

(i) the date on which a notice of abandonment is given to the insurers; and

15

(ii) the date of any compromise, arrangement or agreement made by or on behalf of a Borrower owning that Ship with that Ship's insurers in which the insurers agree to treat that 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 it appears to the Agent that the event constituting the total loss occurred;

"Transaction"means any transaction entered into by the Borrowers pursuant to the Master Agreement with the Swap Bank;

"Transfer Certificate"has the meaning given in Clause 26.2;

"Trust Property"has the meaning given in clause 3.1 of the Agency and Trust Agreement;

"Ultimate Beneficial Owner"means Mr. George Economou, a citizen of Greece residing, as at the date of this Agreement, at 38 Boulevard Du Jardin Exotique, 98000 Monaco, and any of his linear descendants;

"US"means the United States of America;

"US Tax Obligor"means a Borrower if it is resident for tax purposes in the US or if some or all of its payments under the Finance Documents are from sources within the US for US federal income tax purposes; and

"Write-down and Conversion Powers"means:

(a) in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and

(b) in relation to any other applicable Bail-In Legislation:

(i) any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and

(ii) any similar or analogous powers under that Bail-In Legislation.

1.2 Construction of certain terms

In this Agreement:

"administration notice"means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in connection with, the appointment of an administrator;

16

"approved"means, for the purposes of Clause 13, approved in writing by the Agent;

"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 or fax;

"excess risks"means, in relation to a Ship, the proportion of claims for general average, salvage and salvage charges which are not recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which a 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 owning that Ship is obliged to effect, under Clause 13 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, which is a member of the International Group of protection and indemnity associations and approved by the Agent, 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 7 of the International Hull Clauses (1/11/02 or 1/11/03) or clause 9 of the Institute Time

17

Clauses (Hulls) (1/11/95) or clause 9 of the Institute Time Clauses (Hulls) (1/10/83) 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 29 of the International Hull Clauses (1/11/02 or 1/11/03) or clause 24 of the Institute Time Clauses (Hulls)(1/11/1995) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83) or any equivalent provision.

1.3 Meaning 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.

1.4 Meaning 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.

18

1.5 General Interpretation

In this Agreement:

(a) references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented (following the agreement of the parties thereto), whether before the date of this Agreement or otherwise;

(b) 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;

(c) words denoting the singular number shall include the plural and vice versa;

(d) Clauses 1.1 to 1.5 apply unless the contrary intention appears;

(e) In the case of any conflict between the Loan Agreement and the other Finance Documents, the provisions of the Loan Agreement shall prevail; and

(f) 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.

1.6 Headings

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

2.1 Amount of facility

Subject to the other provisions of this Agreement, the Lenders shall make available to the Borrowers a loan facility in an amount up to the lesser of (i) $90,000,000 and (ii) 50 per cent. of the aggregate Initial Market Value of the Ships, in four Advances as follows:

(a) Advance A shall be in an amount up to $28,000,000;

(b) Advance B shall be in an amount up to $26,000,000;

(c) Advance C shall be in an amount up to $15,000,000; and

(d) Advance D shall be in an amount up to $21,000,000.

If the aggregate of the Loan on the Drawdown Date is less than $90,000,000, each Advance will be reduced pro rata by an amount equal to the amount by which $90,000,000 exceeds the amount of the Loan on the Drawdown Date.

19

2.2 Lenders' participation in Advances

Subject to the other provisions of this Agreement, each Lender shall participate in each Advance in the proportion which, as at the Drawdown Date, its Commitment bears to the Total Commitments.

2.3 Purpose of Advances

The Borrowers undertake with each Creditor Party to use each Advance only for the purpose stated in the preamble to this Agreement.

3 POSITION OF THE LENDERS AND THE SWAP BANK

3.1 Interests of Lenders and the Swap Bank several

The rights of the Lenders and the Swap Bank under this Agreement and under the Master Agreement are several.

3.2 Individual Lender's or Swap Bank's right of action

Each Lender and the Swap Bank shall be entitled to sue for any amount which has become due and payable by the Borrowers to it under this Agreement or under the Master Agreement without joining the Agent, the Security Trustee or any other Creditor Party as additional parties in the proceedings.

3.3 Proceedings by individual Lender requiring Majority Lenders' consent

Except as provided in Clause 3.2, no Lender and no Swap Bank may commence proceedings against any Borrower or any Security Party in connection with a Finance Document without the prior consent of the Majority Lenders.

3.4 Obligations of Lenders and Swap Bank several

3.5 The obligations of the Lenders and the Swap Bank under this Agreement and of the Swap Bank under the Master Agreement are several; and a failure of a Lender to perform its obligations under this Agreement or of the Swap Bank to perform its obligations under the Master Agreement shall not result in:

(a) the obligations of the other Lenders or (as the case may be) the Swap Bank being increased; nor

(b) any Borrower, any Security Party or any other Lender or the Swap Bank being discharged (in whole or in part) from its obligations under any Finance Document,

3.6 and in no circumstances shall a Lender or the Swap Bank have any responsibility for a failure of another Lender or the Swap Bank to perform its obligations under this Agreement or under the Master Agreement.

20

4 DRAWDOWN

4.1 Request for Advance

Subject to the following conditions, the Borrowers may request an Advance to be made by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (Swiss time) 3 Business Days prior to the intended Drawdown Date.

4.2 Availability

The conditions referred to in Clause 4.1 are that:

(a) the Drawdown Date in relation to an Advance has to be a Business Day during the Availability Period;

(b) each Advance shall be drawn in a single amount which does not exceed the amount applicable thereto referred to in Clause 2.1 and shall be used for the purpose referred to in the preamble to this Agreement;

(c) all the Advances shall be drawn down on the same Drawdown Date;

(d) any amount of an Advance which is not drawn at the Drawdown Date in respect of that Advance shall be cancelled and may not be borrowed by the Borrowers at a later stage; and

(e) the aggregate amount of the Advances shall not exceed the Total Commitments.

4.3 Notification to Lenders of receipt of a Drawdown Notice

The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:

(a) the amount of the Advance and the Drawdown Date;

(b) the amount of that Lender's participation in the Advance; and

(c) the duration of the first Interest Period.

4.4 Drawdown Notice irrevocable

Each Drawdown Notice must be signed by a duly authorised person on behalf of each Borrower; and once served, no Drawdown Notice can be revoked without the prior consent of the Agent, acting on the authority of the Majority Lenders.

4.5 Lenders to make available Contributions

Subject to the provisions of this Agreement, each Lender shall, on and with value on each Drawdown Date, make available to the Agent for the account of the Borrowers the amount due from that Lender on that Drawdown Date under Clause 2.2.

4.6 Disbursement of Advance

Subject to the provisions of this Agreement, the Agent shall on each Drawdown Date make available to the Borrowers the amounts which the Agent receives from the Lenders under Clause 4.5; and payment to the Borrowers shall be made:

21

(a) to the account which the Borrowers specify in the relevant Drawdown Notice; and

(b) in the like funds as the Agent received the payments from the Lenders.

4.7 Disbursement of Advance to third party

The payment by the Agent under Clause 4.6 to the account which the Borrowers specify in the relevant Drawdown Notice shall constitute the making of the Advance and the Borrowers shall at that time become indebted, as principal and direct obligors, to each Lender in an amount equal to that Lender's Contribution.

5 INTEREST

5.1 Payment of normal interest

Subject to the provisions of this Agreement, interest on an Advance in respect of each Interest Period shall be paid by the Borrowers on the last day of that Interest Period.

5.2 Normal rate of interest

Subject to the provisions of this Agreement, the rate of interest on each Advance in respect of an Interest Period shall be the aggregate of (i) the Margin, (ii) the Mandatory Cost (if any) and (iii) LIBOR for that Interest Period.

5.3 Payment 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.

5.4 Notification of Interest Periods and rates of normal interest

The Agent shall notify the Borrowers and each Lender of:

(a) each rate of interest; and

(b) the duration of each Interest Period,

as soon as reasonably practicable after each of (a) and (b) is determined.

5.5 Obligation of Reference Banks to quote

Each of the Reference Banks which is a Lender shall use all reasonable efforts to supply the quotation required of it for the purposes of fixing a rate of interest under this Agreement.

5.6 Absence of quotations by Reference Banks

If any Reference Bank fails to supply a quotation, the Agent shall determine the relevant LIBOR on the basis of the quotations supplied by the other Reference Bank or Banks; but if 2 or more of the Reference Banks fail (or, if at any time there is only one Reference Bank, that Reference Bank fails) to provide a quotation, the relevant rate of interest shall be set in accordance with the following provisions of this Clause 5.

22

5.7 Market disruption

The following provisions of this Clause 5 apply if:

(a) no Screen Rate is available for an Interest Period and 2 or more of the Reference Banks do not (or, if at any time there is only one Reference Bank, that Reference Bank does not), before 1.00 p.m. (London time) on the Quotation Date, provide quotations to the Agent in order to fix LIBOR; or

(b) at least 1 Business Day before the start of an Interest Period, Lenders having Contributions together amounting to more than 33% per cent. of the Loan (or, if an Advance has not been made, Commitments amounting to more than 33% per cent. of the Total Commitments) notify the Agent that LIBOR fixed by the Agent would not accurately reflect the cost to those Lenders of funding their respective Contributions (or any part of them) during the Interest Period in the London Interbank Market before close of business on the Quotation Date for the Interest Period; or

(c) at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the "Affected Lender") that for any reason it is unable to obtain Dollars in the London Interbank Market in order to fund its Contribution (or any part of it) during the Interest Period.

5.8 Notification of market disruption

The Agent shall promptly notify the Borrowers and each of the Lenders and the Swap Bank stating the circumstances falling within Clause 5.7 which have caused its notice to be given.

5.9 Suspension of drawdown

If the Agent's notice under Clause 5.8 is served before an Advance is made:

(a) in a case falling within paragraphs (a) or (b) of Clause 5.7, the Lenders' obligations to make that Advance; and

(b) in a case falling within Clause 5.7(c), the Affected Lender's obligation to participate in that Advance,

shall be suspended while the circumstances referred to in the Agent's notice continue.

5.10 Negotiation of alternative rate of interest

If the Agent's notice under Clause 5.8 is served after an Advance is made, the Borrowers, the Agent, the Lenders or (as the case may be) the Affected Lender and the Swap Bank shall use reasonable endeavours to agree, within 30 days after the date on which the Agent serves its notice under Clause 5.8 (the "Negotiation Period"), an alternative interest rate or (as the case may be) an alternative basis for the Lenders or (as the case may be) the Affected Lender to fund or continue to fund their or its Contribution in respect of that Advance during the Interest Period concerned.

5.11 Application of agreed alternative rate of interest

Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.

23

5.12 Alternative rate of interest in absence of agreement

If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender, set an interest period and interest rate representing the cost of funding of the Lenders or (as the case may be) the Affected Lender in Dollars or in any available currency of their or its Contribution plus the applicable Margin and the Mandatory Cost (if any); and the procedure provided for by this Clause 5.12 shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.

5.13 Notice of prepayment

If the Borrowers do not agree with an interest rate set by the Agent under Clause 5.12, the Borrowers may give the Agent not less than 15 Business Days' notice of their intention to prepay the relevant Advance or the Loan at the end of the interest period set by the Agent.

5.14 Prepayment; termination of Commitments

A notice under Clause 5.13 shall be irrevocable; the Agent shall promptly notify the Lenders or (as the case may require) the Affected Lender of the Borrowers' notice of intended prepayment and:

(a) on the date on which the Agent serves that notice, the Total Commitments or (as the case may require) the Commitment in respect of the relevant Advance or (as applicable) of the Affected Lender shall be cancelled; and

(b) on the last Business Day of the interest period set by the Agent, the Borrowers shall prepay (without premium or penalty) the Loan or, as the case may be, the Affected Lender's Contribution to the Loan, together with accrued interest thereon at the applicable rate plus the Margin and the Mandatory Cost (if any).

5.15 Application of prepayment

The provisions of Clause 8 shall apply in relation to the prepayment.

6 INTEREST PERIODS

6.1 Commencement of Interest Periods

The first Interest Period applicable to an Advance shall commence on the Drawdown Date of that Advance and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.

6.2 Duration of normal Interest Periods

Subject to Clauses 6.3 and 6.4, each Interest Period shall be:

(a) 1, 3, 6 or 12 months as notified by the Borrowers to the Agent not later than 11.00 a.m. (CET) 3 Business Days before the commencement of the Interest Period; or

(b) 3 months, if the Borrowers fail to notify the Agent by the time specified in paragraph (a); or

24

(c) such other period as the Agent may, with the authorisation of the Majority Lenders agree with the Borrowers.

6.3 Duration of Interest Periods for repayment instalments

In respect of an amount due to be repaid under Clause 8 on a particular Repayment Date, an Interest Period shall end on that Repayment Date.

6.4 Non-availability of matching deposits for Interest Period selected

If, after the Borrowers have selected and the Lenders have agreed an Interest Period longer than 3 months, any Lender notifies the Borrowers by 11.00 a.m. (CET) 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 3 months.

6.5 No Interest Period to extend beyond the Final Maturity Date

No Interest Period in respect of each Advance shall end after the Final Maturity Date in respect of that Advance and any Interest Period which would otherwise extend beyond that Final Maturity Date shall instead end on that Final Maturity Date.

6.6 Transactions under the Master Agreement

(a) At any time during the Security Period the Borrowers may request the Swap Bank to conclude Transactions. The entry by the Swap Bank into the Master Agreement does not commit the Swap Bank to conclude Transactions, or even to offer terms for doing so, but does provide a contractual framework within which Transactions may be concluded and secured, assuming that the Swap Bank is willing to conclude any Transaction at the relevant time and that, if that is the case, mutually acceptable terms can be agreed at the relevant time.

(b) A Master Agreement shall:

(i) be with the Swap Bank;

(ii) be for a term not exceeding the Security Period;

(iii) in the case of interest rate swaps, have settlement dates coinciding with the dates when interest is payable in accordance with Clauses 5.1 and 5.3;

(iv) be in Agreed Form; and

(v) provide that the Termination Currency (as defined in the Master Agreement) shall be dollars.

7 DEFAULT INTEREST

7.1 Payment of default interest on overdue amounts

The Borrowers shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrowers under any Finance Document which the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:

25

(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 19.4, the date on which it became immediately due and payable.

7.2 Default rate of interest

Interest shall accrue on an overdue amount from (and including) the relevant date on which the overdue amount became due until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent 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 7.3(a) and (b); or

(b) in the case of any other overdue amount, the rate set out at Clause 7.3(b).

7.3 Calculation of default rate of interest

The rates referred to in Clause 7.2 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) applicable to it;

(b) the aggregate of the Margin and the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:

(i) LIBOR; or

(ii) if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time determine.

7.4 Notification of interest periods and default rates

The Agent shall promptly notify the Lenders and the Borrowers of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the Agent for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrowers are liable to pay such interest only with effect from the date of the Agent's notification.

7.5 Payment 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; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.

26

7.6 Compounding 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.

7.7 Application to Master Agreement

For the avoidance of doubt, this Clause 7 does not apply to any amount payable under the Master Agreement in respect of any continuing Transaction as to which section 9(h) (Interest and Compensation) of the Master Agreement shall apply.

8 REPAYMENT, PREPAYMENT, DEFERRAL AND CASH SWEEP

8.1 Amount of repayment instalments

The Borrowers shall repay:

(a) Advance A by:

(i) 20 equal consecutive quarterly instalments, each in an amount of $850,000 (each an "Advance A Repayment Instalment"and in the plural the "Advance A Repayment Instalments");and

(ii) a balloon instalment in an amount of $11,000,000 (the "Advance A Balloon Instalment");

(b) Advance B by:

(i) 20 equal consecutive quarterly instalments, each in an amount of $460,000 (each an "Advance B Repayment Instalment"and in the plural the "Advance B Repayment Instalments");and

(ii) a balloon instalment in an amount of $16,800,000 (the "Advance B Balloon Instalment");

(c) Advance C by:

(i) 20 equal consecutive quarterly instalments, each in an amount of $400,000 (each an "Advance C Repayment Instalment"and in the plural the "Advance C Repayment Instalments");and

(ii) a balloon instalment in an amount of $7,000,000 (the "Advance C Balloon Instalment");and

(d) Advance D by:

(i) 20 equal consecutive quarterly instalments, each in an amount of $375,000 (each an "Advance D Repayment Instalment"and in the plural the "Advance D Repayment Instalments"and together with the Advance A Repayment Instalments, Advance B Repayment Instalments and Advance C Repayment Instalments, the "Repayment Instalments"and each a "Repayment Instalment");and

(ii) a balloon instalment in an amount of $13,500,000 (the "Advance D Balloon Instalment"and together with the Advance A Balloon Instalment, the Advance B

27

Balloon Instalment and the Advance C Balloon Instalment, the "Balloon Instalments"and each a "Balloon Instalment"),

Provided that if the amount advanced is less than the maximum amount of an Advance each Repayment Instalment and Balloon Instalment relating to that Advance shall be reduced pro rata by an amount equal to the undrawn amount.

8.2 Repayment Dates

The first Repayment Instalment in respect of each Advance shall be repaid on the date falling 3 months after the Drawdown Date relevant to that Advance and each subsequent Repayment Instalment in respect of each Advance shall be repaid at 3 month intervals thereafter. The last Repayment Instalment in respect of an Advance, together with the relevant Balloon Instalment, shall be repaid on the respective Final Maturity Date.

8.3 Final Repayment Date

On the final Repayment Date, the Borrowers shall additionally pay to the Agent for the account of the Creditor Parties all other sums (if any) then accrued or owing under any Finance Document.

8.4 Voluntary prepayment

Subject to the following conditions, the Borrowers may prepay the whole or any part of any Advance on the last day of an Interest Period.

8.5 Conditions for voluntary prepayment

The conditions referred to in Clause 8.4 are that:

(a) a partial prepayment shall be in the minimum amount of $500,000 or a multiple thereof (or such other amount as the Lenders may agree with the Borrowers);

(b) the Agent has received from the Borrowers at least 3 days' prior written notice specifying the amount to be prepaid, the date on which the prepayment is to be made and the Advance against which the prepayment is to be applied;

(c) the Borrowers have provided evidence satisfactory to the Agent that any consent required by any Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any official regulation relevant to this Agreement which affects any Borrower or any Security Party has been complied with; and

(d) the Borrowers have complied with Clause 8.12 on or prior to the date of prepayment.

8.6 Effect of notice of prepayment

A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrowers on the date for prepayment specified in the prepayment notice.

28

8.7 Notification of notice of prepayment

The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the Borrowers under Clause 8.5(c).

8.8 Mandatory prepayment

The Borrowers shall be obliged to prepay the Relevant Amount if a Ship is sold or becomes a Total Loss:

(a) in the case of a sale, on or before the date on which the sale is completed by delivery of the Ship to the buyer; or

(b) in the case of a Total Loss, on the earlier of (i) the date falling 120 days after the Total Loss Date and (ii) the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss.

(c) In this Clause 8.8, the following definitions shall have the following meanings:

(d) "Relevant Amount"means an amount equal to the greater of:

(i) the outstanding amount of the Advance relevant to the Ship which is sold or has become a Total Loss; and

(ii) an amount which, after the application of the prepayment to be made pursuant to this Clause 8.8 results in the Security Cover Ratio being the greater of (i) 130 per cent. of the aggregate of (A) the Loan and (B) the Swap Exposure (with any such determination being binding and conclusive as regards the Borrowers) and (ii) the Security Cover Ratio which applied immediately prior to the sale or Total Loss of the relevant Ship.

8.9 Amounts payable on prepayment

A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 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 Clause 21.1(b) but without premium or penalty.

8.10 Application of partial prepayment

Each partial prepayment pursuant to:

(a) Clause 8.4 shall be applied first towards prepayment of any Deferred Amount and any balance shall be applied towards prepayment of the relevant Advance and within that Advance pro rata against the outstanding Repayment Instalments and the Balloon Instalment relevant to that Advance; and

(b) Clause 8.8 shall be applied first towards prepayment of any Deferred Amount, secondly against the Advance relevant to the Ship which is sold or has become a Total Loss and thereafter any balance shall be applied pro-rata between the remaining Advances and, within each Advance, pro rata against the Balloon Instalment and the outstanding Repayment Instalments relevant to that Advance.

29

8.11 No reborrowing

No amount repaid or prepaid may be reborrowed.

8.12 Unwinding of Transactions

Upon any repayment or prepayment under this Clause 8 or any other provision of this Agreement, the Agent (acting on the instructions of the Majority Lenders) may direct the Borrowers (at their own cost) to promptly procure that all action required or appropriate under the Master Agreement is taken so that the aggregate notional amount of the continuing Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortisation) exceed the amount of the Loan as reducing from time to time thereafter pursuant to Clause 8.

8.13 Deferral Option

The Borrowers may, by giving no less than 90 days written notice to the Agent (the "Deferral Notice") prior to the then next Repayment Date in respect of an Advance, elect to defer repayment of the Repayment Instalment in respect of that Advance due on that Repayment Date subject to the following conditions:

(a) the Borrowers providing the Agent with evidence satisfactory to it that the aggregate of the accumulated available cash of the Borrowers and the projected Earnings of the Ships during the 3 month period (the "Applicable Period") commencing on the Repayment Date of the Repayment Instalment which the Borrowers have elected to defer in accordance with this Clause 8.13 (the "Requested Deferred Instalment") are insufficient to cover the Requested Deferred Instalment and the Operating Expenses of the Ships for that Applicable Period, such evidence to include, without limitation (i) future performance and cash flow projections of each Ship which, in the opinion of the Agent, demonstrate the Borrowers' inability to pay (A) the Requested Deferred Instalment and (B) the General and Administrative Expenses incurred during the Applicable Period and the Operating Expenses of the Ships on a timely basis during the Applicable Period and (ii) performance and cash flow analysis in respect of the 6-month period ending on the date of the Deferral Notice demonstrating, in the opinion of the Agent, utilisation of accumulated cash balances by the Borrowers solely for payment of interest and principal under this Agreement, the General and Administrative Expenses incurred during the Applicable Period and the Operating Expenses of the Ships during that 6-month period which nevertheless results in the projected cash shortfall;

(b) a Deferral Notice may not be served in respect of a Repayment Instalment in relation to an Advance at any time prior to the second anniversary of the Drawdown Date of that Advance;

(c) no more than four Repayment Instalments in respect of an Advance may be deferred pursuant to this Clause 8.13;

(d) no more than two Repayment Instalments in respect of an Advance may be deferred in a calendar year;

(e) no more than three Repayment Instalments in respect of an Advance may be deferred consecutively;

(f) any Repayment Instalment in respect of an Advance which is deferred in accordance with this Clause 8.13 shall be added to the Balloon Instalment of that Advance which shall be increased by the amount of the deferred Repayment Instalment;

30

(g) any Repayment Instalment in respect of an Advance which is deferred in accordance with this Clause 8.13 and which is subsequently prepaid; and

(h) no Event of Default or Potential Event of Default having occurred on or prior to the date of the Deferral Notice or on the date on which such deferred Repayment Instalment would have been (except for such election of deferral by the Borrowers) due and payable,

(any amount deferred in accordance with this Clause 8.13 shall hereafter be referred to as the "Deferred Amount"and, in the plural, "Deferred Amounts").

8.14 Excess earnings recapture

(a) At all times while any Deferred Amounts remain outstanding, if, on an Excess Cash Flow Date, the aggregate Earnings for the Ships during the Cash Sweep Period ending on that Excess Cash Flow Date exceeds the aggregate of:

(i) the aggregate of the Operating Expenses of all the Ships and the General and Administrative Expenses of all the Borrowers incurred during such Cash Sweep Period; and

(ii) the aggregate amounts payable by the Borrowers pursuant to Clause 5 and Clause 8.1 during such Cash Sweep Period (excluding, for the avoidance of doubt, any Deferred Amount),

the Borrowers shall pay such excess amount (the "Excess Cash Flow"), as evidenced in the relevant Excess Cash Flow Notice, to the Agent within 45 days from the Excess Cash Flow Date and such Excess Cash Flow shall be applied pro rata towards prepayment of any Deferred Amount which is outstanding under each Advance

Within 5 Business Days from the date of preparation of each Borrower's individual annual unaudited financial statements and the unaudited financial statements in respect of the second quarter in each of their financial years, the Borrowers shall notify the Agent in writing (the "Discrepancy Notice") if there is a discrepancy between the Excess Cash Flow determined in accordance with those financial statements and that for the same period referred to in any Excess Cash Flow Notice delivered to the Agent in accordance with this Clause 8.14(a).

If such discrepancies result:

(i) in a higher Excess Cash Flow than the amount referred to in the relevant Excess Cash Flow Notice, the Borrowers shall pay to the Agent the surplus amount within 5 Business Days from the date of the Discrepancy Notice; or

(ii) in a lower Excess Cash Flow than the amount referred to in the relevant Excess Cash Flow Notice, the Excess Cash Flow determined in respect of the Cash Sweep Period ending on the then next Excess Cash Flow Date shall be reduced by such deficit.

The aggregate of all Excess Cash Flow applied in accordance with this Clause 8.14 shall not exceed the aggregate of the Deferred Amounts.

(b) In this Clause 8.14:

"Cash Sweep Period"means, at any time when any Deferred Amounts remain outstanding, each six-month period commencing on 1 January and 1 July in each financial year of the Borrowers;

31

"Excess Cash Flow Date"means the last day of each Cash Sweep Period; and

"Excess Cash Flow Notice"means a certificate to be provided by the Borrowers to the Agent on each Excess Cash Flow Date evidencing, to the satisfaction of the Agent, the Excess Cash Flow available on such date.

9 CONDITIONS PRECEDENT

9.1 Documents, fees and no default

Each Lender's obligation to contribute to an Advance is subject to the following conditions precedent:

(a) that, on or before the service of the first Drawdown Notice, the Agent receives:

(i) the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers; and

(ii) payment of the arrangement fee payable pursuant to Clause 20.1 (a);

(b) that, on each Drawdown Date but prior to making of the relevant Advance available, the Agent receives or is satisfied that it will receive on the making of that Advance:

(i) the documents described in Part B of Schedule 3 in form and substance satisfactory to it and its lawyers; and

(ii) payment of all accrued commitment fee payable pursuant to Clause 20.1 (b);

(c) that both at the date of each Drawdown Notice and at each Drawdown Date:

(i) no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the relevant Advance;

(ii) the representations and warranties in Clause 10 and those of any Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing;

(iii) none of the circumstances contemplated by Clause 5.7 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 Borrowers or any other Security Party in the light of which the Agent considers that there is a significant risk that the Borrowers 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;

(d) that, if the ratio set out in Clause 15.1 were applied immediately following the making of the relevant Advance, the Borrowers would not be obliged to provide additional security or prepay part of the Loan under that Clause; and

(e) that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may,

32

with the authorisation of the Majority Lenders, request by notice to the Borrowers prior to each Drawdown Date.

9.2 Waivers of conditions precedent

If the Majority Lenders, at their discretion, permit an Advance to be borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrowers shall ensure that those conditions are satisfied within 5 Business Days after the relevant Drawdown Date (or such other period as the Agent may, with the authorisation of the Majority Lenders, specify).

10 REPRESENTATIONS AND WARRANTIES

10.1 General

Each Borrower represents and warrants (which representations and warranties shall survive the execution of this Agreement and shall be deemed to be repeated throughout the Security Period on the first day of each Interest Period with respect to the facts and circumstances then existing) to each Creditor Party as follows.

10.2 Status

Each Borrower is duly incorporated and validly existing and in good standing under the laws of the Republic of the Marshall Islands.

10.3 Share capital and ownership

Each Borrower has an authorised share capital of 500 registered shares with par value of $20 per share, all of which shares have been issued and are legally and beneficially owned by the Shareholder.

10.4 Corporate power

Each Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:

(a) to maintain the registration of its Ship in its ownership under an Approved Flag;

(b) to execute the Finance Documents to which that Borrower 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 to which the Borrower is a party.

10.5 Consents 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.

10.6 Legal validity; effective Security Interests

The Finance Documents to which each 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):

33

(a) constitute that Borrower's legal, valid and binding obligations enforceable against that Borrower 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.

10.7 No third party Security Interests

Without limiting the generality of Clause 10.6, at the time of the execution and delivery of each Finance Document:

(a) each Borrower which is a party to that Finance Document 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.

10.8 No conflicts

The execution by each Borrower of each Finance Document to which it is a party, and the borrowing by that Borrower of the Loan, and its compliance with each Finance Document to which it is a party will not involve or lead to a contravention of:

(a) any law or regulation; or

(b) the constitutional documents of that Borrower; or

(c) any contractual or other obligation or restriction which is binding on that Borrower or any of its assets.

10.9 No withholding taxes

All payments which each Borrower is liable to make under the Finance Documents to which it is a party may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction. For the avoidance of doubt, this Clause 10.9 does not apply to any amount payable under the Master Agreement in respect of any continuing Transaction as to which section 3 (Basic Representations) of the Master Agreement shall apply.

10.10 No default

No Event of Default or Potential Event of Default has occurred.

10.11 Information

All information which has been provided in writing by or on behalf of any Borrower or any Security Party to any Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.5; all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.7; and there has been no material adverse change in the financial position or state of affairs of any Borrower from that disclosed in the latest of those accounts.

34

10.12 No litigation

No legal or administrative action involving any Borrower (including, without limitation, any action relating to any alleged or actual breach of the ISM Code and ISPS Code) has been commenced or taken or, to any Borrower's knowledge, is likely to be commenced or taken.

10.13 Compliance with certain undertakings

At the date of this Agreement, the Borrowers are in compliance with Clauses 11.2, 11.4, 11.9, 11.12 and 11.13.

10.14 Taxes paid

Each Borrower has paid all taxes applicable to, or imposed on or in relation to that Borrower, its business or the Ship owned by it.

10.15 ISM Code, ISPS Code and Environmental Law compliance

All requirements of the ISM Code and ISPS Code and any Environmental Law as they relate to each Borrower, the Approved Manager and each Ship, have been complied with.

10.16 No immunity

Neither the Borrowers, nor any of their assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit attachment prior to judgement, execution or other enforcement).

10.17 No money laundering

Without prejudice to the generality of Clause 2.3, in relation to the borrowing by the Borrowers of the Loan, the performance and discharge of their obligations and liabilities under the Finance Documents, and the transactions and other arrangements effected or contemplated by the Finance Documents to which any Borrower is a party, each Borrower confirms (i) that it is acting for its own account; (ii) that 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 2015/849/EC of the European Parliament and of the Council and/or Article 305 bis of the Swiss Penal Code).

10.18 Sanctions

The Borrowers, the Security Parties and their respective directors and/or officers are not, nor act directly or indirectly on behalf of, a Restricted Party (as defined in Clause 11.18).

11 GENERAL UNDERTAKINGS

11.1 General

Each Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 at all times during the Security Period, except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.

35

11.2 Title; negative pledge

Each Borrower will:

(a) hold the legal title to, and own the entire beneficial interest in the Ship owned by it, her Insurances and 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;

(b) not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future; and

(c) procure that its liabilities under the Finance Documents to which it is party do and will rank at least pari passu with all other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.

11.3 No disposal of assets

No Borrower will 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,

(c) but paragraph (a) does not apply to any charter of a Ship as to which Clause 14.14 applies.

11.4 No other liabilities or obligations to be incurred

No Borrower will incur any liability or obligation except liabilities or obligations:

(a) under the Finance Documents to which it is or, as the case may be, will be a party;

(b) in respect of trade debts reasonably incurred in the ordinary course of owning, operating and chartering the Ship owned by it; or

(c) which are unsecured and fully subordinated to the rights of the Creditor Parties and on terms acceptable to the Majority Lenders,

Provided that in respect of any liabilities or obligations incurred pursuant to paragraphs (b) and (c) above that the liquidity of that Borrower is not adversely affected.

11.5 Information provided to be accurate

All financial and other information which is provided in writing by or on behalf of a Borrower under or in connection with any Finance Document, any Assignable Charter or otherwise in accordance with Clause 11.6 will be true and not misleading and will not omit any material fact or consideration.

11.6 Provision of financial statements

The Borrowers will send, or will procure that they are sent, to the Agent:

36

(a) as soon as possible, but in no event later than 180 days after the end of each financial year of the Borrowers (commencing with the financial year ended on 31 December 2017) the individual unaudited financial statements of each Borrower, certified as to their correctness by an officer or any other authorised person of the relevant Borrower;

(b) 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 ended on 31 December 2017) the annual audited consolidated financial statements of the Group, certified as to their correctness by the chief financial officer or any other authorised officer or any other authorised person of the Corporate Guarantor;

(c) as soon as possible, but in no event later than 180 days after the end of each financial year of the Shareholder (commencing with the financial year ending in the calendar year on which a Qualified IPO is effected) the annual audited consolidated financial statements of the Group, certified as to their correctness by the chief financial officer or any other authorised officer or any other authorised person of the Shareholder;

(d) as soon as possible, but in no event later than 180 days after the end of each financial year of the Approved Manager (commencing with the financial year ending in the calendar year on which a Permitted Ultimate Beneficial Ownership Change is effected) the annual audited combined financial statements of the Group, certified as to their correctness by the chief financial officer or any other authorised officer or any other authorised person of the Approved Manager;

(e) as soon as possible, but in no event later than 90 days after the end of each quarter in each financial year of the Borrowers (commencing with the three-month period ending on 31 March 2018), the individual unaudited financial statements of each Borrower for that quarter, certified as to their correctness by an officer or any other authorised person of the relevant Borrower;

(f) as soon as possible, but in no event later than 90 days after the end of each quarter in each financial year of the Corporate Guarantor (commencing with the three-month period ending on 31 March 2018), the unaudited consolidated financial statements of the Group for that quarter, certified as to their correctness by the chief financial officer or any other authorised officer or any other authorised person of the Corporate Guarantor;

(g) as soon as possible, but in no event later than 90 days after the end of each quarter in each financial year of the Shareholder (commencing with the first quarter of the financial year of the Shareholder to occur following a Qualified IPO), the unaudited consolidated financial statements of the Group for that quarter, certified as to their correctness by the chief financial officer or any other authorised officer or any other authorised person of the Shareholder;

(h) as soon as possible, but in no event later than 90 days after the end of each quarter in each financial year of the Approved Manager (commencing with the first quarter of the financial year of the Approved Manager to occur following a Permitted Ultimate Beneficial Ownership Change), the unaudited combined financial statements of the Group for that quarter, certified as to their correctness by the chief financial officer or any other authorised officer or any other authorised person of the Approved Manager; and

(i) promptly after each request by the Agent, such further financial or other information in respect of the financial condition, commitments and operation of any Borrower, a Guarantor and any other member of the Group.

37

11.7 Form of financial statements

All accounts delivered under Clause 11.6 will:

(a) be prepared in accordance with all applicable laws and GAAP is applied;

(b) give a true and fair view of the state of affairs of the Borrowers, the relevant Guarantor (as the case may be) and the Group at the date of those accounts and of its profit for the period to which those accounts relate; and

(c) fully disclose or provide for all significant liabilities of the Borrowers and the relevant Guarantor (as the case may be) and the Group.

11.8 Shareholder and creditor notices

Each Borrower will send the Agent, upon its request, copies of all communications which are despatched to that Borrower's shareholders or creditors or any class of them.

11.9 Consents

Each Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:

(a) for that Borrower to perform its obligations under any Finance Document to which it is a party;

(b) for the validity or enforceability of any Finance Document to which it is a party; and

(c) for that Borrower to continue to own and operate the Ship owned by it,

and each Borrower will comply (or procure compliance) with the terms of all such consents.

11.10 Maintenance of Security Interests

Each 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), at its own cost, 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, in the opinion of the Majority Lenders, is or has 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.

11.11 Notification of litigation

Each Borrower will provide the Agent with details of any legal or administrative action involving that Borrower, any Security Party, the Approved Manager or the Ship owned by it, the Earnings or the Insurances as soon as such action is instituted or it becomes apparent to that Borrower 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 any Finance Document.

38

11.12 Principal place of business

Each Borrower will maintain its place of business, and keep its corporate documents and records, at the address disclosed to the Lender in writing on or prior to the date of this Agreement; and that Borrower will not establish, nor do anything as a result of which it would be deemed to have, a place of business in any other country.

11.13 Confirmation of no default

Each Borrower will, promptly after service by the Agent of a written request, serve on the Agent a notice which is signed by the sole director of that 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.

The Agent may serve requests under this Clause 11.13 from time to time but only if asked to do so by a Lender or Lenders having Contributions exceeding 10 per cent. of the Loan or (if no Advances have been made) Commitments exceeding 10 per cent. of the Total Commitments; and this Clause 11.13 does not affect the Borrowers' obligations under Clause 11.14.

11.14 Notification of default

Each Borrower will notify the Agent as soon as that 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 Agent fully up-to-date with all developments.

11.15 Provision of further information

The Borrowers will, upon receiving the request, provide the Agent with any additional financial or other information relating:

(a) to the Borrowers, the Group, any Guarantor, the Ships, the Insurances or the Earnings; or

(b) to any other matter relevant to, or to any provision of or a Finance Document,   which may be required by the Agent or any other Creditor Party at any time.

11.16 "Know your customer" checks

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 the Borrowers or any Security Party after the date of this Agreement; or

39

(c) 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,

obliges the Agent or any Lender (or, in the case of paragraph (c), 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 Borrowers shall promptly upon the request of the Agent or the Lender concerned 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 the Lender concerned (for itself or, in the case of the event described in paragraph (c), on behalf of any prospective new Lender) in order for the Agent, the Lender concerned or, in the case of the event described in paragraph (c), 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.

11.17 Provision of copies and translation of documents

Upon the Agent's request, the Borrowers will supply the Agent with a sufficient number of copies of the documents referred to above; and if the Agent so requires in respect of any of those documents, the Borrowers will provide a certified English translation prepared by a translator approved by the Agent.

11.18 Sanctions

(a) Each Borrower understands that the Creditor Parties - be it due to applicable laws and/or internal rules and regulations - are prohibited from conducting business in relation to Restricted Countries or Restricted Parties.

(b) Each Borrower confirms and undertakes that it will not transfer, make use of, or provide the benefit of, any funds received from, or services provided by, any Creditor Party to any Restricted Parties, or conduct, permit or allow any business activity related to the Ships (including, but not limited to, entering into any acquisition agreement, a (re-)financing or any charter in relation to the Ships) or related to any other Relevant Asset with any Restricted Parties or for business activities that are subject to Sanctions.

(c) This Clause 11.18 shall not be interpreted as restricting charterers or sub-charterers to use the Ships to conduct occasional business activities with Restricted Parties or Restricted Countries (and for the purpose of this Clause 11.18, occasional business activities means activities where it is not the main purpose of such chartering contract to conduct business activities with Restricted Parties or Restricted Countries) provided such business activities are not subject to restrictions under any of the sanctions regimes as enumerated in the definition of "Restricted Parties" (irrespective of whether or not the restrictions imposed by such sanctions regimes apply to the concerned business activity).

(d) In addition and without prejudice to the foregoing, each Borrower shall procure that no proceeds, funds or benefit from any activity or dealing with Restricted Parties are used in discharging any obligation due or owing to the Creditor Parties or are credited to any bank account held with any Creditor Party, and that no payment to a Restricted Party is effected, whether to discharge any obligation due or owing to such person or for any other purpose, through the use of any bank account held with any Creditor Party.

In this Clause 11.18:

40

"Relevant Asset"means the Ships or any other vessel, asset or project in relation to which funds have been received from, or services have been provided by, the Creditor Parties;

"Restricted Countries"means, as of the date of this Agreement, Cuba, Iran, North Korea, Sudan, Syria, the region of Crimea and/or any other country and/or any other region subject to Sanctions, as notified from time to time to the Borrowers by the Agent;

"Restricted Parties"means any person, entity or party: (i) located, domiciled, resident or incorporated in a Restricted Country; or (ii) the government of a Restricted Country; or (iii) subject to Sanctions; or (iv) controlling, controlled by, or under common control with, any person, entity or party referred to under (i) to (iii) above; and

"Sanctions"means any economic sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by (i) the United Nations; (ii) the European Union; (iii) the United States Treasury Department's Office of Foreign Assets Control ("OFAC"); (iv) the State Secretariat for Economic Affairs of Switzerland ("SECO") or the Swiss Directorate of International Law ("DIL"); (v) HM Treasury of the United Kingdom; (vi) the Monetary Authority of Singapore ("MAS") and (vii) the Hong Kong Monetary Authority ("HKMA") and/or any other body notified from time to time in writing to the Borrowers by the Agent.

11.19 Anti-Corruption

(a) The Borrowers shall not (and shall procure that no Security Party will) directly or indirectly use the proceeds of the Loan for any purpose which would breach or might breach applicable anti-corruption laws, including, but not limited to, the UK Bribery Act of 2010 and the United States Foreign Corrupt Practices Act of 1977, each as amended.

(b) The Borrowers shall (and shall procure that each Security Party will):

(i) conduct its business in compliance with applicable anti-corruption laws and regulations; and

(ii) maintain effective policies and procedures designed to promote and achieve compliance with such laws and regulations.

11.20 Transactions

The Borrowers shall not, without the prior consent of the Agent (acting on the instructions of the Majority Lenders), enter into a Transaction other than for the purpose of hedging its exposure under this Agreement to fluctuations in LIBOR arising from the funding of the facility (or any part thereof).

12 CORPORATE UNDERTAKINGS

12.1 General

Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.

41

12.2 Maintenance of status

Each Borrower will maintain its separate corporate existence and remain in good standing under the laws of the Republic of the Marshall Islands.

12.3 Negative undertakings

No Borrower will:

(a) carry on any business other than the ownership, chartering and operation of the Ship owned by it; or

(b) declare or pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of share capital in any financial year Provided that the Borrowers may pay dividends if at the relevant time (i) no Event of Default or Potential Event of Default has occurred or will result from the payment of such dividend or the making or any other form of distribution or (ii) the Deferred Amounts have been fully repaid or prepaid; or

(c) effect any form of redemption, purchase or return of share capital; or

(d) provide any form of credit or financial assistance to any person, or company, including without limitation:

(i) a person who is directly or indirectly interested in that 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 that Borrower than those which it could obtain in a bargain made at arms' length; or

(e) incur any Financial Indebtedness except as permitted under this Agreement and the other Finance Documents; or

(f) open or maintain any account with any bank or financial institution except accounts opened or to be opened with the Agent and the Security Trustee for the purposes of the Finance Documents; or

(g) issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital; or

(h) 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 under the Master Agreement); or

(i) enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation unless arising in connection with a Qualified IPO (subject to clause 12.4 of the Guarantee entered into by the Shareholder) or a Permitted Ultimate Beneficial Ownership Change (subject to Clause 19.1(k)(ii); or

(j) acquire any vessel other than the Ship owned by it.

42

12.4 Minimum Liquidity

Each Borrower shall maintain in its Minimum Liquidity Account an amount of $750,000 ($3,000,000 in aggregate, the "Minimum Liquidity") in the manner set out below, which shall remain blocked and may not be withdrawn by the Borrowers without the prior written consent of the Lenders.

13 INSURANCE

13.1 General

Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 13 from the Drawdown Date of the Advance relevant to that Ship and at all times thereafter during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.

13.2 Maintenance of obligatory insurances

Each Borrower shall keep the Ship owned by it insured at the expense of that Borrower against:

(a) fire and usual marine risks (including hull and machinery and excess risks);

(b) war risks (including, without limitation, war P&I cover and crew liability cover);

(c) protection and indemnity risks; and

(d) any other risks against which the Security Trustee considers, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Security Trustee be reasonable for that Borrower to insure and which are specified by the Security Trustee by notice to that Borrower.

13.3 Terms of obligatory insurances

Each Borrower 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 of at least the greater of (i) the Market Value of its Ship and (ii) an amount which when aggregated with the amount for which the other Mortgaged Ships are insured pursuant to this Clause 13.3(b) equals to 120 per cent. of the Loan;

(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 (currently $1,000,000,000);

(d) in relation to protection and indemnity risks in respect of the full tonnage of the Ship owned by it;

(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

43

and indemnity risks associations which are members of the international group of protection and indemnity associations and in all respects acceptable to the Agent.

13.4 Further protections for the Creditor Parties

In addition to the terms set out in Clause 13.3, each Borrower shall procure that the obligatory insurances effected by it shall:

(a) subject always to paragraph (b), name that Borrower as the main named assured unless the interest of every other named assured is limited:

(i) in respect of any obligatory insurances for hull and machinery and war risks;

(A) to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and

(B) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and

(ii) in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it,

and every other named assured has undertaken in writing to the Security Trustee (in such form as it requires) that any deductible shall be apportioned between that Borrower and every other named assured in proportion to the gross claims made or paid by each of them and that it shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;

(b) name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify;

(c) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions for premiums due from other vessels;

(d) provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and

(e) provide that the Security Trustee may make proof of loss if that Borrower fails to do so.

13.5 Renewal of obligatory insurances

Each Borrower shall:

(a) at least 14 days before the expiry of any obligatory insurance effected by it:

(i) notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom that Borrower proposes to renew that obligatory insurance and of the proposed terms of renewal; and

44

(ii) obtain the Security Trustee's approval to the matters referred to in paragraph (i);

(b) at least 7 days before the expiry of any obligatory insurance effected by it, renew that obligatory insurance in accordance with the Security Trustee's approval pursuant to paragraph (a); 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 Security Trustee in writing of the terms and conditions of the renewal.

13.6 Copies of policies; letters of undertaking

Each Borrower shall ensure that all approved brokers provide the Security Trustee 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 of undertaking in a form required by the Security Trustee 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 13.4;

(b) they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;

(c) they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;

(d) they will notify the Security Trustee, 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 that Borrower or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee 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 Ship owned by that Borrower under such obligatory insurances any premiums or other amounts due to them or any other person from other vessels within the Group or otherwise, they waive any lien on the policies, 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 that Ship forthwith upon being so requested by the Security Trustee.

13.7 Copies of certificates of entry

Each Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by it is entered provides the Security Trustee with:

(a) a certified copy of the certificate of entry for that Ship;

(b) a letter or letters of undertaking in such form as may be required by the Security Trustee; and

(c) where required to be issued under the terms of insurance/indemnity provided by the relevant Borrower's protection and indemnity association, a copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by that

45

Borrower in relation to the relevant Ship in accordance with the requirements of such protection and indemnity association.

13.8 Deposit of policies

Each Borrower shall ensure that copies of all policies relating to obligatory insurances effected by it are deposited with the approved brokers through which the insurances are effected or renewed.

13.9 Payment of premiums

Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances effected by it and produce all relevant receipts when so required by the Security Trustee.

13.10 Guarantees

Each Borrower 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.

13.11 Restrictions on employment

Each Borrower shall not employ the Ship owned by it, nor permit it to be employed, outside the cover provided by any obligatory insurances without prior written approval from the insurers.

13.12 Compliance with terms of insurances

No Borrower shall 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) each Borrower 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 13.2) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;

(b) no Borrower shall 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; and

(c) no Borrower shall employ the Ship owned by it, 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.

13.13 Alteration to terms of insurances

No Borrower shall either make or agree to any material alteration to the terms of any obligatory insurance nor waive any material right relating to any obligatory insurance.

46

13.14 Settlement of claims

No Borrower shall 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 Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

13.15 Provision of information

In addition, each Borrower shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (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 13.16 below or dealing with or considering any matters relating to any such insurances;

and the Borrowers shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a).

13.16 Mortgagee's interest and additional perils

The Security Trustee shall be entitled from time to time to effect, maintain and renew a mortgagee's interest marine insurance and a mortgagee's interest additional perils insurance in respect of each Ship and a mortgagee's interest marine insurance in respect of any Ship, in each case in an amount equal to not less than 120 per cent. of the outstanding amount of the Advance which has been used to finance that Ship, on such terms, through such insurers and generally in such manner as the Security Trustee may from time to time consider appropriate and the Borrowers shall upon demand fully indemnify the Security Trustee in respect of all premiums and other expenses which may be 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.

13.17 Review of insurance requirements

The Security Trustee shall be entitled to review the requirements of this Clause 13 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 Agent, significant and capable of affecting the relevant Borrower or the Ship owned by it and its or their insurance (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which the Borrowers may be subject), and may appoint insurance consultants in relation to this review at the cost of the Borrowers.

13.18 Modification of insurance requirements

The Security Trustee shall notify the Borrowers of any proposed modification under Clause 13.17 to the requirements of this Clause 13 which the Security Trustee considers appropriate in the circumstances, and, after consultation with the Borrowers, such modification shall take effect on and from the date it is notified in writing to the Borrowers as an amendment to this Clause 13 and shall bind the Borrowers accordingly.

47

13.19 Compliance with mortgagee's instructions

The Security Trustee shall be entitled (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to require each Ship to remain at any safe port or to proceed to and remain at any safe port designated by the Security Trustee until the relevant Borrower implements any amendments to the terms of the obligatory insurances and any operational changes required as a result of a notice served under Clause 13.18.

14 SHIP COVENANTS

14.1 General

Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 14 from the Drawdown Date of the Advance relevant to that Ship and at all times thereafter during the Security Period except as the Agent, with the authorisation of the Majority Lenders, may otherwise permit.

14.2 Ship's name and registration

Each Borrower shall keep the Ship owned by it registered in its name under the applicable Approved Flag; 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 the Ship owned by it.

14.3 Repair and classification

Each Borrower 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 its Ship with the highest classification for vessels of the same type, age and specification as the Ship with a first-class classification society which is a member of IACS and acceptable to the Agent free of any qualifications and recommendations; and

(c) so as to comply with all laws and regulations applicable to vessels registered at ports in the applicable Approved Flag State or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not limited to the ISM Code and the ISPS Code.

14.4 Classification society undertaking

Each Borrower undertakes:

(a) to send to the Agent, promptly upon its request, certified true copies of all original class records held by the classification society in relation to its Ship;

(b) to notify the Agent immediately in writing if:

(i) a Ship's classification society is to be changed; or

(ii) it becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of a Ship's class under the

48

rules or terms and conditions of that Borrower's or that Ship's membership of the classification society;

(c) following receipt of a written request from the Agent:

(i) to confirm that it is not in default of any of its contractual obligations or liabilities to the classification society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the classification society; or

(ii) if it is in default of any of its contractual obligations or liabilities to the classification society, to specify to the Agent in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the classification society.

14.5 Sharing of Earnings

No Borrower shall:

(a) enter into any agreement or arrangement for the sharing of any of its Earnings;

(b) enter into any agreement or arrangement for the postponement of any date on which any of its Earnings are due; the reduction of the amount of any of its Earnings or otherwise for the release or adverse alteration of any right of that Borrower to any of its Earnings; or

(c) enter into any agreement or arrangement for the release of, or adverse alteration to, any guarantee or Security Interest relating to any of its Earnings.

14.6 Modification

No Borrower shall make any modification or repairs to, or replacement of, any Ship or equipment installed on any Ship which would or might materially alter the structure, type or performance characteristics of any Ship or materially reduce its value.

14.7 Removal of parts

No Borrower shall remove any material part of any Ship, or any item of equipment installed on any 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 Security Trustee and becomes on installation on the relevant Ship the property of the relevant Borrower and subject to the security constituted by the relevant Mortgage Provided that a Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship owned by it.

14.8 Surveys

Each Borrower 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 Security Trustee provide the Security Trustee, with copies of all survey reports, and shall allow the Security Trustee's representatives to conduct a comprehensive inspection of each Ship's records when and if required by the Security Trustee.

49

14.9 Inspection

Each Borrower shall permit the Security Trustee (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 and the Borrowers shall fully indemnify the Security Trustee on demand in respect of any cost so incurred Provided that (a) so long as no Event of Default has occurred and (b) the Ship owned by it is found to be in a satisfactory condition (in the opinion of the Agent) and maintains specifications acceptable to the Agent, the Borrowers shall only be obliged to indemnify the Security Trustee on demand for the cost incurred by the Security Trustee in connection with up to one inspection made in that Ship in each calendar year.

14.10 Prevention of and release from arrest

Each Borrower 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, the Earnings or the Insurances;

(b) all taxes, dues and other amounts charged in respect of the Ship owned by it, the Earnings or the Insurances; and

(c) all other outgoings whatsoever in respect of the Ship owned by it, the Earnings or the Insurances,

and, forthwith upon receiving notice of the arrest of the Ship owned by it, or of its detention in exercise or purported exercise of any lien or claim, that Borrower shall procure its release by providing bail or otherwise as the circumstances may require.

14.11 Compliance with laws etc.

Each Borrower 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 that Borrower and, as the case may be, the Approved Manager (including, but not limited to, the International Management Code for the Safe Operations of Ships and for Pollution Prevention);

(b) not employ the Ship owned by it 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;

(c) in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Ship owned by it to enter or trade to any zone which is declared a war zone by any government or by that Ship's war risks insurers unless the prior consent of the Security Trustee has been given and that Borrower has (at its expense) effected any special, additional or modified insurance cover which the Security Trustee may require; and

(d) comply with all applicable regulations (in the United States of America and, where relevant, elsewhere) with respect to maintenance of its Certificate of Financial Responsibility and other certificates of third party liability insurance so as to enable its Ship to trade fully at all times.

50

14.12 Provision of information

Each Borrower shall promptly provide the Security Trustee 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 the master and crew of the Ship owned by it;

(c) any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship owned by it and any payments made in respect of that Ship;

(d) any towages and salvages; and

(e) its compliance, the Approved Manager's compliance and the compliance of the Ship owned by it with the ISM Code and the ISPS Code,

and, upon the Security Trustee's request shall promptly provide the Security Trustee with copies of any current charter relating to the Ship owned by it, of any current charter guarantee and copies of that Borrower's or the Approved Manager's Document of Compliance.

14.13 Notification of certain events

Each Borrower shall immediately notify the Security Trustee by fax or email, 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 the Ship owned by it, any exercise or purported exercise of any lien on that Ship or its Earnings or any requisition of that Ship for hire;

(e) any intended drydocking in respect of the Ship owned by it;

(f) any Environmental Claim or any Environmental Incident made against that Borrower or in connection with its Ship;

(g) any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, 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 and/or the ISPS Code not being complied with,

and that Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of that Borrower's, the Approved Manager's or any other person's response to any of those events or matters.

51

14.14 Restrictions on chartering, appointment of managers etc.

No Borrower shall in relation to the Ship owned by it:

(a) let that Ship on 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 that Ship is fixed;

(e) 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 it in an amount exceeding or likely to exceed, in relation to Ship A, $1,000,000 and, in relation to each of Ship B, Ship C and Ship D, $500,000 (or, in each case, the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason.

14.15 Notice of Mortgage

Each Borrower shall keep the relevant Mortgage registered against the Ship owned by it as a valid first priority or, as the case may be, preferred mortgage, carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that Borrower to the Security Trustee.

14.16 ISPS Code

Each Borrower shall comply with the ISPS Code and in particular, without limitation, shall:

(a) procure that the Ship owned by it and the company responsible for that Ship's compliance with the ISPS Code comply with the ISPS Code; and

(b) maintain for the Ship owned by it an ISSC; and

(c) notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.

14.17 Charter Assignment

If a Borrower enters into any Assignable Charter (subject to the Agent's approval) pursuant to Clause 14.14(b), that Borrower shall, on the date on which it enters into such Assignable Charter:

(a) provide the Agent with a copy of such Assignable Charter; and

52

(b) execute in favour of the Security Trustee a Charterparty Assignment in respect of that Assignable Charter (such Charterparty Assignment to be notified to, and that Borrower shall use its best efforts to procure that such notification is acknowledged by, the relevant charterer and any charter guarantor); and

(c) deliver to the Agent such other documents equivalent to those referred to at paragraphs 2, 3, 4 and 10 of Schedule 3, Part A, as the Agent may require.

14.18 Trading Certificates

Each Borrower shall ensure that it and the Ship owned by it shall maintain at all times unexpired and valid certificates required for the trading of that Ship and procure that the Approved Manager and any charterer of that Ship will comply with the requirements of this Clause 14.18.

15 SECURITY COVER

15.1 Minimum required security cover

Clause 15.2 applies if the Agent notifies the Borrowers that:

(a) the aggregate of the Market Values of the Ships; plus

(b) the net realisable value of any additional security previously provided under this Clause 15,

is below 130 per cent. of the aggregate of (i) the Loan and (ii) the Swap Exposure (with any such determination being binding and conclusive as regards the Borrowers).

15.2 Provision of additional security; prepayment

If the Agent serves a notice on the Borrowers under Clause 15.1, the Borrowers shall prepay such part (at least) of the Loan as will eliminate the shortfall on or before the date falling 30 days after the date on which the Agent's notice is served under Clause 15.1 (the "Prepayment Date") unless at least 1 Business Day before the Prepayment Date they have provided, or ensured that a third party has provided, additional security (in the form of cash or security over other vessels) or a partial prepayment which, in the opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and which has been documented in such terms as the Agent may, with the authorisation of the Majority Lenders, approve or require.

15.3 Meaning of additional security

In Clauses 15.1 and 15.2, "security" means a Security Interest over an asset or assets (whether securing the Borrowers' liabilities under the Finance Documents or a guarantee in respect of those liabilities), or a guarantee, letter of credit or other security in respect of the Borrowers' liabilities under the Finance Documents.

15.4 Requirement for additional documents

Each Borrower shall not be deemed to have complied with Clause 15.2 above until the Security Trustee has received in connection with the additional security certified copies of documents of the kinds referred to in paragraphs 2, 3, 4 and 5 of Schedule 3, Part A below and such legal opinions in terms acceptable to the Security Trustee from such lawyers as it may select.

53

15.5 Valuation of Ships

(a) The Market Value of a Ship at any date is that shown by the average of two valuations, each such valuation to be prepared:

(i) as at a date not more than 30 days previously;

(ii) by two Approved Valuers selected by the Borrowers, confirmed by the Lenders and reporting to the Agent for the purpose;

(iii) with or without physical inspection of that Ship (as the Agent may require);

(iv) 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, free of any existing charter or other contract of employment; and

(v) after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.

(b) Provided that if the market value of a Ship as evidenced in one of the two valuations provided under paragraph (a) above exceeds by 15 per cent. the market value of that Ship as evidenced in the other valuation to be provided under paragraph (a) above (such difference to be determined with reference to the lowest valuation), then the Borrowers shall procure that the Agent is promptly provided with a third valuation prepared in accordance with the requirements referred under paragraph (a) above and the Market Value of that Ship shall be determined as the arithmetic mean of all three valuations.

15.6 Value of additional vessel security

The net realisable value of any additional security which is provided under Clause 15.2 shall be determined by the Agent.

15.7 Valuations binding

Any valuation under this Clause 15 shall be binding and conclusive as regards the Borrowers, as shall be any valuation which the Majority Lenders make of any additional security which does not consist of or include a Security Interest.

15.8 Provision of information

The Borrowers shall promptly provide the Agent and any Approved Valuer or expert acting under this Clause 15 with any information which the Agent or the Approved Valuer or expert may request for the purposes of the valuation; and, if the Borrowers fail to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which the Approved Valuer or the Majority Lenders (or the expert appointed by them) consider prudent.

15.9 Payment of valuation expenses

Without prejudice to the generality of the Borrowers' obligations under Clauses 20.2, 20.3 and 21.3, the Borrowers shall, on demand, pay the Agent the amount of the fees and expenses of any Approved Valuer or expert instructed by the Agent under this Clause and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause

54

15 Provided that so long as no Event of Default has occurred the Borrowers shall not be obliged to pay any such fees and expenses in respect of more than one set of valuations of each Ship in any calendar year (in addition to the set of valuations to determine the Initial Market Value of the Ships for the purposes of drawdown).

15.10 Frequency of Valuations

Subject to Clause 15.9, each Borrower acknowledges and agrees that the Agent may commission valuations of a Ship at such times as the Agent shall deem necessary.

15.11 Application of prepayment

Any prepayment made pursuant to Clause 15.2 shall be applied pro rata towards prepayment of the Advances and within such Advance pro rata against the Repayment Instalments thereof falling due after such prepayment and the Balloon Instalment thereof.

16 PAYMENTS AND CALCULATIONS

16.1 Currency and method of payments

All payments to be made by the Lenders or by any Borrower under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:

(a) by not later than 11.00 a.m. (New York City 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 Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement); and

(c) in the case of an amount payable by a Lender to the Agent or by any Borrower to the Agent or any Lender, to the account indicated by the Agent at CREDIT SUISSE AG, Basel, Switzerland or to such other account with such other bank as the Agent may from time to time notify to the Borrowers and the other Creditor Parties; and

(d) in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrowers and the other Creditor Parties.

16.2 Payment on non-Business Day

If any payment by any 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.

55

16.3 Basis for calculation of periodic payments

All interest and commitment fee 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.

16.4 Distribution of payments to Creditor Parties

Subject to Clauses 16.5, 16.6 and 16.7:

(a) any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, the Swap Bank or the Security Trustee shall be made available by the Agent to that Lender, the Swap Bank or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender, the Swap Bank or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and

(b) amounts to be applied in satisfying amounts of a particular category which are due to the Lenders and/or the Swap Bank generally shall be distributed by the Agent to each Lender and the Swap Bank pro rata to the amount in that category which is due to it.

16.5 Permitted deductions by Agent

Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender or the Swap Bank, deduct and withhold from that amount:

(a) any sum which is then due and payable to the Agent from that Lender or the Swap Bank under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender or the Swap Bank to pay on demand; and

(b) any FATCA Deduction.

16.6 Agent only obliged to pay when monies received

Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to any Borrower or any Lender or the Swap Bank any sum which the Agent is expecting to receive for remittance or distribution to that Borrower or that Lender or the Swap Bank until the Agent has satisfied itself that it has received that sum.

16.7 Refund to Agent of monies not received

If and to the extent that the Agent makes available a sum to a Borrower or a Lender or the Swap Bank, without first having received that sum, that Borrower or (as the case may be) the Lender concerned or the Swap Bank shall, on demand:

(a) refund the sum in full to the Agent; and

(b) pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.

56

16.8 Agent may assume receipt

Clause 16.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.

16.9 Creditor Party accounts

Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.

16.10 Agent accounts

The Agent shall maintain an account or accounts showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.

16.11 Accounts prima facie evidence

If any accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by a Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie evidence that that amount is owing to that Creditor Party.

17 APPLICATION OF RECEIPTS

17.1 Normal order of application

Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party 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 and the Master Agreement (or any of them) in the following proportions:

(i) first, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents other than those amounts referred to at (ii) and (iii) below (including, but without limitation, all amounts payable by any Borrower under Clauses 20, 21 and 22 of this Agreement or by any 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 Creditor Parties under the Finance Documents (including for the avoidance of doubt, the Master Agreement) (and, for this purpose, the expression "interest" shall include any net amount which the Borrowers shall have become liable to pay or deliver under section 9(h) (Interest and Compensation) of the Master Agreement but shall have failed to pay or deliver to the Swap Bank at the time of application or distribution under this Clause 17); and

(iii) thirdly, in or towards satisfaction pro rata of the Loan and the Swap Exposure (in the case of the latter, calculated as at the actual Early Termination Date applying to each particular Transaction, or if no such Early Termination Date shall have occurred,

57

calculated as if an Early Termination Date occurred on the date of application or distribution hereunder);

(b) SECONDLY:, in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrowers and the Security Parties and other Creditor 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 provisions of this Clause; and

(c) THIRDLY: any surplus shall be paid to the Borrowers or to any other person appearing to be entitled to it.

17.2 Variation of order of application

The Agent may, with the authorisation of the Majority Lenders and the Swap Bank, by notice to the Borrowers the Security Parties and the other Creditor Parties, provide for a different manner of application from that set out in Clause 17.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.

17.3 Notice of variation of order of application

The Agent may give notices under Clause 17.2 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.

17.4 Appropriation rights overridden

This Clause 17 and any notice which the Agent gives under Clause 17.2 shall override any right of appropriation possessed, and any appropriation made, by any Borrower or any Security Party.

18 APPLICATION OF EARNINGS, SWAP PAYMENTS

18.1 Payment of Earnings and Swap Payments

Each Borrower undertakes with each Creditor Party to ensure that, throughout the Security Period:

(a) subject only to the provisions of the General Assignment to which it is a party, all the Earnings of the Ship owned by it are paid to the Earnings Account for that Ship; and

(b) all payments by the Swap Bank to the relevant Borrower under each Transaction are paid to the Earnings Account for the Ship owned by it.

18.2 Withdrawals from Earnings Account

Each Borrower shall be entitled to withdraw any balance standing to the credit of the Earnings Account for the purpose of complying with its obligations under this Agreement and the other Finance Documents, to cover the operating expenses of the Ship owned by it which are due and payable on or prior the date of such withdrawal (including any general and administrative expenses) and to pay dividends (subject to compliance with Clause 12.3(b) Provided that no

58

Event of Default or Potential Event of Default has occurred at that time or will result from such withdrawal.

18.3 Location of accounts

Each Borrower shall promptly:

(a) comply with any requirement of the Agent as to the location or re-location of the Earnings Accounts and the Minimum Liquidity Accounts (or any of them); and

(b) execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Accounts and the Minimum Liquidity Accounts.

18.4 Debits for expenses etc.

The Agent is hereby irrevocably authorised by the Borrowers from time to time to debit the Earnings Accounts (or any of them) and apply the relevant amount towards pro tanto satisfaction of the Borrowers' obligations to a Creditor Party in respect of the repayment of principal of and the payment of interest on the Loan, or any part thereof due and payable on each such date, together with all moneys expended or liabilities incurred by any Creditor Party described in Clauses 7, 20 or 21.

18.5 Borrowers' obligations unaffected

The provisions of this Clause 18 do not affect:

(a) the liability of the Borrowers to make payments of principal and interest on the due dates;

(b) the liability of the Borrowers to make payments to the Swap Bank pursuant to the Master Agreement on the due dates; or

(c) any other liability or obligation of the Borrowers or any Security Party under any Finance Document.

19 EVENTS OF DEFAULT

19.1 Events of Default

An Event of Default occurs if:

(a) any Borrower or any Security Party (other than the Approved Manager) 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 Clause 9.2, 11.2, 11.3, 11.18, 11.19, 12.2, 12.3, 12.4, 13, 14.2, 14.3(b), 14.10 or 15.2; or

(c) any breach by any Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b) if, in the opinion of the Majority Lenders, such default is capable of remedy and such default continues unremedied 10 days after written notice from the Agent requesting action to remedy the same; or

59

(d) (subject to any applicable grace period specified in the Finance Document) any breach by any of the Borrowers or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a), (b) or (c) above) including, for the avoidance of doubt, a breach of clause 11.16 of the Guarantee entered into by the Corporate Guarantor; or

(e) any representation, warranty or statement made or repeated by, or by an officer of, a Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made or repeated; or

(f) any of the following occurs in relation to any Financial Indebtedness of a Relevant Person:

(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,

provided that no Event of Default will occur under this paragraph (f) of Clause 19.1 in respect of the Corporate Guarantor and its subsidiaries (excluding the Borrowers) and, following a Qualified IPO, the Shareholder and its subsidiaries (excluding the Borrowers) if the aggregate amount of Financial Indebtedness falling within sub-paragraphs (i) to (v) above is less than $5,000,000 (or its equivalent in any other currency); or

(g) any of the following occurs in relation to a Relevant Person:

(i) a Relevant Person becomes, in the opinion of the Majority Lenders, 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 or any form of freezing order and, except in the case of the Borrowers, having an aggregate value in excess of $1,000,000 and is not discharged within seven (7) days; or

(iii) any administrative or other receiver is appointed over any asset of a Relevant Person; or

60

(iv) an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or

(v) any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or

(vi) a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or

(vii) a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than a Borrower or the Approved Manager which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or

(viii) an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or

(ix) a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or

61

(x) any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or

(xi) in a Pertinent Jurisdiction other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or

(h) either a Borrower or any Security Party ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement; or

(i) it becomes unlawful in any Pertinent Jurisdiction or impossible:

(i) for any Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or

(ii) for the Agent, the Security Trustee or the Lenders 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 a Borrower to own, operate or charter the Ship owned by it to enable a Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document, 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 Majority Lenders that, without their prior written consent, a change has occurred or probably has occurred after the date of this Agreement in the direct, ultimate and beneficial ownership of any of the shares in a Borrower or the Shareholder or in the ultimate control of the voting rights attaching to any of those shares unless:

(i) such change results from a Qualified IPO and the Shareholder continues to remain the direct and legal owner of all the issued share capital of each Borrower, subject to the provisions of clause 12.4 of the Guarantee entered into by the Shareholder being complied with and the Corporate Guarantor shall be released from the Guarantee to which it is a party provided that the Guarantee entered into by the Shareholder remains valid and in full force and effect; or

(ii) in connection with a Permitted Ultimate Beneficial Ownership Change, the Ultimate Beneficial Owner becoming the ultimate, direct or indirect, legal and beneficial holder of 100% of the issued share capital in each Borrower and/or the Shareholder, subject to:

(A) the Ultimate Beneficial Owner giving at least 30 days' prior notice to the Agent of its intention to make a Permitted Ultimate Beneficial Ownership Change and requesting the consent of the Agent (acting on the instructions of the Lenders at their discretion);

62

(B) the Agent (acting on the instructions of the Lenders at their discretion) providing its written approval to a Permitted Ultimate Beneficial Ownership Change; and

(C) the Ultimate Beneficial Owner becoming the ultimate, direct or indirect, legal and beneficial holder of the total of the issued share capital in each Borrower and/or the Shareholder simultaneously,

and the Corporate Guarantor and, in the event that the Shareholder is no longer the direct and legal owner of all the issued share capital of each Borrower on the date the Permitted Ultimate Beneficial Ownership Change is effected, the Shareholder shall be released from their obligations under the Guarantee to which each is a party subject to (1) the Approved Manager providing, in substitution of the Guarantee(s) entered into by the Corporate Guarantor and, if applicable the Shareholder, a guarantee of all the Borrowers' obligations under this Agreement and the other Finance Documents in such form as the Agent (acting on the instructions of the Majority Lenders) may require by no later than the date on which the Permitted Ultimate Beneficial Ownership Change is effected and (2) in the event that the Shareholder remains the legal and direct holder of all the issued share capital of each Borrower, the Guarantee entered into by the Shareholder remaining valid and in full force and effect; or

(l) it appears to the Majority Lenders that, without their prior written consent:

(i) the Ultimate Beneficial Owner owns or controls (whether directly or indirectly, legally or beneficially) less than 50 per cent. of the issued and outstanding common stock of the Corporate Guarantor or the ultimate voting rights attaching to such common stock; or

(ii) any person, or group of persons acting in concert, have become the beneficial holder(s) (directly or indirectly) of a higher percentage of the issued and outstanding common stock of the Corporate Guarantor or, following a Qualified IPO, the Shareholder or of the ultimate voting rights attaching to such common stock than that held or exercised by the Ultimate Beneficial Owner or acquire a greater power to direct the management and policies of any of the Corporate Guarantor and the Borrowers or, following a Qualified IPO, the Shareholder (whether through the ownership of voting securities, contract or otherwise) than that enjoyed by the Ultimate Beneficial Owner; or

(m) any provision which the Majority Lenders consider 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) any Borrower, the Approved Manager or any other Security Party (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or evidences its intention to rescind or repudiate a Finance Document; 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 Majority Lenders; or

63

(q) an Event of Default (as defined in section 14 of the Master Agreement) occurs with the Borrowers as the Defaulting Party (as defined in the Master Agreement) or an Early Termination has been designated by the Swap Bank in accordance with Section 6(a) of the Master Agreement; or

(r) 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 any Borrower or a Relevant Person; or

(ii) any accident or other event involving any Ship or another vessel owned, chartered or operated by a Relevant Person,

in the light of which the Majority Lenders consider that there is a significant risk that a Borrower or the Approved Manager is, or will later become, unable to discharge its liabilities under the Finance Documents as they fall due.

19.2 Actions following an Event of Default

(a) On, or at any time after, the occurrence of an Event of Default, the Agent may, and if so instructed by the Majority Lenders, the Agent shall:

(i) serve on the Borrowers a notice stating that all or part of the Commitments and of the other obligations of each Lender to the Borrowers under this Agreement are cancelled; and/or

(ii) serve on the Borrowers a notice stating that all or part of the Loan together with 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

(iii) take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or

(b) the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a)(i) or (a)(ii), the Security Trustee, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law.

19.3 Termination of obligations

On the service of a notice under Clause 19.2 (a)(i), all the Commitments and all other obligations of each Lender to the Borrowers under this Agreement shall be cancelled.

19.4 Acceleration of Loan

On the service of a notice under Clause 19.2 (a)(ii), all or, as the case may be, the part of the Loan specified in the notice together with accrued interest and all other amounts accrued or owing from the Borrowers 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.

64

19.5 Multiple notices; action without notice

The Agent may serve notices under Clauses 19.2 (a)(i) and (ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in Clause 19.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.

19.6 Notification of Creditor Parties and Security Parties

The Agent shall send to each Lender, the Security Trustee, the Swap Bank and each Security Party a copy or the text of any notice which the Agent serves on the Borrowers under Clause 19.2; but the notice shall become effective when it is served on the Borrowers, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide any Borrower or any Security Party with any form of claim or defence.

19.7 Creditor Party's rights unimpaired

Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders or the Swap Bank under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1.

19.8 Exclusion of Creditor Party liability

No Creditor Party nor any receiver or manager appointed by the Security Trustee, shall have any liability to a Borrower or a 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 a Creditor Party or a receiver or manager from liability for losses shown to have been caused directly and mainly by the dishonesty or the wilful misconduct of such Creditor Party's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.

19.9 Relevant Persons

In this Clause 19, a "Relevant Person"means a Borrower, a Guarantor or any other Security Party (except the Approved Manager unless a Permitted Ultimate Beneficial Ownership Change is effected in accordance with this Agreement, following which, including the Approved Manager), and any company which is a subsidiary of either a Borrower or a Guarantor or of which the Borrowers or a Security Party is a subsidiary, but excluding any company which is dormant.

65

19.10 Interpretation

In Clause 19.1 (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 19.1 (g) "petition"includes an application.

19.11 Position of Swap Bank

Neither the Agent nor the Security Trustee shall be obliged, in connection with any action taken or proposed to be taken under or pursuant to the foregoing provisions of this Clause 19, to have any regard to the requirements of the Swap Bank except to the extent that the Swap Bank is also a Lender.

20 FEES AND EXPENSES

20.1 Arrangement and commitment fees

The Borrower shall pay to the Agent:

(a) a non-refundable arrangement fee of $765,000 (representing 0.85 per cent. of the Total Commitments) for distribution among the Lenders in the proportions agreed by the Agent and the Lenders which fee shall be payable in two equal instalments of $382,500 as follows:

(i) the first instalment has been paid on 5 January 2018; and

(ii) the second instalment shall be paid on or prior to the date of this Agreement; and

(b) a non-refundable commitment fee, at the rate of 1.10 per cent. per annum on the undrawn or uncancelled Total Commitments, during the period from and including the date of this Agreement to the date on which the Commitments have been drawn-down or cancelled (the "Backstop Date") (payable quarterly in arears during that period and on the Backstop Date).

20.2 Costs of negotiation, preparation etc.

The Borrowers shall pay to the Agent on its demand the amount of all expenses incurred by the Agent or the Security Trustee 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.

20.3 Costs of variations, amendments, enforcement etc.

The Borrowers shall pay to the Agent, on the Agent's demand, for the account of the Creditor Party concerned, the amount of all expenses incurred by a Creditor Party 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 Lenders, the Swap Bank, the Majority Lenders or the Creditor Party 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 15 or any other matter relating to such security;

66

(d) where the Agent, in its absolute opinion, considers that there has been a material change to the insurances in respect of a Ship, the review of the insurances of that Ship pursuant to Clause 13.17; or

(e) any step taken by the Creditor Party concerned or the Swap Bank 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 (e) 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.

20.4 Documentary taxes

The Borrowers shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent's demand, fully indemnify each Creditor Party against any claims, expenses, liabilities and losses resulting from any failure or delay by the Borrowers to pay such a tax.

20.5 Certification of amounts

A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 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 that the amount, or aggregate amount, is due.

21 INDEMNITIES

21.1 Indemnities regarding borrowing and repayment of Loan

The Borrowers shall fully indemnify the Agent and each Lender and the Swap Bank on the Agent's demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:

(a) an Advance not being borrowed on the date specified in the relevant Drawdown Notice for any reason other than a default by the Lender or the Swap Bank claiming the indemnity;

(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 Borrowers 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 Borrowers on the amount concerned under Clause 7);

(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 19,

and in respect of any tax (other than tax on its overall net income and a FATCA Deduction) for which a Creditor Party is liable in connection with any amount paid or payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.

67

21.2 Breakage costs

Without limiting its generality, Clause 21.1 covers any claim, expense, liability or loss (including loss of prospective profit) incurred by a Lender:

(a) in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution 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 a Lender) to hedge any exposure arising under this Agreement or that part which the Lender determines is fairly attributable to this Agreement of the amount of the liabilities, expenses or losses (including losses of prospective profits) incurred by it in terminating or otherwise in connection with, a number of transactions of which this Agreement is one.

21.3 Miscellaneous indemnities

The Borrowers shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by a Creditor Party, 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 Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document; or

(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 Creditor Party concerned.

Without prejudice to its generality, this Clause 21.3 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.

21.4 Currency indemnity

If any sum due from any Borrower or any Security Party to a Creditor Party 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 any 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;

68

the Borrowers shall indemnify the Creditor Party concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.

In this Clause 21.4, the "available rate of exchange"means the rate at which the Creditor Party concerned is able at the opening of business (Swiss time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

This Clause 21.4 creates a separate liability of the Borrowers 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.

21.5 Application to Master Agreement

For the avoidance of doubt, Clause 21.4 does not apply in respect of sums due from the Borrowers to the Swap Bank 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.

21.6 Certification of amounts

A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 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 that the amount, or aggregate amount, is due.

21.7 Environmental Indemnity

Without prejudice to its generality, Clause 21.3 covers any claims, demands, proceedings, liabilities, taxes, losses or expenses of every kind which arise, or are asserted, under or in connection with any law relating to safety at sea, pollution or the protection of the environment, the ISM Code or the ISPS Code.

21.8 Sums deemed due to a Lender

For the purposes of this Clause 21, a sum payable by a Borrower to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.

22 NO SET-OFF OR TAX DEDUCTION

22.1 No deductions

All amounts due from the Borrowers 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 a Borrower is required by law to make.

22.2 Grossing-up for taxes

If a Borrower is required by law to make a tax deduction from any payment:

(a) that Borrower shall notify the Agent as soon as it becomes aware of the requirement;

69

(b) that Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and

(c) the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party 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.

22.3 Evidence of payment of taxes

Within one month after making any tax deduction, the Borrower concerned shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.

22.4 Exclusion of tax on overall net income

In this Clause 22, "tax deduction"means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party's overall net income or a FATCA Deduction.

22.5 Tax credits

A Creditor Party receives for its own account a repayment or credit in respect of tax on account of which the Borrowers have made an increased payment under Clause 22.2, it shall pay to the Borrowers a sum equal to the proportion of the repayment or credit which that Creditor Party allocates to the amount due from the Borrowers in respect of which the Borrowers made the increased payment Provided that:

(a) the Creditor Party shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a class or number of transactions;

(b) nothing in this Clause 22.5 shall oblige a Creditor Party to arrange its tax affairs in any particular manner, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to make any such claim within any particular time;

(c) nothing in this Clause 22.5 shall oblige a Creditor Party to make a payment which would leave it in a worse position than it would have been in if the Borrowers had not been required to make a tax deduction from a payment;

(d) any allocation or determination made by a Creditor Party under or in connection with this Clause 22.5 shall be conclusive and binding on the Borrowers;

(e) nothing in this Clause 22.5 shall oblige a Creditor Party to disclose any information relating to its affairs (tax or otherwise) or those of its ultimate payment company (or any subsidiary thereof) or any computations in respect of tax; and

(f) the Agent's tax affairs for its tax year in respect of which such credit or repayment was obtained have been finally settled.

22.6 Application to Master Agreement

For the avoidance of doubt, Clause 22 does not apply in respect of sums due from the Borrowers to the Swap Bank under or in connection with the Master Agreement as to which

70

sums the provisions of section 2(d) (Deduction or Withholding for Tax) of the Master Agreement shall apply.

22.7 FATCA information

(a) Subject to paragraph (c) below, each party to a Finance Document shall, within 10 Business

Days of a reasonable request by another party to a Finance Document:

(i) confirm to that other party whether it is:

(A) a FATCA Exempt Party; or

(B) not a FATCA Exempt Party; and

(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

(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 to any Finance Document 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 Creditor 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 to any Finance Document 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 a Borrower is a US Tax Obligor or the Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within 10 Business Days of:

(i) where a Borrower is a US Tax Obligor and the relevant Lender is a Lender as at the date of this Agreement, the date of this Agreement;

(ii) where a Borrower is a US Tax Obligor on a date on which a transfer under Clause 26 becomes effective and the relevant Lender is a Transferee Lender, such date; or

71

(iii) the date of a request from the Agent supply to the Agent:

(A) a withholding certificate on Form W-8, Form W-9 or any other relevant form; and/or

(B) any withholding statement or other document, authorisation or waiver as the Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation;

(f) the 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 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 Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Agent). The Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the relevant Borrower; and

(h) the 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 Agent shall not be liable for any action taken by it under or in connection with paragraph (e), (f) or (g) above.

22.8 FATCA Deduction

(a) Each party to a Finance Document 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 to a Finance Document 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; and

(b) each party to a Finance Document 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 a Finance Document to whom it is making the payment and, in addition, shall notify the Borrowers and the Agent and the Agent shall notify the other Creditor Parties.

23 ILLEGALITY, ETC.

23.1 Illegality

This Clause 23 applies if a Lender (the "Notifying Lender") notifies the Agent 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,

72

for the Notifying Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement or any other Finance Document.

23.2 Notification of illegality

The Agent shall promptly notify the Borrowers, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 which the Agent receives from the Notifying Lender.

23.3 Prepayment; termination of Commitment

On the Agent notifying the Borrowers, the Security Parties, the Security Trustee and the other Lenders under Clause 23.2, the Notifying Lender's Commitment shall terminate; and thereupon or, if later, on the date specified in the Notifying Lender's notice under Clause 23.1 as the date on which the notified event would become effective, the Borrowers shall prepay the Notifying Lender's Contribution in full in accordance with Clause 8.

24 INCREASED COSTS

24.1 Increased costs

This Clause 24 applies if a Lender (the "Notifying Lender") notifies the Agent that the Notifying Lender 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) complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement, the Notifying Lender (or a parent company of it) has incurred or will incur an "increased cost".

24.2 Meaning of "increased costs"

In this Clause 24, "increased costs"means, in relation to a Notifying Lender (or a parent company of it):

(a) an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums; or

(b) a reduction in the amount of any payment to the Notifying Lender under this Agreement, or in the effective return which such a payment represents to the Notifying Lender, or on its capital; or

73

(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 Notifying Lender's Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; 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 Notifying Lender under this Agreement; or

(e) 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 as well as "the international framework for liquidity risk measurement, standards and monitoring" and (i) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel Ill: A global regulatory framework for more resilient banks and banking systems", "Basel Ill: 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, (ii) 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 December 2011, as amended, supplemented or restated and (iii) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel Ill" ("Basel Ill Accord") or any other law or regulation implementing the Basel Ill Accord or any of the approaches provided for and allowed to be used by banks under or in connection with the Basel Ill Accord and in both case as from time to time implemented by the Notifying Lender (whether such implementation, application or compliance is by a government, regulator, supervisory authority, the Notifying Lender or its holding company),

but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause 21.1 or by Clause 22 or a FATCA Deduction.

For the purposes of this Clause 24.2, the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class thereof) on such basis as it considers appropriate.

24.3 Notification to Borrowers of claim for increased costs

The Agent shall promptly notify the Borrowers and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1.

24.4 Payment of increased costs

The Borrowers shall pay to the Agent, on the Agent's demand, for the account of the Notifying Lender, the amounts which the Agent from time to time notifies the Borrowers that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.

74

24.5 Notice of prepayment

If the Borrowers are not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.4, the Borrowers may give the Agent not less than 14 days' notice of their intention to prepay the Notifying Lender's Contribution at the end of an Interest Period.

24.6 Prepayment

A notice under Clause 24.5 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrowers' notice of intended prepayment and

(a) on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and

(b) on the date specified in the Borrowers' notice of intended prepayment, the Borrowers shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin and the Mandatory Cost.

24.7 Application of prepayment

Clause 8.10 shall apply in relation to the prepayment.

25 SET-OFF

25.1 Application of credit balances

Each Creditor Party 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 a Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from that Borrower to that Creditor Party and any other liability of that Borrower (whether actual or contingent) 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 that Borrower;

(ii) convert or translate all or any part of a deposit or other credit balance into Dollars; and/or

(iii) enter into any other transaction, execute such document or make any entry in the name of the relevant Borrower and/or the Creditor Party with regard to the credit balance which the Creditor Party considers appropriate; and/or

(iv) to combine and/or consolidate and/or liquidate all or any accounts (whether current, deposit, loan or of any other nature whatsoever, whether subject to notice or not and in whatever currency) of any one or more of the Borrowers with any office or branch of the Creditor Party.

75

25.2 Existing rights unaffected

No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1; 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 a Creditor Party is entitled (whether under the general law or any document) including without limitation any rights of netting and set off conferred on the Swap Bank under the Master Agreement.

25.3 Sums deemed due to a Lender

For the purposes of this Clause 25, a sum payable by the Borrowers to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender's proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.

25.4 No Security Interest

This Clause 25 gives the Creditor Parties a contractual right of set-off only, and does not create any equitable charge or other Security Interest over any credit balance of any Borrower.

26 TRANSFERS AND CHANGES IN LENDING OFFICES

26.1 Transfer by Borrowers

No Borrower may, without the prior written consent of the Agent, given on the instructions of all the Lenders, transfer any of its rights, liabilities or obligations under any Finance Document.

26.2 Transfer by a Lender

Subject to Clause 26.4, a Lender (the "Transferor Lender") may at any time cause:

(a) its rights in respect of all or part of its Contribution; or

(b) its obligations in respect of all or part of its Commitment; or

(c) a combination of (a) and (b),

to be (in the case of its rights) transferred to, or (in the case of its obligations) assumed by, another bank or financial institution or any other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans or securities (a "Transferee Lender") by delivering to the Agent a completed certificate in the form set out in Schedule 4 with any modifications approved or required by the Agent (a "Transfer Certificate") executed by the Transferor Lender and the Transferee Lender.

However any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in accordance with the Agency and Trust Agreement.

Any transfer made pursuant to this Clause 26.2 shall require the prior written consent of the Borrowers (such consent not to be unreasonably withheld or delayed and shall be deemed to be given if the Borrowers do not respond to the Agent's request for such consent within 10 Business Days of receiving the same) unless (i) a transfer is to be made at any time after the

76

occurrence of an Event of Default which is continuing or (ii) to another Lender or an Affiliate of a Lender.

26.3 Transfer Certificate, delivery and notification

As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):

(a) sign the Transfer Certificate on behalf of itself, the Borrowers, the Security Parties, the Security Trustee and each of the other Lenders and the Swap Bank;

(b) on behalf of the Transferee Lender, send to each Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it; and

(c) send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above,

but the Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Transferor Lender and the Transferee 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 that Transferee Lender.

26.4 Effective Date of Transfer Certificate

A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date, Provided that it is signed by the Agent under Clause 26.3 on or before that date.

26.5 No transfer without Transfer Certificate

Except as provided in Clause 26.17, no assignment or transfer of any right or obligation of a Lender under any Finance Document (other than the Master Agreement) is binding on, or effective in relation to, any Borrower, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.

26.6 Lender re-organisation; waiver of Transfer Certificate

However, if a Lender enters into any merger, de-merger or other reorganisation, as a result of which all its rights or obligations vest in another person (the "successor"), the Agent may, if it sees fit, by notice to the successor and the Borrowers and the Security Trustee, waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent's notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.

26.7 Effect of Transfer Certificate

A Transfer Certificate takes effect in accordance with English law as follows:

(a) to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents (other than the Master Agreement) are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which any Borrower or any Security Party had against the Transferor Lender;

77

(b) the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate;

(c) the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;

(d) the Transferee Lender becomes bound by all the provisions of the Finance Documents (other than the Master Agreement) which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;

(e) any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of any Borrower or any Security Party against the Transferor Lender had not existed;

(f) the Transferee Lender becomes entitled to all the rights under the Finance Documents (other than the Master Agreement) which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.7 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and

(g) in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document (other than the Master Agreement) or any misrepresentation made in or in connection with a Finance Document (other than the Master Agreement), the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.

The rights and equities of any Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any other kind of cross-claim.

26.8 Maintenance of register of Lenders

During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrowers during normal banking hours, subject to receiving at least 3 Business Days' prior notice.

26.9 Reliance on register of Lenders

The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.

78

26.10 Authorisation of Agent to sign Transfer Certificates

Each Borrower, the Security Trustee, each Lender and the Swap Bank irrevocably authorise the Agent to sign Transfer Certificates on their behalf.

26.11 Registration fee

In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $5,000 (and all costs, fees and expenses incidental to the transfer (including, but not limited to legal fees and expenses) from the Transferor Lender or (at the Agent's option) the Transferee Lender.

26.12 Sub-participation; subrogation assignment

A Lender may, sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them without the Borrowers' consent.

26.13 Disclosure of information

A Lender may, disclose to a potential Transferee Lender or sub-participant any information which a Lender has received in relation to any Borrower, any Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature in which case the relevant transferee, assignee or sub-participant must execute a confidentiality agreement in respect of such information (unless an Event of Default occurs, in which case no such confidentiality undertaking will be required).

26.14 Change of lending office

A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:

(a) the date on which the Agent receives the notice; and

(b) the date, if any, specified in the notice as the date on which the change will come into effect.

26.15 Notification

On receiving such a notice, the Agent shall notify the Borrowers and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.

26.16 Replacement of Reference Bank

If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 then, unless the Borrowers, the Agent and the Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrowers, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment comes into effect, the first-mentioned Reference Bank's appointment shall cease to be effective.

79

26.17 Security over Lender's rights

In addition to the other rights provided to the Lenders under this Clause 26, each Lender may without consulting with or obtaining consent from any Borrower or any Security Party, 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 (other than the Master Agreement) to secure obligations of that Lender including, without limitation:

(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;

(c) 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 any Borrower or any Security Party 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.

27 VARIATIONS AND WAIVERS

27.1 Variations, waivers etc. by Majority Lenders

Subject to Clause 27.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party'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 Borrowers, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.

27.2 Variations, waivers etc. requiring agreement of all Lenders

However, as regards the following, Clause 27.1 applies as if the words "by the Agent on behalf of the Majority Lenders" were replaced by the words "by or on behalf of every Lender":

(a) a reduction in the Margin;

(b) a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees or other sum payable under this Agreement;

(c) an increase in any Lender's Commitment;

(d) a change to the definition of "Majority Lenders";

(e) a change to Clause 2 or this Clause 27;

80

(f) any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and

(g) any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required.

27.3 Exclusion of other or implied variations

Except for a document which satisfies the requirements of Clauses 27.1 and 27.2, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) 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 a Borrower or a 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.

28 NOTICES

28.1 General

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.

28.2 Addresses for communications

A notice by letter or fax shall be sent:

(a)          to the Borrowers:	c/o TMS Tankers Ltd.Athens Licensed Shipmanagement OfficeOmega BuildingKifissias AvenueAmarousion 15125GreeceTel No.: +30 210 8090 400Fax No: +30 210 8090 405
(b)          to a Lender:	At the address below its name in Schedule 1 or (as the case may require) in the relevant Transfer Certificate.

81

(c)          to the Agent	Credit Suisse AGSt. Alban-Graben 1-3Basel 4051SwitzerlandFax No: +(41) 61 266 79 39 Attn: Ship Finance Loans Administration
(d)          to the Security Trustee:	Credit Suisse AGSt. Alban-Graben 1-3Basel 4051SwitzerlandFax No: +(41) 61 266 79 39 Attn: Ship Finance Loans Administration
(e)          to the Swap Bank:	Credit Suisse AGUetlibergstrasse 2318070 ZurichSwitzerlandFax No: +(41) 61 266 79 39 Attn: Ship Finance Loans Administration

or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or the Security Trustee, the Borrowers, the Lenders and the Security Parties.

28.3 Effective date of notices

Subject to Clauses 28.4 and 28.5:

(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, 3 hours after its transmission is completed.

28.4 Service outside business hours

However, if under Clause 28.3 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 28.5) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.

28.5 Illegible notices

Clauses 28.3 and 28.4 do not apply if the recipient of a notice notifies the sender within 2 hours 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.

82

28.6 Valid 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.

28.7 Electronic communication between the Agent and the Lenders

Any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Lender:

(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 respective addresses or any other such information supplied to them.

Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and, in the case of any electronic communication made by a Lender to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose.

28.8 Electronic communication between the Agent and the Borrowers

The Agent and the Borrowers agree to send information via email to each other and possibly to third parties involved in the provision of services. In particular, the recipient is aware that:

(a) the unencrypted information is transported over an open, publicly accessible network and can, in principle, be viewed by others, thereby allowing conclusions to be drawn about a banking relationship;

(b) the information can be changed and manipulated by a third party;

(c) the sender's identity (sender of the e-mail) can be assumed or otherwise manipulated;

the Agent assumes no liability for any loss incurred as a result of manipulation of the e-mail address or content nor is it liable for any loss incurred by any Borrower and any other relevant persons due to interruptions and delays in transmission caused by technical problems.

The Agent is entitled to assume that all the orders and instructions received from the Borrowers or a third party designated by the Borrowers are from an authorized individual,

83

irrespective of the existing signatory rights in accordance with the commercial register or the specimen signature. The Borrowers shall further procure that all third parties referred to herein agree with the use of e-mails and are aware of the above terms and conditions related to the use of e-mail.

28.9 English language

Any notice under or in connection with a Finance Document shall be in English.

28.10 Meaning of "notice"

In this Clause 28, "notice"includes any demand, consent, authorisation, approval, instruction, waiver or other communication.

29 JOINT AND SEVERAL LIABILITY

29.1 General

All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be several and joint.

29.2 No impairment of Borrower's obligations

The liabilities and obligations of a Borrower shall not be impaired by:

(a) this Agreement being or later becoming void, unenforceable or illegal as regards any other Borrower;

(b) any Lender or the Security Trustee entering into any rescheduling, refinancing or other arrangement of any kind with any other Borrower;

(c) any Lender or the Security Trustee releasing any other Borrower or any Security Interest created by a Finance Document; or

(d) any combination of the foregoing.

29.3 Principal debtors

Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no Borrower shall in any circumstances be construed to be a surety for the obligations of any other Borrower under this Agreement.

29.4 Subordination

Subject to Clause 29.5, during the Security Period, no Borrower shall:

(a) claim any amount which may be due to it from any other Borrower whether in respect of a payment made, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any Finance Document; or

(b) take or enforce any form of security from any other Borrower for such an amount, or in any other way seek to have recourse in respect of such an amount against any asset of any other Borrower; or

84

(c) set off such an amount against any sum due from it to any other Borrower; or

(d) prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving any other Borrower or other Security Party; or

(e) exercise or assert any combination of the foregoing.

29.5 Borrower's required action

If during the Security Period, the Agent, by notice to a Borrower, requires it to take any action referred to in paragraphs (a) to (d) of Clause 29.4, in relation to any other Borrower, that Borrower shall take that action as soon as practicable after receiving the Agent 's notice.

30 SUPPLEMENTAL

30.1 Rights cumulative, non-exclusive

The rights and remedies which the Finance Documents give to each Creditor Party:

(a) are 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.

30.2 Severability 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.

30.3 Counterparts

A Finance Document may be executed in any number of counterparts.

30.4 Third 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.

30.5 Disclosure

(a) The Borrowers authorise the Agent and each Lender to disclose all information related or connected to:

(i) the Ships or any other vessel owned or operated by a Security Party;

(ii) the negotiation, drafting and content of this Agreement, the other Finance Documents;

(iii) the Loan; or

(iv) any Security Party,

85

to any service provider (included but not limited to professional advisers, auditors, lawyers, accountants, surveyors, valuers, insurers, insurance advisers and brokers) or to any other party (including, but not limited to, any Affiliate of the Creditor Parties) in Switzerland or abroad which that Lender may in its discretion deem necessary or desirable in any connection with this Agreement or any other Finance Document for the purpose of the protection or enforcement of the Lenders' rights under this Agreement or any other Finance Document or to any person 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 Provided that the Agent shall procure that any recipient of information who is not subject to any applicable laws of confidentiality and/or duty of confidentiality pursuant to its professional code of conduct enters into a confidentiality agreement in respect of any information which is clearly confidential unless an Event of Default has occurred.

(b) The Borrowers hereby release the Creditor Parties and each of their Affiliates and each of their officers, directors, employees, head office, professional advisers, auditors and representatives (together, the "Disclosing Party") from any confidentiality obligations or confidentiality restrictions arising from Swiss law or other applicable banking secrecy and data protection legislation which would prevent a Disclosing Party from disclosing any confidential information in accordance with this Clause or Clause 26.13.

31 BAIL IN

31.1 Contractual recognition of bail-in

(a) Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each party acknowledges and accepts that any liability of any party to a Finance Document under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

(b) any Bail-In Action in relation to any such liability, including (without limitation):

(i) a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

(ii) a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

(iii) a cancellation of any such liability; and

(c) a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.

32 LAW AND JURISDICTION

32.1 English 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.

86

32.2 Exclusive English jurisdiction

Subject to Clause 32.3, the courts of England shall have exclusive jurisdiction to settle any Dispute.

32.3 Choice of forum for the exclusive benefit of the Creditor Parties

Clause 32.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the right:

(a) to commence proceedings in relation to any Dispute 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.

No Borrower shall commence any proceedings in any country other than England in relation to a Dispute.

32.4 Process agent

Each Borrower irrevocably appoints Ince Process Agents Ltd at its registered office for the time being, presently at Aldgate Tower, 2 Leman Street, London El 8QW, 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 a Dispute.

32.5 Creditor Parties' rights unaffected

Nothing in this Clause 32 shall exclude or limit any right which any Creditor Party 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.

32.6 Meaning of "proceedings"

In this Clause 32, "proceedings"means proceedings of any kind, including an application for a provisional or protective measure and a "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.

87

SCHEDULE 1

LENDERS AND COMMITMENTS

Lender	Lending Office	Commitment (US$)
CREDIT SUISSE AGSt. Alban-Graben 1-3Basel 4051 Switzerland	Credit Suisse AG	$90,000,000

88

SCHEDULE 2

DRAWDOWN NOTICE

To: Credit Suisse AGSt. Alban-Graben 1-3Basel 4051 Switzerland

From: TORTUGA OWNERS INC.CECILIA OWNING COMPANY LIMITEDFAROS OWNERS INC. andREGINA OWNERS INC. Attention: Loans Administration

[·] 2018

Dear Sirs

1 We refer to the loan agreement (the "Loan Agreement") dated [•] 2018 and made between ourselves, as joint and several Borrowers, the Lenders referred to therein, Credit Suisse, as Agent and as Security Trustee and Credit Suisse AG as Swap Bank, in connection with a facility of up to US$90,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.

2 We request to borrow [Advance A] [Advance B] [Advance C] [Advance D] as follows:

(a) Amount of Advances: US$[·];

(b) Drawdown Date: [·];

(c) Duration of the first Interest Period shall be [·] months; and

(d) Payment instructions: [name and numbered [·] with [·] of [·]]

3 We represent and warrant that:

(a) the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and

(b) no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the above Advance[s].

89

4 This notice cannot be revoked without the prior consent of the Majority Lenders.

………………………………………

for and on behalf ofTORTUGA OWNERS INC.CECILIA OWNING COMPANY LIMITEDFAROS OWNERS INC. andREGINA OWNERS INC.

90

SCHEDULE 3

CONDITION PRECEDENT DOCUMENTS

PART A

The following are the documents referred to in Clause 9.1(a) required before service of the first Drawdown Notice.

1 A duly executed original of this Agreement and each other Finance Document (and of each document required to be delivered by each Finance Document) other than those referred to in Part B, and the Non-US Person Representation Letter.

2 Copies of the certificate of incorporation and constitutional documents of each Borrower and each Security Party.

3 Copies of resolutions of the shareholders and directors of each Borrower and each Security Party authorising the execution of each of the Finance Documents to which that Borrower or that Security Party is a party and, in the case of a Borrower, authorising named officers and attorneys-in-fact to give Drawdown Notices (and other notices under this Agreement and the other Finance Documents to which it is a party).

4 The original of any power of attorney under which any Finance Document is executed on behalf of a Borrower or a Security Party.

5 Copies of all consents which any Borrower or any Security Party requires to enter into, or make any payment under, any Finance Document to which each is a party.

6 The originals of any mandates or other documents required in connection with the opening or operation of the Earnings Accounts and the Minimum Liquidity Accounts.

7 Documentary evidence that the agent for service of process named in Clause 32.4 has accepted its appointment.

8 Evidence that the Minimum Liquidity amount required to be maintained by the Borrowers in accordance with Clause 12.4 is standing to the credit of the respective Minimum Liquidity Accounts.

9 Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Marshall Islands, Malta and such other relevant jurisdictions as the Agent may require.

10 Satisfactory completion of the each Lender's compliance and due diligence requirements in connection with the "know your customer" process or similar identification procedures in relation to the transactions contemplated by the Finance Documents, (including, without limitation, any form requested by the Agent completed and signed by a person satisfactory to the Agent confirming the direct and ultimate shareholders in respect of the Borrowers (together with any other opening forms required by the Agent).

11 If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.

91

PART B

The following are the documents referred to in Clause 9.1 (b) required before the Drawdown Date of an Advance:

In Part B of this Schedule 2, the following definitions have the following meanings:

(a) "Relevant Borrower"means the Borrower which is the owner of the Relevant Ship; and

(b) "Relevant Ship"means the Ship which is to be financed by using the proceeds of the Advance being drawn on the relevant Drawdown Date.

1 A duly executed original of the Mortgage, the General Assignment, and any Charterparty Assignment relating to the Relevant Ship (and of each document to be delivered pursuant thereto).

2 Documentary evidence that:

(a) the Relevant Ship is definitively and permanently and/or, in the case of Ship A, provisionally registered in the name of the Relevant Borrower under the relevant Approved Flag;

(b) the Relevant Ship is in the absolute and unencumbered ownership of the relevant Borrower save as contemplated by the Finance Documents;

(c) the Relevant Ship maintains the highest available class with, in respect of Ship A, DNV GL, in respect of Ship B, Bureau Veritas, in respect of Ship C, American Bureau of Shipping and, in respect of Ship D, Korean Register (or, in each case, an equivalent classification society acceptable to the Lenders in its sole discretion) free of all recommendations, qualifications and conditions of such classification society;

(d) the Mortgage in respect of the Relevant Ship has been duly recorded or registered against that Ship as a valid first priority or, as the case may be, preferred mortgage in accordance with the laws of the relevant Approved Flag State; and

(e) the Relevant Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with.

3 Documents establishing that the Relevant Ship will, as from the Drawdown Date of the relevant Advance, be managed by the Approved Manager on terms acceptable to the Lenders, together with:

(a) the Approved Manager's Undertaking;

(b) copies of the Approved Manager's documents of compliance (DOC) and the safety management certificate (SMC) in respect of the Ship referred to in paragraph (a) of the definition of the ISM Code Documentation; and

(c) a copy of the International Ship Security Certificate in respect of the Ship.

4 A favourable opinion from an independent insurance consultant acceptable to and appointed by the Agent on such matters relating to the insurances for the Relevant Ship as the Agent may require.

92

5 If the Relevant Ship is subject to an Assignable Charter:

(a) a copy of the Assignable Charter together with evidence in relation to its due authorisation and execution if such evidence is available to the Borrowers (on a best effort basis); and

(b) a duly executed original of the relevant Charterparty Assignment.

6 Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the relevant Approved Flag State and such other relevant jurisdictions as the Agent may require.

7 In respect of the Relevant Ship, two or, as applicable, three valuations of that Relevant Ship, each dated not earlier than one month prior to the relevant Drawdown Date, prepared in accordance with Clause 15.5 and delivered to the Agent at least 7 days prior to such Drawdown Date.

8 If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.

Each copy document to be delivered under Part A and Part B of this Schedule shall be certified as a true and up to date copy by the secretary (or equivalent officer) of the Borrowers.

93

SCHEDULE 4

TRANSFER CERTIFICATE

The Transferor and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.

To: CREDIT SUISSE AG for itself and for and on behalf of each Borrower, each Security Party, the Security Trustee and each Lender, as defined in the Loan Agreement referred to below.

[·]

1 This Certificate relates to a Loan Agreement (the "Loan Agreement") dated [·] 2018 and made between (1) (1) Tortuga Owners Inc., Cecilia Owning Company Limited, Faros Owners Inc. and Regina Owners Inc. (the "Borrowers"), (2) the banks and financial institutions named therein, (3) Credit Suisse AG as Agent and as Security Trustee and (4) Credit Suisse AG as Swap Bank for a loan facility of up to US$90,000,000.

2 In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings when used in this Certificate and:

"Relevant Parties"means the Agent, each Borrower, each Security Party, the Security Trustee and each Lender and the Swap Bank;

"Transferor"means [full name] of [lending office]; and

"Transferee"means [full name] of [lending office].

3 The effective date of this Certificate is [·] Provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date.

4 The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document (other than the Master Agreement) in relation to [·] per cent. of its Contribution, which percentage represents $[·].

5 By virtue of this Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[·]] [from [·] per cent. of its Commitment, which percentage represents $[·]] and the Transferee acquires a Commitment of $[·].]

6 The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents (other than the Master Agreement) which Clause 26 of the Loan Agreement provides will become binding on it upon this Certificate taking effect.

7 The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 26 of the Loan Agreement.

8 The Transferor:

94

(a) warrants to the Transferee and each Relevant Party that:

(i) the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are required in connection with this transaction; and

(ii) this Certificate is valid and binding as regards the Transferor;

(b) warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4 above; and

(c) undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose.

9 The Transferee:

(a) confirms that it has received a copy of the Loan Agreement and each of the other Finance Documents;

(b) agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Security Trustee or any Lender or the Swap Bank in the event that:

(i) any of the Finance Documents prove to be invalid or ineffective;

(ii) any Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents;

(iii) it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrowers or Security Party under the Finance Documents;

(c) agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee or any Lender or the Swap Bank in the event that this Certificate proves to be invalid or ineffective;

(d) warrants to the Transferor and each Relevant Party that:

(i) it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and

(ii) this Certificate is valid and binding as regards the Transferee; and

(iii) confirms the accuracy of the administrative details set out below regarding the Transferee.

10 The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent's or the Security Trustee's own officers or employees.

95

11 The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it.

[Name of Transferor]   By:             By:Date:          Date [Name of Transferee]

AgentSigned for itself and for and on behalf of itself as Agent and for every other Relevant Party

Credit Suisse AG

By: Date:

96

Administrative Details of Transferee

Name of Transferee:

Lending Office:

Contact Person(Loan Administration Department):

Telephone:

Fax:

Contact Person(Credit Administration Department):

Telephone:

Fax:

Account for payments:

Note: This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor's interest in the security constituted by the Finance Documents in the Transferor's or Transferee's jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.

97

EXECUTION PAGES

BORROWERS

SIGNED by Savvas Tournis for and on behalf of TORTUGA OWNERS INC. in the presence of: ILIAS VASSILIOS TSIGOS ATTORNEY-AT-LAW WATSON FARLEY & WILLIAMS 348 SYNGROU AVENUE 176 74 KALLITHEA ATHENS × GREECE   SIGNED by Savvas Tournis for and on behalf of CECILIA OWNING COMPANY LIMITED in the presence of: ILIAS VASSILIOS TSIGOS ATTORNEY-AT-LAW WATSON FARLEY & WILLIAMS 348 SYNGROU AVENUE 176 74 KALLITHEA ATHENS × GREECE   SIGNED by Savvas Tournis for and on behalf of FAROS OWNERS INC. in the presence of: ILIAS VASSILIOS TSIGOS ATTORNEY-AT-LAW WATSON FARLEY & WILLIAMS 348 SYNGROU AVENUE 176 74 KALLITHEA ATHENS × GREECE   SIGNED by Savvas Tournis for and on behalf of REGINA OWNERS INC. in the presence of: ILIAS VASSILIOS TSIGOS ATTORNEY-AT-LAW WATSON FARLEY & WILLIAMS 348 SYNGROU AVENUE 176 74 KALLITHEA ATHENS × GREECE     LENDERS     SIGNED by Dimitris Karamacheras for and on behalf of CREDIT SUISSE AG in the presence of: ILIAS VASSILIOS TSIGOS ATTORNEY-AT-LAW WATSON FARLEY & WILLIAMS 348 SYNGROU AVENUE 176 74 KALLITHEA ATHENS × GREECE ) ) ) ) )               ) ) ) ) )               ) ) ) ) )               ) ) ) ) )                   ) ) ) ) )     /s/ Savvas Tournis         /s/ Ilias Vassilios Tsigos             /s/ Savvas Tournis         /s/ Ilias Vassilios Tsigos             /s/ Savvas Tournis         /s/ Ilias Vassilios Tsigos             /s/ Savvas Tournis         /s/ Ilias Vassilios Tsigos                     /s/ Dimitris Karamacheras         /s/ Ilias Vassilios Tsigos    

98

AGENT     SIGNED by Dimitris Karamacheras for and on behalf of CREDIT SUISSE AG in the presence of: ILIAS VASSILIOS TSIGOS ATTORNEY-AT-LAW WATSON FARLEY & WILLIAMS 348 SYNGROU AVENUE 176 74 KALLITHEA ATHENS × GREECE     SECURITY TRUSTEE         SIGNED by Dimitris Karamacheras for and on behalf of CREDIT SUISSE AG in the presence of: ILIAS VASSILIOS TSIGOS ATTORNEY-AT-LAW WATSON FARLEY & WILLIAMS 348 SYNGROU AVENUE 176 74 KALLITHEA ATHENS × GREECE     SWAP BANK       SIGNED by Dimitris Karamacheras for and on behalf of CREDIT SUISSE AG in the presence of: ILIAS VASSILIOS TSIGOS ATTORNEY-AT-LAW WATSON FARLEY & WILLIAMS 348 SYNGROU AVENUE 176 74 KALLITHEA ATHENS × GREECE         ) ) ) ) )                           ) ) ) ) )                         ) ) ) ) )             /s/ Dimitris Karamacheras         /s/ Ilias Vassilios Tsigos                         /s/ Dimitris Karamacheras         /s/ Ilias Vassilios Tsigos                       /s/ Dimitris Karamacheras         /s/ Ilias Vassilios Tsigos  

99

EX-4.68

Exhibit 4.68

US$35,000,000

FACILITY AGREEMENT

Dated 29 January 2018

for

QUORA OWNERS INC.PHOENIX OWNERS INC. andROSCOE MARINE LTD. as joint and several Borrowers

guaranteed by

DRYSHIPS INC. as Guarantor

arranged by

DVB BANK SE, AMSTERDAM BRANCH as Arranger

with

DVB BANK SE, AMSTERDAM BRANCH acting as Facility Agent

and

DVB BANK SE, AMSTERDAM BRANCH acting as Security Agent

and

DVB BANK SE acting as Account Bank

relating to the financing of m.vs. "VALADON", "MATISSE" and "RAPALLO"

WATSON FARLEY
&
WILLIAMS

Index

Clause Page

Section 1	Interpretation	2
1	Definitions and Interpretation	2
Section 2	The Facility	26
2	The Facility	26
3	Purpose	26
4	Conditions of Drawdown	27
Section 3	Drawdown	28
5	Drawdown	28
Section 4	Repayment, Prepayment and Cancellation	30
6	Repayment	30
7	Prepayment and Cancellation	31
Section 5	Costs of Drawdown	34
8	Interest	34
9	Interest Periods	35
10	Changes to the Calculation of Interest	36
11	Fees	38
Section 6	Additional Payment Obligations	40
12	Tax Gross Up and Indemnities	40
13	Increased Costs	45
14	Other Indemnities	46
15	Costs and Expenses	49
Section 7	Guarantee and Joint and Several Liability of Borrowers	51
16	Guarantee and Indemnity	51
17	Joint and Several Liability of the Borrowers	54
Section 8	Representations, Undertakings and Events of Default	56
18	Representations	56
19	Information Undertakings	62
20	Financial Covenants	67
21	General Undertakings	69
22	Insurance Undertakings	75
23	Post-Delivery Vessel Undertakings	81
24	Security Cover	86
25	Accounts and Application of Earnings	88
26	Events of Default	91
Section 9	Changes to Parties	97
27	Changes to the Lenders	97
28	Changes to the Transaction Obligors	102
Section 10	The Finance Parties	103
29	The Facility Agent, the Arranger and the Reference Banks	103
30	The Security Agent	114
31	Conduct of Business by the Finance Parties	129
32	Sharing among the Finance Parties	129
Section 11	Administration	132
33	Payment Mechanics	132
34	Set-Off	135
35	Bail-in	135
36	Notices	136

37	Calculations and Certificates	138
38	Partial Invalidity	138
39	Remedies and Waivers	138
40	Settlement or Discharge Conditional	138
41	Irrevocable Payment	139
42	Amendments and Waivers	139
43	Confidential Information	141
44	Confidentiality of Funding Rates and Reference Bank Quotations	145
45	Counterparts	146
Section 12	Governing Law and Enforcement	147
46	Governing Law	147
47	Enforcement	147
Schedules
Schedule 1 The Parties		148
Part A The Obligors		148
Part B The Original Lenders		150
Part C The Servicing Parties		151
Schedule 2 Conditions Precedent and Subsequent		154
Part A Conditions precedent to Drawdown Request		154
Part B Conditions Precedent to Drawdown		156
Part C Conditions Subsequent		158
Schedule 3 Requests		159
Part A Drawdown Request		159
Part B Selection Notice		161
Schedule 4 Form of Transfer Certificate		162
Schedule 5 Form of Assignment Agreement		165
Schedule 6 Form of Compliance Certificate		167
Schedule 7 Timetables		169
Execution
Execution Pages		170

THIS AGREEMENT is made on 29 January 2018

PARTIES

(1) QUORA OWNERS INC., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 as a borrower ("Borrower A")

(2) PHOENIX OWNERS INC., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 as a borrower ("Borrower B")

(3) ROSCOE MARINE LTD., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 as a borrower ("Borrower C")

(4) DRYSHIPS INC., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 as guarantor (the "Guarantor")

(5) DVB BANK SE, AMSTERDAM BRANCH, as arranger (the "Arranger")

(6) THE FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 (The Parties) as lenders (the "Original Lenders")

(7) DVB BANK SE, AMSTERDAM BRANCH, as agent of the other Finance Parties (the "Facility Agent")

(8) DVB BANK SE, AMSTERDAM BRANCH, as security agent for the Creditor Parties (the "Security Agent")

(9) DVB BANK SE, acting through its office at Platz der Republik 6, 60325, Frankfurt/Main, Germany as account bank (the "Account Bank")

SECTION 1
INTERPRETATION

1 DEFINITIONS AND INTERPRETATION

1.1 Definitions

In this Agreement:

"Accounts" means:

(a) the Earnings Accounts;

(b) the Time Deposit Accounts; and

(c) with the express written consent of the Facility Agent, any other accounts opened by any Borrower with the Account Bank, the Facility Agent or the Security Agent for the purposes of the Finance Documents.

"Account Security" means a document creating Security over any Account in agreed form.

"Advance" means a borrowing of all or any part of a Tranche under this Agreement.

"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.

"Approved Broker" means any firm or firms of insurance brokers approved in writing by the Facility Agent, acting with the authorisation of the Lenders.

"Approved Classification" means, as at the date of this Agreement, in relation to:

(a) Vessel A, +A1, Bulk Carrier, BC-A (Holds 2, 4 and 6 may be empty) ESP, (E), +AMS, +ACCU, CPS, CSR AB-CM and additional notations POT, PMA, UWILD, TCM, CRC, GRAB (20);

(b) Vessel B, +A1, Bulk Carrier, BC-A (Holds 2, 4 and 6 may be empty) ESP, (E), +AMS, +ACCU, CPS, CSR AB-CM and additional notations POT, PMA, UWILD, TCM, CRC, GRAB (20); and

(c) Vessel C, +A1, Bulk Carrier, BC-A (Holds 2, 4 and 6 may be empty) ESP, (E), +AMS, +ACCU, SH, SHCM and additional notations UWILD, TCM, CRC, GRAB (20),

in each case, with the relevant Approved Classification Society or the equivalent classification with another Approved Classification Society.

"Approved Classification Society" means, in relation to a Vessel, as at the date of this Agreement, American Bureau of Shipping or any other classification society approved in writing by the Facility Agent acting with the authorisation of the Lenders.

"Approved Commercial Manager" means, in relation to a Vessel, as at the date of this Agreement, 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 MH 96960 or any management company in the same beneficial ownership as

5

TMS Bulkers Ltd. or any other person approved in writing by the Facility Agent, acting with the authorisation of the Lenders, as the commercial manager of that Vessel.

"Approved Flag" means, in relation to a Vessel, the flag of Malta, the Marshall Islands, the Cayman Islands or any other flag acceptable to Facility Agent acting on the authorisation of the Lenders.

"Approved Manager" means, in relation to a Vessel, the Approved Commercial Manager and/or the Approved Technical Manager in respect of that Vessel.

"Approved Technical Manager" means, in relation to a Vessel, as at the date of this Agreement, TMS Bulkers Ltd., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 or any management company in the same beneficial ownership as TMS Bulkers Ltd. or any other person approved in writing by the Facility Agent, acting with the authorisation of the Lenders, as the technical manager of that Vessel.

"Approved Valuer" means any one of Arrow Valuations Ltd., Compass Maritime Services, Fearnleys Shipping AS, Barry Rogliano and Salles (BRS), Golden Destiny S.A., Maritime Strategies International Ltd., VesselsValue.com, Braemar ACM Shipbroking, Galbraiths Limited Shipbrokers, Clarksons Platou, Simpson Spence & Young Shipbrokers Ltd., Howe Robinson and Lorentzen & Stemoco AS (or any Affiliate of such person through which valuations are commonly issued) and any other firm or firms of independent sale and purchase shipbrokers approved in writing by the Facility Agent, acting with the authorisation of the Lenders.

"Assignable Charter" means, in relation to a Vessel, any Charter in respect of that Vessel having a duration of 12 months or more (or capable of exceeding, by virtue of any optional extensions or renewals, a duration of 12 months) on terms approved in writing by the Facility Agent, acting with the authorisation of the Majority Lenders.

"Assignment Agreement" means an agreement substantially in the form set out in Schedule 5 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and 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 including the earlier of:

(a) 31 March 2018; and

(b) the date on which the Available Facility is fully borrowed, cancelled or terminated in accordance with the terms of this Agreement.

"Available Commitment" means a Lender's Commitment minus:

(a) the amount of its participation in the outstanding Loan; and

(b) in relation to the proposed Drawdown, the amount of its participation in any Advance that is due to be made on or before the proposed Drawdown Date.

6

"Available Facility" means the aggregate for the time being of each Lender's Available Commitment.

"Bail-In Action" means the exercise of any Write-down and Conversion Powers.

"Bail-In Legislation" means:

(a) in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

(b) in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.

"Borrower" means each of Borrower A, Borrower B and Borrower C and in the plural means all of them.

"Break Costs" means the amount (if any) by which:

(a)

(i) 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 an Unpaid Sum to the last day of the current Interest Period in relation to the Loan, the relevant part of the Loan or that Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period

exceeds

(ii) 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, or

(b) where a Lender is providing a fixed interest rate under Clause 8.3 (Fixed rate of interest) and only for the period for which the fixed rate of interest shall apply, any claim, expense, liability or loss incurred by a Lender 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 concerned) to hedge any exposure in connection with the Lender providing a fixed interest rate under Clause 8.3 (Fixed rate of interest) or that part which the Lender concerned determines is fairly attributable to this Agreement of the amount of the claim, expense, liability or loss incurred by it in terminating, or otherwise in connection with, a number of transactions for which this Agreement is one.

"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Amsterdam and Athens and:

7

(a) (in relation to funding of the Loan only) Frankfurt;

(b) (in relation only to any date for payment or purchase of dollars) New York; and

(c) (in relation only to any date for the fixing of an interest rate using LIBOR) London.

"Charter" means, in relation to a Vessel, any charter relating to that Vessel, or other contract for its employment, whether or not already in existence.

"Charterer" means any person approved in writing by the Facility Agent, acting with the authorisation of the Majority Lenders, who, as charterer, is a party to a Charter.

"Charter Guarantee" means any guarantee, bond, letter of credit or other instrument (whether or not already issued) supporting a Charter.

"Charterparty Assignment" means, in relation to any Assignable Charter, the assignment creating Security over the rights of the relevant Borrower under that Assignable Charter and any Charter Guarantee relative thereto in agreed form.

"Code" means the US Internal Revenue Code of 1986.

"Commercial Management Agreement" means, in relation to a Vessel, the agreement entered into between the relevant Borrower and the relevant Approved Commercial Manager regarding the commercial management of that Vessel.

"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.

"Compliance Certificate" means a certificate in the form set out in Schedule 6 (Form of Compliance Certificate) or in any other form agreed between the Guarantor, the Borrowers and the Facility Agent.

"Confidential Information" means all information relating to any Transaction 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,

8

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:

(i) information that:

(A) is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 43 (Confidential Information); or

(B) is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or

(C) 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; and

(ii) any Funding Rate or Reference Bank Quotation.

"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 Borrowers and the Facility Agent.

"Corresponding Debt" means any amount, other than any Parallel Debt, which an Obligor owes to a Creditor Party under or in connection with the Finance Documents.

"Creditor Party" means each Finance Party from time to time party to this Agreement, a Receiver or any Delegate.

"Deed of Covenant" means, in relation a Vessel, the deed of covenant collateral to the Mortgage on that Vessel if required under the laws of the jurisdiction of the relevant Approved Flag, in agreed form.

"Default" means an Event of Default or a Potential Event of Default.

"Delegate" means any delegate, agent, attorney or co-trustee 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, if applicable, any Transaction Obligor; 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 or, if

9

applicable, any Transaction Obligor preventing that, or any other, Party or, if applicable, any Transaction Obligor:

(i) from performing its payment obligations under the Finance Documents; or

(ii) from communicating with other Parties or, if applicable, any Transaction Obligor 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 or, if applicable, any Transaction Obligor whose operations are disrupted.

"Document of Compliance" has the meaning given to it in the ISM Code.

"dollars" and "$" mean the lawful currency, for the time being, of the United States of America.

"Drawdown" means the drawdown of an Advance.

"Drawdown Date" means the date of the Drawdown, being the date on which the relevant Advance is to be made.

"Drawdown Request" means a notice substantially in the form set out in Part A of Schedule 3 (Requests).

"Earnings" means, in relation to a Vessel, all moneys whatsoever which are now, or later become, payable (actually or contingently) to a Borrower or the Security Agent and which arise out of or in connection with or relate to the use or operation of that Vessel, including (but not limited to):

(a) the following, save to the extent that any of them is, with the prior written consent of the Facility Agent, pooled or shared with any other person:

(i) all freight, hire and passage moneys including, without limitation, all moneys payable under, arising out of or in connection with a Charter or a Charter Guarantee;

(ii) the proceeds of the exercise of any lien on sub-freights;

(iii) compensation payable to a Borrower or the Security Agent in the event of requisition of that Vessel for hire or use;

(iv) remuneration for salvage and towage services;

(v) demurrage and detention moneys;

(vi) without prejudice to the generality of sub-paragraph (i) above, damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Vessel;

(vii) all moneys which are at any time payable under any Insurances in relation to loss of hire;

(viii) all monies which are at any time payable to a Borrower in relation to general average contribution; and

10

(b) if and whenever that Vessel is employed on terms whereby any moneys falling within sub-paragraphs (i) to (vii) of paragraph (a) above 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 that Vessel.

"Earnings Account" means, in relation to:

(a) Borrower A, an account in the name of the Borrower A with the Account Bank with account number 2910068510;

(b) Borrower B, an account in the name of the Borrower B with the Account Bank with account number 2910068501; or

(c) Borrower C, an account in the name of the Borrower C with the Account Bank with account number 2910068528,

and, in the plural, means all of them.

"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway.

"Environmental Approval" means any present or future permit, ruling, variance or other Authorisation required under Environmental Laws.

"Environmental Claim" means any claim by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose, "claim" includes a claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, 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, emission, spill or discharge into any Vessel or into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally Sensitive Material within or from any Vessel; or

(b) any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water from a vessel other than any Vessel and which involves a collision between any Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Vessel is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Vessel and/or any Transaction Obligor and/or any operator or manager of a Vessel 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, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water otherwise than from a Vessel and in connection with which a Vessel is actually or potentially liable to be arrested and/or where any Transaction Obligor and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise

11

liable to any legal or administrative action, other than in accordance with an Environmental Approval.

"Environmental Law" means any present or future law relating to pollution or protection of human health or the environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.

"Environmentally Sensitive Material" means and includes all contaminants, oil, oil products, toxic substances 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.

"EU Bail-In Legislation Schedule" means the document described as such and published by the Loan Market Association (or any successor person) from time to time.

"Event of Default" means any event or circumstance specified as such in Clause 26 (Events of Default).

"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)(í) 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 2019; 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 2019,

12

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.

"Finance Document" means:

(a) this Agreement;

(b) the Drawdown Request;

(c) any Security Document;

(d) any Subordination Deed;

(e) any other document which is executed for the purpose of establishing any priority or subordination arrangement in relation to the Secured Liabilities; or

(f) any other document designated as such by the Facility Agent and the Borrowers.

"Finance Party" means the Facility Agent, the Security Agent, the Arranger, the Account Bank 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 balance sheet liability (other than any liability in respect of a lease or hire purchase contract which would, in accordance with GAAP in force prior to 1 January 2019, have been treated as an operating lease);

(e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

(f) any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition 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 (or, if any actual amount is

13

due as a result of the termination or close-out of that derivative transaction, that amount) 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 (f) above.

"Fleet Vessel" has the meaning given in Clause 20.2 (Guarantor's financial covenants).

"Funding Rate" means any individual rate notified by a Lender to the Facility Agent pursuant to sub-paragraph (ii) of paragraph (a) of Clause 10.4 (Cost of funds).

"GAAP" means generally accepted accounting principles in including IFRS.

"General Assignment" means, in relation to a Vessel, the general assignment creating Security over that Vessel's Earnings, its Insurances and any Requisition Compensation in agreed form.

"Group" means the Guarantor and its Subsidiaries for the time being (including, but not limited to, the Borrowers and the Shareholder) and "member of the Group" shall be construed accordingly.

"Guarantee" means the guarantee of the Guarantor contained in this Agreement.

"Holding Company" means, in relation to a person, any other person in relation to which it is a Subsidiary.

"IAPPC" means a valid international air pollution prevention certificate issued under MARPOL Annex VI;

"IFRS" means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.

"Indemnified Person" has the meaning given to it in Clause 14.2 (Other indemnities).

"Initial Market Value" means, in respect of a Vessel, the Market Value of that Vessel determined in accordance with the valuations provided pursuant to paragraph 3.6 of Schedule 2, Part B.

"Insurances" means, in relation to a Vessel:

(a) all policies and contracts of insurance, including entries of that Vessel in any protection and indemnity or war risks association, effected in relation to that Vessel, the Earnings or otherwise in relation to that Vessel whether before, on or after the date of this Agreement; and

(b) all rights and other assets relating to, or derived from, any of such policies, contracts or entries, including any rights to a return of premium and any rights in relation to any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement.

14

"Interest Payment Date" has the meaning given to it in paragraph (a) of Clause 8.2 (Payment of interest).

"Interest Period" means, in relation to the Loan or any part of the Loan, each period determined in accordance with Clause 8.3 (Fixed rate of interest), Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.4 (Default interest).

"Interpolated Screen Rate" means, in relation to the Loan or any part of the Loan, 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 or that part of the Loan; 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 or that part of the Loan,

each as of the Specified Time for dollars.

"ISM Code" means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (including the guidelines on its implementation), adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time.

"ISPS Code" means the International Ship and Port Facility Security (ISPS) Code as adopted by the International Maritime Organization's (IMO) Diplomatic Conference of December 2002, as the same may be amended or supplemented from time to time.

"ISSC" means an International Ship Security Certificate issued under the ISPS Code.

"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 27 (Changes to the Lenders),

which in each case has not ceased to be a Party in accordance with this Agreement.

"LIBOR" means, in relation to an Advance, the Loan or any part of the Loan:

(a) the applicable Screen Rate as of the Specified Time for dollars and for a period equal in length to the Interest Period of that Advance, the Loan or that part of the Loan; or

(b) as otherwise determined pursuant to Clause 10.1 (Unavailability of Screen Rate), and if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero.

"LMA" means the Loan Market Association.

15

"Loan" means the loan to be made available under the Facility or the aggregate principal amount outstanding for the time being of the borrowings under the Facility and a "part of the Loan" means an Advance, a Tranche or any other part of the Loan as the context may require.

"Major Casualty" means, in relation to a Vessel, any casualty to that Vessel in relation to which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $750,000 or the equivalent in any other currency.

"Majority Lenders" means:

(a) if no Advance has yet been made, a Lender or Lenders whose Commitments aggregate more than 66 2/3 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 2/3 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 2/3 per cent. of the Loan immediately before such repayment.

"Management Agreement" means each of the Technical Management Agreements and the Commercial Management Agreements.

"Manager's Undertaking" means, in relation to a Vessel, each of the letter of undertaking from the relevant Approved Technical Manager and the letter of undertaking from the relevant Approved Commercial Manager subordinating the rights of that Approved Technical Manager and that Approved Commercial Manager respectively against that Vessel and the relevant Borrower to the rights of the Finance Parties and assigning the rights and interests of that Approved Technical Manager and that Approved Commercial Manager in the Insurances in relation to that Vessel to the Finance Parties in agreed form.

"Margin" means 2.50 per cent. per annum.

"Market Value" means, in relation to a Vessel or any other vessel, at any date, the market value of that Vessel or vessel determined in accordance with Clause 24.7 (Provision of valuations) and prepared:

(a) unless otherwise specified, as at a date not more than 14 days previously;

(b) by an Approved Valuer or Approved Valuers;

(c) without physical inspection of that Vessel or vessel; and

(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, free of any Charter,

after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.

"Material Adverse Effect" means in the reasonable opinion of the Majority Lenders a material adverse effect on:

(a) the business, operations, property, condition (financial or otherwise) or prospects of any member of the Group or the Group as a whole; or

16

(b) the ability of any Transaction Obligor 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.

"Maturity Date" means, in relation to each Tranche, the earlier of (i) the date falling on the sixth anniversary of the Drawdown Date and (ii) 31 March 2024.

"Minimum Liquidity Amount" has the meaning given to it in Clause 20.1 (Borrowers' minimum liquidity).

"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.

"Mortgage" means, in relation to a Vessel, a first priority or preferred (as the case may be) ship mortgage on that Vessel in agreed form.

"Mortgaged Vessel" means each Vessel subject to a Mortgage at any relevant time.

"Obligor" means a Borrower or the Guarantor.

"Original Financial Statements" means:

(a) in relation to the Guarantor the audited consolidated financial statements of the Group for its financial year ended 31 December 2016; and

(b) in relation to each Borrower its unaudited financial statements for its financial year ended 31 December 2016.

"Original Jurisdiction" means, in relation to an Obligor, the jurisdiction under whose laws that Obligor is incorporated as at the date of this Agreement.

"Overseas Regulations" means the Overseas Companies Regulations 2009 (SI 2009/1801).

"Parallel Debt" means any amount which an Obligor owes to the Security Agent under Clause 30.2 (Parallel Debt (Covenant to pay the Security Agent)) or under that clause as incorporated by reference or in full in any other Finance Document.

17

"Participating Member State" means any member state of the European Union that has 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.

"Permitted Ultimate Beneficial Ownership Change" means the Ultimate Beneficial Owner becoming the ultimate legal, direct or indirect, beneficial owner of the total issued share capital of each Borrower by way of transfer of all the shares of each Borrower to an entity which is wholly beneficially owned by the Ultimate Beneficial Owner and approved by all the Lenders in their sole discretion, subject to paragraph (f) of Clause 26.10 (Ownership of the Obligors and the Shareholder).

"Permitted Charter" means, in relation to a Vessel, a Charter:

(a) which is a time, voyage or consecutive voyage charter;

(b) the duration of which does not exceed and is not capable of exceeding, by virtue of any optional extensions, 12 months plus a redelivery allowance of not more than 30 days;

(c) which is entered into on bona fide arm's length terms at the time at which that Vessel is fixed; and

(d) in relation to which not more than two months' hire is payable in advance,

and any other Charter which is approved in writing by the Facility Agent acting with the authorisation of the Majority Lenders.

"Permitted Financial Indebtedness" means:

(a) any Financial Indebtedness incurred under the Finance Documents;

(b) any Financial Indebtedness that is subordinated to all Financial Indebtedness incurred under the Finance Documents pursuant to a Subordination Deed or otherwise and which is, in the case of any such Financial Indebtedness of a Borrower, the subject of Subordinated Debt Security.

"Permitted Security" means:

(a) Security created by the Finance Documents;

(b) any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;

(c) liens for unpaid master's and crew's wages in accordance with first class ship ownership and management practice;

(d) liens for salvage;

(e) liens for master's disbursements incurred in the ordinary course of trading; and

18

(f) any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of any Vessel and not as a result of any default or omission by any Borrower and subject, in the case of liens for repair or maintenance, to Clause 23.17 (Restrictions on chartering, appointment of managers etc.).

"Potential Event of Default" means any event or circumstance specified in Clause 26 (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.

"Prohibited Person" means any person (whether designated by name or by reason of being included in a class of persons) against whom Sanctions are directed.

"Protected Party" has the meaning given to it in Clause 12.1 (Definition).

"Quotation Day" means, in relation to any period for which an interest rate is to be determined, two Business Days before 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 Security Assets.

"Reference Bank Quotation" means any quotation supplied to the Facility Agent by a Reference Bank.

"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:

(a) if:

(i) the Reference Bank is a contributor to the Screen Rate; and

(ii) it consists of a single figure,

as the rate (applied to the relevant Reference Bank and the relevant currency and period) which contributors to the Screen Rate are asked to submit to the relevant administrator; or

(b) in any other case, as the rate at which the relevant Reference Bank could fund itself in dollars for the relevant period with reference to the unsecured wholesale funding market.

"Reference Banks" means the principal London offices of any three banks from the ICE LIBOR panel or such other entities as may be appointed by the Facility Agent in consultation with the Borrowers.

"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

19

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 Original Jurisdiction;

(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, by it is situated;

(c) any jurisdiction where it conducts its business; and

(d) the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.

"Repayment Date" means each date on which a Repayment Instalment is required to be paid under Clause 6.1 (Repayment of Loan).

"Repayment Instalment" has the meaning given to it in Clause 6.1 (Repayment of Loan).

"Repeating Representation" means each of the representations set out in Clause 18 (Representations) except Clause 18.10 (Insolvency), Clause 18.11 (No filing or stamp taxes), Clause 18.12 (Deduction of Tax) and Clause 18.17 (No proceedings pending or threatened) 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.

"Requisition" means, in relation to a Vessel:

(a) any expropriation, confiscation, requisition (excluding a requisition for hire or use which does not involve a requisition for title) or acquisition of that Vessel, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected (whether de jure or de facto) by any government or official authority or by any person or persons claiming to be or to represent a government or official authority; and

(b) any capture or seizure of that Vessel (including any hijacking or theft) by any person whatsoever.

"Requisition Compensation" includes all compensation or other moneys payable to a Borrower by reason of any Requisition or any arrest or detention of the Vessel owned by that Borrower in the exercise or purported exercise of any lien or claim.

"Resolution Authority" means any body which has authority to exercise any Write-down and Conversion Powers.

"Safety Management Certificate" has the meaning given to it in the ISM Code.

"Safety Management System" has the meaning given to it in the ISM Code.

20

"Sanctions" means any sanctions, embargoes, freezing provisions, prohibitions or other restrictions relating to trading, doing business, investment, exporting, financing or making assets available (or other activities similar to or connected with any of the foregoing):

(a) imposed by law or regulation of the United Kingdom, the Council of the European Union, the United Nations or its Security Council or the United States of America; or

(b) otherwise imposed by any law or regulation.

"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 page LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson 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 Thomson 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 Borrowers.

"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 Creditor Party under or in connection with each Finance Document.

"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 Assets" means all of the assets of the Transaction Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.

"Security Cover Ratio" means, at any relevant time, the aggregate of (i) the aggregate Market Value of the Mortgaged Vessels and (ii) the net realisable value of any additional security provided at that time under Clause 24.2 (Provision of additional security; prepayment), at that time expressed as a percentage of the amount of the Loan.

"Security Document" means:

(a) any Shares Security;

(b) any Mortgage;

(c) any Deed of Covenant;

(d) any General Assignment;

(e) any Account Security;

(¹) any Charterparty Assignment;

(g) any Manager's Undertaking;

(h) any Subordinated Debt Security;

(i) any other document (whether or not it creates Security) which is executed as security for the Secured Liabilities; or

21

(j) any other document designated as such by the Facility Agent and the Borrowers.

"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 Creditor Parties and all proceeds of that Transaction Security;

(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 Creditor 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 Creditor Parties;

(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 Creditor 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.

"Shareholder" means Drybulk Investments Inc., a corporation incorporated in the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960.

"Shares Security" means, in relation to a Borrower, a document creating Security over the share capital in that Borrower in agreed form.

"Specified Time" means a day or time determined in accordance with Schedule 7 (Timetables).

"Subordinated Creditor" means:

(a) a Transaction Obligor; or

(b) any other person who becomes a Subordinated Creditor in accordance with this Agreement.

22

"Subordinated Debt Security" means a Security over Subordinated Liabilities entered into or to be entered into by a Subordinated Creditor in favour of the Security Agent in an agreed form.

"Subordinated Finance Document" means:

(a) a Subordinated Loan Agreement; and

(b) any other document relating to or evidencing Subordinated Liabilities.

"Subordinated Liabilities" means all indebtedness owed or expressed to be owed by a Borrower to a Subordinated Creditor whether under the Subordinated Finance Documents or otherwise.

"Subordinated Loan Agreement" means any loan agreement made or to be made between (i) a Borrower and (ii) a Subordinated Creditor.

"Subordination Deed" means a subordination deed entered into or to be entered into by each Subordinated Creditor and the Security Agent in agreed form.

"Subsidiary" means a subsidiary within the meaning of section 1159 of the Companies Act 2006.

"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).

"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).

"Technical Management Agreement" means, in relation to a Vessel, the agreement entered into between the relevant Borrower and the relevant Approved Technical Manager regarding the technical management of that Vessel.

"Terms and Conditions" means the Special Conditions for Time Deposit Accounts for Commercial Clients (including but not limited to the Account Bank's General Terms and Conditions of Business) as set out in the Application for Opening of each Time Deposit Account.

"Third Parties Act" has the meaning given to it in Clause 1.5 (Third party rights).

"Time Deposit Account" means, in relation to each Borrower, an account opened or to be opened in the name of that Borrower with the Account Bank designated "[name of relevant Borrower] — Time Deposit Account" and, in the plural, means all of them.

"Total Commitments" means the aggregate of the Commitments, being $35,000,000 at the date of this Agreement.

"Total Loss" means, in relation to a Vessel:

(a) actual, constructive, compromised, agreed or arranged total loss of that Vessel; or

23

(b) any Requisition of a Vessel unless that Vessel is returned to the full control of the relevant Borrower within 30 days of such Requisition.

"Total Loss Date" means, in relation to the Total Loss of a Vessel:

(a) in the case of an actual loss of that Vessel, the date on which it occurred or, if that is unknown, the date when that Vessel was last heard of;

(b) in the case of a constructive, compromised, agreed or arranged total loss of that Vessel, the earlier 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 relevant Borrower with that Vessel's insurers in which the insurers agree to treat that Vessel as a total loss; and

(c) in the case of any other type of Total Loss, the date (or the most likely date) on which it appears to the Facility Agent that the event constituting the total loss occurred.

"Tranche" means each of Tranche A, Tranche B and Tranche C, and, in the plural, means all of them.

"Tranche A" means that part of the Loan made or to be made available to the Borrowers to finance part of the Initial Market Value of Vessel A in a principal amount not exceeding $13,500,000.

"Tranche B" means that part of the Loan made or to be made available to the Borrowers to finance part of the Initial Market Value of Vessel B in a principal amount not exceeding $13,500,000.

"Tranche C" means that part of the Loan made or to be made available to the Borrowers to finance part of the Initial Market Value of Vessel C in a principal amount not exceeding $8,000,000.

"Transaction Document" means:

(a) a Finance Document;

(b) a Subordinated Finance Document;

(c) any Charter; or

(d) any other document designated as such by the Facility Agent and the Borrowers.

"Transaction Obligor" means an Obligor, the Shareholder, any Approved Manager or any other member of the Group who executes a Transaction Document.

"Transaction Security" means the Security created or evidenced or expressed to be created or evidenced under the Security 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 Borrowers.

24

"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.

"UK Establishment" means a UK establishment as defined in the Overseas Regulations.

"Ultimate Beneficial Owner" means Mr. George Economou, a citizen of Greece residing, as at the date of this Agreement, at 38 Boulevard du Jardin Exotique, 98000 Monaco, and/or any of his linear descendants;

"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) a person which is resident for tax purposes in the US; or

(b) a person some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.

"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.

"VAT Group" means two or more companies or limited liability partnerships which register as a single taxable entity for VAT purposes.

"Vessel" means each of Vessel A, Vessel B and Vessel C and in the plural means all of them.

"Vessel A" means the 2014-built 81,198.70 deadweight metric tons bulk carrier type of vessel, registered in the ownership of Borrower A with IMO No. 9677387 under an Approved Flag (which at the date of this Agreement is the flag of the Marshall Islands) with the name "VALADON".

"Vessel B" means the 2014-built 81,128.60 deadweight metric tons bulk carrier type of vessel, registered in the ownership of Borrower B with IMO No. 9677375 under an Approved Flag (which at the date of this Agreement is the flag of the Marshall Islands) with the name "MATISSE".

"Vessel C" means the 2009-built 75,123 deadweight metric tons bulk carrier type of vessel, registered in the ownership of Borrower C with IMO No. 9413690 under an Approved Flag (which at the date of this Agreement is the flag of Malta) with the name "RAPALLO".

25

"Write-down and Conversion Powers" means:

(a) in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and

(b) in relation to any other applicable Bail-In Legislation:

(I0 any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and

(ii) any similar or analogous powers under that Bail-In Legislation.

1.2 Construction

(a) Unless a contrary indication appears, a reference in this Agreement to:

(i) the "Account Bank", the "Arranger", the "Facility Agent", any "Finance Party", any "Lender", any "Obligor", any "Party", any "Creditor 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", a "Security Document" or "Transaction Document" or any other agreement or instrument is a reference to that Finance Document, Security 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;

26

(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 or other entity (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 Central European 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; and

(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) The determination of the extent to which a rate is "for a period equal in length" to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.

(c) 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.

(d) 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.

(e) 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 insurance terms

In this Agreement.

"approved" means, for the purposes of Clause 22 (Insurance Undertakings), approved in writing by the Facility Agent;

"excess risks" means the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of a Vessel in consequence of its insured value being less than the value at which that Vessel is assessed for the purpose of such claims;

27

"obligatory insurances" means all insurances effected, or which each Borrower is obliged to effect, under Clause 22 (Insurance Undertakings) or any other provision of this Agreement or of another Finance Document;

"policy" 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 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/10/83)(1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision; and

"war risks" includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses (Hulls) (1/11/95) or clause 23 of the Institute Time Clauses (Hulls)(1/10/83).

1.4 Agreed forms of Finance Documents

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 Borrowers and the Facility Agent); or

(b) in any other form agreed in writing between the Borrowers and the Facility Agent acting with the authorisation of the Majority Lenders or, where Clause 42.2 (All Lender matters) applies, all the Lenders.

1.5 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.

(b) Subject to Clause 42.3 (Other exceptions) but otherwise 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, Affiliate or any other person described in paragraph (d) of Clause 14.2 (Other indemnities), paragraph (b) of Clause 29.11 (Exclusion of liability), Clause 29.21 (Role of Reference Banks), Clause 29.22 (Third Party Reference Banks) or paragraph (b) of Clause 30.11 (Exclusion of liability) may, subject to this Clause 1.5 (Third party rights) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.

28

SECTION 2
THE FACILITY

2 THE FACILITY

2.1 The Facility

Subject to the terms of this Agreement, the Lenders agree to make available to the Borrowers in three Tranches 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 is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with paragraph (c) below. The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of the Loan or any other amount owed by a Transaction Obligor which relates to a Finance Party's participation in the Facility or its role under a Finance Document (including any such amount payable to the Facility Agent on its behalf) is a debt owing to that Finance Party by that Transaction Obligor.

(c) A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents.

3 PURPOSE

3.1 Purpose

The Borrowers shall apply all amounts borrowed by them under the Facility only for the purpose of financing part of the aggregate Initial Market Value of the Vessels, in an aggregate principal amount not exceeding the lower of:

(a) 55 per cent. of the aggregate Initial Market Value of the Vessels; and

(b) US$35,000,000.

3.2 Monitoring

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

29

4 CONDITIONS OF DRAWDOWN

4.1 Conditions precedent to delivery of the Drawdown Request

The Borrowers may not deliver the Drawdown Request unless the Facility Agent has received all of the documents and other evidence listed in Part A of Schedule 2 (Conditions Precedent and Subsequent) in form and substance satisfactory to the Facility Agent.

4.2 Conditions precedent to Drawdown

The Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation) if:

(a) on the date of the Drawdown Request and on the proposed Drawdown Date and before an Advance is made available:

(i) no Default is continuing or would result from the proposed Advance; and

(ii) the Repeating Representations to be made by each Transaction Obligor are true; and

(b) on the Drawdown Date, the Facility Agent has received, or is satisfied that it will receive when the relevant Advance is made available, all of the documents and other evidence listed in Part B of Schedule 2 (Conditions Precedent and Subsequent) in form and substance satisfactory to the Facility Agent (acting on the instructions of all the Lenders).

4.3 Conditions subsequent

The Borrowers undertake to deliver or cause to be delivered to the Facility Agent within five Business Days after the Drawdown Date (or such later date agreed by the Facility Agent, acting with the authorisation of the Lenders), the additional documents and other evidence listed in Part C of Schedule 2 (Conditions Precedent and Subsequent) in form and substance satisfactory to the Facility Agent.

4.4 Notification of satisfaction of conditions precedent

(a) The Facility Agent shall notify the Borrowers and the Lenders promptly upon being satisfied as to the satisfaction of the conditions precedent and subsequent referred to in Clause 4.1 (Conditions precedent to delivery of the Drawdown Request), Clause 4.2 (Conditions precedent to Drawdown) and Clause 4.3 (Conditions subsequent).

(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.

4.5 Waiver of conditions precedent

If the Lenders, at their discretion, permit an Advance to be released before any of the conditions precedent referred to in Clause 4 (Conditions of Drawdown) or Clause 4.2 (Conditions precedent to Drawdown) has been satisfied, the Borrowers shall ensure that that condition is satisfied within five Business Days after the Drawdown Date or such later date as the Facility Agent, acting with the authorisation of the Lenders, may agree in writing with the Borrowers.

30

SECTION 3

DRAWDOWN

5 DRAWDOWN

5.1 Delivery of Drawdown Request

The Borrowers may utilise the Facility by delivery to the Facility Agent of a duly completed Drawdown Request not later than the Specified Time.

5.2 Completion of Drawdown Request

(a) The Drawdown Request is irrevocable and will not be regarded as having been duly completed unless:

(i) it identifies each of the Tranches to be utilised;

(ii) the proposed Drawdown Date is a Business Day within the Availability Period;

(iii) the currency and amount of the Drawdown comply with Clause 5.3 (Currency and amount); and

(iv) the proposed Interest Period complies with Clause 9 (Interest Periods).

(b) Only one Drawdown Request may be delivered in respect of all Tranches.

(c) The Advances under all Tranches must be drawn down simultaneously.

5.3 Currency and amount

(a) The currency specified in the Drawdown Request must be dollars.

(b) The amount of the proposed Advance must be an amount which is not more than:

(i) in respect of the Advance under Tranche A, $13,500,000;

(ii) in respect of the Advance under Tranche B, $13,500,000; and

(iii) in respect of the Advance under Tranche C, $8,000,000.

(c) The aggregate amount of the proposed Advances under all Tranches must be an amount which is not more than the lower of:

(i) $35,000,000; and

(ii) 55 per cent. of the aggregate Initial Market Value of the Vessels.

(d) The amount of the proposed Advance must be an amount which would not oblige the Borrowers to provide additional security or prepay part of any Advance if the ratio set out in Clause 24 (Security Cover) were applied and notice was given by the Facility Agent under Clause 24.1 (Minimum required security cover) immediately after that Advance was made.

31

5.4 Lenders' participation

(a) If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Advance available by the Drawdown Date through its Facility Office.

(b) The amount of each Lender's participation in each Advance will be equal to the proportion borne by its Commitment to the Total Commitments immediately before making that Advance.

(c) The Facility Agent shall notify each Lender of the amount of each Advance and the amount of its participation in that Advance by the Specified Time.

5.5 Cancellation of Commitments

The Commitments in respect of any Tranche which are unutilised at the end of the Availability Period shall then be cancelled.

32

SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION

6 REPAYMENT

6.1 Repayment of Loan

The Borrowers shall repay the Loan as follows:

(a) Tranche A shall be repaid by:

(i) 24 equal consecutive quarterly instalments, each in an amount of $281,250 (each a "Tranche A Instalment"), the first of which shall be repaid on the date falling three Months after the Drawdown Date, each subsequent Tranche A Instalment shall be repaid at three-monthly intervals thereafter and the last Tranche A Instalment shall be repaid on the Maturity Date; and

(ii) a balloon instalment of $6,750,000 ("Tranche A Balloon Instalment") shall be repaid on the Maturity Date together with the last Tranche A Instalment.

(b) Tranche B shall be repaid by:

(i) equal consecutive quarterly instalments, each in an amount of $281,250 (each a "Tranche B Instalment"), the first of which shall be repaid on the date falling three Months after the Drawdown Date, each subsequent Tranche B Instalment shall be repaid at three-monthly intervals thereafter and the last Tranche B Instalment shall be repaid on the Maturity Date; and

(ii) a balloon instalment of $6,750,000 ("Tranche B Balloon Instalment") shall be repaid on the Maturity Date together with the last Tranche B Instalment; and

(c) Tranche C shall be repaid by:

(i) 24 equal consecutive quarterly instalments, each in an amount of $285,000 (each a "Tranche C Instalment" and together with the Tranche A Instalments and the Tranche B Instalments, the "Instalments"), the first of which shall be repaid on the date falling three Months after the Drawdown Date, each subsequent Tranche C Instalment shall be repaid at three-monthly intervals thereafter and the last Tranche C Instalment shall be repaid on the Maturity Date; and

(ii) a balloon instalment of $1,160,000 ("Tranche C Balloon Instalment" and together with the Tranche A Balloon Instalment and the Tranche B Balloon Instalment, the "Balloon Instalments") shall be repaid on the Maturity Date together with the last Tranche C Instalment,

and each of the Instalments and the Balloon Instalments shall be a "Repayment Instalment",

Provided that, if the amount advanced under a Tranche is less than the maximum amount of such Tranche, the amount of the Repayment Instalments relating to that Tranche shall be reduced proportionately.

33

6.2 Effect of cancellation and prepayment on scheduled repayments

(a) If the Available Commitment in respect of any Tranche of any Lender is cancelled under Clause 7.1 (Illegality) then the Repayment Instalments in respect of that Tranche falling after that cancellation will reduce pro rata by the amount of the Available Commitments in respect of that Tranche so cancelled.

(b) If the whole or any part of any Available Commitment in respect of a Tranche is cancelled in accordance with Clause 7.2 (Automatic cancellation) or if the whole or part of any Commitment in respect of a Tranche is cancelled pursuant to Clause 5.5 (Cancellation of Commitments), the Repayment Instalments in respect of that Tranche falling after that cancellation will reduce pro rata by the amount of the Commitments so cancelled.

(c) If any part of a Tranche is repaid or prepaid in accordance with Clause 7.1 (Illegality) then the Repayment Instalments in respect of that Tranche for each Repayment Date falling after that repayment or prepayment will reduce pro rata by the amount of the Tranche repaid or prepaid.

(d) If any part of a Tranche is prepaid in accordance with Clause 7.3 (Voluntary prepayment of Loan) then the amount of the Repayment Instalments in respect of that Tranche for each Repayment Date falling after that repayment or prepayment will reduce pro rata by the amount of the Tranche repaid or prepaid.

(e) If any part of the Loan is prepaid in accordance with Clause 7.4 (Mandatory prepayment on sale, arrest or Total Loss), the amount of the Loan prepaid shall be applied first against the Tranche which has been used in part financing the relevant Vessel and thereafter any balance shall reduce pro rata the then outstanding Repayment Instalments of the other Tranches.

6.3 Maturity Date

On the Maturity Date, the Borrowers 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.

6.4 Reborrowing

No Borrower may reborrow any part of the Facility which is repaid or prepaid.

7 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 an Advance or 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 Borrowers, the Available Commitment of that Lender will be immediately cancelled; and

(c) the Borrowers shall prepay 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 Borrowers or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no

34

earlier than the last day of any applicable grace period permitted by law) and that Lender's corresponding Commitment shall be cancelled in the amount of the participation prepaid.

7.2 Automatic cancellation

The unutilised Commitment (if any) of each Lender in respect of a Tranche shall be automatically cancelled at close of business on the date on which that Tranche is made available.

7.3 Voluntary prepayment of Loan

(a) Subject to paragraph (b) below, the Borrowers may, if they give the Facility Agent not less than five 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 $500,000 or a multiple of that amount).

(b) The Loan or any part thereof 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 sale, arrest or Total Loss

If a Vessel is sold, arrested or becomes a Total Loss, the Borrowers shall prepay the Relevant Amount of the Loan. Such repayment shall be made:

(a) in the case of a sale of that Vessel, on or before the date on which the sale is completed by delivery of that Vessel to the buyer; or

(b) in the case of any arrest of that Vessel, where that Vessel is not within 30 days redelivered to the full control of the relevant Borrower, on or before the date falling 150 days after the date of the arrest of that Vessel; or

(c) in the case of a Total Loss (excluding, for the avoidance of doubt, any arrest of a Vessel where that Vessel is not within 30 days redelivered to the full control of the relevant Borrower, in which case paragraph (b) above applies), on the earlier of (i) the date falling 120 days after the Total Loss Date and (ii) the date of receipt by the Security Agent of the proceeds of insurance relating to such Total Loss.

In this Clause 7.4, "Relevant Amount" means an amount equal amount equal to the higher of:

(i) the Tranche applicable to the Vessel which is sold, arrested or becomes a Total Loss; and

(ii) an amount which, after the application of the prepayment to be made pursuant to this Clause 7.4 (Mandatory prepayment on sale, arrest or Total Loss), results in the Security Cover Ratio being the greater of (i) the Security Cover Ratio that applied immediately prior to the applicable event described in paragraph (a), (b) or (c) of this Clause 7.4 (Mandatory prepayment on sale, arrest or Total Loss) and (ii) the Security Cover Ratio required to be maintained pursuant to Clause 24.1 (Minimum required security cover).

7.5 Restrictions

(a) Any notice of cancellation or prepayment given by any Party under this Clause 7 (Prepayment and Cancellation) shall be irrevocable and, unless a contrary indication appears in this

35

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 all other amounts accrued under the Finance Documents and, subject to the fee provided for in Clause 11.3 (Prepayment fee) and any Break Costs, without premium or penalty.

(c) No Borrower may reborrow any part of the Facility which is prepaid.

(d) No Borrower shall 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 (Prepayment and Cancellation) it shall promptly forward a copy of that notice to either the Borrowers or the affected Lender, as appropriate.

(g) If all or part of any Lender's participation in the Loan is repaid or prepaid, an amount of that Lender's Commitment (equal to the amount of the participation which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment.

7.6 Application of prepayments

Any prepayment of any part of the Loan (other than a prepayment pursuant to Clause 7.1 (Illegality)) shall be applied pro rata to each Lender's participation in that part of the Loan.

36

SECTION 5
COSTS OF DRAWDOWN

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 Margin; and

(b) LIBOR.

8.2 Payment of interest

(a) The Borrowers shall pay accrued interest on the Loan or any part of the Loan on the last day of each Interest Period (each an "Interest Payment Date").

(b) If an Interest Period is longer than three Months, the Borrowers shall also pay interest then accrued on the Loan or the relevant part of the Loan on the dates falling at three Monthly intervals after the first day of the Interest Period.

8.3 Fixed rate of interest

(a) The Borrowers may, by giving not less than five Business Days' notice in writing, request that a fixed rate of interest shall apply on the whole of the Loan or a Tranche for a period of 12 months or more by giving to the Facility Agent a notice which shall specify the period for which the fixed rate of interest shall apply and shall be given at least five Business Days before the end of the then current Interest Period of the Loan or that Tranche (as applicable). The Facility Agent shall notify the Borrowers of the fixed rate of interest to apply (which shall be determined at the level of the actual refinancing rates available to the Lenders (as certified by them) for the relevant period to which such fixed rate is to apply plus the Margin) and the Borrowers shall either accept or refuse the offer promptly in writing and in any event within one Business Day. Such offer and acceptance shall be in a form that shall constitute a Finance Document. Once accepted, the Borrowers may not revoke their acceptance and the relevant fixed rate of interest shall apply to the Loan or a Tranche from the first day of the next Interest Period of the Loan or that Tranche (as applicable). If the Borrowers refuse the offer or fail to accept it within the time permitted for acceptance, the other provisions of this Clause 8 (Interest) shall continue to apply.

(b) The Borrowers acknowledge and agree that in fixing the interest rate under this Clause 8.3 (Fixed rate of interest), a Lender may enter into internal or external interest rate swaps and that any claim, expense, liability or loss arising as a result of the early termination of such internal or external rate swap shall be for the account of the Borrowers.

8.4 Default interest

(a) If a Transaction Obligor 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 (b) below, is 2 per cent. per annum higher than the rate which would have been payable if the Unpaid Sum

37

had, during the period of non-payment, constituted part of the 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 8.4 (Default interest) shall be immediately payable by the Obligors on demand by the Facility Agent.

(b) 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 or that part of 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 or that part of the Loan; and

(ii) the rate of interest applying to that Unpaid Sum during that first Interest Period shall be 2 per cent. per annum higher than the rate which would have applied if that Unpaid Sum had not become due.

(c) 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.

8.5 Notification of rates of interest

(a) The Facility Agent shall promptly notify the Lenders and the Borrowers of the determination of a rate of interest under this Agreement.

(b) The Facility Agent shall promptly notify the Borrowers of each Funding Rate relating to the Loan, any part of the Loan or any Unpaid Sum.

9 INTEREST PERIODS

9.1 Selection of Interest Periods

(a) The first Interest Period for a Tranche as specified in the Drawdown Request for that Tranche shall be three Months from the Drawdown Date.

(b) Subject to paragraph (g) below, the Borrowers may select each subsequent Interest Period in respect of that Tranche in a Selection Notice.

(c) Each Selection Notice is irrevocable and must be delivered to the Facility Agent by the Borrowers not later than the Specified Time.

(d) If the Borrowers fail to deliver a Selection Notice to the Facility Agent in accordance with paragraphs (b) and (c) above, the relevant Interest Period will, subject to Clause 9.2 (Changes to Interest Periods) and paragraph (g) below, be three Months.

(e) Subject to Clause 8.3 (Fixed rate of interest) and this Clause 9 (Interest Periods), the Borrowers may select an Interest Period of three Months or any other period (up to a maximum of 12 Months) agreed between the Borrowers and the Facility Agent (acting on the instructions of all the Lenders).

(f) An Interest Period in respect of a Tranche shall not extend beyond the Maturity Date.

38

(g) In respect of a Repayment Instalment, the Borrowers may request in the relevant Selection Notice that an Interest Period for a part of a Tranche equal to such Repayment Instalment shall end on the Repayment Date relating to it and, subject to paragraph (d) above, select a longer Interest Period for the remaining part of that Tranche.

(h) Subject to paragraph (i) below, the first Interest Period for a Tranche shall start on the Drawdown Date and each subsequent Interest Period shall start on the last day of the preceding Interest Period.

(i) Except for the purposes of paragraph (g) above and Clause 9.2 (Changes to Interest Periods) below, each Tranche shall have one Interest Period only at any time and all Tranches shall have the same Interest Period.

9.2 Changes to Interest Periods

(a) In respect of a Repayment Instalment related to a Tranche, prior to determining the interest rate for that Tranche, the Facility Agent may establish an Interest Period for a part of a Tranche equal to such Repayment Instalment to end on the Repayment Date relating to it and the remaining part of that Tranche shall have the Interest Period selected in the relevant Selection Notice, subject to paragraph (e) of 9.1 (Selection of Interest Periods).

(b) If after the Borrowers have selected and the Lenders have agreed an Interest Period longer than three Months, any Lender notifies the Facility Agent within two Business Days after the Specified Time relating to the Drawdown 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 three Months.

(c) 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 Borrowers and the Lenders.

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 Unavailability of Screen Rate

(a) Interpolated Screen Rate: If no Screen Rate is available for LIBOR for the Interest Period of the Loan or any part of the Loan, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of the Loan or that part of the Loan.

(b) Reference Bank Rate: If no Screen Rate is available for LIBOR for:

(i) dollars; or

(ii) the Interest Period of the Loan or any part of the Loan and it is not possible to calculate the Interpolated Screen Rate,

39

the applicable LIBOR shall be the Reference Bank Rate as of the Specified Time and for a period equal in length to the Interest Period of the Loan or that part of the Loan.

(c) Cost of funds: If paragraph (b) above applies but no Reference Bank Rate is available for dollars or the relevant Interest Period there shall be no LIBOR for the Loan or that part of the Loan (as applicable) and Clause 10.4 (Cost of funds) shall apply to the Loan or that part of the Loan for that Interest Period.

10.2 Calculation of Reference Bank Rate

(a) Subject to paragraph (b) below, if LIBOR is to be determined on the basis of a Reference Bank Rate but a Reference Bank does not supply a quotation by the Specified Time, the Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks.

(b) If at or about noon on the Quotation Day none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank Rate for the relevant Interest Period.

10.3 Market disruption

If before close of business in London on the Quotation Day for the relevant Interest Period the Facility Agent receives notification from a Lender or Lenders (whose participations in the Loan or the relevant part of the Loan exceed 10 per cent. of the Loan or the relevant part of the Loan as appropriate) (the "Relevant Lender") that the cost to it of funding its participation in the Loan or that part of the Loan from whatever source it may reasonably select would be in excess of LIBOR then Clause 10.4 (Cost of funds) shall apply to the Loan or that part of the Loan (as applicable) for the relevant Interest Period.

10.4 Cost of funds

(a) If this Clause 10.4 (Cost of funds) applies, the rate of interest on each Lender's share of the Loan or the relevant part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

(i) the Margin; and

(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 the relevant Lender of funding its participation in the Loan or that part of the Loan from whatever source it may reasonably select.

(b) If this Clause 10.4 (Cost of funds) applies and the Facility Agent or the Borrowers so require, the Facility 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 or (as the case may be) an alternative basis for funding.

(c) Subject to Clause 42.4 (Replacement of Screen Rate), any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.

(d) If paragraph (e) below does not apply and any rate notified to the Facility Agent under sub-paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.

40

(e) If this Clause 10.4 (Cost of funds) applies pursuant to Clause 10.3 (Market disruption) and:

(i) a Lender's Funding Rate is less than LIBOR; or

(ii) a Lender does not supply a quotation by the time specified in sub-paragraph (ii) of paragraph (a) above,

the cost to that Lender of funding its participation in the Loan or the relevant part of the Loan for that Interest Period shall be deemed, for the purposes of paragraph (a) above, to be LIBOR.

10.5 Notification to Borrowers

If Clause 10.4 (Cost of funds) applies the Facility Agent shall, as soon as is practicable, notify the Borrowers.

10.6 Break Costs

(a) The Borrowers 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 Borrowers on a day other than the last day of an Interest Period for the Loan, the relevant part of the Loan or that 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 Commitment fee

(a) The Borrowers shall pay to the Facility Agent (for the account of each Lender) a fee computed at the rate of 1.00 per cent. per annum on that Lender's Available Commitment from time to time for the Availability Period.

(b) The accrued commitment fee is payable on the last day of each successive period of three Months which ends during the Availability Period, on the last day of the Availability Period and, if cancelled, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective.

11.2 Arrangement fee

The Borrowers shall pay to the Arranger a non-refundable arrangement fee in the amount of $350,000 on the date of this Agreement.

11.3 Prepayment fee

(a) Subject to paragraph (c) below, the Borrowers must pay to the Facility Agent for each Lender a prepayment fee on the date of prepayment of all or any part of the Loan in the case of a refinancing of all or any part of the Loan by any bank, financial institution, trust, fund or any entity other than a Lender.

(b) The amount of the prepayment fee is:

41

(i) if the prepayment occurs on or before the first anniversary of the Drawdown Date, three per cent. of the amount prepaid;

(ii) if the prepayment occurs after the first but on or before the second anniversary of the Drawdown Date, two per cent. of the amount prepaid; and

(iii) if the prepayment occurs after the second but on or before the third anniversary of the Drawdown Date, one per cent. of the amount prepaid.

(c) No prepayment fee shall be payable under this Clause if the prepayment is made after the third anniversary of the Drawdown Date.

42

SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS

12 TAX GROSS UP AND INDEMNITIES

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 an Obligor 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 and Indemnities) 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) Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

(b) The Borrowers shall promptly upon 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 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 Borrowers and that Obligor.

(c) If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor 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 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.

(e) 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 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.

43

12.3 Tax indemnity

(a) The Obligors 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 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; or

(ii) to the extent a loss, liability or cost:

(A) is compensated for by an increased payment under Clause 12.2 (Tax gross-up); or

(B) 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 Obligors.

(d) A Protected Party shall, on receiving a payment from an Obligor under this Clause 12.3 (Tax indemnity), notify the Facility Agent.

12.4 Tax Credit

If an Obligor makes a Tax Payment and the relevant Finance Party determines that:

(a) a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was received; and

(b) that Finance Party has obtained and utilised that Tax Credit,

the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.

44

12.5 Stamp taxes

The Obligors shall pay and, within three Business Days of demand, indemnify each Creditor Party against any cost, loss or liability which that Creditor 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 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 that Party is treated as a member of a group or unity (or fiscal unity) for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the person who is treated at that time as making the supply, or (as appropriate) receiving the supply, under the grouping rules (provided for in Article 11 of Council Directive 2006/112/EC (or as implemented by the relevant member state of the European Union)) so that a reference to a Party shall be construed as a reference to that Party or the relevant group or unity (or fiscal unity) of which that Party is a

45

member for VAT purposes at the relevant time or the relevant representative member (or representative or head) of that group or unity at the relevant time (as the case may be).

(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 FATCA Information

(a) Subject to paragraph (c) below, each Party shall, within 10 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; and

(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

(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 sub-paragraph (i) of paragraph (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.

(c) Paragraph (a) above shall not oblige any Finance Party to do anything and sub-paragraph (iii) of paragraph (a) 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 sub-paragraphs (i) or (ii) of paragraph (a) 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 a 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 10 Business Days of:

46

(i) where that Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement;

(ii) where that 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 that Borrower is not a US Tax Obligor, the date of a request from the Facility Agent, supply to the Facility Agent:

(A) a withholding certificate on Form W-8, Form W-9 or any other relevant form; or

(B) 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 Borrowers.

(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). The Facility Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the Borrowers.

(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 paragraphs (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 each Obligor and the Facility Agent and the Facility Agent shall notify the other Finance Parties.

47

13 INCREASED COSTS

13.1 Increased costs

(a) Subject to Clause 13.3 (Exceptions), the Borrowers 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,

in each case after the date of this Agreement; or

(iii) the implementation, application of or compliance with Basel Ill or CRD IV or any law or regulation that implements or applies Basel III or CRD IV.

(b) In this Agreement:

(i) "Basel III" means:

(A) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel Ill: A global regulatory framework for more resilient banks and banking systems", "Basel Ill: 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) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel Ill".

(ii) "CRD IV" means:

(A) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012;

(B) Directive 2013/36/EU of the European Parliament and of the Council 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 Directives 2006/48/EC and 2006/49/EC; and

(C) any other law or regulation which implements Basel Ill.

(iii) "Increased Costs" means:

48

(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

(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 Borrowers.

(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.

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 an 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 by 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 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:

(i) making or filing a claim or proof against that Obligor; or

(ii) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

that Obligor shall, as an independent obligation, within two Business Days of demand, indemnify each Creditor 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

49

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) 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

(a) Each Obligor shall, within two Business Days of demand, indemnify each Creditor 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 a Transaction Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 32 (Sharing among the Finance Parties);

(iii) funding, or making arrangements to fund, its participation in an Advance or the Loan requested by the Borrowers in the Drawdown 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 Creditor Party alone); or

(iv) the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers.

(b) Each Obligor shall, within two 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 or which relates to the condition or operation of, or any incident occurring in relation to, any Vessel unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person.

(c) Without limiting, but subject to any limitations set out in paragraph (b) above, the indemnity in paragraph (b) above shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:

(i) arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or

(ii) in connection with any Environmental Claim.

(d) Any Affiliate or any officer or employee of a Finance Party or of any of its Affiliates may rely on this Clause 14.2 (Other indemnities) subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.

50

14.3 Mandatory Cost

Each Borrower shall, within two 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 Facility Agent

Each Obligor shall, within two Business Days of demand, indemnify the Facility Agent against:

(a) any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:

(i) investigating any event which it reasonably believes is a Default; or

(ii) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or

(iii) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents; and

(b) 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 33.11 (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.

14.5 Indemnity to the Security Agent

(a) Each Obligor shall, on demand, indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them:

(i) in relation to or as a result of:

(A) any failure by a Borrower to comply with its obligations under Clause 15 (Costs and Expenses);

51

(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 Finance Documents and the Transaction Security;

(D) 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;

(E) any default by any Transaction Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;

(F) any action by any Transaction Obligor which vitiates, reduces the value of, or is otherwise prejudicial to, the Transaction Security; and

(G) 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 or wilful misconduct).

(b) The Security Agent and every Receiver and Delegate may, in priority to any payment to the Creditor Parties, indemnify itself out of the Security Assets in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.5 (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 COSTS AND EXPENSES

15.1 Transaction expenses

The Obligors shall, within two Business Days of demand, pay the Facility Agent, the Security Agent and the Arranger the amount of all costs and expenses (including legal fees) reasonably incurred by any Creditor 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 or in a Security Document; and

(b) any other Finance Documents executed after the date of this Agreement.

15.2 Amendment costs

If:

(a) a Transaction Obligor requests an amendment, waiver or consent; or

(b) an amendment is required pursuant to Clause 33.9 (Change of currency); or

52

(c) a Transaction Obligor requests, and the Security Agent agrees to, the release of all or any part of the Security Assets from the Transaction Security,

the Obligors shall, within two Business Days of 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 Creditor Party in responding to, evaluating, negotiating or complying with that request or requirement.

15.3 Enforcement and preservation costs

The Obligors shall, on demand, pay to each Creditor Party the amount of all costs and expenses (including legal fees) incurred by that Creditor Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document or the Transaction Security and with any proceedings instituted by or against that Creditor Party as a consequence of it entering into a Finance Document, taking or holding the Transaction Security, or enforcing those rights.

53

SECTION 7
GUARANTEE AND JOINT AND SEVERAL LIABILITY OF BORROWERS

16 GUARANTEE AND INDEMNITY

16.1 Guarantee and indemnity

The Guarantor irrevocably and unconditionally:

(a) guarantees to each Finance Party punctual performance by each Borrower of all of that Borrower's obligations under the Finance Documents;

(b) undertakes with each Finance Party that whenever a Borrower does not pay any amount when due under or in connection with any Finance Document, the Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and

(c) agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of a Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by the Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 16 (Guarantee and Indemnity) if the amount claimed had been recoverable on the basis of a guarantee.

16.2 Continuing guarantee

This Guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Transaction Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.

16.3 Reinstatement

If any discharge, release or arrangement (whether in respect of the obligations of any Transaction Obligor or any security for those obligations or otherwise) is made by a Creditor 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 Guarantor under this Clause 16 (Guarantee and Indemnity) will continue or be reinstated as if the discharge, release or arrangement had not occurred.

16.4 Waiver of defences

The obligations of the Guarantor under this Clause 16 (Guarantee and Indemnity) and in respect of any Transaction Security will not be affected or discharged by an act, omission, matter or thing which, but for this Clause 16.4 (Waiver of defences), would reduce, release or prejudice any of its obligations under this Clause 16 (Guarantee and Indemnity) or in respect of any Transaction Security (without limitation and whether or not known to it or any Creditor Party) including:

(a) any time, waiver or consent granted to, or composition with, any Transaction Obligor or other person;

54

(b) the release of any other Transaction Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

(c) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or delay in perfecting, or refusal or neglect to take up or enforce, or delay in taking or enforcing any rights against, or security over assets of, any Transaction 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 a Transaction 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 including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or 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.

16.5 Immediate recourse

The Guarantor waives any right it may have of first requiring any Creditor 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 (including without limitation to commence any proceedings under any Finance Document or to enforce any Transaction Security) before claiming or commencing proceedings under this Clause 16 (Guarantee and Indemnity). This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

16.6 Appropriations

Until all amounts which may be or become payable by the Transaction Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Creditor 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 Creditor 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 the Guarantor shall not be entitled to the benefit of the same; and

(b) hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of the Guarantor's liability under this Clause 16 (Guarantee and Indemnity).

16.7 Deferral of Guarantor's rights

All rights which the Guarantor at any time has (whether in respect of this Guarantee, a mortgage or any other transaction) against any Borrower, any other Transaction Obligor or their respective assets shall be fully subordinated to the rights of the Creditor Parties under the Finance Documents and until the end of the Security Period and unless the Facility Agent otherwise directs, the Guarantor will not exercise any rights which it may have (whether in

55

respect of any Finance Document to which it is a Party or any other transaction) 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 16 (Guarantee and Indemnity):

(a) to be indemnified by a Transaction Obligor;

(b) to claim any contribution from any third party providing security for, or any other guarantor of, any Transaction 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 Creditor Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Creditor Party;

(d) to bring legal or other proceedings for an order requiring any Transaction Obligor to make any payment, or perform any obligation, in respect of which the Guarantor has given a guarantee, undertaking or indemnity under Clause 16.1 (Guarantee and indemnity);

(e) to exercise any right of set-off against any Transaction Obligor; and/or

(f) to claim or prove as a creditor of any Transaction Obligor in competition with any Creditor Party.

If the Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Creditor Parties by the Transaction Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Creditor Parties and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with Clause 33 (Payment Mechanics).

16.8 Additional security

This Guarantee and any other Security given by the Guarantor is in addition to and is not in any way prejudiced by, and shall not prejudice, any other guarantee or Security or any other right of recourse now or subsequently held by any Creditor Party or any right of set-off or netting or right to combine accounts in connection with the Finance Documents.

16.9 Applicability of provisions of Guarantee to other Security

Clauses 16.2 (Continuing guarantee), 16.3 (Reinstatement), 16.4 (Waiver of defences), 16.5 (Immediate recourse), 16.6 (Appropriations), 16.7 (Deferral of Guarantor's rights) and 16.8 (Additional security) shall apply, with any necessary modifications, to any Security which the Guarantor creates (whether at the time at which it signs this Agreement or at any later time) to secure the Secured Liabilities or any part of them.

16.10 Release of Guarantor

If a Permitted Ultimate Beneficial Ownership Change is effected (subject to the terms of paragraph (f) of Clause 26.10 (Ownership of the Obligors and the Shareholder)), the Finance Parties will release the Guarantor from its obligations under this Guarantee subject to:

(a) a person in all respects acceptable to the Facility Agent (acting with the authorisation of all the Lenders in their sole and absolute discretion) (the "New Guarantor") providing, in substitution

56

of this Guarantee, a guarantee of all the Borrowers' obligations under this Agreement and the other Finance Documents in such form and by no later than such date as the Facility Agent (acting on the instructions of all the Lenders in their sole discretion) may require; and

(b) the Facility Agent receiving any other documents as it or any other Finance Party may require in connection with the New Guarantor and the release of the Guarantor (including, but not limited to, those referred to at paragraphs 1, 4 and 5 of Part A of Schedule 2) in form and substance satisfactory to the Facility Agent.

17 JOINT AND SEVERAL LIABILITY OF THE BORROWERS

17.1 Joint and several liability

All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be joint and several.

17.2 Waiver of defences

The liabilities and obligations of a Borrower shall not be impaired by:

(a) this Agreement being or later becoming void, unenforceable or illegal as regards any other Borrower;

(b) any Lender or the Security Agent entering into any rescheduling, refinancing or other arrangement of any kind with any other Borrower;

(c) any Lender or the Security Agent releasing any other Borrower or any Security created by a Finance Document; or

(d) any time, waiver or consent granted to, or composition with any other Borrower or other person;

(e) the release of any other Borrower or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

(f) 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 other Borrower 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;

(g) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of any other Borrower or any other person;

(h) 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 including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;

(i) any unenforceability, illegality or invalidity of any obligation or any person under any Finance Document or any other document or security; or

(j) any insolvency or similar proceedings.

57

17.3 Principal Debtor

Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no Borrower shall, in any circumstances, be construed to be a surety for the obligations of any other Borrower under this Agreement.

17.4 Borrower restrictions

(a) Subject to paragraph (b) below, during the Security Period no Borrower shall:

(i) claim any amount which may be due to it from any other Borrower whether in respect of a payment made under, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any Finance Document; or

(ii) take or enforce any form of security from any other Borrower for such an amount, or in any way seek to have recourse in respect of such an amount against any asset of any other Borrower; or

(iii) set off such an amount against any sum due from it to any other Borrower; or

(iv) prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving any other Borrower; or

(v) exercise or assert any combination of the foregoing.

(b) If during the Security Period, the Facility Agent, by notice to a Borrower, requires it to take any action referred to in paragraph (a) above in relation to any other Borrower, that Borrower shall take that action as soon as practicable after receiving the Facility Agent's notice.

17.5 Deferral of Borrowers' rights

Until all amounts which may be or become payable by the Borrowers under or in connection with the Finance Documents have been irrevocably paid in full and unless the Facility Agent otherwise directs, no Borrower will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:

(a) to be indemnified by any other Borrower; or

(b) to claim any contribution from any other Borrower in relation to any payment made by it under the Finance Documents.

58

SECTION 8
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

18 REPRESENTATIONS

18.1 General

Each Obligor makes the representations and warranties set out in this Clause 18 (Representations) to each Finance Party on the date of this Agreement.

18.2 Status

(a) It is a corporation, duly incorporated and validly existing in good standing under the law of its Original Jurisdiction.

(b) It and each Transaction Obligor has the power to own its assets and carry on its business as it is being conducted.

18.3 Share capital and ownership

(a) Each of Borrower A and Borrower B is authorised to issue 500 registered shares with a par value of $20 each, all of which shares have been issued fully paid.

(b) Borrower C is authorised to issue 500 registered and/or bearer shares without par value, all of which shares have been issued in registered form fully paid.

(c) The Guarantor is authorised to issue 1,000,000,000 registered shares of common stock with a par value of $0.01 each and 500,000,000 registered preferred shares with a par value of $0.01 each, of which 104,274,708 registered shares of common stock have been issued and are outstanding as at the date of this Agreement.

(d) The legal title to and beneficial interest in the shares in each Borrower is held free of any Security (other than Permitted Security) or any other claim by the Shareholder.

(e) Each Borrower is 100 per cent. owned directly or indirectly (but, if indirectly, only through the Shareholder), by the Guarantor (unless a Permitted Ultimate Beneficial Ownership Change has been effected in accordance with, and subject to, the terms of paragraph (f) of Clause 26.10 (Ownership of the Obligors and the Shareholder)).

(f) The ultimate beneficial ownership and control of at least 50.1 per cent. of the issued and outstanding common stock of the Guarantor (and the voting rights attaching to those shares) is held, directly or indirectly, by the Ultimate Beneficial Owner.

(g) None of the shares in a Borrower is subject to any option to purchase, pre-emption rights or similar rights.

18.4 Binding obligations

The obligations expressed to be assumed by it in each Transaction Document to which it is a party are legal, valid, binding and enforceable obligations.

59

18.5 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 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) No third party has or will have any Security (except for Permitted Security) over any assets that are the subject of any Transaction Security granted by it.

(c) The Transaction Security granted by it to the Security Agent or any other Creditor 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.

(d) No concurrence, consent or authorisation of any person is required for the creation of or otherwise in connection with any Transaction Security.

18.6 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 do not and will not conflict with:

(a) 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.

18.7 Power and authority

(a) It has the power to enter into, perform and deliver, and has taken all necessary action to authorise:

(i) 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) in the case of a Borrower, its registration of the Vessel owned by it under the relevant Approved Flag.

(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.

18.8 Validity and admissibility in evidence

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; and

60

(b) to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions,

have been obtained or effected and are in full force and effect.

18.9 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.

18.10 Insolvency

No:

(a) corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 26.8 (Insolvency proceedings); or

(b) creditors' process described in Clause 26.9 (Creditors' process),

has been taken or, to its knowledge, threatened in relation to a member of the Group; and none of the circumstances described in Clause 26.7 (Insolvency) applies to a member of the Group.

18.11 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 registered, filed, recorded, notarised 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.

18.12 Deduction of Tax

It is not required to make any Tax Deduction from any payment it may make under any Finance Document to which it is a party.

18.13 No default

(a) No Event of Default and, on the date of this Agreement and on the Drawdown Date, no Default is continuing or might reasonably be expected to result from the making of the Drawdown 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 any of its Subsidiaries or to which its (or any of its Subsidiaries') assets are subject.

61

18.14 No misleading information

(a) Any factual information provided by any member of the Group 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.

18.15 Financial Statements

(a) Its Original Financial Statements were prepared in accordance with GAAP consistently applied.

(b) Its Original Financial Statements give a true and fair view of its financial condition as at the end of the relevant financial year and results of operations during the relevant financial year (consolidated in the case of the Guarantor).

(c) There has been no material adverse change in its assets, business or financial condition (or the assets, business or consolidated financial condition of the Group, in the case of the Guarantor) since 31 December 2016.

(d) Its most recent financial statements delivered pursuant to Clause 19.2 (Financial statements):

(i) have been prepared in accordance with Clause 19.4 (Requirements as to financial statements); and

(ii) give a true and fair view of (if audited) or fairly represent (if unaudited) its financial condition as at the end of the relevant financial year and operations during the relevant financial year (consolidated in the case of the Guarantor).

(e) Since the date of the most recent financial statements delivered pursuant to Clause 19.2 (Financial statements) there has been no material adverse change in its business, assets or financial condition (or the business or consolidated financial condition of the Group, in the case of the Guarantor).

18.16 Pari passu ranking

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.

18.17 No proceedings pending or threatened

(a) No material litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) of or before any court, arbitral body or agency have been started or threatened against it or any other Transaction Obligor (in the case of an Approved Manager, in connection with a Vessel or a Borrower), other than as disclosed to the Facility Agent and the public filings of the Guarantor with the US Securities and Exchange Commission.

62

(b) No judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which might reasonably be expected to have a Material Adverse Effect has (to the best of its knowledge and belief (having made due and careful enquiry)) been made against it or any other Transaction Obligor (in the case of an Approved Manager, in connection with a Vessel or a Borrower).

18.18 Validity and completeness of the Transaction Documents

(a) Each of the Transaction Documents to which any Charterer and each Transaction Obligor is a party constitutes legal, valid, binding and enforceable obligations of that Charterer and each Transaction Obligor.

(b) The copies of the Transaction Documents delivered to the Facility Agent before the date of this Agreement are true and complete copies.

(c) No amendments or additions to the Transaction Documents have been agreed nor has any Charterer or any Transaction Obligor waived any of its respective rights under the Transaction Documents.

18.19 Valuations

(a) All information supplied by it or on its behalf to an Approved Valuer for the purposes of a valuation delivered to the Facility Agent in accordance with this Agreement was true and accurate as at the date it was supplied or (if appropriate) as at the date (if any) at which it is stated to be given.

(b) It has not omitted to supply any information to an Approved Valuer which, if disclosed, would adversely affect any valuation prepared by such Approved Valuer.

(c) There has been no change to the factual information provided pursuant to paragraph (a) above in relation to any valuation between the date such information was provided and the date of that valuation which, in either case, renders that information untrue or misleading in any material respect.

18.20 No breach of laws

It has not (and no other Transaction Obligor has) breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.

18.21 No Charter

Except as disclosed by the Borrowers to the Security Agent in writing on or before the date of this Agreement, no Vessel is subject to any Charter other than a Permitted Charter.

18.22 Compliance with Environmental Laws

All Environmental Laws relating to the ownership, operation and management of each Vessel and the business of each Transaction Obligor (as now conducted and as reasonably anticipated to be conducted in the future) and the terms of all Environmental Approvals have been complied with.

63

18.23 No Environmental Claim

No Environmental Claim has been made or threatened against any Transaction Obligor or any Vessel.

18.24 No Environmental Incident

No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred.

18.25 ISM and ISPS Code compliance

All requirements of the ISM Code and the ISPS Code as they relate to each Borrower, each Approved Manager and each Vessel have been complied with.

18.26 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 (or any other member of the Group) with respect to Taxes.

18.27 Financial Indebtedness

(a) No Borrower has any Financial Indebtedness outstanding other than Permitted Financial Indebtedness.

(b) No Borrower has acquired or invested in any additional assets and/or investments other than its Vessel.

18.28 Overseas companies

No Transaction Obligor has 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.

18.29 Good title to assets

It and each other Transaction Obligor 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.

18.30 Ownership

(a) Each Borrower is the sole legal and beneficial owner of all rights and interests which any Charter creates in favour of that Borrower.

(b) Each Borrower is the sole legal and beneficial owner of the Vessel owned by it, its Earnings and its Insurances.

64

(c) With effect on and from the date of its creation or intended creation, each Transaction Obligor will be the sole legal and beneficial owner of any asset that is the subject of any Transaction Security created or intended to be created by such Transaction Obligor.

(d) The constitutional documents of each Transaction Obligor do not and could not restrict or inhibit any transfer of the shares of a Borrower on creation or enforcement of the security conferred by the Security Documents.

18.31 Place of business

No Transaction Obligor has a place of business in the United Kingdom or the United States of America.

18.32 No employee or pension arrangements

No Transaction Obligor (other than an Approved Manager) has any employees or any liabilities under any pension scheme.

18.33 Sanctions

(a) No Transaction Obligor:

(i) and no director or officer, or to the best of its knowledge employee, of a Transaction Obligor, is a Prohibited Person;

(ii) is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person; or

(iii) owns or controls a Prohibited Person.

(b) No proceeds of the Loan shall be made available, directly or indirectly, to or for the benefit of a Prohibited Person nor shall they be otherwise directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions.

18.34 US Tax Obligor

No Transaction Obligor is a US Tax Obligor.

18.35 Repetition

The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on the date of the Drawdown Request and the first day of each Interest Period.

19 INFORMATION UNDERTAKINGS

19.1 General

The undertakings in this Clause 19 (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.

65

19.2 Financial statements

(a) Subject to paragraph (c) below, each Obligor shall supply to the Facility Agent in sufficient copies for all the Lenders:

(i) as soon as they become available, but in any event within 180 days after the end of each of its financial years (commencing with the financial year ended on 31 December 2017):

(A) the unaudited financial statements of each Borrower for that financial year; and

(B) the audited consolidated financial statements of the Guarantor for that financial year;

(ii) as soon as the same become available, but in any event within 90 days after the end of each half of each of its financial years (commencing with the financial half year ended on 31 December 2017), the unaudited financial statements of each Borrower for that financial half year; and

(iii) as soon as the same become available, but in any event within 90 days after the end of each quarter of each of its financial years (commencing with the financial quarter ended on 31 December 2017), the unaudited consolidated financial statements of the Guarantor for that financial quarter.

(b) The financial statements required to be provided by the Obligors under paragraph (a) above shall include, or shall be supplemented by, updated details of all off balance sheets and time charter hire commitments.

(c) To the extent that the financial statements and other information required to be provided by each Obligor to the Facility Agent under paragraph (a) above are published on the internet by, or on behalf of such Obligor, such statements and information must be made immediately available to the Facility Agent and in any event within 5 Business Days of such publication.

19.3 Compliance Certificate

(a) The Guarantor shall supply to the Facility Agent, with each set of financial statements delivered pursuant to paragraph (a)(i)(B) and paragraph (a)(iii) of Clause 19.2 (Financial statements), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 20 (Financial Covenants) as at the date as at which those financial statements were drawn up and including, without limitation, valuations (at the cost of the Borrowers) in a form acceptable to the Facility Agent evidencing the Market Value of each Fleet Vessel.

(b) Each Compliance Certificate shall be signed by an officer or any other authorised signatory of the Guarantor.

19.4 Requirements as to financial statements

(a) Each set of financial statements delivered by an Obligor pursuant to Clause 19.2 (Financial statements) shall be certified by an officer or any other authorised signatory of the company as giving a true and fair view (if audited) or fairly representing (if unaudited) its financial condition and operations as at the date as at which those financial statements were drawn up.

66

(b) Each Borrower shall procure that each set of financial statements of an Obligor delivered pursuant to Clause 19.2 (Financial statements) is prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for that Obligor unless, in relation to any set of financial statements, it notifies the Facility Agent that there has been a change in GAAP, the accounting practices or reference periods and its auditors (or, if appropriate, the auditors of that Obligor) deliver to the Facility Agent:

(i) a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which that Obligor's Original Financial Statements were prepared; and

(ii) sufficient information, in form and substance as may be reasonably required by the Facility Agent, to enable the Lenders to determine whether Clause 20 (Financial Covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and that Obligor's Original Financial Statements.

Any reference in this Agreement to those 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.

19.5 Information: miscellaneous

Each Obligor shall supply to the Facility Agent (in sufficient copies for all the Lenders, if the Facility Agent so requests):

(a) upon the Facility Agent's request, 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 or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) which are current, or to the best of the Obligor's knowledge threatened or pending, against any Transaction Obligor or any member of the Group, and which might, if adversely determined, have a Material Adverse Effect;

(c) promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which is made against any Transaction Obligor or any member of the Group and which might have a Material Adverse Effect;

(d) promptly, its constitutional documents where these have been amended or varied;

(e) promptly, such further information and/or documents regarding:

(i) each Vessel, goods transported on each Vessel, its Earnings, its Insurances, the Shareholder or any other Transaction Obligor;

(ii) the Security Assets;

(iii) compliance of the Transaction Obligors with the terms of the Finance Documents; and

67

(iv) the financial condition, business and operations of any member of the Group,

as any Finance Party (through the Facility Agent) may reasonably request; and

(f) 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 or as may be required by any regulatory authority.

19.6 Notification of Default

(a) Each Obligor shall, and shall procure that each other Transaction Obligor shall, notify the Facility Agent:

(i) of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor); and

(ii) promptly upon becoming aware of the same, of any breach of any Sanctions applicable to any Vessel, any Transaction Obligor or any party to any agreement relating to any Vessel.

(b) Promptly upon a request by the Facility Agent, each Borrower shall supply to the Facility Agent a certificate signed by an authorised signatory 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).

19.7 Use of websites

(a) Each Obligor 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 Borrowers 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;

(ii) both the relevant Obligor 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 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 Obligors accordingly and each Obligor shall supply the information to the Facility Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event each Obligor 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 Obligors or any of them and the Facility Agent.

(c) An Obligor shall promptly upon becoming aware of its occurrence notify the Facility Agent if:

68

(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 that Obligor 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 an Obligor notifies the Facility Agent under sub-paragraph (i) or (v) of paragraph (c) above, all information to be provided by the Obligors 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 Obligors shall comply with any such request within 10 Business Days.

19.8 "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 a Transaction Obligor (or of a Holding Company of a Transaction Obligor) (including, without limitation, a change of ownership of a Transaction Obligor) 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,

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, each Obligor 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

69

necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

20 FINANCIAL COVENANTS

20.1 Borrowers' minimum liquidity

Each Borrower shall ensure that, as from the Drawdown Date and at all times thereafter during the Security Period, an amount of not less than $1,000,000 (the "Minimum Liquidity Amount") shall:

(a) unless paragraph (b) below applies, be credited in its entirety to its Earnings Account; or

(b) where that Borrower has opened and elected to place funds on its Time Deposit Account, be credited in its entirety to that Borrower's Time Deposit Account.

The Minimum Liquidity Amount in respect of each Borrower shall be pledged in its Earnings Account or its Time Deposit Account pursuant to the relevant Account Security and shall remain blocked and may not be withdrawn.

20.2 Guarantor's financial covenants

The Guarantor shall ensure that at all times during the Security Period the following covenants shall be complied with:

(a) the Working Capital shall be greater than zero;

(b) it has Cash and Cash Equivalents of the Guarantor (on a consolidated basis) of at least $15,000,000; and

(c) the ratio of Total Net Liabilities to Net Market Value Adjusted Total Assets shall be less than 50 per cent.

In this Clause 20.2 (Guarantor's financial covenants).

"Cash and Cash Equivalents" means, at any time, the aggregate of:

(a) cash in hand or on deposit with any bank;

(b) Marketable Securities valued at their then published market value rates owned by the members of the Group at that date; and

(c) any other instrument, security or investment approved by the Majority Lenders,

(d) which are free from any Security and/or restrictions and to which any member of the Group is beneficially entitled at that time and which are readily available to the members of the Group and capable of being applied against Financial Indebtedness, but also including any cash deposit which is blocked and/or otherwise restricted and/or subject to a Security if the sole purpose of such deposit and/or restriction and/or Security is the maintenance of a minimum liquidity covenant under borrowing arrangements of any member of the Group, as demonstrated by the then most recent Financial Statements.

70

"Current Assets" means, in respect of any Relevant Period, the amount of the current assets of the Guarantor and the members of the Group (on a consolidated basis) as shown in the Latest Financial Statements.

"Current Liabilities" means, in respect of any Relevant Period, the amount of the current liabilities of the Guarantor and the members of the Group (on a consolidated basis) (as shown in the Latest Financial Statements) less the current liabilities maturing after six (6) months of the relevant Testing Date, as shown in the Latest Financial Statements.

"Fleet Vessels" means all vessels (including the Vessels) from time to time directly or indirectly owned by the Guarantor (each, a "Fleet Vessel").

"Latest Financial Statements" means the financial statements of the Guarantor which are required to be delivered pursuant to Clause 19.2 (Financial statements) relating to a period ending on a Testing Date.

"Market Value Adjusted Total Assets" means, in respect of any Relevant Period, Total Assets adjusted to reflect the difference between the book values of all Fleet Vessels and the aggregate Market Value of all Fleet Vessels.

"Marketable Securities" means any bonds, stocks, notes or bills payable in a freely convertible and transferable currency and which are listed on a stock exchange acceptable to the Facility Agent.

"Net Market Value Adjusted Total Assets" means, in respect of any Relevant Period, Market Value Adjusted Total Assets less Cash and Cash Equivalents, each as shown in the Latest Financial Statements.

"Relevant Period" means each period of three months ending on 31 March, 30 June, 30 September and 31 December in each financial year of the Guarantor.

"Testing Date" means the last date of any quarterly period at the end of which the financial statements of the Guarantor that are required to be delivered pursuant to paragraph (a) of Clause 19.2 (Financial statements) are prepared.

"Total Assets" means, in respect of any Relevant Period, the aggregate book value of all current assets, fixed assets, and other assets and restricted cash of the Guarantor on a consolidated basis as shown in the Latest Financial Statements but excluding any assets held on trust.

"Total Liabilities" means, in respect of any Relevant Period, the aggregate book value of all liabilities of the Guarantor at any time on a consolidated basis as shown in the Latest Financial Statements.

"Total Net Liabilities" means, in respect of any Relevant Period, Total Liabilities less Cash and Cash Equivalents, each as shown in the Latest Financial Statements.

"Working Capital" means, in respect of any Relevant Period, Current Assets less Current Liabilities.

71

20.3 Testing

The financial covenants set out in Clause 20.2 (Guarantor's financial covenants) shall be calculated as per each Testing Date in accordance with GAAP and tested by reference to each of the financial statements of the Guarantor delivered pursuant to paragraphs (a)(i)(B) or (a)(iii) of Clause 19.2 (Financial statements) and/or each Compliance Certificate delivered pursuant to Clause 19.3 (Compliance Certificate).

21 GENERAL UNDERTAKINGS

21.1 General

The undertakings in this Clause 21 (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 (such permission not to be unreasonably withheld in the case of Clause 21.12 in relation to an Approved Manager).

21.2 Authorisations

Each Obligor shall, and shall procure that each other Transaction 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 Facility Agent of,

any Authorisation required under any law or regulation of a Relevant Jurisdiction or the state of the applicable Approved Flag at any time of each Vessel to enable it to:

(i) perform its obligations under the Transaction Documents to which it is a party;

(ii) ensure the legality, validity, enforceability or admissibility in evidence in any Relevant Jurisdiction and in the state of the Approved Flag at any time of each Vessel or any Transaction Document to which it is a party; and

(iii) own and operate the relevant Vessel (in the case of a Borrower).

21.3 Compliance with laws

Each Obligor 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.

21.4 Environmental compliance

Each Obligor shall, and shall procure that each other Transaction Obligor will:

(a) comply with all Environmental Laws;

(b) obtain, maintain and ensure compliance with all requisite Environmental Approvals;

(c) implement procedures to monitor compliance with and to prevent liability under any Environmental Law,

where failure to do so has or is reasonably likely to have a Material Adverse Effect.

72

21.5 Environmental claims

Each Obligor shall, and shall procure that each other Transaction Obligor will, (through the Guarantor), promptly upon becoming aware of the same, inform the Facility Agent in writing of:

(a) any Environmental Claim against any member of the Group which is current, pending or threatened; and

(b) any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group,

where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect.

21.6 Taxation

(a) Each Obligor shall, and shall procure that each other Transaction Obligor (other than an Approved Manager) 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;

(ii) adequate reserves are maintained for those Taxes and the costs required to contest them and both have been disclosed in its latest financial statements delivered to the Facility Agent under Clause 19.2 (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) No Obligor shall, and the Obligors shall procure that no other Transaction Obligor (other than an Approved Manager) will, change its residence for Tax purposes.

21.7 Overseas companies

Each Obligor shall, and shall procure that each other Transaction Obligor (other than an Approved Manager) will, 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.

21.8 Pari passu ranking

Each Obligor shall 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.

21.9 Title

(a) Each Borrower shall hold the legal title to, and own the entire beneficial interest in:

73

(i) the Vessel owned by it, its Earnings and its Insurances; and

(ii) with effect on and from its creation or intended creation, any other assets the subject of any Transaction Security created or intended to be created by that Borrower.

(b) The Guarantor shall hold the legal title to, and own the entire beneficial interest in, with effect on and from its creation or intended creation, any assets the subject of any Transaction Security created or intended to be created by the Guarantor.

21.10 Negative pledge

(a) No Borrower shall, and the Obligors shall procure that the Shareholder will not, create or permit to subsist any Security over any of its assets (which are, in the case of the Shareholder, the subject of the Security created or intended to be created by the Finance Documents).

(b) No Borrower shall:

(i) sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by a Transaction Obligor;

(ii) sell, transfer or otherwise dispose of any of its receivables on recourse terms;

(iii) 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

(iv) 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.

(c) Paragraphs (a) and (b) above do not apply to any Permitted Security.

21.11 Disposals

Subject to Clause 23.17 (Restrictions on chartering, appointment of managers etc.), no Borrower shall, and the Obligors shall procure that the Shareholder will not, enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset (including without limitation any Vessel, its Earnings or its Insurances) which is, in the case of the Shareholder, the subject of the Security created or intended to be created by the Finance Documents.

21.12 Merger

No Obligor shall and the Obligors shall procure that no other Transaction Obligor will enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction (except in the case of a reorganisation of a Borrower arising in connection with a Permitted Ultimate Beneficial Ownership Change and subject to paragraph (f) of Clause 26.10 (Ownership of the Obligors and the Shareholder)).

21.13 Change of business

(a) The Guarantor shall procure that no substantial change is made to the general nature of the business of the Guarantor or the Group from that carried on at the date of this Agreement.

74

(b) No Borrower shall engage in any business other than the ownership and operation of its Vessel.

21.14 Financial Indebtedness

No Borrower shall incur or permit to be outstanding any Financial Indebtedness except (i) Permitted Financial Indebtedness and (ii) Financial Indebtedness owed to trade creditors of that Borrower in the ordinary course of its business in relation to the trading and operation of its Vessel.

21.15 Expenditure

No Borrower shall incur any expenditure, except for expenditure reasonably incurred in the ordinary course of owning, operating, maintaining and repairing its Vessel.

21.16 Share capital

(a) No Borrower shall:

(i) purchase, cancel or redeem any of its share capital;

(ii) increase or reduce its authorised share capital;

(iii) issue any further shares except to the Shareholder and provided such new shares are in registered form and made subject to the terms of the relevant Shares Security immediately upon the issue of such new shares in a manner satisfactory to the Facility Agent and the terms of the relevant Shares Security are complied with;

(iv) appoint any further director or officer of that Borrower (unless the provisions of the relevant Shares Security are complied with); or

(v) convert any of its shares into bearer form.

(b) The Guarantor shall ensure that none of the shares in a Borrower or the Shareholder are converted into, or issued in, bearer form.

21.17 Dividends

(a) No Obligor shall make or pay any dividend or other distribution (in cash or in kind) in respect of its share capital following the occurrence of an Event of Default which is continuing or where the making or payment of such dividend or distribution would result in the occurrence of an Event of Default.

21.18 People of significant control regime

Each Obligor shall (and the Guarantor shall ensure that each other Transaction Obligor will):

(a) within the relevant timeframe, comply with any notice it receives pursuant to Part 21A of the Companies Act 2006 from any company incorporated in the United Kingdom whose shares are the subject of the Transaction Security; and

(b) promptly provide the Security Agent with a copy of that notice.

75

21.19 Accounts

No Borrower shall open or maintain any account with any bank or financial institution except its Accounts.

21.20 Other transactions

No Borrower shall:

(a) be the creditor in respect of any loan or any form of credit to any person other than another Transaction Obligor and where such loan or form of credit is Permitted Financial Indebtedness;

(b) give or allow to be outstanding any guarantee or indemnity to or for the benefit of any person in respect of any obligation of any other person or enter into any document under which a Borrower assumes any liability of any other person other than any guarantee or indemnity given under the Finance Documents other than the incurrence of liabilities to trade creditors in the ordinary course of its business in relation to the trading and operation of its Vessel.

(c) enter into any material agreement other than:

(i) the Transaction Documents;

(ii) any other agreement expressly allowed under any other term of this Agreement; and

(d) enter into any transaction on terms which are, in any respect, less favourable to that Borrower than those which it could obtain in a bargain made at arms' length; or

(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.

21.21 Unlawfulness, invalidity and ranking; Security imperilled

No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, 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 a Transaction Obligor to perform any of its obligations under the Transaction Documents;

(b) cause any obligation of a Transaction Obligor 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.

21.22 Separate corporate existence

Each Borrower shall maintain separate corporate existence and identity, shall keep separate records, books and accounts and shall not co-mingle its assets nor become a member of a VAT Group.

76

21.23 Accounting reference date

No Obligor shall change its year end accounting reference date.

21.24 Securitisation

Each Obligor shall, and the Obligors shall procure that each other Transaction Obligor (other than an Approved Manager) will, assist the Facility Agent and/or any Lender in achieving a successful securitisation (or similar transaction) in respect of the Facility and the Finance Documents and such Transaction Obligor's reasonable costs for providing such assistance shall be met by the relevant Lender. Each Borrower, if requested by the Facility Agent, shall provide documentation evidencing the purchase price of the Vessel owned by it when acquired by that Borrower.

21.25 Constitutional documents

Without prejudice to Clause 21.16 (Share capital) and the terms of any Shares Security, no Obligor shall allow any amendment or variation to its constitutional documents unless such amendment or variation would clearly be immaterial to this Agreement and the other Finance Documents.

21.26 Further assurance

(a) Each Obligor shall, and shall procure that each other Transaction Obligor will, 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 any of the Creditor Parties provided by or pursuant to the Finance Documents or by law;

(ii) to confer on the Security Agent or confer on the Creditor Parties Security over any property and assets of that Transaction Obligor 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.

77

(b) Each Obligor shall, and shall procure that each other Transaction Obligor will 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 Creditor Parties by or pursuant to the Finance Documents.

(c) At the same time as an Obligor delivers to the Security Agent any document executed by itself or another Transaction Obligor pursuant to this Clause 21.26 (Further assurance), that Obligor shall deliver, or shall procure that such other Transaction Obligor will deliver, to the Security Agent a certificate signed by an officer of that Obligor or that Transaction Obligor which shall:

(i) set out the text of a resolution of that Obligor's or Transaction Obligor'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 and is valid under that Obligor's or Transaction Obligor's articles of incorporation, articles of association or other constitutional documents.

21.27 Charterparty Assignment

Upon a Borrower entering into an Assignable Charter, it shall enter into a Charterparty Assignment in respect of that Assignable Charter and shall procure that all relevant documents pursuant to that Charterparty Assignment in the agreed form are (and shall use its best endeavours to procure that the Charterer's acknowledgement to that Charterparty Assignment is) delivered to the Facility Agent in a form satisfactory to it and any supporting legal opinions as may be required by it.

21.28 Subordination

Each Obligor shall ensure that any loans to any Borrower, any sums owed to any Approved Manager in connection with any Borrower and/or any Ship, any claims of the Guarantor against any Borrower and any intra-group debt are fully subordinated to the Secured Liabilities.

22 INSURANCE UNDERTAKINGS

22.1 General

The undertakings in this Clause 22 (Insurance Undertakings) remain in force on and from the Drawdown Date and throughout the rest of 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.

22.2 Maintenance of obligatory insurances

Each Borrower shall keep the Vessel owned by it insured at its expense against:

(a) hull and machinery plus freight interest and hull interest and/or increased value and any other usual marine risks (including excess risks);

(b) war risks (including the London Blocking and Trapping addendum or its equivalent);

78

(c) protection and indemnity risks (including liability for oil pollution for an amount of no less than $1,000,000,000 and excess war risk P&I cover) on standard Club Rules, 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);

(d) freight, demurrage and defence; and

(e) any other risks against which the Facility Agent acting on the instructions of the Majority Lenders considers, having regard to practices and other circumstances prevailing at the relevant time, it would be reasonable for the Borrowers to insure and which are specified by the Facility Agent by notice to the Borrowers.

22.3 Terms of obligatory insurances

Each Borrower shall effect such insurances in respect of the Vessel owned by it:

(a) in dollars;

(b) in the case of hull and machinery and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of:

(i) an amount which, when aggregated with the amounts for which the other Mortgaged Vessels are insured for such risks, equals 120 per cent. of the Loan; and

(ii) the Market Value of that Vessel;

(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 but such amount shall not be less than $1,000,000,000;

(d) in the case of protection and indemnity risks, in respect of the full tonnage of its Vessel;

(e) in the case of the hull and machinery insurance, on the basis that the deductible is not higher than the Major Casualty figure;

(f) in the case where a Vessel is insured on a fleet policy, on the basis that each vessel insured on that fleet policy is deemed to be insured on an individual basis;

(g) on approved terms; and

(h) 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.

22.4 Further protections for the Finance Parties

In addition to the terms set out in Clause 22.3 (Terms of obligatory insurances), each Borrower shall procure that the obligatory insurances effected by it shall:

79

(a) subject always to paragraph Error! Reference source not found., name that Borrower as the sole named insured unless the interest of every other named insured is limited:

(i) in respect of any obligatory insurances for hull and machinery and war risks;

(A) to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and

(B) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and

(ii) in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it;

and every other named insured has undertaken in writing to the Security Agent (in such form as it requires) that any deductible shall be apportioned between that Borrower and every other named insured in proportion to the gross claims made or paid by each of them and that it shall do all things necessary and provide all documents, evidence and information to enable the Security Agent to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;

(b) name the Security Agent as loss payee with such directions for payment as the Facility Agent may specify;

(c) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Agent shall be made without set off, counterclaim or deductions or condition whatsoever;

(d) provide that the obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Agent or any other Finance Party; and

(e) provide that the Security Agent may make proof of loss if that Borrower fails to do so.

22.5 Renewal of obligatory insurances Each Borrower shall:

(a) at least 10 days before the expiry of any obligatory insurance effected by it:

(i) notify the Facility Agent of the Approved Brokers (or other insurers) and any protection and indemnity or war risks association through or with which that Borrower proposes to renew that obligatory insurance and of the proposed terms of renewal; and

(ii) obtain the Facility Agents' approval to the matters referred to in sub-paragraph (i) of paragraph (a) above;

(b) at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Facility Agent's approval pursuant to paragraph (a) above; and

80

(c) procure that the Approved Brokers and/or the approved war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Facility Agent in writing of the terms and conditions of the renewal.

22.6 Copies of policies; letters of undertaking

Each Borrower shall ensure that the Approved Brokers provide the Security Agent with:

(a) pro forma copies of all policies relating to the obligatory insurances which they are to effect or renew; and

(b) a letter or letters or undertaking in a form required by the Facility Agent and including undertakings by the Approved Brokers that:

(i) 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 22.4 (Further protections for the Finance Parties);

(ii) they will hold such policies, and the benefit of such insurances, to the order of the Security Agent in accordance with such loss payable clause;

(iii) they will advise the Security Agent immediately of any material change to the terms of the obligatory insurances;

(iv) they will, if they have not received notice of renewal instructions from that Borrower or its agents, notify the Security Agent not less than 14 days before the expiry of the obligatory insurances;

(v) if they receive instructions to renew the obligatory insurances, they will promptly notify the Facility Agent of the terms of the instructions;

(vi) they will not set off against any sum recoverable in respect of a claim relating to the Vessel owned by that Borrower under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of other vessels under the fleet cover to which that Vessel relates or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts in relation to other vessels under the fleet cover and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts in relation to other vessels under that fleet cover and will arrange for a separate policy to be issued in respect of that Vessel forthwith upon being so requested by the Security Agent; and

(vii) they will arrange for a separate policy to be issued in respect of the Vessel owned by that Borrower forthwith upon being so requested by the Facility Agent.

22.7 Copies of certificates of entry

Each Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Vessel owned by it is entered provide the Security Agent with:

(a) the certificate of entry for that Vessel;

81

(b) a letter or letters of undertaking in such form as may be required by the Facility Agent acting on the instructions of Majority Lenders; and

(c) each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Vessel.

22.8 Deposit of original policies

Each Borrower shall ensure that all policies relating to obligatory insurances effected by it deposited with the Approved Brokers through which the insurances are effected or renewed.

22.9 Payment of premiums

Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances effected by it and produce all relevant receipts when so required by the Facility Agent or the Security Agent.

22.10 Guarantees

Each Borrower 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.

22.11 Compliance with terms of insurances

(a) No Borrower shall do or omit to do (or 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.

(b) Without limiting paragraph (a) above, each Borrower shall:

(i) 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 sub-paragraph (iii) of paragraph (b) of Clause 22.6 (Copies of policies; letters of undertaking)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Facility Agent has not given its prior approval;

(ii) not make any changes relating to the classification or classification society or manager or operator of the Vessel owned by it approved by the underwriters of the obligatory insurances without obtaining the prior consent of the insurers;

(iii) make (and promptly supply copies to the Facility Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Vessel owned by it is entered to maintain cover for trading 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

(iv) not employ the Vessel owned by it, 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.

82

22.12 Alteration to terms of insurances

No Borrower shall make or agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance.

22.13 Settlement of claims

Each Borrower shall:

(a) not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty; and

(b) do all things necessary and provide all documents, evidence and information to enable the Security Agent to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

22.14 Provision of copies of communications

Each Borrower shall provide the Security Agent, at the time of each such communication, with copies of all written communications between that Borrower and:

(a) the Approved Brokers;

(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 Borrower'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 Borrower 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.

22.15 Provision of information

Each Borrower shall promptly provide the Facility Agent (or any persons which it may designate) with any information which the Facility Agent (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 22.16 (Mortgagee's interest, additional perils and mortgagee's rights insurances) or dealing with or considering any matters relating to any such insurances,

and the Borrowers shall, forthwith upon demand, indemnify the Facility Agent in respect of all fees and other expenses incurred by or for the account of the Facility Agent in connection with any such report as is referred to in paragraph (a) above.

83

22.16 Mortgagee's interest, additional perils and mortgagee's rights insurances

The Security Agent shall be entitled from time to time to effect, maintain and renew:

(a) a mortgagee's interest insurance in an amount of not less than 120 per cent. of the Loan;

(b) a mortgagee's interest additional perils insurance in an amount of not less than 120 per cent. of the Loan;

(c) if applicable, a mortgagee's rights insurance in an amount of not less than 110 per cent. of the Loan,

and the Borrowers shall upon demand fully indemnify the Finance Parties in respect of all 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.

23 POST-DELIVERY VESSEL UNDERTAKINGS

23.1 General

The undertakings in this Clause 23 (Post-Delivery Vessel Undertakings) remain in force on and from the Drawdown Date and throughout the rest of 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.

23.2 Vessel's names and registration

Each Borrower shall, in respect of the Vessel owned by it:

(a) keep that Vessel registered in its name under the relevant Approved Flag from time to time at its port of registration;

(b) not do or allow to be done anything as a result of which such registration might be suspended, cancelled or imperilled; and

(c) not change the name of that Vessel.

23.3 Repair and classification

Each Borrower shall keep the Vessel owned by it in a good and safe condition and state of repair:

(a) consistent with first class ship ownership and management practice; and

(b) so as to maintain that Vessel's Approved Classification free of overdue recommendations and conditions.

23.4 Modifications

No Borrower shall make any modification or repairs to, or replacement of, any Vessel or equipment installed on it which would or might materially alter the structure, type or performance characteristics of that Vessel or materially reduce its value.

84

23.5 Removal and installation of parts

(a) Subject to paragraph (b) below, no Borrower shall remove any material part of the Vessel owned by it, or any item of equipment installed on that Vessel unless:

(i) 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;

(ii) the replacement part or item is free from any Security in favour of any person other than the Security Agent; and

(iii) the replacement part or item becomes, on installation on that Vessel, the property of that Borrower and subject to the security constituted by the Mortgage and, where applicable, the Deed of Covenant in respect of that Vessel.

(b) A Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Vessel owned by that Borrower.

23.6 Surveys

Each Borrower shall submit the Vessel owned by it regularly to all periodic or other surveys which may be required for classification purposes and, if so required by the Facility Agent acting on the instructions of the Majority Lenders, provide the Facility Agent, with copies of all survey reports.

23.7 Inspection

(a) Each Borrower shall permit the Security Agent (acting through surveyors or other persons appointed by it for that purpose) to board the Vessel 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.

(b) The cost of all inspections under this Clause 23.7 (Inspection) shall be for the account of the Borrowers Provided that if no Event of Default has occurred and the relevant Vessel is found to be in a condition satisfactory to the Facility Agent (acting on the instructions of the Majority Lenders) in all respects, the Borrowers shall not have to pay for more than one inspection in respect of that Vessel in each calendar year.

23.8 Prevention of and release from arrest

(a) Each Borrower shall, in respect of the Vessel owned by it, promptly discharge:

(i) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against that Vessel, its Earnings or its Insurances;

(ii) all Taxes, dues and other amounts charged in respect of that Vessel, its Earnings or its Insurances; and

(iii) all other outgoings whatsoever in respect of that Vessel, its Earnings or its Insurances.

(b) Each Borrower shall immediately upon receiving notice of the arrest of the Vessel owned by it or of its detention in exercise or purported exercise of any lien or claim, take all steps necessary to procure its release by providing bail or otherwise as the circumstances may require.

85

23.9 Compliance with laws etc.

Each Borrower shall:

(a) comply, or procure compliance with all laws or regulations:

(i) relating to its business generally; and

(ii) relating to the Vessel owned by it, its ownership, employment, operation, management and registration,

including, but not limited to, the ISM Code, the ISPS Code, all Environmental Laws, all Sanctions and the laws of the relevant Approved Flag;

(b) obtain, comply with and do all that is necessary to maintain in full force and effect any Environmental Approvals;

(c) without limiting paragraph (a) above, not employ the Vessel owned by it nor allow its employment, operation or management in any manner contrary to any law or regulation including but not limited to the ISM Code, the ISPS Code, all Environmental Laws and all Sanctions; and

(d) not appoint any manager or agent to manage the Vessel owned by it unless such party undertakes to procure that any agreement entered into relating to the management, employment or operation of that Vessel contains a clause in which the counterparty undertakes to comply with all Sanctions.

23.10 ISPS Code

Without limiting paragraph (a) of Clause 23.9 (Compliance with laws etc.), each Borrower shall:

(a) procure that the Vessel owned by it and the company responsible for that Vessel's compliance with the ISPS Code comply with the ISPS Code; and

(b) maintain an ISSC and an IAPPC for that Vessel; and

(c) notify the Facility Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.

23.11 Green scrapping

(a) Each Borrower shall use reasonable endeavours (including the implementation of internal policies) to ensure that any scrapping of the Vessel owned by it is carried out in accordance with the IMO Convention for the Safe and Environmentally Sound Recycling of Ships.

(b) Each Borrower shall use reasonable endeavours to obtain (in its first survey) and to maintain (in subsequent surveys) a green passport notification (based on the inventory of hazardous materials) for the Vessel owned by it from the relevant Approved Classification Society.

23.12 Sanctions and Vessel trading

Without limiting Clause 23.9 (Compliance with laws etc.), each Borrower shall procure:

(a) that the Vessel owned by it shall not be used by or for the benefit of a Prohibited Person;

86

(b) that the Vessel owned by it shall not be used in trading in any manner contrary to Sanctions (or which could be contrary to Sanctions if Sanctions were binding on each Transaction Obligor); and

(c) that the Vessel owned by it shall not be traded in any manner which would trigger the operation of any sanctions limitation or exclusion clause (or similar) in the Insurances.

23.13 Trading in war zones

In the event of hostilities in any part of the world (whether war is declared or not), no Borrower shall cause or permit any Vessel to enter or trade to any zone which is declared a war zone by any government or by that Vessel's war risks insurers unless:

(a) the prior written consent of that Vessel's war risks insurers has been obtained and prior written notice has been given by the Borrowers to the Facility Agent; and

(b) that Borrower has (at its expense) effected any special, additional or modified insurance cover which the Security Agent acting on the instructions of the Majority Lenders may require.

23.14 Monitoring

(a) Each Borrower shall (or shall procure that the relevant Approved Technical Manager shall) allow the Security Agent (or its agents), at any time and from time to time, to access all information pertaining to the Vessel owned by it (including the movement of that Vessel) using any and all available means.

(b) All costs incurred by the Security Agent (and any of its agents) under paragraph (a) of Clause 23.14 (Monitoring) above shall be for the account of the Lenders.

23.15 Provision of information

Without prejudice to Clause 19.5 (Information: miscellaneous) each Borrower shall, in respect of the Vessel owned by it, promptly provide the Facility Agent with any information which it requests regarding:

(a) that Vessel, its employment, position and engagements;

(b) its Earnings and payments and amounts due to its master and crew;

(c) any expenditure incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Vessel and any payments made by it in respect of that Vessel;

(d) any towages and salvages; and

(e) its compliance, each Approved Manager's compliance and the compliance of that Vessel with the ISM Code and the ISPS Code,

and, upon the Facility Agent's request, each Borrower shall promptly provide copies of class records, any inspection reports obtained for the Vessel owned by it, any current Charter relating to that Vessel, any current guarantee of any such Charter, that Vessel's Safety Management Certificate and any relevant Document of Compliance.

87

23.16 Notification of certain events

Each Borrower shall, in respect of the Vessel owned by it, immediately notify the Facility Agent in writing, of:

(a) any casualty to that Vessel which is or is likely to be or to become a Major Casualty;

(b) any occurrence as a result of which that Vessel has become or is, by the passing of time or otherwise, likely to become a Total Loss;

(c) any requisition of that Vessel for hire;

(d) any requirement or recommendation made in relation to that Vessel by any insurer or classification society or by any competent authority which is not immediately complied with;

(e) any arrest or detention of that Vessel, any exercise or purported exercise of any lien on that Vessel or the Earnings;

(f) any intended dry docking of that Vessel;

(g) any Environmental Claim made against that Borrower or in connection with that Vessel, or any Environmental Incident;

(h) any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, an Approved Manager or otherwise in connection with that Vessel; or

(i) 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 that Borrower shall keep the Facility Agent advised in writing on a regular basis and in such detail as the Facility Agent shall require as to that Borrower's, any such Approved Manager's or any other person's response to any of those events or matters.

23.17 Restrictions on chartering, appointment of managers etc.

No Borrower shall, in relation to the Vessel owned by it:

(a) let that Vessel on demise charter for any period;

(b) enter into any time, voyage or consecutive voyage charter in respect of that Vessel other than a Permitted Charter;

(c) change, cancel or terminate any Assignable Charter or any Charter Guarantee in respect of such Assignable Charter;

(d) change, cancel or terminate a Management Agreement;

(e) appoint a manager of that Vessel other than an Approved Manager or agree to any alteration to the terms of an Approved Manager's appointment;

(f) de activate or lay up that Vessel; or

(g) put that Vessel into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $500,000 (or the equivalent in any other currency)

88

unless that person has first given to the Security Agent and in terms satisfactory to it a written undertaking not to exercise any lien on that Vessel or its Earnings for the cost of such work or for any other reason.

23.18 Notice of Mortgage

Each Borrower shall keep the relevant Mortgage registered against the Vessel owned by it as a valid first priority or preferred (as the case may be) mortgage, carry on board that Vessel a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the master's cabin of that Vessel a framed printed notice stating that that Vessel is mortgaged by that Borrower to the Security Agent.

23.19 Sharing of Earnings

No Borrower shall enter into any agreement or arrangement for the sharing of any Earnings.

23.20 Nuclear materials

No Borrower shall permit the Vessel owned by it to carry any nuclear material or any nuclear waste.

23.21 Notification of compliance

Each Borrower shall promptly provide the Facility Agent, upon the Facility Agent's request, from time to time with evidence (in such form as the Facility Agent requires) that it is complying with this Clause 23 (Post-Delivery Vessel Undertakings).

24 SECURITY COVER

24.1 Minimum required security cover

Clause 24.2 (Provision of additional security; prepayment) applies if the Facility Agent notifies the Borrowers that:

(a) the aggregate Market Value of the Mortgaged Vessels; plus

(b) the net realisable value of additional Security previously provided under this Clause 24.1 (Minimum required security cover),

is below 130 per cent. of the Loan.

24.2 Provision of additional security; prepayment

(a) If the Facility Agent serves a notice on the Borrowers under Clause 24.1 (Minimum required security cover), the Borrowers shall, on or before the date falling one Month after the date on which the Facility Agent's notice is served (the "Prepayment Date"), prepay such part of the Loan as shall eliminate the shortfall.

(b) The Borrowers may, instead of making a prepayment as described in paragraph (a) above, provide, or ensure that the Guarantor or a third party has provided, additional security (in the form of cash or otherwise) which, in the opinion of the Facility Agent acting on the instructions of the Majority Lenders:

(i) has a net realisable value at least equal to the shortfall; and

89

(ii) is documented in such terms as the Facility Agent may approve or require,

before the Prepayment Date; and conditional upon such security being provided in such manner, it shall satisfy such prepayment obligation.

24.3 Value of additional vessel security

The net realisable value of any additional security which is provided under Clause 24.2 (Provision of additional security; prepayment) and which consists of Security over a vessel shall be the Market Value of the vessel concerned.

24.4 Valuations binding

Any valuation under this Clause 24 (Security Cover) shall be binding and conclusive as regards each Borrower.

24.5 Provision of information

(a) Each Borrower shall promptly provide the Facility Agent and any shipbroker acting under this Clause 24 (Security Cover) with any information which the Facility Agent or the shipbroker may request for the purposes of the valuation.

(b) If a Borrower fails to provide the information referred to in paragraph (a) above by the date specified in the request, the valuation may be made on any basis and assumptions which the shipbroker or the Facility Agent considers prudent.

24.6 Prepayment mechanism

Any prepayment pursuant to Clause 24.2 (Provision of additional security; prepayment) shall be made in accordance with the relevant provisions of Clause 7 (Prepayment and Cancellation) and shall be treated as a voluntary prepayment pursuant to Clause 7.3 (Voluntary prepayment of Loan).

24.7 Provision of valuations

(a) The Facility Agent shall be entitled to test the security requirements under Clause 24.1 (Minimum required security cover) by reference to valuations in respect of each Vessel from the required number of Approved Valuers semi-annually and in the case of a sale or Total Loss of a Vessel pursuant to Clause 7.4 (Mandatory prepayment on sale, arrest or Total Loss), and on dates to be selected by the Facility Agent.

(b) The Facility Agent shall at the request of the Lenders additionally be entitled to test the security cover requirement under Clause 24.1 (Minimum required security cover) by reference to a valuation in respect of each Vessel from the required number of Approved Valuers at any time and each such valuation shall be at the expense of the Lenders except where the Borrowers are by means of such valuation(s) shown to be in breach of Clause 24.1 (Minimum required security cover).

(c) Subject to paragraph (d) below, the Market Value of any Vessel shall be determined by reference to one valuation of that Vessel as given by an Approved Valuer selected and appointed by the Facility Agent and such valuation shall be addressed to the Facility Agent.

90

(d) If requested by the Borrowers in relation to paragraph (c) above, a second Approved Valuer shall be selected by the Borrowers and appointed by the Facility Agent and such valuation shall be addressed to the Facility Agent, and the Market Value of that Vessel shall be the arithmetic average of the two valuations.

(e) If one such valuation in respect of a Vessel obtained pursuant to paragraphs (c) and (d) above differs by at least 10 per cent. from the other valuation, then a third valuation for that Vessel shall be obtained from an Approved Valuer selected by the Borrowers and appointed by the Facility Agent and such valuation shall be addressed to the Facility Agent, and the Market Value of that Vessel shall be the arithmetic average of all three such valuations.

(f) The Facility Agent may at any time after a Default has occurred and is continuing obtain valuations of any Vessel and any other vessel over which additional security has been created in accordance with Clause 24.2 (Provision of additional security; prepayment) from Approved Valuers to enable the Facility Agent to determine the Market Value of that Vessel and any other vessel.

(g) The valuations referred to in paragraph (a), (b), (c), (d), (e) and (f) above and the valuations required to determine the Market Value of the Fleet Vessels at all required times (starting from the Drawdown Date) pursuant to Clause 20.2 (Guarantor's financial covenants), shall be obtained at the cost and expense of the Borrowers (except where specified in paragraph (b) above) (in addition to any set of valuations required in respect of each Vessel for the purposes of Drawdown) and the Borrowers shall within three Business Days of demand by the Facility Agent pay to the Facility Agent all costs and expenses incurred by it in obtaining any such valuations.

25 ACCOUNTS AND APPLICATION OF EARNINGS 25.1 Account bank

25.1 Account bank

Subject to Clause 25.9 (Location of Accounts), each Account must be held with the Account Bank.

25.2 Accounts

(a) Each Borrower must operate each of its Accounts in accordance with this Clause 25 (Accounts and Application of Earnings) and the provisions of the Account Security.

(b) Account Security must be provided in respect of any Account opened after the date of this Agreement.

25.3 Payments into the Time Deposit Accounts

Upon opening each Time Deposit Account and the execution of Account Security in relation to such Account, each Borrower may, provided that there is no Event of Default which is continuing, transfer the Minimum Liquidity Amount in respect of that Borrower from its Earnings Account to its Time Deposit Account.

25.4 Payments out of the Time Deposit Accounts

(a) The Security Agent shall instruct the Account Bank to transfer any amount standing to the credit of a Time Deposit Account:

91

(i) on expiry of the term of the deposit on that Time Deposit Account, at the Borrowers' request, in accordance with the provisions of the Account Bank's Terms and Conditions; or

(ii) at any time (subject to the payment of any break costs payable in accordance with the terms of the deposit), to meet any Borrower's prepayment obligations under any of Clauses 7.1 (Illegality) or 7.4 (Mandatory prepayment on sale, arrest or Total Loss),

Provided that in each case:

(A) there is no Event of Default which is continuing; and

(B) no breach of Clause 20.1 (Borrowers' minimum liquidity) has occurred or will occur as a result of such transfer.

(b) Where no transfer can be made as a result of the proviso under paragraph (a) above, interest shall be payable on the amount then standing to the credit of the relevant Time Deposit Account at the Account Bank's discretion and in accordance with market standard conditions at that time.

In the event of any conflict between the provisions of the Terms and Conditions and this Agreement, this Agreement shall prevail.

25.5 Payment of Earnings

Each Borrower shall ensure that, subject only to the provisions of the relevant General Assignment, all the Earnings in respect of the Vessel owned by it are paid in to its Earnings Account.

25.6 Application of Earnings

The Borrowers shall transfer from the Earnings Accounts to the Facility Agent:

(a) on each Repayment Date, the amount of the Repayment Instalment then due on the Repayment Date; and

(b) on the last day of each Interest Period, the amount of interest then due on that date; and

(c) on any day on which an amount is otherwise due from any Borrower under a Finance Document, an amount necessary to meet that due amount,

and each Borrower irrevocably authorizes and instructs:

(i) the Account Bank to make those transfers in accordance with the instructions of the Facility Agent (copied to the Security Agent, who, as security taker under the Account Security, agrees for itself and on behalf of the other pledgees that such transfers may be made);

(ii) the Facility Agent to apply the transferred amounts in payment of the relevant Repayment Instalment, interest amount or other amount due.

92

25.7 Shortfall in Earnings

(a) If the credit balance on the Earnings Accounts is insufficient for the required amount to be transferred under Clause 25.6 (Application of Earnings), the Borrowers shall make up the amount of the insufficiency.

(b) The Borrowers may not make up all or any part of the insufficiency by utilising the Minimum Liquidity Amount in any Earnings Account.

25.8 Application of funds

Until an Event of Default occurs, the Facility Agent shall on each Repayment Date and on each Interest Payment Date distribute to the Finance Parties in accordance with Clause 33.2 (Distributions by the Facility Agent) so much of the then balance on the Earnings Accounts as equals:

(a) the Repayment Instalment due on that Repayment Date; and

(b) the amount of interest payable on that Interest Payment Date,

in discharge of the Borrowers' liability for that Repayment Instalment or that interest.

25.9 Location of Accounts

Each Borrower shall promptly:

(a) comply with any requirement of the Facility Agent as to the location or relocation of the Accounts (or any of them); and

(b) execute any documents which the Facility Agent specifies to create or maintain in favour of the Security Agent Security over (and/or rights of set-off, consolidation or other rights in relation to) each Account.

25.10 Miscellaneous Accounts provisions

(a) No Finance Party is responsible or liable to any Transaction Obligor for:

(b) any non-payment of any liability of a Transaction Obligor which could be paid out of moneys standing to the credit of an Earnings Account; or

(c) any withdrawal wrongly made, if made in good faith.

25.11 Withdrawals from Earnings Accounts

Subject to Clause 20.1 (Borrowers' minimum liquidity), Clause 25.6 (Application of Earnings) and Clause 25.7 (Shortfall in Earnings), a Borrower shall be entitled to withdraw any balance standing to the credit of its Earnings Account Provided that:

(a) each Borrower is in compliance with Clause 20.1 (Borrowers' minimum liquidity), Clause 25.6 (Application of Earnings) and Clause 25.7 (Shortfall in Earnings) at the relevant time; and

(b) no Event of Default has occurred and is continuing or would result from such withdrawal.

93

26 EVENTS OF DEFAULT

26.1 General

Each of the events or circumstances set out in this Clause 26 (Events of Default) is an Event of Default except for Clause 26.18 (Acceleration) and Clause 26.19 (Enforcement of security).

26.2 Non-payment

A Transaction Obligor (other than an Approved 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:

(i) administrative or technical error; or

(ii) a Disruption Event; and

(b) payment is made within three Business Days of its due date.

26.3 Specific obligations

A breach occurs of Clause 4.5 (Waiver of conditions precedent), Clause 20 (Financial Covenants), Clause 21.9 (Title), Clause 21.10 (Negative pledge), Clause 21.21 (Unlawfulness, invalidity and ranking; Security imperilled), Clause 22.2 (Maintenance of obligatory insurances), Clause 22.3 (Terms of obligatory insurances), Clause 22.5 (Renewal of obligatory insurances), Clause 23.9 (Compliance with laws etc.) in relation to Sanctions or Clause 24 (Security Cover).

26.4 Other obligations

(a) A Transaction Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 26.2 (Non-payment) and Clause 26.3 (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 ten Business Days of the Facility Agent giving notice to the Borrowers or (if earlier) any Transaction Obligor becoming aware of the failure to comply.

26.5 Misrepresentation

Any representation or statement made or deemed to be made by a Transaction Obligor in the Finance Documents or any other document delivered by or on behalf of any Transaction 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.

26.6 Cross default

(a) Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period.

(b) Any Financial Indebtedness of any member of the Group 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).

94

(c) Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described).

(d) Any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described).

(e) No Event of Default will occur under this Clause 26.6 (Cross default) in respect of the Group taken as a whole (other than the Borrowers) if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (d) above in respect of the Group taken as a whole (other than the Borrowers) is less than $10,000,000 (or its equivalent in any other currency).

26.7 Insolvency

(a) A Transaction Obligor (other than an Approved Manager):

(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 any Transaction Obligor is less than its liabilities (taking into account contingent and prospective liabilities).

(c) A moratorium is declared in respect of any indebtedness of any Transaction Obligor. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.

26.8 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 any Transaction Obligor (other than an Approved Manager);

(ii) a composition, compromise, assignment or arrangement with any creditor of any Transaction Obligor (other than an Approved Manager);

(iii) the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any Transaction Obligor (other than an Approved Manager) or any of its assets; or

(iv) enforcement of any Security over any assets of any Transaction Obligor (other than an Approved Manager),

95

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 14 days of commencement.

26.9 Creditors' process

Any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of a Transaction Obligor (which is not an Approved Manager) (other than an arrest or detention of a Vessel in which case paragraph (b) of Clause 7.4 (Mandatory prepayment on sale, arrest or Total Loss) shall apply) having in the case of the Guarantor an aggregate value in excess of $500,000 (or its equivalent in any other currency), and is not discharged within 14 days.

26.10 Ownership of the Obligors and the Shareholder

(a) A Borrower or the Shareholder is not or ceases to be a 100 per cent. directly or indirectly owned Subsidiary of the Guarantor.

(b) The Ultimate Beneficial Owner ceases to be the direct or indirect beneficial owner of at least 50.1 per cent. of the issued and outstanding common stock (and the ultimate voting rights attaching to such stock) of the Guarantor or ceases to control directly or indirectly the Guarantor.

(c) For the purpose of paragraph (b) above "control" means the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

(i) cast, or control the casting of, more than 50.1 per cent. of the maximum number of votes that might be cast at a general meeting of the Guarantor; or

(ii) appoint or remove all, or the majority, of the directors or other equivalent officers of the Guarantor; or

(iii) give directions with respect to the operating and financial policies of the Guarantor with which the directors or other equivalent officers of the Guarantor are obliged to comply.

(d) The Ultimate Beneficial Owner ceases to be the chairman of the board of directors and/or the chief executive officer of the Guarantor.

(e) Without the prior written consent of all the Lenders, the shares of the Guarantor cease to be listed on the Nasdaq Stock Market or another stock exchange acceptable to the Facility Agent (acting on the instructions of all the Lenders).

(f) No Event of Default under paragraph (a) above will occur if, in connection with a Permitted Ultimate Beneficial Ownership Change, the Ultimate Beneficial Owner becomes the ultimate, direct or indirect, legal and beneficial holder of 100 per cent. of the issued share capital of each Borrower, subject to:

(i) the Ultimate Beneficial Owner giving at least 30 days' prior written notice to the Facility Agent of its intention to make a Permitted Ultimate Beneficial Ownership Change, including full details of the entity wholly beneficially owned by the Ultimate Beneficial Owner which would become the new legal and direct owner of all the issued share

96

capital of each Borrower in place of the Shareholder pursuant to the Permitted Ultimate Beneficial Ownership Change (the "New Shareholder");

(ii) the Facility Agent (acting on the instructions of all the Lenders in their sole discretion) giving its written consent to such Permitted Ultimate Beneficial Ownership Change and approving the New Shareholder;

(iii) the Ultimate Beneficial Owner becoming the ultimate beneficial owner, and the New Shareholder becoming the legal and direct owner, of all of the issued share capital of each Borrower simultaneously;

(iv) the New Shareholder providing Security over the share capital of each Borrower in favour of the Security Agent in form and substance in all respects satisfactory to the Facility Agent (acting on the instructions of all the Lenders in their sole discretion) on the date on which the Permitted Ultimate Beneficial Ownership Change is effected; and

(v) the Transaction Obligors executing and delivering to the Facility Agent by no later than the date on which the Permitted Ultimate Beneficial Ownership Change is effected, an agreement or deed in form and substance in all respects satisfactory to the Facility Agent (acting on the instructions of all the Lenders in their sole discretion) amending, supplementing and/or restating this Agreement and the other Finance Documents for the purpose of implementing any amendments which the Finance Parties may deed necessary in connection with the Permitted Ultimate Beneficial Ownership Change and paragraph (f) of this Clause 26.10 (Ownership of the Obligors and the Shareholder).

26.11 Unlawfulness, invalidity and ranking

(a) It is or becomes unlawful for a Transaction Obligor to perform any of its obligations under the Finance Documents.

(b) Any obligation of a Transaction Obligor 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.

26.12 Security imperilled; flag instability

(a) Any Security created or intended to be created by a Finance Document is in any way imperilled or in jeopardy.

(b) The state of the Approved Flag of any Vessel is or becomes involved in hostilities or civil war or there is a seizure of power in such state by unconstitutional means, or any other event occurs in relation to that Vessel, the relevant Mortgage or its Approved Flag and in the reasonable opinion of the Facility Agent such event is likely to have a Material Adverse Effect unless the relevant Borrower, within 30 days of the occurrence of such event (or such longer period as may be agreed by the Facility Agent acting with the authorisation of the Lenders) re-registers that Vessel on an alternative flag approved pursuant to Clause 23.2 (Vessel's names and registration) and subject to:

97

(i) that Vessel remaining subject to Security created by a first priority or preferred ship mortgage on that Vessel and, if appropriate, a first priority deed of covenant collateral to that mortgage (or equivalent first priority security) on substantially the same terms as the relevant Mortgage and if applicable, the relevant Deed of Covenant and on such other terms and in such other form as the Facility Agent, acting with the authorisation of the Lenders, shall reasonably approve or require; and

(ii) the execution of such other documentation amending and supplementing the Finance Documents, as the Facility Agent, acting with the authorisation of the Lenders, shall reasonably approve or require.

26.13 Cessation of business

Any Transaction Obligor suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.

26.14 Expropriation

The authority or ability of any Transaction Obligor (other than an Approved 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 Transaction Obligor (other than an Approved Manager) or any of its assets (and the aggregate value of any such action in relation to the Guarantor being in excess of $1,000,000 (or its equivalent in any other currency)) other than:

(a) an arrest or detention of a Vessel (in which case paragraph (b) of Clause 7.4 (Mandatory prepayment on sale, arrest or Total Loss) shall apply);

(b) any Requisition; or

(c) an expropriation of a Vessel which is reversed within 30 days of its initial occurrence with the relevant Borrower having full and unrestricted control over, and possession of, that Vessel.

26.15 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.

26.16 Litigation

Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened, or any judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body is made, in relation to any of the Transaction Documents or the transactions contemplated in any of the Transaction Documents or against any Transaction Obligor (other than an Approved Manager) or any member of the Group or its assets which has or is reasonably likely to have a Material Adverse Effect.

98

26.17 Material adverse change

Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect.

26.18 Acceleration

On and at any time after the occurrence of an Event of Default the Facility Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrowers:

(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

(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 26.19 (Enforcement of security) if no such notice is served or simultaneously with or at any time after the service of any of such notice.

26.19 Enforcement of security

On and at any time after the occurrence of an Event of Default 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 26.18 (Acceleration), the Security Agent is entitled to take under any Finance Document or any applicable law or regulation.

99

SECTION 9
CHANGES TO PARTIES

27 CHANGES TO THE LENDERS

27.1 Assignments and transfers by the Lenders

Subject to this Clause 27 (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").

27.2 Conditions of assignment or transfer

(a) The prior written consent of an Obligor 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;

(ii) if the Existing Lender is a fund, to a fund which is a Related Fund; or

(iii) made after the occurrence of an Event of Default,

in each of which cases no Obligor's consent will be required.

The consent of an Obligor to an assignment or transfer by an Existing Lender shall not be unreasonably withheld or delayed. An Obligor shall be deemed to have given its consent five Business Days after the Existing Lender has requested it unless consent is expressly refused by that Obligor within that time.

The consent of an Obligor to an assignment or transfer by an Existing Lender shall not be withheld solely because the assignment or transfer may result in an increase to any amount payable under Clause 14.3 (Mandatory Cost).

(b) The consent of the Facility Agent is required for an assignment or transfer by an Existing Lender, such consent not to be unreasonably withheld.

(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 Creditor 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.

100

(d) A transfer will only be effective if the procedure set out in Clause 27.5 (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, a Transaction Obligor 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 and Indemnities) or under that clause as incorporated by reference or in full in any other Finance Document or Clause 13 (Increased Costs),

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:

(i) 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; and

(ii) it has received a copy of each of the Security Documents which are governed by German law and which are account pledges, is aware of the contents of such account pledges and expressly consents to the declarations of the Security Agent made on behalf of the New Lender (as future pledgee) in such account pledges.

27.3 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 $10,000.

27.4 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 Transaction 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 Transaction Documents or any other documents; or

101

(iv) the accuracy of any statements (whether written or oral) made in or in connection with any Transaction 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 Creditor 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 Transaction 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 27 (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 Transaction Documents or otherwise.

27.5 Procedure for transfer

(a) Subject to the conditions set out in Clause 27.2 (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. Upon execution by the Facility Agent, the Security Agent shall also execute the 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 27.9 (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");

102

(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".

27.6 Procedure for assignment

(a) Subject to the conditions set out in Clause 27.2 (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. Upon execution by the Facility Agent, the Security Agent shall also execute the 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 27.9 (Pro rata interest settlement), on the Transfer Date:

(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 27.6 (Procedure for assignment) to assign their rights under the Finance Documents (but not, without the consent of the relevant Transaction Obligor or unless in accordance with Clause 27.5 (Procedure for transfer), to obtain a release by that Transaction Obligor from the obligations owed to that Transaction 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 27.2 (Conditions of assignment or transfer).

103

27.7 Copy of Transfer Certificate or Assignment Agreement to Borrowers

The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrowers a copy of that Transfer Certificate or Assignment Agreement.

27.8 Security over Lenders' rights

In addition to the other rights provided to Lenders under this Clause 27 (Changes to the Lenders), each Lender may, with the prior written consent of an Obligor (such consent not to be unreasonably withheld or delayed), 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) 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 a Transaction 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.

(iii) An Obligor shall be deemed to have given its consent to the creation of any charge, assignment or other Security referred to in this Clause 27.8 (Security over Lenders' rights), five Business Days after a Lender has requested it unless consent is expressly refused by that Obligor within that time.

27.9 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 27.5 (Procedure for transfer) or any assignment pursuant to Clause 27.6 (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):

(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:

104

(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 27.9 (Pro rata interest settlement), have been payable to it on that date, but after deduction of the Accrued Amounts.

(c) In this Clause 27.9 (Pro rata interest settlement) references to "Interest Period" shall be construed to include a reference to any other period for accrual of fees.

28 CHANGES TO THE TRANSACTION OBLIGORS

28.1 Assignment or transfer by Transaction Obligors

No Transaction Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

28.2 Release of security

(a) If a disposal of any asset subject to security created by a Security Document is made in the following circumstances:

(i) the disposal is permitted by the terms of any Finance Document;

(ii) all the Lenders agree to the disposal;

(iii) the disposal is being made at the request of the Security Agent in circumstances where any security created by the Security Documents has become enforceable; or

(iv) the disposal is being effected by enforcement of a Security Document,

the Security Agent may release the asset(s) being disposed of from any security over those assets created by a Security Document. However, the proceeds of any disposal (or an amount corresponding to them) must be applied in accordance with the requirements of the Finance Documents (if any).

(b) If the Security Agent is satisfied that a release is allowed under this Clause 28.2 (Release of security) (at the request and expense of the Borrowers) each Finance Party must enter into any document and do all such other things which are reasonably required to achieve that release. Each other Finance Party irrevocably authorises the Security Agent to enter into any such document. Any release will not affect the obligations of any other Transaction Obligor under the Finance Documents.

105

SECTION 10
THE FINANCE PARTIES

29 THE FACILITY AGENT, THE ARRANGER AND THE REFERENCE BANKS

29.1 Appointment of the Facility Agent

(a) Each of the Arranger and the Lenders appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.

(b) Each of the Arranger and the Lenders authorises the Facility Agent to perform the duties, obligations and responsibilities and 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.

29.2 Instructions

(a) The Facility Agent shall:

(i) unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by:

(A) all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

(B) in all other cases, the Majority Lenders; and

(ii) not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or, if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, in accordance with instructions given to it by that Finance Party or group of Finance Parties).

(b) The Facility 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 Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Facility Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.

(c) Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Facility Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

(d) Paragraph (a) above shall not apply:

(i) where a contrary indication appears in a Finance Document;

(ii) where a Finance Document requires the Facility Agent to act in a specified manner or to take a specified action;

106

(iii) in respect of any provision which protects the Facility Agent's own position in its personal capacity as opposed to its role of Facility Agent for the relevant Finance Parties.

(e) If giving effect to instructions given by the Majority Lenders would in the Facility Agent's opinion have an effect equivalent to an amendment or waiver referred to in Clause 42 (Amendments and Waivers), the Facility Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than the Facility Agent) whose consent would have been required in respect of that amendment or waiver.

(f) In exercising any discretion to exercise a right, power or authority under the Finance Documents where it has not received any instructions as to the exercise of that discretion the Facility Agent shall do so having regard to the interests of all the Finance Parties.

(g) The Facility Agent may refrain from acting in accordance with any instructions of any Finance Party or group of Finance Parties 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 applicable VAT) which it may incur in complying with those instructions.

(h) Without prejudice to the remainder of this Clause 29.2 (Instructions), in the absence of instructions, 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 Finance Parties. The Facility Agent may act (or refrain from acting) as it considers to be in the best interest of the Finance Parties.

(i) The Facility Agent is not authorised to act on behalf of a Finance Party (without first obtaining that Finance Party's consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (i) 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 Transaction Security or Security Documents.

29.3 Duties of the Facility Agent

(a) The Facility Agent's duties under the Finance Documents are solely mechanical and administrative in nature.

(b) Subject to paragraph (c) 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.

(c) Without prejudice to Clause 27.7 (Copy of Transfer Certificate or Assignment Agreement to Borrowers), paragraph (b) above shall not apply to any Transfer Certificate or any Assignment Agreement.

(d) 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.

(e) If the Facility Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

107

(f) 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, the Arranger or the Security Agent) under this Agreement, it shall promptly notify the other Finance Parties.

(g) The Facility 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).

29.4 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.

29.5 No fiduciary duties

(a) Nothing in any Finance Document constitutes the Facility Agent or the Arranger as a trustee or fiduciary of any other person.

(b) Neither the Facility Agent nor the Arranger shall be bound to account to other Finance Party for any sum or the profit element of any sum received by it for its own account.

29.6 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 33.5 (Application of receipts; partial payments).

29.7 Business with the Group

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 member of the Group.

29.8 Rights and discretions

(a) The Facility Agent may:

(i) rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;

(ii) assume that:

(A) any instructions received by it from the Majority Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents; and

(B) unless it has received notice of revocation, that those instructions have not been revoked; and

(iii) rely on a certificate from any person:

(A) as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

108

(B) 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 (A) above, may assume the truth and accuracy of that certificate.

(b) The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Finance Parties) that:

(i) no Default has occurred (unless it has actual knowledge of a Default arising under Clause 26.2 (Non-payment));

(ii) any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and

(iii) any notice or request made by any Borrower (other than the Drawdown 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 and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.

(d) Without prejudice to the generality of paragraph (c) above or paragraph (e) below, the Facility Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Facility Agent (and so separate from any lawyers instructed by the Lenders) if the Facility Agent in its reasonable opinion deems this to be desirable.

(e) The Facility 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 Facility 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.

(f) The Facility Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:

(i) be liable for any error of judgment made by any such person; or

(ii) 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 Facility Agent's gross negligence or wilful misconduct.

(g) Unless a Finance Document expressly provides otherwise the Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under the Finance Documents.

(h) Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility 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.

109

(i) Notwithstanding any provision of any Finance Document to the contrary, the Facility 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.

29.9 Responsibility for documentation

Neither the Facility Agent nor the Arranger is responsible or liable for:

(a) the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Arranger, a Transaction Obligor or any other person in, or in connection with, any Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document;

(b) the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

(c) any determination as to whether any information provided or to be provided to any Finance Party or Creditor 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.

29.10 No duty to monitor

The Facility 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 Transaction Obligor of its obligations under any Transaction Document; or

(c) whether any other event specified in any Transaction Document has occurred.

29.11 Exclusion of liability

(a) Without limiting paragraph (b) below (and without prejudice to paragraph (e) of Clause 33.11 (Disruption to Payment Systems etc.) or any other provision of any Finance Document excluding or limiting the liability of the Facility Agent), the Facility Agent will not be liable for:

(i) 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 Transaction Document or the Security Property, unless directly caused by its gross negligence or wilful misconduct;

(ii) exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Transaction 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 Transaction Document or the Security Property; or

110

(iii) any shortfall which arises on the enforcement or realisation of the Security Property; or

(iv) without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

(A) any act, event or circumstance not reasonably within its control; or

(B) 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.

(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 Transaction Document or any Security Property and any officer, employee or agent of the Facility Agent may rely on this Clause subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.

(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 the Facility Agent if the Facility Agent 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 the Facility Agent for that purpose.

(d) Nothing in this Agreement shall oblige the Facility Agent or the Arranger to carry out:

(i) any "know your customer" or other checks in relation to any person; or

(ii) any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,

on behalf of any Finance Party and each Finance Party 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.

(e) Without prejudice to any provision of any Finance Document excluding or limiting the Facility Agent's liability, any liability of the Facility Agent arising under or in connection with any Transaction Document or the Security 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 Facility 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 Facility Agent at any time which increase the amount of that loss. In no event shall the Facility Agent be liable for any loss of profits, goodwill, reputation, business opportunity or

111

anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Facility Agent has been advised of the possibility of such loss or damages.

29.12 Lenders' indemnity to the Facility Agent

(a) 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 the Facility Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 33.11 (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).

(b) Subject to paragraph (c) below, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Facility Agent pursuant to paragraph (a) above.

(c) Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Facility Agent to an Obligor.

29.13 Resignation of the Facility Agent

(a) The Facility Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrowers.

(b) Alternatively, the Facility Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrowers, 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) If the Facility Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Facility Agent is entitled to appoint a successor Facility Agent under paragraph (c) above, the Facility Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Facility Agent to become a party to this Agreement as Facility Agent) agree with the proposed successor Facility Agent amendments to this Clause 29 (The Facility Agent, the Arranger and the Reference Banks) and any other term of this Agreement dealing with the rights or obligations of the Facility 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 Facility Agent's normal fee rates and those amendments will bind the Parties.

(e) 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 as Facility Agent under the Finance Documents. The Borrowers shall, within three Business Days of demand, reimburse the retiring Facility Agent for the amount of all costs and expenses (including legal fees)

112

properly incurred by it in making available such documents and records and providing such assistance.

(f) The Facility Agent's resignation notice shall only take effect upon the appointment of a successor.

(g) Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (e) above) but shall remain entitled to the benefit of Clause 14.4 (Indemnity to the Facility Agent) and this Clause 29 (The Facility Agent, the Arranger and the Reference Banks) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Facility Agent. Any fees for the account of the retiring Facility 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.

(h) 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 but the cost referred to in paragraph (e) above shall be for the account of the Borrowers.

(i) The consent of the Borrowers (or any other Transaction Obligor) is not required for an assignment or transfer of rights and/or obligations by the Facility Agent.

(j) 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 Borrowers 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.

29.14 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.

113

(b) If information is received by a division or department of the Facility Agent other than the 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.

(c) Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility 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.

29.15 Relationship with the other Finance Parties

(a) Subject to Clause 27.9 (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 Finance Party 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 Finance Party shall deal with the 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 36.5 (Electronic communication) electronic mail address and/or any other information required to enable the transmission 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 (or such other information), department and officer by that Lender for the purposes of Clause 36.2 (Addresses) and sub-paragraph (ii) of paragraph (a) of Clause 36.5 (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.

29.16 Credit appraisal by the Finance Parties

Without affecting the responsibility of any Transaction Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance Party confirms to the Facility Agent and the Arranger that it has been, and will continue to be, solely responsible

114

for making its own independent appraisal and investigation of all risks arising under, or in connection with, any Transaction Document including but not limited to:

(a) the financial condition, status and nature of each member of the Group;

(b) the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

(c) whether that 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 Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

(d) the adequacy, accuracy or completeness of any information provided by the Facility Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and

(e) the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.

29.17 Facility Agent's management time

Any amount payable to the Facility Agent under Clause 14.4 (Indemnity to the Facility Agent), Clause 15 (Costs and Expenses) and Clause 29.12 (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 Borrowers and the other Finance Parties, and is in addition to any fee paid or payable to the Facility Agent under Clause 11 (Fees).

29.18 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.

29.19 Reliance and engagement letters

Each Creditor Party confirms that each of the Arranger and the Facility Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Arranger or the Facility Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those, reports or letters and to sign such letters

115

on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.

29.20 Full freedom to enter into transactions

Without prejudice to Clause 29.7 (Business with the Group) or any other provision of a Finance Document and 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 the Borrowers 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.

29.21 Role of Reference Banks

(a) No Reference Bank is under any obligation to provide a quotation or any other information to the Facility Agent.

(b) No Reference Bank will be liable for any action taken by it under or in connection with any Finance Document, or for any Reference Bank Quotation, unless directly caused by its gross negligence or wilful misconduct.

(c) No Party (other than the relevant Reference Bank) may take any proceedings against any officer, employee or agent of any Reference Bank in respect of any claim it might have against that Reference Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document, or to any Reference Bank Quotation, and any officer, employee or agent of each Reference Bank may rely on this Clause 29.21 (Role of Reference Banks) subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.

116

29.22 Third Party Reference Banks

A Reference Bank which is not a Party may rely on Clause 29.21 (Role of Reference Banks), Clause 42.3 (Other exceptions) and Clause 44 (Confidentiality of Funding Rates and Reference Bank Quotations) subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.

30 THE SECURITY AGENT

30.1 Trust

(a) The Security Agent declares that it holds the Security Property on trust for the Creditor Parties on the terms contained in this Agreement and shall deal with the Security Property in accordance with this Clause 30 (The Security Agent) and the other provisions of the Finance Documents.

(b) Each other Finance Party authorises the Security Agent 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.

30.2 Parallel Debt (Covenant to pay the Security Agent)

(a) Each 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 an 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 the purposes of this Clause 30.2 (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 an Obligor shall be:

(i) decreased 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 an Obligor shall be:

117

(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 an Obligor shall never exceed its Corresponding Debt.

(e) All amounts received or recovered by the Security Agent in connection with this Clause 30.2 (Parallel Debt (Covenant to pay the Security Agent)) to the extent permitted by applicable law, shall be applied in accordance with Clause 33.5 (Application of receipts; partial payments).

(f) This Clause 30.2 (Parallel Debt (Covenant to pay the Security Agent)) shall apply, with any necessary modifications, to each Finance Document.

30.3 Enforcement through Security Agent only

The Creditor Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any right, power, authority or discretion arising under the Security Documents except through the Security Agent.

30.4 Instructions

(a) The Security Agent shall:

(i) 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:

(A) all Lenders (or the Facility Agent on their behalf) if the relevant Finance Document stipulates the matter is an all Lender decision; and

(B) in all other cases, the Majority Lenders (or the Facility Agent on their behalf); and

(ii) not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, in accordance with instructions given to it by that Finance Party or group of Finance Parties).

(b) The Security Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or the Facility Agent on their behalf) (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) 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 any such instructions or clarification that it has requested.

(c) Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Security Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

118

(d) Paragraph (a) above shall not apply:

(i)          where a contrary indication appears in a Finance Document;

(ii) where a Finance Document 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 relevant Creditor Parties.

(iv) in respect of the exercise of the Security Agent's discretion to exercise a right, power or authority under any of:

(A) Clause 30.28 (Application of receipts upon enforcement);

(B) Clause 30.29 (Permitted Deductions); and

(C) Clause 30.30 (Prospective liabilities).

(e) If giving effect to instructions given by the Majority Lenders would in the Security Agent's opinion have an effect equivalent to an amendment or waiver referred to in Clause 42 (Amendments and Waivers), the Security Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than the Security Agent) whose consent would have been required in respect of that amendment or waiver.

(f) In exercising any discretion to exercise a right, power or authority under the Finance Documents where either:

(i) it has not received any instructions as to the exercise of that discretion; or

(ii) the exercise of that discretion is subject to sub-paragraph (iv) of paragraph (d) above,

the Security Agent shall do so having regard to the interests of all the Creditor Parties.

(g) The Security Agent may refrain from acting in accordance with any instructions of any Finance Party or group of Finance Parties 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 applicable VAT) which it may incur in complying with those instructions.

(h) Without prejudice to the remainder of this Clause 30.4 (Instructions), in the absence of instructions, the Security Agent may (but shall not be obliged to) take such action in the exercise of its powers and duties under the Finance Documents as it considers in its discretion to be appropriate.

(i) The Security Agent is not authorised to act on behalf of a Finance Party (without first obtaining that Finance Party's consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (i) 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 Transaction Security or Security Documents.

119

30.5 Duties of the Security Agent

(a) The Security Agent's duties under the Finance Documents are solely mechanical and administrative in nature.

(b) The Security Agent shall promptly 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.

(c) Except where a Finance Document specifically 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.

(d) If the Security Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

(e) The Security 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).

30.6 No fiduciary duties

(a) Nothing in any Finance Document constitutes the Security Agent as an agent, trustee or fiduciary of any Transaction Obligor.

(b) The Security Agent shall not 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.

30.7 Business with the Group

The Security Agent may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any member of the Group.

30.8 Rights and discretions

(a) The Security Agent may:

(i) rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;

(ii) assume that:

(A) any instructions received by it from the Majority Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents;

(B) unless it has received notice of revocation, that those instructions have not been revoked; and

(C) if it receives any instructions to act in relation to the Transaction Security, that all applicable conditions under the Finance Documents for so acting have been satisfied; and

(iii) rely on a certificate from any person:

120

(A) as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

(B) 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 (A) above, may assume the truth and accuracy of that certificate.

(b) The Security Agent shall be entitled to carry out all dealings with the other Finance Parties through the Facility Agent and may give to the Facility Agent any notice or other communication required to be given by the Security Agent to any Finance Party.

(c) The Security Agent may assume (unless it has received notice to the contrary in its capacity as security agent for the Creditor Parties) that:

(i) no Default has occurred;

(ii) any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and

(iii) any notice or request made by a Borrower (other than the Drawdown Request or a Selection Notice) is made on behalf of and with the consent and knowledge of all the Transaction Obligors.

(d) The Security Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.

(e) Without prejudice to the generality of paragraph (d) above or paragraph (f) below, the Security Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Security Agent (and so separate from any lawyers instructed by the Facility Agent or the Lenders) if the Security Agent in its reasonable opinion deems this to be desirable.

(f) The Security 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 Security 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.

(g) The Security Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:

(i) be liable for any error of judgment made by any such person; or

(ii) 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 Security Agent's gross negligence or wilful misconduct.

(h) Unless a Finance Document expressly provides otherwise the Security Agent may disclose to any other Party any information it reasonably believes it has received as security agent under the Finance Documents.

121

(i) 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.

(j) Notwithstanding any provision of any Finance Document to the contrary, the Security 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.

30.9 Responsibility for documentation

None of the Security Agent, any Receiver or Delegate is responsible or liable for:

(a) the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Arranger, a Transaction Obligor or any other person in, or in connection with, any Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; or

(b) the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or

(c) any determination as to whether any information provided or to be provided to any Creditor 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.

30.10 No duty to monitor

The Security 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 Transaction Obligor of its obligations under any Transaction Document; or

(c) whether any other event specified in any Transaction Document has occurred.

30.11 Exclusion of liability

(a) Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Security Agent or any Receiver or Delegate), none of the Security Agent nor any Receiver or Delegate will be liable for:

(i) 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 Transaction Document or the Security Property, unless directly caused by its gross negligence or wilful misconduct;

122

(ii) exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Transaction 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 Transaction Document or the Security Property; or

(iii) any shortfall which arises on the enforcement or realisation of the Security Property; or

(iv) without prejudice to the generality of sub-paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

(A) any act, event or circumstance not reasonably within its control; or

(B) 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.

(b) No Party other than the Security Agent, that Receiver or that Delegate (as applicable) 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 Transaction 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 1.5 (Third party rights) and the provisions of the Third Parties Act.

(c) 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 the Security Agent if the Security Agent 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 the Security Agent for that purpose.

(d) Nothing in this Agreement shall oblige the Security Agent to carry out:

(i) any "know your customer" or other checks in relation to any person; or

(ii) any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,

on behalf of any Finance Party and each Finance Party 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.

(e) Without prejudice to any provision of any Finance Document excluding or limiting the liability of the Security Agent or any Receiver or Delegate, any liability of the Security Agent or any

123

Receiver or Delegate arising under or in connection with any Transaction Document or the Security 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 Security Agent, Receiver or Delegate 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 Security Agent, any Receiver or Delegate at any time which increase the amount of that loss. In no event shall the Security Agent, any Receiver or Delegate 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 Security Agent, the Receiver or Delegate has been advised of the possibility of such loss or damages.

30.12 Lenders' indemnity to the Security Agent

(a) 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 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 Security Agent, Receiver or Delegate has been reimbursed by a Transaction Obligor pursuant to a Finance Document).

(b) Subject to paragraph (c) below, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Security Agent pursuant to paragraph (a) above.

(c) Paragraph (b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Security Agent to an Obligor.

30.13 Resignation of the Security Agent

(a) The Security Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrowers.

(b) Alternatively, the Security Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrowers, 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 20 days after notice of resignation was given, the retiring Security Agent may appoint a successor Security Agent.

(d) 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. The Borrowers shall, within three Business Days of demand, reimburse the retiring Security 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.

(e) The Security Agent's resignation notice shall only take effect upon:

124

(i) the appointment of a successor; and

(ii) the transfer, by way of a document expressed as a deed, of all 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 30.25 (Winding up of trust) and paragraph (d) above) but shall remain entitled to the benefit of Clause 14.5 (Indemnity to the Security Agent) and this Clause 30 (The Security Agent) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Security Agent. Any fees for the account of the retiring Security 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.

(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 Borrowers.

(h) The consent of the Borrowers (or any other Transaction Obligor) is not required for an assignment or transfer of rights and/or obligations by the Security Agent.

30.14 Confidentiality

(a) In acting as Security Agent for the Finance Parties, the Security Agent shall be regarded as acting through its trustee 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 Security Agent other than the 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 Security Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.

(c) Notwithstanding any other provision of any Finance Document to the contrary, the Security Agent is not 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.

30.15 Credit appraisal by the Finance Parties

Without affecting the responsibility of any Transaction Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance 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 Transaction Document including but not limited to:

(a) the financial condition, status and nature of each member of the Group;

(b) the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Security Property and any other agreement, arrangement or document entered into, made

125

or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

(c) whether that 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 Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;

(d) the adequacy, accuracy or completeness of any information provided by the Security Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and

(e) the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.

30.16 Security Agent's management time

(a) Any amount payable to the Security Agent under Clause 14.5 (Indemnity to the Security Agent), Clause 15 (Costs and Expenses) and Clause 30.12 (Lenders' indemnity to the Security Agent) shall include the cost of utilising the Security Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Security Agent may notify to the Borrowers and the other Finance Parties, and is in addition to any fee paid or payable to the Security Agent under Clause 11 (Fees).

(b) Without prejudice to paragraph (a) above, in the event of:

(i) a Default;

(ii) the Security Agent being requested by a Transaction Obligor or the Majority Lenders to undertake duties which the Security Agent and the Borrowers agree to be of an exceptional nature or outside the scope of the normal duties of the Security Agent under the Finance Documents; or

(iii) the Security Agent and the Borrowers agreeing that it is otherwise appropriate in the circumstances,

the Borrowers shall pay to the Security Agent any additional remuneration (together with any applicable VAT) that may be agreed between them or determined pursuant to paragraph (c) below.

(c) If the Security Agent and the Borrowers fail to agree upon the nature of the duties, or upon the additional remuneration referred to in paragraph (b) above or whether additional remuneration is appropriate in the circumstances, any dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved by the Borrowers or, failing approval, nominated (on the application of the Security Agent) by the President for the time being of the Law Society of England and Wales (the costs of the nomination and of the investment bank being payable by the Borrowers) and the determination of any investment bank shall be final and binding upon the Parties.

126

30.17 Reliance and engagement letters

Each Creditor Party confirms that the Security Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Security Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those, reports or letters and to sign such letters on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.

30.18 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 Security Assets;

(b) obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any Finance Document 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 law or regulation or to give notice to any person of the execution of any Finance Document or of the Transaction Security;

(d) take, or to require any Transaction Obligor to take, any step to perfect its title to any of the Security Assets or to render the Transaction Security effective or to secure the creation of any ancillary Security under any law or regulation; or

(e) require any further assurance in relation to any Security Document.

30.19 Insurance by Security Agent

(a) The Security Agent shall not be obliged:

(i) to insure any of the Security Assets;

(ii) to require any other person to maintain any insurance; or

(iii) to verify any obligation to arrange or maintain insurance contained in any Finance Document,

and the Security Agent shall not be liable for any damages, costs or losses to 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 liable for any damages, costs or losses to any person as a result of 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 Majority Lenders request it to do so in writing and the Security Agent fails to do so within 14 days after receipt of that request.

127

30.20 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 asset 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.

30.21 Delegation by the Security Agent

(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 right, power, authority or discretion vested in it in its capacity as such.

(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 Creditor Parties.

(c) No Security Agent, Receiver or Delegate shall be bound to supervise, or be in any way responsible for any damages, costs or losses incurred by reason of any misconduct, omission or default on the part of any such delegate or sub delegate.

30.22 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:

(i) if it considers that appointment to be in the interests of the Creditor Parties; or

(ii) for the purposes of conforming to any legal requirement, restriction or condition 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 Borrowers and the Finance Parties of that appointment.

(b) Any person so appointed shall have the rights, powers, authorities and discretions (not exceeding those given to the Security Agent under or in connection with the Finance Documents) and the duties, obligations and responsibilities that are given 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.

30.23 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 Transaction Obligor may have to any of the Security

128

Assets and shall not be liable for or bound to require any Transaction Obligor to remedy any defect in its right or title.

30.24 Releases

Upon a disposal of any of the Security Assets pursuant to the enforcement of the Transaction Security by a Receiver, a Delegate or the Security Agent, the Security Agent is irrevocably authorised (at the cost of the Obligors and without any consent, sanction, authority or further confirmation from any other Creditor Party) to release, without recourse or warranty, that property from the Transaction Security and to execute any release of the Transaction Security or other claim over that asset and to issue any certificates of non-crystallisation of floating charges that may be required or desirable.

30.25 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 Security Documents have been fully and finally discharged; and

(b) no Creditor Party 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,

then

(i) 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 Security Documents; and

(ii) any Security Agent which has resigned pursuant to Clause 30.13 (Resignation of the Security Agent) shall release, without recourse or warranty, all of its rights under each Security Document.

30.26 Powers supplemental to Trustee Acts

The rights, powers, authorities and discretions given to the Security Agent under or in connection with the Finance Documents 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 law or regulation or otherwise.

30.27 Disapplication of Trustee Acts

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. Where there are any inconsistencies between (i) the Trustee Acts 1925 and 2000 and (ii) the provisions of this Agreement and any other Finance Document, the provisions of this Agreement and any other Finance Document shall, to the extent permitted by law and regulation, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement and any other Finance Document shall constitute a restriction or exclusion for the purposes of the Trustee Act 2000.

129

30.28 Application of receipts upon enforcement

All amounts from time to time received or recovered by the Security Agent pursuant to the terms of any Finance Document, under Clause 30.2 ((Parallel Debt (Covenant to pay the Security Agent)) or in connection with the realisation or enforcement of all or any part of the Security Property (for the purposes of this Clause 30 (The Security Agent), the "Recoveries") shall be held by the Security Agent on trust to apply them at any time as the Security Agent (in its discretion) sees fit, to the extent permitted by applicable law (and subject to the remaining provisions of this Clause 30 (The Security Agent)), in the following order of priority:

(a) in discharging any sums owing to the Security Agent (in its capacity as such) other than pursuant to Clause 30.2 (Parallel Debt (Covenant to pay the Security Agent)) or any Receiver or Delegate;

(b) in payment or distribution to the Facility Agent, on its behalf and on behalf of the other Creditor Parties, for application towards the discharge of all sums due and payable by any Transaction Obligor under any of the Finance Documents in accordance with Clause 33.5 (Application of receipts; partial payments);

(c) if none of the Transaction Obligors is under any further actual or contingent liability under any Finance Document, in payment or distribution to any person to whom the Security Agent is obliged to pay or distribute in priority to any Transaction Obligor; and

(d) the balance, if any, in payment or distribution to the relevant Transaction Obligor.

30.29 Permitted Deductions

(a) The Security Agent may, in its discretion:

(i) 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 or may be required by any applicable law to make from any distribution or payment made by it under this Agreement; and

(ii) 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.

30.30 Prospective liabilities

Following acceleration, the Security Agent may, in its discretion, or at the request of the Facility Agent, hold any Recoveries 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) for later payment to the Facility Agent for application in accordance with Clause 33.5 (Application of receipts; partial payments) in respect of:

(a) any sum to the Security Agent, any Receiver or any Delegate; and

130

(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.

30.31 Investment of proceeds

Prior to the payment of the proceeds of the Recoveries to the Facility Agent for application in accordance with Clause 33.5 (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 30.31 (Investment of proceeds).

30.32 Currency conversion

(a) For the purpose of, or pending the discharge of, any of the Secured Liabilities the Security Agent may convert any moneys received or recovered by the Security Agent 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.

30.33 Good discharge

(a) Any payment to be made in respect of the Secured Liabilities by the Security Agent may be made to the Facility Agent on behalf of the Creditor Parties and any payment made in that way shall be a good discharge, to the extent of that payment, by the Security Agent.

(b) The Security Agent is under no obligation to make the payments to the Facility Agent under paragraph (a) above in the same currency as that in which the obligations and liabilities owing to the relevant Finance Party are denominated.

30.34 Amounts received by Obligors

If any of the Obligors receives or recovers any amount which, under the terms of any of the Finance Documents, should have been paid to the Security Agent, that Obligor will hold the amount received or recovered on trust for the Security Agent and promptly pay that amount to the Security Agent for application in accordance with the terms of this Agreement.

30.35 Application and consideration

In consideration for the covenants given to the Security Agent by each Obligor in relation to Clause 30.2 (Parallel Debt (Covenant to pay the Security Agent)) the Security Agent agrees with each Obligor to apply all moneys from time to time paid by such Obligor to the Security Agent in accordance with the foregoing provisions of this Clause 30 (The Security Agent).

131

30.36 Full freedom to enter into transactions

Without prejudice to Clause 30.7 (Business with the Group) or any other provision of a Finance Document and 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 Borrowers or any person who is a party to, or referred to in, a Finance Document,

and, in particular, the Security 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.

31 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.

32 SHARING AMONG THE FINANCE PARTIES

32.1 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 33 (Payment Mechanics) (a "Recovered Amount") and applies that amount to a payment due to it under the Finance Documents then:

132

(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 33 (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 33.5 (Application of receipts; partial payments).

32.2 Redistribution of payments

The Facility Agent shall treat the Sharing Payment as if it had been paid by the relevant Transaction Obligor and distribute it among the Finance Parties (other than the Recovering Finance Party) (the "Sharing Finance Parties") in accordance with Clause 33.5 (Application of receipts; partial payments) towards the obligations of that Transaction Obligor to the Sharing Finance Parties.

32.3 Recovering Finance Party's rights

On a distribution by the Facility Agent under Clause 32.2 (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.

32.4 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.

32.5 Exceptions

(a) This Clause 32 (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.

133

(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.

134

SECTION 11
ADMINISTRATION

33 PAYMENT MECHANICS

33.1 Payments to the Facility Agent

(a) On each date on which a Transaction Obligor or a Lender is required to make a payment under a Finance Document, that Transaction Obligor 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 (or, in relation to euro, in a principal financial centre in such Participating Member State or London, as specified by the Facility Agent) and with such bank as the Facility Agent, in each case, specifies.

33.2 Distributions by the Facility Agent

Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to Clause 33.3 (Distributions to a Transaction Obligor) and Clause 33.4 (Clawback and pre funding) 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 relation to euro, in the principal financial centre of a Participating Member State or London), as specified by that Party or, in the case of an Advance, to such account of such person as may be specified by the Borrowers in the Drawdown Request.

33.3 Distributions to a Transaction Obligor

The Facility Agent may (with the consent of the Transaction Obligor or in accordance with Clause 34 (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.

33.4 Clawback and pre-funding

(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) Unless paragraph (c) below applies, 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

135

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.

(c) If the Facility Agent has notified the Lenders that it is willing to make available amounts for the account of the Borrowers before receiving funds from the Lenders then if and to the extent that the Facility Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to the Borrowers:

(i) the Facility Agent shall notify the Borrowers of that Lender's identity and the Borrowers shall on demand refund it to the Facility Agent; and

(ii) the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrowers shall on demand pay to the Facility Agent the amount (as certified by the Facility Agent) which will indemnify the Facility Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.

33.5 Application of receipts; partial payments

(a) If the Facility Agent or the Security Agent (as applicable) receives a payment that is insufficient to discharge all the amounts then due and payable by a Transaction Obligor under the Finance Documents, the Facility Agent or the Security Agent (as applicable) shall apply that payment towards the obligations of that Transaction Obligor 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 or any Delegate under the Finance Documents;

(ii) secondly, in or towards payment pro rata of any accrued interest and fees due but unpaid to the Lenders under this Agreement;

(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.

(b) The Facility Agent shall, if so directed by the Majority Lenders, vary, or instruct the Security Agent to vary (as applicable), the order set out in sub-paragraphs (ii) to (iv) of paragraph (a) above.

(c) Paragraphs (a) and (b) above will override any appropriation made by a Transaction Obligor.

33.6 No set-off by Transaction Obligors

All payments to be made by a Transaction Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

136

33.7 Business Days

(a) Any payment under the Finance Documents 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.

33.8 Currency of account

(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.

33.9 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 Borrowers); 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 Borrowers) 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.

33.10 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.

137

33.11 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 Borrowers that a Disruption Event has occurred:

(a) the Facility 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 Facility Agent may deem necessary in the circumstances;

(b) the Facility 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 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;

(d) any such changes agreed upon by the Facility Agent and the Borrowers shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties and any Transaction Obligors as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 42 (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 33.11 (Disruption to Payment Systems etc.); and

(f) the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.

34 SET-OFF

A Finance Party may set off any matured obligation due from a Transaction 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 Transaction 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.

35 BAIL-IN

Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each Party acknowledges and accepts that any liability of any party to a Finance Document under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

(a) any Bail-In Action in relation to any such liability, including (without limitation):

(i) a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

138

(ii) a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

(iii) a cancellation of any such liability; and

(b) a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.

36 NOTICES

36.1 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.

36.2 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 Borrowers, that specified in Schedule 1 (The PartiesThe Parties);

(b) in the case of each Lender or any other Obligor, that specified in Schedule 1 (The PartiesThe 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 PartiesThe Parties); and

(d) in the case of the Security Agent, that specified in Schedule 1 (The PartiesThe 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.

36.3 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

(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 36.2 (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 PartiesThe Parties) (or any substitute department or officer as that Servicing Party shall specify for this purpose).

139

(c) All notices from or to a Transaction Obligor shall be sent through the Facility Agent unless otherwise specified in any Finance Document.

(d) 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 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.

36.4 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 36.2 (Addresses) or changing its own address or fax number, the Facility Agent shall notify the other Parties.

36.5 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 (including, without limitation, by way of posting to a secure website) if those two Parties:

(i) notify each other in writing of their electronic mail address and/or any other information required to enable the transmission 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 such electronic communication as specified in paragraph (a) above to be made between an Obligor and a Finance Party may only be made in that way 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.

(c) Any such electronic communication as specified in paragraph (a) above made between any two Parties will be effective only when actually received (or made available) in readable form and in the case of any electronic communication made by a Party to the Facility Agent or the Security Agent only if it is addressed in such a manner as the Facility Agent or the Security Agent shall specify for this purpose.

(d) Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5.00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.

(e) Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 36.5 (Electronic communication).

36.6 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:

140

(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.

37 CALCULATIONS AND CERTIFICATES

37.1 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.

37.2 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.

37.3 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.

38 PARTIAL INVALIDITY

(a) If, at any time, any provision of a Finance Document 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.

39 REMEDIES AND WAIVERS

No failure to exercise, nor any delay in exercising, on the part of any Creditor Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document. No election to affirm any Finance Document on the part of a Creditor 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 each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.

40 SETTLEMENT OR DISCHARGE CONDITIONAL

Any settlement or discharge under any Finance Document between any Finance Party and any Transaction Obligor shall be conditional upon no security or payment to any Finance Party by any Transaction Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

141

41 IRREVOCABLE PAYMENT

If the Facility Agent considers that an amount paid or discharged by, or on behalf of, a Transaction Obligor or by any other person in purported payment or discharge of an obligation of that Transaction Obligor to a Creditor Party under the Finance Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Transaction 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.

42 AMENDMENTS AND WAIVERS

42.1 Required consents

(a) Subject to Clause 42.2 (All Lender matters) and Clause 42.3 (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 Obligors 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 42 (Amendments and Waivers).

(c) Without prejudice to the generality of Clause 29.8 (Rights and 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.

42.2 All Lender matters

Subject to Clause 42.4 (Replacement of Screen Rate), 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:

(a) the definition of "Majority Lenders" in Clause 1.1 (Definitions);

(b) a postponement to or extension of the date of payment of any amount under the Finance Documents;

(c) a reduction in the Margin or the amount of any payment of principal, interest, fees or commission payable;

(d) a change in currency of payment of any amount under the Finance Documents;

(e) 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;

(f) a change to any Transaction Obligor;

(g) any provision which expressly requires the consent of all the Lenders;

(h) this Clause 42 (Amendments and Waivers);

(i) any change to Clause 2 (The Facility), Clause 3 (Purpose), Clause 5 (Drawdown), Clause 6.2 (Effect of cancellation and prepayment on scheduled repayments), Clause 7.4 (Mandatory

142

prepayment on sale, arrest or Total Loss), Clause 8 (Interest), paragraph (a) of Clause 24.7 (Provision of valuations), Clause 25 (Accounts and Application of Earnings), Clause 27 (Changes to the Lenders), Clause 32 (Sharing among the Finance Parties), Clause 46 (Governing Law) or Clause 47 (Enforcement);

(j) 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 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);

(k) (other than as expressly permitted by the provisions of any Finance Document) the nature or scope of:

(i) the guarantee and indemnity granted under Clause 16 (Guarantee and Indemnity);

(ii) the Security Assets; or

(iii) the manner in which the proceeds of enforcement of the Transaction Security are distributed,

(except in the case of sub-paragraphs (ii) and (iii) above, 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);

(l) the release of the guarantee and indemnity granted under Clause 16 (Guarantee and Indemnity) or 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.

42.3 Other exceptions

(a) An amendment or waiver which relates to the rights or obligations of a Servicing Party or the Arranger or a Reference Bank (each in their capacity as such) may not be effected without the consent of that Servicing Party, the Arranger or that Reference Bank, as the case may be.

42.4 Replacement of Screen Rate

(a) Subject to Clause 42.3 (Other exceptions), if the Screen Rate is not available for dollars, any amendment or waiver which relates to providing for another benchmark rate to apply in relation to dollars, in place of that Screen Rate (or which relates to aligning any provision of a Finance Document to the use of that benchmark rate) may be made with the consent of the Majority Lenders and the Obligors.

(b) If any Lender fails to respond to a request for an amendment or waiver described in paragraph (a) above within 10 Business Days (unless the Borrowers and the Facility Agent agree to a longer time period in relation to any request) of that request being made:

143

(i) its Commitment shall not be included for the purpose of calculating the Total Commitments when ascertaining whether any relevant percentage of Total Commitments has been obtained to approve that request; and

(ii) its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.

42.5 Obligor Intent

Without prejudice to the generality of Clauses 1.2 (Construction) and 16.4 (Waiver of defences) each Obligor expressly confirms that it intends that any guarantee contained in this Agreement or any other Finance Document and any Security created by any Finance Document shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

43 CONFIDENTIAL INFORMATION

43.1 Confidentiality

Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 43.2 (Disclosure of Confidential Information) and Clause 43.3 (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.

43.2 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 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;

144

(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 including a securitisation 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-paragraph (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 29.15 (Relationship with the other Finance Parties);

(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 including any applicable data protection laws;

(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 27.8 (Security over Lenders' rights);

(viii) who is a Party, a member of the Group or any related entity of a Transaction Obligor;

(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 Borrowers;

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;

(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

145

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 Borrowers and the relevant Finance Party; and

(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.

43.3 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) Clause 46 (Governing Law);

(vi) the names of the Facility Agent and the Arranger;

(vii) date of each amendment and restatement of this Agreement;

(viii) amount of Total Commitments;

(ix) currency of the Facility;

(x) type of Facility;

(xi) ranking of Facility;

(xii) Maturity Date for Facility;

(xiii) changes to any of the information previously supplied pursuant to sub-paragraphs (i) to (xii) above; and

(xiv) such other information agreed between such Finance Party and the Borrowers,

146

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) Each Obligor represents, on behalf of itself and the other Transaction Obligors, that none of the information set out in sub-paragraphs (i) to (xiv) of paragraph (a) above is, nor will at any time be, unpublished price-sensitive information.

(d) The Facility Agent shall notify the Guarantor 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.

43.4 Entire agreement

This Clause 43 (Confidential Information) 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.

43.5 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.

43.6 Notification of disclosure

Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrowers:

(a) of the circumstances of any disclosure of Confidential Information made pursuant to sub-paragraph (v) of paragraph (b) of Clause 43.2 (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 43 (Confidential Information).

147

43.7 Continuing obligations

The obligations in this Clause 43 (Confidential Information) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of 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.

44 CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS

44.1 Confidentiality and disclosure

(a) The Facility Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b), (c) and (d) below.

(b) The Facility Agent may disclose:

(i) any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the Borrowers pursuant to Clause 8.5 (Notification of rates of interest); and

(ii) any Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into 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 Facility Agent and the relevant Lender or Reference Bank, as the case may be.

(c) The Facility Agent may disclose any Funding Rate or any Reference Bank Quotation, and each Obligor may disclose any Funding Rate, to:

(i) any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate or Reference Bank Quotation is to be given pursuant to this sub-paragraph (i) is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it;

(ii) any person 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 if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no requirement to so

148

inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;

(iii) any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and

(iv) any person with the consent of the relevant Lender or Reference Bank, as the case may be.

(d) The Facility Agent's obligations in this Clause 44 (Confidentiality of Funding Rates and Reference Bank Quotations) relating to Reference Bank Quotations are without prejudice to its obligations to make notifications under Clause 8.5 (Notification of rates of interest) provided that (other than pursuant to sub-paragraph (i) of paragraph (b) above) the Facility Agent shall not include the details of any individual Reference Bank Quotation as part of any such notification.

44.2 Related obligations

(a) The Facility Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) is or may be price sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Facility Agent and each Obligor undertake not to use any Funding Rate or, in the case of the Facility Agent, any Reference Bank Quotation for any unlawful purpose.

(b) The Facility Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be:

(i) of the circumstances of any disclosure made pursuant to sub-paragraph (ii) of paragraph (c) of Clause 44.1 (Confidentiality and disclosure) 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

(ii) upon becoming aware that any information has been disclosed in breach of this Clause 44 (Confidentiality of Funding Rates and Reference Bank Quotations).

44.3 No Event of Default

No Event of Default will occur under Clause 26.4 (Other obligations) by reason only of an Obligor's failure to comply with this Clause 44 (Confidentiality of Funding Rates and Reference Bank Quotations).

45 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.

149

SECTION 12
GOVERNING LAW AND ENFORCEMENT

46 GOVERNING LAW

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

47 ENFORCEMENT

47.1 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 Obligors accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Obligor will argue to the contrary.

(c) This Clause 47.1 (Jurisdiction) is for the benefit of the Creditor Parties only. As a result, no Creditor Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Creditor Parties may take concurrent proceedings in any number of jurisdictions.

47.2 Service of process

(a) Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):

(i) irrevocably appoints Ince Process Agents Limited at its registered office for the time being, presently at Aldgate Tower, 2 Leman Street, London E18QN, England, 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 relevant Obligor 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 Borrowers (on behalf of all the Obligors) must immediately (and in any event within five 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.

150

SCHEDULE 1

THE PARTIES

PART A

THE OBLIGORS

Name of Borrower	Place of Incorporation	Registrationnumber (orequivalent, if any)	Address for Communication
Quora Owners Inc.	Marshall Islands	899950	c/o TMS BULKERS LTD.Athens Licenced Shipping Office11 Fragkokklisias Street15125, Maroussi Attiki, Greece Fax: +30 210 8090205Email: finance@tms-management.orgAttn: Mr. Dimitrios Glynos
Phoenix Owners Inc.	Marshall Islands	89603	c/o TMS BULKERS LTD.Athens Licenced Shipping Office11 Fragkokklisias Street15125, Maroussi Attiki, Greece Fax: +30 210 8090205Email: finance@tms-management.orgAttn: Mr. Dimitrios Glynos
Roscoe Marine Ltd.	Marshall Islands	17715	c/o TMS BULKERS LTD.Athens Licenced Shipping Office11 Fragkokklisias Street15125, Maroussi Attiki, Greece Fax: +30 210 8090205Email: finance@tms-management.orgAttn: Mr. Dimitrios Glynos

151

Name of Borrower	Place of Incorporation	Registrationnumber (orequivalent, if any)	Address for Communication
Dryships Inc.	Marshall Islands	11911	c/o TMS BULKERS LTD.Athens Licenced Shipping Office11 Fragkokklisias Street15125, Maroussi Attiki, Greece Fax: +30 210 8090205Email: finance@tms-management.orgAttn: Mr. Dimitrios Glynos

152

PART B

THE ORIGINAL LENDERS

Name of Original Lender	Commitment	Address for Communication
DVB Bank SE, Amsterdam Branch	35,000,000	WTC Schiphol Tower F 6th Floor Attn: Transaction Management Schiphol Boulevard 255 1118 BH Schiphol The Netherlands Fax: +31 88 399 8113 Email: TLS.TM.Amsterdam@dvbbank.com with copy to DVB Bank SE 3, Moraitini Street & 1, Palea Leof. Posidonos, Bldg. K4 Delta Paleo Faliro 175 61 Athens Email: D-Shipping Athens@dvbbank.com

153

PART C

THE SERVICING PARTIES

Name of Arranger

Address for Communication

DVB Bank SE, Amsterdam Branch

WTC Schiphol Tower F 6th Floor Attn: Transaction Management Schiphol Boulevard 255 1118 BH Schiphol The Netherlands Fax: + 31 88 399 8113 Email: TLS.TM.Amsterdam@dvbbank.com with copies to: DVB Bank SE, Athens Branch 3, Moraitini Street 8' 1, Palea Leof. Posidonos, Bldg. K4 Delta Paleo Faliro 175 61 Athens Email: D-Shipping Athens@dvbbank.com and DVB Bank SE, London Branch Park House 16-18 Finsbury Circus London EC2M 7EB only in relation to loan administration Email: TLS.LA.LONDON@DVBBANK.COM

154

Name of Facility Agent

Address for Communication

DVB Bank SE, Amsterdam Branch

WTC Schiphol Tower F 6th Floor Attn: Transaction Management Schiphol Boulevard 255 1118 BH Schiphol The Netherlands Fax: + 31 88 399 8113 Email: TLS.TM.Amsterdam@dvbbank.com with copies to: DVB Bank SE, Athens Branch 3, Moraitini Street 8' 1, Palea Leof. Posidonos, Bldg. K4 Delta Paleo Faliro 175 61 Athens Email: D-Shipping Athens@dvbbank.com and DVB Bank SE, London Branch Park House 16-18 Finsbury Circus London EC2M 7EB only in relation to loan administration Email: TLS.LA.LONDON@DVBBANK.COM

155

Name of Security Agent

Address for Communication

DVB Bank SE, Amsterdam Branch

WTC Schiphol Tower F 6th Floor Attn: Transaction Management Schiphol Boulevard 255 1118 BH Schiphol The Netherlands Fax: + 31 88 399 8113 Email: TLS.TM.Amsterdam@dvbbank.com with copies to: DVB Bank SE, Athens Branch 3, Moraitini Street 8' 1, Palea Leof. Posidonos, Bldg. K4 Delta Paleo Faliro 175 61 Athens Email: D-Shipping Athens@dvbbank.com and DVB Bank SE, London Branch Park House 16-18 Finsbury Circus London EC2M 7EB only in relation to loan administration Email: TLS.LA.LONDON@DVBBANK.COM

156

SCHEDULE 2

CONDITIONS PRECEDENT AND SUBSEQUENT

PART A

CONDITIONS PRECEDENT TO DRAWDOWN REQUEST

1 Transaction Obligors

1.1 A copy of the constitutional documents of each Transaction Obligor.

1.2 A copy of a resolution of the board of directors of each Transaction Obligor:

(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 Drawdown 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 authorising a specified person or persons to execute the Finance Documents to which it is a party.

1.4 A certified copy of the passport of each person authorised by the resolution referred to in paragraph 1.2 above, bearing a specimen of his/her signature.

1.5 A copy of a resolution signed by the Shareholder as the holder of the issued shares in each Borrower, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Borrower is a party.

1.6 A certificate of each Transaction Obligor (signed by an officer) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on that Transaction Obligor to be exceeded.

1.7 A certificate of each Transaction Obligor that is incorporated outside the UK (signed by an officer) 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.

1.8 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 and Subsequent) is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

1.9 Evidence of satisfactory shareholding structure of the Transaction Obligors.

157

2 Finance Documents

2.1 A duly executed original of any Finance Document not otherwise referred to in this Schedule 2 (Conditions Precedent and Subsequent).

2.2 A duly executed original of any other document required to be delivered by each Finance Document if not otherwise referred to in this Schedule 2 (Conditions Precedent and Subsequent).

3 Security Documents

3.1 A duly executed original of each of the Account Security and the Shares Security in respect of each Borrower (and of each document to be delivered under each of them) including confirmation of the appointment of any process agent under the relevant Account Security.

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 (New York) LLP, legal advisers to the Arranger, the Facility Agent and the Security Agent in the Marshall Islands, substantially in the form distributed to the Original Lenders before signing this Agreement.

4.3 A legal opinion of Watson Farley & Williams, legal advisers to the Arranger, the Facility Agent and the Security Agent in Germany, substantially in the form distributed to the Original Lenders before signing this Agreement.

5 Other documents and evidence

5.1 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 Borrowers 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.

5.2 The Original Financial Statements of each Borrower and the Guarantor.

5.3 The original of any mandates or other documents required in connection with the opening or operation of each Account.

5.4 Such evidence as the Facility Agent may reasonably require for the Finance Parties to be able to satisfy each of their "know your customer" or similar identification procedures in relation to the transactions contemplated by the Finance Documents.

158

PART B

CONDITIONS PRECEDENT TO DRAWDOWN

1 Transaction Obligors

A certificate of an authorised signatory of the relevant Transaction Obligor certifying that each corporate and copy document provided by it under Part A of Schedule 2 (Conditions Precedent and Subsequent) remains correct, complete and in full force and effect as at the Drawdown Date.

2 Borrowers

A certificate of an authorised signatory of each Borrower certifying that each copy document which it is required to provide under this Part B of Schedule 2 (Conditions Precedent and Subsequent) is correct, complete and in full force and effect as at the Drawdown Date.

3 Vessel and other security

3.1 A duly executed and dated original of the Mortgage, the Deed of Covenant (if applicable), the General Assignment and any Charterparty Assignment in respect of each Vessel and of each document to be delivered under or pursuant to each of them.

3.2 Documentary evidence that the Mortgage in respect of each Vessel has been duly registered or recorded (as the case may be) as a valid first preferred or priority (as the case may be) ship mortgage in accordance with the laws of the jurisdiction of the relevant Approved Flag.

3.3 Documentary evidence that each Vessel:

(a) is definitively and permanently registered in the name of the relevant Borrower under the relevant Approved Flag;

(b) is in the absolute and unencumbered ownership of the relevant Borrower save as contemplated by the Finance Documents;

(c) maintains the Approved Classification with the Approved Classification Society free of all overdue recommendations and conditions of the Approved Classification Society; and

(d) is insured in accordance with the provisions of this Agreement and all requirements in this Agreement in respect of insurances have been complied with.

3.4 Copies of each Vessel's class certificate, class maintenance certificate and Safety Management Certificate (together with any other details of the applicable Safety Management System which the Facility Agent requires) and of any other documents required under the ISM Code and the ISPS Code in relation to each Vessel including without limitation an ISSC and an IAPCC.

3.5 The Commercial Management Agreement and the Technical Management Agreement in respect of each Vessel, both on terms acceptable to the Facility Agent acting with the authorisation of all of the Lenders, together with:

(a) a duly executed and dated original of the Manager's Undertaking for each of the Approved Technical Manager and the Approved Commercial Manager in respect of each Vessel; and

159

(b) copies of the relevant Approved Technical Manager's Document of Compliance.

3.6 A valuation or, as the case may be, valuations of each Vessel (at the cost of the Borrowers), addressed to the Facility Agent on behalf of the Finance Parties, stated to be for the purposes of this Agreement and dated not earlier than 30 days before the Drawdown Date (unless otherwise agreed by the Facility Agent) from an Approved Valuer or Approved Valuers and prepared in accordance with Clause 24.7 (Provision of valuations), showing the Initial Market Value for that Vessel.

3.7 A favourable opinion from Bankserve or any independent insurance consultant acceptable to the Facility Agent on such matters relating to the Insurances in respect of each Vessel as the Facility Agent may require.

4 Legal opinions

4.1 Draft agreed form legal opinions of the legal advisers to the Arranger, the Facility Agent and the Security Agent in the jurisdiction of the Approved Flag of each Vessel, England and the Marshall Islands and such other relevant jurisdictions as the Facility Agent may require.

5 Other documents and evidence

5.1 Evidence that any process agent referred to in Clause 47.2 (Service of process), if not an Obligor, has accepted its appointment.

5.2 Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 11 (Fees) and Clause 15 (Costs and Expenses), including legal fees, have been paid or will be paid by the Drawdown Date.

5.3 Confirmation from the Account Bank that the Minimum Liquidity Amount in respect of each Borrower is standing to the credit of the relevant Earnings Account or the relevant Time Deposit Account.

160

PART C

CONDITIONS SUBSEQUENT

1 Legal opinions

Executed legal opinions in agreed form of the legal advisers to the Facility Agent and the Security Agent in the jurisdiction of the Approved Flag of each Vessel, England and such other relevant jurisdictions as the Facility Agent may require.

2 Vessel and other security

2.1 Evidence that the Security Documents have been duly registered or recorded in such jurisdictions as the Facility Agent may require and that all notices of assignment (where applicable) required under or in connection with the relevant Security Documents have been served.

2.2 A duly executed original or copy (as available) of a Letter of Undertaking from the Approved Brokers in a form acceptable to the Facility Agent.

2.3 A duly executed original or copy (as available) of a Letter of Undertaking from any protection and indemnity club or war risks association through or with whom any obligatory insurances are placed or effected in a form acceptable to the Facility Agent.

161

SCHEDULE 3

REQUESTS

PART A

DRAWDOWN REQUEST

From:	Quora Owners Inc. Phoenix Owners Inc. and Roscoe Marine Ltd.
To:	DVB Bank SE, Amsterdam Branch
	Dated: [●] 2018

Dear Sirs

Quora Owners Inc., Phoenix Owners Inc. and Roscoe Marine Ltd. - $35,000,000 Facility Agreement dated [•] January 2018 (the "Agreement")

1	We refer to the Agreement. This is the Drawdown Request. Terms defined in the Agreement have the same meaning in this Drawdown Request unless given a different meaning in this Drawdown Request.
2	We wish to borrow the Advances under Tranche A, Tranche B and Tranche C on the following terms:
	Proposed Drawdown Date:	[●] 2018 (or, if that is not a Business Day, the next Business Day)
	Amount:
	Tranche A:	$[●]
	Tranche B:	$[●]
	Tranche C:	$[●]
	Aggregate amount of all Tranches:    $[●] or, if less, the Available Facility
	Interest Period:	3 Months
3	We confirm that each condition specified in Clause 4.1 (Conditions precedent to delivery of the Drawdown Request) and paragraph (a) of Clause 4.2 (Conditions precedent to Drawdown) of this Agreement is satisfied on the date of this Drawdown Request.
4	The proceeds of these Advances should be credited to:
	account number: [●]
	name and SWIFT of account bank: [●]

162

	name and SWIFT of US correspondent bank: [●]
5	This Drawdown Request is irrevocable.

Yours faithfully

[●]

authorised signatory forQUORA OWNERS INC.

[●]

authorised signatory forPHOENIX OWNERS INC.

[●]

authorised signatory forROSCOE MARINE LTD.

163

PART A

DRAWDOWN REQUEST

From:	Quora Owners Inc. Phoenix Owners Inc. and Roscoe Marine Ltd.
To:	DVB Bank SE, Amsterdam Branch
Dated:	[●]

Dear Sirs

Quora Owners Inc., Phoenix Owners Inc. and Roscoe Marine Ltd. - $35,000,000 Facility Agreement dated [•] January 2018 (the "Agreement")

6	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.
7	We request that, subject to paragraph (g) of Clause 9.1 (Selection of Interest Periods) of the Agreement, the next Interest Period for the Loan be [●].
8	This Selection Notice is irrevocable.

Yours faithfully

[●]

authorised signatory forQuora Owners Inc.

[●]

authorised signatory forPhoenix Owners Inc.

[●]

authorised signatory forRoscoe Marine Ltd.

164

SCHEDULE 4

FORM OF TRANSFER CERTIFICATE

From:	DVB Bank SE, Amsterdam Branch as Facility Agent and DVB Bank SE, Amsterdam Branch as Security Agent
To:	[The Existing Lender] (the "Existing Lender") and [The New Lender] (the "New Lender")
Dated:	[●]

Dear Sirs

Quora Owners Inc., Phoenix Owners Inc. and Roscoe Marine Ltd. - $35,000,000 Facility Agreement dated [•] January 2018 (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 27.5 (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 27.5 (Procedure for transfer) of the Agreement.

(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 36.2 (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 27.4 (Limitation of responsibility of Existing Lenders) of the Agreement.

4 The New Lender hereby confirms that it has received a copy of each of the Security Documents which are governed by German law and which are account pledges, is aware of the contents of such account pledges and expressly consents to the declarations of the Security Agent made on behalf of the New Lender (as future pledgee) in such account pledges.

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 This Transfer Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law.

165

7 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.

166

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 Security Agent] and the Transfer Date is confirmed as [•].

[Facility Agent]

By: [●]

[Security Agent]

By: [●]

167

SCHEDULE 5

FORM OF ASSIGNMENT AGREEMENT

To:	DVB Bank SE, Amsterdam Branch as Facility Agent, DVB Bank SE, Amsterdam Branch as Security Agent and Quora Owners Inc., Phoenix Owners Inc. and Roscoe Marine Ltd. as Borrowers, for and on behalf of each Transaction Obligor
From:	[The Existing Lender] (the "Existing Lender") and [The New Lender] (the "New Lender")
Dated:	[●]

Dear Sirs

Quora Owners Inc., Phoenix Owners Inc. and Roscoe Marine Ltd. - $35,000,000 Facility Agreement dated [•] January 2018 (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 27.6 (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 36.2 (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 27.4 (Limitation of responsibility of Existing Lenders).

7 The New Lender hereby confirms that it has received a copy of each of the Security Documents which are governed by German law and which are account pledges, is aware of the contents of such account pledges and expressly consents to the declarations of the Security Agent made on behalf of the New Lender (as future pledgee) in such account pledges.

168

8 This Assignment Agreement acts as notice to the Facility Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 27.7 (Copy of Transfer Certificate or Assignment Agreement to Borrowers), to the Borrowers (on behalf of each Transaction Obligor) of the assignment referred to in this Assignment Agreement.

9 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.

10 This Assignment Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

11 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.

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 Security 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:

[Security Agent]

By:

169

SCHEDULE 6

FORM OF COMPLIANCE CERTIFICATE

To:	DVB Bank SE, Amsterdam Branch as Facility Agent
From:	Dryships Inc.
	Dated: [●]

Dear Sirs

Quora Owners Inc., Phoenix Owners Inc. and Roscoe Marine Ltd. - $35,000,000 Facility Agreement dated [•] January 2018 (the "Agreement")

1 We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

2 We confirm that:

(a) an amount of $1,000,000 remains credited to each [Earnings Account][Time Deposit Account];

(b) as at the 3-month period ending on [●] to which the financial statements referred to below were prepared, the Guarantor is in compliance with the following covenants under Clause 20.2 (Guarantor's financial covenants):

(i) the Working Capital is [●];

(ii) the Cash and Cash Equivalents are $[●];

(iii) the ratio of Total Net Liabilities to Net Market Value Adjusted Total Assets is [●]; and

(iv) To evidence such compliance, we attach a copy of the latest [annual][quarterly] consolidated financial statements of the Group together with calculations and evidence setting out in reasonable detail the data and calculations made above (including valuations in a form acceptable to the Facility Agent evidencing the Market Value of each Fleet Vessel which were used to calculate the Market Value Adjusted Total Assets of the Group as at [●]).

170

3 We confirm that no Default is continuing.*

Signed:

[Authorised Signatory]

of

DRYSHIPS INC.

*If this statement cannot be made, the Compliance Certificate should identify any Default that is continuing and the steps, if any, being taken to remedy it.

171

SCHEDULE 7

TIMETABLES

Delivery of a duly completed Drawdown Request (Clause 5.1 (Delivery of Drawdown Request)) or a Selection Notice (Clause 9.1 (Selection of Interest Periods))	Three Business Days before the intended Drawdown Date (Clause 5.1 (Delivery of Drawdown Request)) or the expiry of the preceding Interest Period (Clause 9.1 (Selection of Interest Periods))
Facility Agent notifies the Lenders of an Advance in accordance with Clause 5.4 (Lenders' Participation)	Three Business Days before the intended Drawdown Date.
LIBOR is fixed	Quotation Day as of 11:00 am London time
Reference Bank Rate calculated by reference to available quotations in accordance with Clause 10.2 (Calculation of Reference Bank Rate)	Noon on Quotation Day

172

EXECUTION PAGES

BORROWERS

SIGNED by Dimitrios Glynos	)
duly authorised for	)
and on behalf of	)	/s/ Dimitrios Glynos
QUORA OWNERS INC.	)
in the presence of:	)
Witness' signature: /s/ Ilias Vassilios Tsigos
Witness' name: Ilias Vassilios Tsigos
Witness' address: 348 Syngrou Avenue
176 74 Kallithea
Athens – Greece
SIGNED by Dimitrios Glynos	)
duly authorised for	)
and on behalf of	)	/s/ Dimitrios Glynos
PHOENIX OWNERS INC.	)
in the presence of:	)
Witness' signature: /s/ Ilias Vassilios Tsigos
Witness' name: Ilias Vassilios Tsigos
Witness' address: 348 Syngrou Avenue
176 74 Kallithea
Athens – Greece
SIGNED by Dimitrios Glynos	)
duly authorised for	)
and on behalf of	)	/s/ Dimitrios Glynos
ROSCOE MARINE LTD.	)
in the presence of:	)
Witness' signature: /s/ Ilias Vassilios Tsigos
Witness' name: Ilias Vassilios Tsigos
Witness' address: 348 Syngrou Avenue
176 74 Kallithea
Athens – Greece
GUARANTOR
SIGNED by Dimitrios Glynos	)
duly authorised for	)
and on behalf of	)	/s/ Dimitrios Glynos
DRYSHIPS INC.	)
in the presence of:	)
Witness' signature: /s/ Ilias Vassilios Tsigos
Witness' name: Ilias Vassilios Tsigos
Witness' address: 348 Syngrou Avenue
176 74 Kallithea
Athens – Greece

173

LENDERS
SIGNED by Vassiliki Georgopoulos	)
duly authorised for	)
and on behalf of	)	/s/ Vassiliki Georgopoulos
DVB BANK SE, AMSTERDAM BRANCH	)
in the presence of:	)
Witness' signature: /s/ Ilias Vassilios Tsigos
Witness' name: Ilias Vassilios Tsigos
Witness' address: 348 Syngrou Avenue
176 74 Kallithea
Athens – Greece
ARRANGER
SIGNED by Vassiliki Georgopoulos	)
duly authorised for	)
and on behalf of	)	/s/ Vassiliki Georgopoulos
DVB BANK SE, AMSTERDAM BRANCH	)
in the presence of:	)
Witness' signature: /s/ Ilias Vassilios Tsigos
Witness' name: Ilias Vassilios Tsigos
Witness' address: 348 Syngrou Avenue
176 74 Kallithea
Athens – Greece
FACILITY AGENT
SIGNED by Vassiliki Georgopoulos	)
duly authorised for	)
and on behalf of	)	/s/ Vassiliki Georgopoulos
DVB BANK SE, AMSTERDAM BRANCH	)
in the presence of:	)
Witness' signature: /s/ Ilias Vassilios Tsigos
Witness' name: Ilias Vassilios Tsigos
Witness' address: 348 Syngrou Avenue
176 74 Kallithea
Athens – Greece
SECURITY AGENT
SIGNED by Vassiliki Georgopoulos	)
duly authorised for	)
and on behalf of	)	/s/ Vassiliki Georgopoulos
DVB BANK SE, AMSTERDAM BRANCH	)
in the presence of:	)
Witness' signature: /s/ Ilias Vassilios Tsigos
Witness' name: Ilias Vassilios Tsigos
Witness' address: 348 Syngrou Avenue
176 74 Kallithea
Athens – Greece

174

ACCOUNT BANK
SIGNED by Vassiliki Georgopoulos	)
duly authorised for	)
and on behalf of	)	/s/ Vassiliki Georgopoulos
DVB BANK SE, AMSTERDAM BRANCH	)
in the presence of:	)
Witness' signature: /s/ Ilias Vassilios Tsigos
Witness' name: Ilias Vassilios Tsigos
Witness' address: 348 Syngrou Avenue
176 74 Kallithea
Athens – Greece

175

EX-4.69

Exhibit 4.69

Date 8 March 2018

AMATHUS OWNING COMPANY LIMITED

NOUFARO OWNERS INC.

as joint and several Borrowers

- and -

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 1

as Lenders

- and -

THE BANKS AND FINANCIAL INSTITUTIONS

listed in Schedule 2

as Swap Banks

- and -

ABN AMRO BANK N.V.

as Arranger, Agent and Security Trustee

______________________________

LOAN AGREEMENT

_______________________________

relating to a secured term loanof up to US$30,000,000 rem.v.'s "RARAKA" and "JUDD"

CONSTANT & CONSTANT149 Karaiskou Street185 38 Piraeus Greece

INDEX

CLAUSE NO.		PAGE NO
1.	INTERPRETATION	- 1 -
2.	FACILITY	- 18 -
3.	POSITION OF THE LENDERS AND THE SWAP BANKS	- 18 -
4.	DRAWDOWN	- 19 -
5.	INTEREST	- 20 -
6.	INTEREST PERIODS	- 22 -
7.	DEFAULT INTEREST	- 23 -
8.	REPAYMENT AND PREPAYMENT	- 24 -
9.	CONDITIONS PRECEDENT	- 27 -
10.	REPRESENTATIONS AND WARRANTIES	- 28 -
11.	GENERAL UNDERTAKINGS	- 31 -
12.	CORPORATE UNDERTAKINGS	- 36 -
13.	INSURANCE	- 37 -
14.	SHIP COVENANTS	- 41 -
15.	SECURITY COVER	- 45 -
16.	PAYMENTS AND CALCULATIONS	- 47 -
17.	APPLICATION OF RECEIPTS	- 49 -
18.	APPLICATION OF EARNINGS	- 50 -
19.	EVENTS OF DEFAULT	- 51 -
20.	FEES AND EXPENSES	- 55 -
21.	INDEMNITIES	- 57 -
22.	NO SET-OFF OR TAX DEDUCTION	- 59 -
23.	ILLEGALITY, ETC	- 61 -
24.	INCREASED COSTS	- 62 -
25.	SET-OFF	- 63 -
26.	TRANSFERS AND CHANGES IN LENDING OFFICES	- 63 -
27.	VARIATIONS AND WAIVERS	- 67 -
28.	NOTICES	- 68 -
29.	SUPPLEMENTAL	- 71 -
30.	JOINT AND SEVERAL LIABILITY	- 72 -
31.	LAW AND JURISDICTION	- 73 -
SCHEDULE 1 LENDERS AND COMMITMENTS		– 75 -
SCHEDULE 2 SWAP BANKS		– 76 -
SCHEDULE 3 DRAWDOWN NOTICE		– 77 -
SCHEDULE 4 CONDITION PRECEDENT DOCUMENTS		– 78 -
SCHEDULE 5 DESIGNATION NOTICE		– 82 -
SCHEDULE 6 TRANSFER CERTIFICATE		– 83 -

- 1 -

SCHEDULE 7 FORM OF COMPLIANCE CERTIFICATE	– 87 -
EXECUTION PAGES	- 89 -

- 2 -

THIS LOAN AGREEMENT is made on 8 March 2018

BETWEEN:

(1) AMATHUS OWNING COMPANY LIMITED and NOUFARO OWNERS INC., each being a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands as joint and several Borrowers;

(2) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1, as Lenders;

(3) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 2, as Swap Banks;

(4) ABN AMRO BANK N.V., acting through its office at 93 Coolsingel, 3012 AE Rotterdam, The Netherlands as Arranger; and

(5) ABN AMRO BANK N.V., having its registered office at Daalsesingel 71, 3511 SW Utrecht, The Netherlands, EA8550 as Agent; and

(6) ABN AMRO BANK N.V., acting through its office at 93 Coolsingel, 3012 AE Rotterdam, The Netherlands as Security Trustee.

WHEREAS

(A) The Lenders have agreed to make available to the Borrowers a secured term loan of up to the lesser of (i) US$30,000,000 and (ii) 50% of the aggregate Fair Market Value of m.v.'s "RARAKA" and "JUDD" for the purposes of refinancing part of the acquisition cost of the Ships.

(B) The Swap Banks have agreed to enter into interest rate swap transactions with the Borrowers from time to time to hedge the Borrowers' exposure under this Agreement to interest rate fluctuations.

(C) The Lenders have agreed with the Swap Banks that the Swap Banks will share in the security to be granted to the Security Trustee pursuant to this Agreement on a pari passu basis.

IT IS AGREED as follows:

1. INTERPRETATION

1.1 Definitions. Subject to Clause 1.5, in this Agreement:

"Accounting Information"means the annual audited financial statements and the quarterly unaudited financial statements for the Group to be provided to the Agent in accordance with Clauses 11.6 (a) and (b) of this Agreement and clause 11.5 (a) and (b) of the Corporate Guarantee (as the context may require);

"Accounts Pledge"means, in relation to each Borrower, the deed or deeds of pledge creating security over the Operating Accounts and the Retention Account, to be executed by the Borrowers in favour of the Security Trustee, in such form as the Lenders may approve or require;

"Affected Lender"has the meaning given in Clause 5.5;

"Affiliate"means a Subsidiary of that person or a parent company of that person or any other Subsidiary of that parent company;

- 1 -

"Agency and Trust Deed"means the agency and trust deed to be executed between the Borrowers, the Lenders, the Swap Banks, the Agent and the Security Trustee, in such form as the Lenders may approve or require;

"Agent"means ABN AMRO Bank N.V., having its registered office at Daalsesingel 71, 3511 SW Utrecht, The Netherlands, EA 8550 or any successor of it appointed under clause 5 of the Agency and Trust Deed;

"Amathus"means Amathus Owning Company Limited, a corporation incorporated in the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands;

"Approved Brokers"means each of Clarksons Platou AS, Arrow Sale & Purchase (UK) Limited of London, Fearnleys A/S of Oslo, Simpson Spence and Young of London, Barry, Rogliano & Salles, Braemar Seascope Valuations Limited of London and Lorentzen & Stemoco of Oslo 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);

"Approved Flag"means, in relation to a Ship, the Republic of Malta, the Republic of the Marshall Islands, the Republic of Liberia, the Hellenic Republic, the Cayman Islands and the Republic of Cyprus, or such other flag as the Agent may, in its sole and absolute discretion, approve as the flag on which a Ship shall be registered;

"Approved Flag State"means, in relation to a Ship, the Republic of Malta, the Republic of the Marshall Islands, the Republic of Liberia, the Hellenic Republic, the Cayman Islands and the Republic of Cyprus, or any other country in which the Agent may, in its sole and absolute discretion, approve that a Ship be registered;

"Approved Manager"means, in relation to a Ship, TMS Bulkers Ltd., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands in its capacity as technical, commercial and operational manager of that Ship, or any other company which the Agent may, with the authorisation of the Majority Lenders, approve from time to time (it being agreed that a company which is in the same ultimate beneficial ownership as TMS Bulkers Ltd. shall be deemed to be approved by the Lenders) as the commercial, technical and operational manager of a Ship and which shall be acceptable to the Lenders in their sole and absolute discretion;

"Approved Manager's Undertaking"means, in relation to a Ship, a letter of undertaking to be executed by the Approved Manager in favour of the Security Trustee in the terms required by the Security Trustee, agreeing certain matters in relation to the Approved Manager and subordinating the rights of the Approved Manager against that Ship and the Borrower which is the owner thereof to the rights of the Creditor Parties under the Finance Documents, in such form as the Lenders may approve or require;

"Arranger"means ABN AMRO Bank N.V., acting through its office at 93 Coolsingel, 3012 AE Rotterdam, The Netherlands;

"Auditors"means one of PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte & Touche or another firm which is approved, provided such approval is permitted by law;

"Availability Period"means the period commencing on the date of this Agreement and ending on:

(a) the date falling sixty (60) days after the date of this Agreement or such later date as the Lenders may agree with the Borrowers; or

- 2 -

(b) if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated;

"Bail-In Action"means the exercise of any Write-down and Conversion Powers;

"Bail-In Legislation"means, in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time;

"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;

(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) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III";

"Borrowers"means each of Amathus and Noufaro;

"Business Day"means a day other than a Saturday or Sunday on which banks are open in London, Rotterdam, Amsterdam, Utrecht, Athens and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City;

"Change of Control"shall have the meaning given to it in Clause 8.7;

"Code"means the United States Internal Revenue Code of 1986 (as amended);

"Commitment"means, in relation to a Lender, the amount set opposite its name in Schedule 1, or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and "Total Commitments"means the aggregate of the Commitments of all the Lenders);

"Compliance Certificate"means a certificate referring to a Compliance Date in the form set out in Schedule 7 (or in any other form which the Agent approves) to be provided together with the financial statements provided in accordance with Clauses 11.6 and 12.6;

"Compliance Date"means 31 March, 30 June, 30 September and 31 December of each calendar year (or such other dates as the Agent may agree pursuant to Clause 12.6);

"Confirmation"and "Early Termination Date", in relation to any continuing Designated Transaction, have the meanings given in each Master Agreement;

"Contractual Currency"has the meaning given in Clause 21.5;

"Contribution"means, in relation to a Lender, the part of the Loan which is owing to that Lender;

- 3 -

"Corporate Guarantee"means the guarantee of the obligations of the Borrowers under this Agreement and the other Finance Documents to which they are a party, to be given by the Corporate Guarantor in favour of the Security Trustee, in such form as the Lenders may approve or require;

"Corporate Guarantor"means DryShips Inc., a corporation incorporated in the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands;

"CRD IV"means Directive 2013/36/EU of the European Parliament and of the Council 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 Directives 2006/48/EC and 2006/49/EC;

"Creditor Party"means the Agent, the Security Trustee, the Arranger, any Lender or any Swap Bank, whether as at the date of this Agreement or at any later time;

"CRR"means Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms;

"Deed of Covenant"means, in relation to a Ship, the first priority deed of covenant collateral to the Ship Mortgage over that Ship, to be executed by the Borrower owning that Ship in favour of the Security Trustee, in such form as the Lenders may approve or require;

"Designated Transaction"means a Transaction which fulfils the following requirements:

(a) it is entered into by the Borrowers pursuant to a Master Agreement with a Swap Bank which, at the time the Transaction is entered into, is also a Lender;

(b) its purpose is the hedging of all or part of the Borrowers' exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any part thereof) for a period expiring no later than the final Repayment Date; and

(c) it is designated by the Borrowers, by delivery by the Borrowers to the Agent of a notice of designation in the form set out in Schedule 5, as a Designated Transaction for the purposes of the Finance Documents;

"Dollars"and "S" means the lawful currency for the time being of the United States of America;

"Drawdown Date"means, in relation to the Loan, the date requested by the Borrowers for the Loan to be made or (as the context requires) the date on which the Loan is actually made;

"Drawdown Notice"means, in relation to the Loan, a notice in the form set out in Schedule 3 (or in any other form which the Agent approves or reasonably requires);

"Earnings"means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower owning that Ship or the Security Trustee and which arise out of the use or operation of that Ship, including (but not limited to):

(a) all freight, hire and passage moneys, compensation payable to the Borrower owning that Ship or the Security Trustee in the event of requisition of that 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 that Ship;

- 4 -

(b) all moneys which are at any time payable under Insurances in respect of loss of hire;

(c) contributions of any nature whatsoever in respect of general average; and

(d) if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) above 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 that Ship;

"EEA Member Country"means any member state of the European Union, Iceland, Liechtenstein and Norway;

"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 the owner of a Ship and/or any operator or manager 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 the owner of a Ship 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;

"EU Bail-In Legislation Schedule"means the document described as such and published by the Loan Market Association (or any successor person) from time to time;

"Event of Default"means any of the events or circumstances described in Clause 19.1;

"Fair Market Value"means:

- 5 -

(a) in relation to a Ship, the market value of that Ship determined from time to time in accordance with Clause 15.3; and

(b) in relation to the other Fleet Vessels, the market value of such other Fleet Vessels determined from time to time in accordance with Clause 15.3;

"FATCA"means:

(a) sections 1471 to 1474 of the Code or any associated regulations or other official guidance;

(b) any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of 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;

"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 2019; 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 2019,

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;

"FATCA FFI"means a foreign financial institution as defined in section 1471(d)(4) of the Code which, if any Creditor Party is not a FATCA Exempt Party, could be required to make a FATCA Deduction;

"FATCA Non-Exempt Lender"means any Lender who is not a FATCA Exempt Party;

"FATCA Protected Lender"means any Lender irrevocably designated as a "FATCA Protected Lender" by the Borrowers by notice to that Lender and the Agent at least six months prior to the earliest FATCA Application Date for a payment by a Party to that Lender (or to the Agent for the account of that Lender);

"Finance Documents"means:

(a) this Agreement;

(b) the Drawdown Notice;

- 6 -

(c) the Agency and Trust Deed;

(d) the Master Agreement;

(e) the Master Agreement Security Deed;

(f) the Corporate Guarantee;

(g) the Shares Pledges;

(h) the Mortgages;

(i) the Deeds of Covenant;

(j) the General Assignments;

(k) the Accounts Pledges;

(1) the Approved Manager's Undertakings;

(m) any Time Charter Assignment;

(n) any Transfer Certificate; and

(o) any other document (whether creating a Security Interest or not) which is executed at any time by any of the Borrowers, the Corporate Guarantor, the Approved Manager, the Shareholder 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 Lenders and/or the Swap Banks under this Agreement or any of the 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 or dematerialised equivalent 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 paragraphs (a) to (e) if the references to the debtor referred to the other person;

"Financial Year"means, in relation to each Borrower and the Corporate Guarantor, each period of 1 year commencing on 1 January in respect of which its accounts are or ought to be prepared;

- 7 -

"Fleet Market Value"means, as of the date of calculation, the aggregate of:

(a) the Fair Market Value of each of the Ships; and

(b) the aggregate Fair Market Value of all other Fleet Vessels (other than the Ships), as most recently determined pursuant to valuations of such vessels;

"Fleet Vessel"means each Ship and any other vessel owned by any Group Member (but excluding any vessels under construction);

"GAAP"means generally accepted accounting principles as from time to time in effect in the United States of America including IFRS;

"General Assignment"means, in relation to a Ship, a general assignment of the Earnings, the Insurances and any Requisition Compensation in respect of that Ship, to be executed by the Borrower owning that Ship in favour of the Security Trustee, in such form as the Lenders may approve or require;

"General Banking Terms and Conditions"means the Agent's general banking terms and conditions of business (algemene bankvoorwaarden), as amended and/or supplemented from time to time;

"Group"means the Corporate Guarantor and its Subsidiaries for the time being and, for the purposes of Clauses 11.6 and 12.5, any other entity required to be treated as a Subsidiary in the Guarantor's consolidated financial statements in accordance with GAAP and/or any applicable law;

"Group Member"means the Borrowers and any other entity which is part of the Group;

"Hedging Exposure"means, as at any relevant date and in relation to a Swap Bank, the amount certified by that Swap Bank to the Agent to be the aggregate net amount in Dollars which would be payable by the Borrowers to that Swap Bank under (and calculated in accordance with) section 6(e) (Payments on Early Termination) of the Master Agreement entered into by that Swap Bank with the Borrowers if an Early Termination Date had occurred on the relevant date in relation to all continuing Designated Transactions entered into between the Borrowers and that Swap Bank, the Borrowers being the defaulting party;

"IFRS"means international accounting standards within the meaning of the IAS Regulations 1606/2002 to the extent applicable to the relevant financial statements;

"Insurances"means, in relation to a Ship:

(a) all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, which are effected in respect of that Ship, her Earnings or otherwise in relation to that Ship whether before, on or after the date of this Agreement; 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 and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement;

"Interbank Market"means the London interbank market;

"Interest Period"means, in relation to the Loan, a period determined in accordance with Clause 6;

"Interpolated Screen Rate"means in relation to LIBOR for the Loan (or any part of it), the rate which results from interpolating on a linear basis between:

- 8 -

(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); 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),

each as of 11:00 am (London time) on the relevant Quotation Day;

"Inventory of Hazardous Materials"means a document describing the materials present in each Ship's structure and equipment that may be hazardous to human health or the environment along with their respective location and approximate quantities;

"ISM Code"means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation Assembly as Resolutions A.741 (18) (as amended by MSC 104 (73)) and A.913(22) (superseding Resolution A.788(19)), as the same may be amended, supplemented or superseded from time to time (and the terms "safety management system", "Safety Management Certificate"and "Document of Compliance"have the same meanings as are given to them in the ISM Code);

"ISPS Code"means the International Ship and Port Facility Security Code adopted by the International Maritime Organisation (as the same may be amended, supplemented or superseded from time to time);

"ISSC" means, in relation to a Ship, a valid and current International Ship Security Certificate issued under the ISPS Code;

"JUDD"means m.v. "JUDD" being a 2015 built 205,000 dwt newcastlemax bulk carrier registered in the ownership of Noufaro under the Malta flag with Official Number/IMO Number 9639476;

"Lender"means, subject to Clause 26.6:

(a) a bank or financial institution listed in Schedule 1 and acting through its branch indicated in Schedule 1 (or through another branch notified to the Agent under Clause 26.14) or its successor or assign, unless it has delivered a Transfer Certificate or Certificates covering the entire amounts of its Commitment and its Contribution; and

(b) the holder for the time being of a Transfer Certificate;

"LIBOR"means, in relation to the Loan or any part of it:

(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

(c) if:

(i) no Screen Rate is available for the currency of the Loan; or

(ii) no Screen Rate is available for the relevant Interest Period and it is not possible to calculate an Interpolated Screen Rate for the Loan (or the relevant part of it),

- 9 -

the Reference Bank Rate, as of 11:00 a.m. (London time) 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, and if (in any of the above cases) that rate is less than zero (0), then LIBOR shall be deemed to be zero (0);

"Loan"means the principal amount for the time being outstanding under this Agreement;

"Major Casualty"means, in relation to a Ship, any casualty to that 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 (inclusive of deductible) or the equivalent in any other currency;

"Majority Lenders"means:

(a) before the Loan has been made, Lenders whose Commitments are equal to or greater than 66 2/3 per cent. of the Total Commitments; and

(b) after the Loan has been made, Lenders whose Contributions are equal to or greater than 66 2/3 per cent. of the Loan;

"Mandatory Costs"shall have the meaning given to it in Clause 21.8;

"Margin"means two point five zero per cent (2.50%) per annum;

"Master Agreement"means, in relation to a Swap Bank, the master agreement (on the 2002 ISDA (Multicurrency - Crossborder) form) made between the Borrowers and that Swap Bank and includes all Designated Transactions from time to time entered into and Confirmations from time to time exchanged under that master agreement;

"Master Agreement Security Deed"means, in relation to each Master Agreement, the deed to be executed by the Borrowers in favour of the Security Trustee in respect of all of the Borrowers' rights under that Master Agreement, in such form as the Lenders may approve or require;

"Material Adverse Effect"means a material adverse effect on;

(a) the business, operations, property, condition (financial or otherwise) or prospects of any Obligor or the Group taken as a whole; or

(b) the ability of any Obligor to perform its respective obligations under the Finance Documents; or

(c) the legality, validity or enforceability of, or the effectiveness or ranking of, any Security Interest granted or purported to be granted pursuant to any of the Finance Documents or the rights or remedies of any Creditor Party under any of the Finance Documents;

"Material Adverse Change"means any event or series of events which, in the reasonable opinion of the Majority Lenders, has or will have a Material Adverse Effect;

"Mortgage"means, in relation to a Ship, the first priority ship mortgage to be executed by the Borrower owning that Ship in favour of the Security Trustee on that Ship under the Approved Flag (and Deed of Covenant collateral thereto if applicable), in such form as the Lenders may approve or require;

"Negotiation Period"has the meaning given in Clause 5.8;

"Notifying Lender"has the meaning given in Clause 23.1 or Clause 24.1 as the context requires;

- 10 -

"Noufaro"means Noufaro Owners Inc., a corporation incorporated in the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands;

"Obligors"means the parties to the Finance Documents (other than the Creditor Parties and any Time Charterer);

"Operating Account"means, in relation to a Ship, an account in the name of the Borrower owning that Ship with the Agent in Rotterdam designated "[Name of Borrower] — Operating Account", or any other account (with that or another office of the Agent or with a bank or financial institution other than the Agent) which is designated by the Agent as the Operating Account for that Ship for the purposes of this Agreement;

"Participating Member State"means any member state of the European Union that has 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 or a Finance Document;

"PATRIOT Act"means the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Improvement and Reauthorization Act of 2005 (H.R. 3199);

"Payment Currency"has the meaning given in Clause 21.5;

"Permitted Holders"means collectively:

(a) the individual disclosed in writing by the Obligors to the Arranger and the Lenders on or before the date of this Agreement as being the ultimate beneficial owner of (i) no less than 50% of the issued and outstanding voting share capital of the Corporate Guarantor and (ii) 100% of the issued and outstanding share capital and voting share capital of the Approved Manager;

(b) his direct lineal descendants;

(c) the personal estate of any of the above persons;

(d) any trust, foundation or other similar entity created for the benefit of one or more of the above persons and their respective estates; and

(e) any corporation or other legal entity beneficially owned (at least as to 100% of (i) its issued and outstanding share capital or (ii) its issued and outstanding voting share capital) and controlled by any of the above persons;

"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

- 11 -

amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower owning that Ship in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.13(g);

(f) any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses where the relevant Borrower is prosecuting or defending such action in good faith by appropriate steps;

(g) Security Interests arising by operation of law in respect of taxes which are not overdue for payment, other than taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made; and

(h) any security created pursuant to the General Banking Terms and Conditions (algemene bankvoorwaarden) of ABN AMRO Bank N.V.;

"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 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 branch or 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, whether as main or territorial or ancillary proceedings or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c);

"Potential Event of Default"means an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Majority Lenders and/or the satisfaction of any other condition that would, reasonably and justifiably as per the conditions of this Agreement, constitute an Event of Default;

"Quotation Day"means, in relation to any period for which an interest rate is to be determined, two 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 (1) day, the Quotation Day will be the last of those days);

"RARAKA"means m.v. "RARAKA" being a 2012 built 76,100 dwt panamax bulk carrier registered in the ownership of Amathus under Malta flag with Official Number/IMO Number 9584504;

"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

- 12 -

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, ABN AMRO Bank N.V. and/or such other banks as may be appointed by the Agent in consultation with the Borrowers;

"Relevant Person"has the meaning given in Clause 19.9;

"Repayment Date"means a date on which a repayment is required to be made under Clause 8;

"Requisition Compensation"includes 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";

"Resolution Authority"means any body which has authority to exercise any Write-down and Conversion Powers;

"Restricted Party"means a person:

(a) listed on or owned or controlled by a person listed on any Sanctions List; or

(b) located in, organised under the laws of or owned or controlled by, or acting on behalf of, a person located in or organised under the laws of a country or territory which is a subject of country-wide or territory-wide Sanctions (including, without limitation, at the date of this Agreement, Cuba, Iran, North Korea, Syria and Sudan); or

(c) otherwise a subject of Sanctions;

"Retention Account"means an account in the name of the Borrowers with the Agent in Rotterdam designated "Amathus/Noufaro — Retention Account" and with account number NL39ABNA0814030939, or any other account (with that or another office of the Agent or with a bank or financial institution other than the Agent) which is designated by the Agent as the Retention Account for the purposes of this Agreement;

"Sanctions"means any trade, economic or financial sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by a Sanctions Authority;

"Sanctions Authority"means:

(a) the Security Council of the United Nations;

(b) the United States;

(c) the United Kingdom;

(d) the European Union;

(e) any member state of the European Union (including, without limitation, The Netherlands);

(f) any country to which any Obligor is bound; and

- 13 -

(g) the governments and official institutions or agencies of any of paragraphs (a) to (f) above, including without limitation the U.S. Office of Foreign Asset Control ("OFAC"), the U.S. Department of State and Her Majesty's Treasury ("HMT");

"Sanctions List"means the Specially Designated Nationals and Blocked Persons list maintained by OFAC, the Consolidated List of Financial Sanctions Targets maintained by HMT, or any similar list maintained by, or public announcement of a Sanctions designation made by, a Sanctions Authority, each as amended, supplemented or substituted from time to time;

"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 and the relevant period displayed on the appropriate pages LIBOR 01 or LIBOR 02 of the Thomson Reuters screen (or any replacement Thomson 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 Thomson Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrowers and the Lenders;

"Secured Liabilities"means all liabilities which the Borrowers, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or by virtue of the Finance Documents or any judgment relating to any of the Finance Documents; 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 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 rights of the plaintiff under an action in rem in which the vessel concerned has been arrested or a writ has been issued or similar step taken; 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 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 Approved Manager, the Shareholder and any other person (except a Creditor Party and any relevant charterer) 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 paragraph (o) 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 Agent notifies the Borrowers, the Security Parties and the other Creditor Parties that:

(a) all amounts which have become due for payment by the Borrowers 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) none of the Borrowers nor any Security Party has any future or contingent liability under Clause 20, 21 or 22 below or any other provision of this Agreement or another Finance Document; and

- 14 -

(d) the Agent, the Security Trustee and the Majority Lenders do 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 any of the Borrowers 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;

"Security Trustee"means ABN AMRO Bank N.V., acting through its office at 93 Coolsingel, 3012 AE Rotterdam, The Netherlands or any successor of it appointed under clause 5 of the Agency and Trust Deed;

"Shareholder"means Drybulk Investments Inc., a corporation incorporated in the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands and which holds all shares in each of the Borrowers;

"Shares Pledge"means, in relation to each Borrower, the pledge of all of the shares in that Borrower, to be executed by the Shareholder in favour of the Security Trustee, in such form as the Lenders may approve or require;

"Ships"means each of "JUDD" and "RARAKA";

"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%;

"Swap Bank"means a bank or financial institution listed in Schedule 2 and acting through its branch indicated in Schedule 2;

"Time Charter"means, in relation to a Ship, any time charter or voyage charter or contract of affreightment made between the Borrower owning that Ship and a charterer acceptable to the Agent (the "Time Charterer"), for the charter of that Ship on terms acceptable to the Agent for a duration of more than twelve (12) months;

"Time Charter Assignment"means, in relation to a Ship, the assignment of all of the rights of the Borrower owning that Ship under any time charter of that Ship which is in excess of twelve (12) months in duration, to be executed by that Borrower in favour of the Security Trustee, in such form as the Lenders may approve or require;

"Total Loss"means, in relation to a Ship:

(a) actual, constructive, compromised, agreed or arranged total loss of that Ship;

(b) any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than her 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 one year without any right to an extension unless it is within 45 days redelivered to the full control of the Borrower owning that Ship;

(c) any arrest, capture, seizure or detention of that Ship (including any hijacking or theft) unless it is within 45 days redelivered to the full control of the Borrower owning that Ship;

- 15 -

"Total Loss Date"means, in relation to a Ship:

(a) in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;

(b) in the case of a constructive, compromised, agreed or arranged total loss of that 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 owning that Ship, with that Ship's insurers in which the insurers agree to treat that 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 it appears to the Agent that the event constituting the total loss occurred;

"Transaction"has the meaning given in each Master Agreement;

"Transfer Certificate"has the meaning given in Clause 26.2;

"Trust Property"has the meaning given in clause 3.1 of the Agency and Trust Deed; and

"US Tax Obligor"means:

(a) a Party which is a "United States person" within the meaning of Section 7701 of the Code; or

(b) a Party some or all of whose payments under the Finance Documents are from sources within the United States for US Federal income tax purposes;

"Write-down and Conversion Powers"means, in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule.

1.2 Construction of certain terms. In this Agreement:

"approved"means, for the purposes of Clause 13, approved in writing by the Agent;

"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 or fax;

"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 her insured value being less than the value at which that Ship is assessed for the purpose of such claims;

- 16 -

"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 form of delegated legislation, any order or decree, 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 owning that Ship is obliged to effect, under Clause 13 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 therein 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 in the Norwegian Marine Insurance Plan;

"regulation"includes any regulation, rule, official directive, request or guideline (either having the force of law or compliance with which is reasonable in the ordinary course of business of the party concerned) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

"successor"includes any person who is entitled (by assignment, novation, merger or otherwise) to any other person's rights under this Agreement or any other Finance Document (or any interest in those rights) or who, as administrator, liquidator or otherwise, is entitled to exercise those rights; and in particular references to a successor include a person to whom those rights (or any interest in those rights) are transferred or pass as a result of a merger, division, reconstruction or other reorganisation of it or any other person;

"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) (1/11/95).

1.3 Meaning 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:

- 17 -

(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.

1.4 General Interpretation.

(a) In this Agreement:

(i) 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;

(ii) 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; and (iii)words denoting the singular number shall include the plural and vice versa.

(b) Clauses 1.1 to 1.3 and paragraph (a) of this Clause 1.4 apply unless the contrary intention appears.

(c) References in Clause 1.1 to a document being in the form of a particular Schedule include references to that form with any modifications to that form which the Agent (with the authorisation of the Majority Lenders in the case of substantial modifications) approves or reasonably requires.

(d) The clause headings shall not affect the interpretation of this Agreement.

1.5 Event of Default. A Potential Event of 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.

2. FACILITY

2.1 Amount of facility. Subject to the other provisions of this Agreement, the Lenders shall make available to the Borrowers a secured term loan facility of up to $30,000,000 in a single advance for the purposes and upon the terms and conditions set out in this Agreement.

2.2 Lenders' participations in Loan. Subject to the other provisions of this Agreement, each Lender shall participate in the Loan in the proportion which, as at the Drawdown Date, its Commitment bears to the Total Commitments.

2.3 Purpose of Loan. Each of the Borrowers undertakes with each Creditor Party to use the Loan only for the purpose stated in the preamble to this Agreement.

3. POSITION OF THE LENDERS AND THE SWAP BANKS

3.1 Interests of Lenders several. The rights of the Lenders and of the Swap Banks under this Agreement and each Master Agreement are several; accordingly each Lender and each Swap Bank shall be entitled to sue for any amount which has become due and payable by the Borrowers to it under this Agreement or under a Master Agreement

- 18 -

without joining the Agent, the Security Trustee, any other Lender or any other Swap Bank as additional parties in the proceedings.

3.2 Proceedings by individual Lender. However, without the prior consent of the Majority Lenders, no Lender and no Swap Bank may bring proceedings in respect of:

(a) any other liability or obligation of any of the Borrowers or a Security Party under or connected with a Finance Document; or

(b) any misrepresentation or breach of warranty by any of the Borrowers or a Security Party in or connected with a Finance Document.

3.3 Obligations of Lenders several. The obligations of the Lenders and the Swap Banks under this Agreement and each Master Agreement are several; and a failure of a Lender to perform its obligations under this Agreement or the failure of a Swap Bank to perform its obligations under the Master Agreement to which it is a party shall not result in:

(a) the obligations of the other Lenders or (as the case may be) the Swap Banks being increased; nor

(b) any of the Borrowers, any Security Party, any other Lender or any other Swap Bank being discharged (in whole or in part) from its obligations under any Finance Document, and in no circumstances shall a Lender or a Swap Bank have any responsibility for a failure of another Lender or another Swap Bank to perform its obligations under this Agreement or a Master Agreement.

3.4 Parties bound by certain actions of Majority Lenders. Every Lender, every Swap Bank, each Borrower and each Security Party shall be bound by:

(a) any determination made, or action taken, by the Majority Lenders under any provision of a Finance Document;

(b) any instruction or authorisation given by the Majority Lenders to the Agent or the Security Trustee under or in connection with any Finance Document;

(c) any action taken (or in good faith purportedly taken) by the Agent or the Security Trustee in accordance with such an instruction or authorisation.

3.5 Reliance on action of Agent. However, each Borrower and each Security Party:

(a) shall be entitled to assume that the Majority Lenders have duly given any instruction or authorisation which, under any provision of a Finance Document, is required in relation to any action which the Agent has taken or is about to take; and

(b) shall not be entitled to require any evidence that such an instruction or authorisation has been given.

3.6 Construction. In Clauses 3.4 and 3.5 references to action taken include (without limitation) the granting of any waiver or consent, an approval of any document and an agreement to any matter.

4. DRAWDOWN

4.1 Request for the Loan. Subject to the following conditions, the Borrowers may request the Loan to be made by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (Rotterdam time) 2 Business Days prior to the intended Drawdown Date.

- 19 -

4.2 Availability. The conditions referred to in Clause 4.1 are that:

(a) the Drawdown Date has to be a Business Day during the Availability Period;

(b) the amount of the Loan shall not exceed the lesser of (i) $30,000,000 and (ii) 50% of the aggregate Fair Market Value of the Ships as at the Drawdown Date and shall be applied in refinancing part of the acquisition cost of the Ships; and

(c) the Borrowers have complied with the provisions of Clause 9.1 with respect to the Loan.

4.3 Notification to Lenders of receipt of the Drawdown Notice. The Agent shall promptly notify the Lenders that it has received the Drawdown Notice and shall inform each Lender of:

(a) the amount of the Loan and the Drawdown Date;

(b) the amount of that Lender's participation in the Loan; and

(c) the duration of the first Interest Period for the Loan.

4.4 Drawdown Notice irrevocable. The Drawdown Notice must be signed by a director or other authorised representative of each of the Borrowers;` and once served, the Drawdown Notice cannot be revoked without the prior consent of the Agent, acting on the authority of the Majority Lenders.

4.5 Lenders to make available Contributions. Subject to the provisions of this Agreement, each Lender shall, on and with value on the Drawdown Date, make available to the Agent for the account of the Borrowers the amount due from that Lender on the Drawdown Date under Clause 2.2.

4.6 Disbursement of Loan. Subject to the provisions of this Agreement, the Agent shall on the Drawdown Date pay to the Borrowers the amounts which the Agent receives from the Lenders under Clause 4.5; and that payment to the Borrowers shall be made:

(a) to the account which the Borrowers specify in the Drawdown Notice; and

(b) in the same funds as the Agent received the payments from the Lenders.

4.7 Disbursement of Loan to third party. The payment by the Agent under Clause 4.6 shall constitute the making of the Loan and the Borrowers shall thereupon become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender's Contribution.

4.8 Cancellation. The Borrowers shall pay a commitment fee on any cancelled portion of the Commitment calculated in accordance with Clause 20.1 (b), proportional to the amount cancelled, to be paid on the date that the cancellation is effective.

5. INTEREST

5.1 Payment of normal interest. Subject to the provisions of this Agreement, interest on the Loan in respect of each Interest Period applicable to it shall be paid by the Borrowers on the last day of that Interest Period.

5.2 Normal rate of interest. Subject to the provisions of this Agreement, the rate of interest on the Loan in respect of an Interest Period applicable to it shall be the aggregate of (i) the Margin, (ii) LIBOR for that Interest Period and (iii) the Mandatory Costs (if any).

- 20 -

5.3 Payment 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.

5.4 Notification of Interest Periods and rates of normal interest. The Agent shall notify the Borrowers and each Lender of:

(a) each rate of interest; and

(b) the duration of each Interest Period;

as soon as reasonably practicable after each is determined. Subject to Clause 5.5, if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by 11:00 am (London time) on the Quotation Day, LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

5.5 Market disruption. The following provisions of this Clause 5 apply if:

(a) before close of business in London on the Quotation Day for the relevant Interest Period, a Lender or Lenders having Contributions together amounting to more than 50 per cent. of the Loan (or, if the Loan has not been made, Commitments amounting to more than 50 per cent. of the Total Commitments) notify the Agent that the cost to them of funding their participation in the Loan from whatever source they may reasonably select would be in excess of LIBOR (provided always that any such notifications by any such Lender or Lenders shall be duly substantiated); or

(b) at or about noon on the Quotation Day for the relevant Interest Period for which LIBOR is to be determined by reference to the Reference Banks, none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for the relevant Interest Period.

5.6 Notification of market disruption. The Agent shall promptly notify the Borrowers and each of the Lenders stating the circumstances falling within Clause 5.5 which have caused its notice to be given (the "Market Disruption Event").

5.7 Market Disruption Event. If a Market Disruption Event occurs in relation to the Loan for any Interest Period, then the rate of interest on each Lender's share of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

(a) the applicable Margin; and

(b) the rate notified to the Agent by that Lender as soon as practicable and in any event not later than five (5) Business Days before the date on which 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 from whatever source it may reasonably select.

5.8 Alternative basis of interest or funding.

(a) 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 thirty (30) days) with a view to agreeing a substitute basis for determining the rate of interest.

(b) Any alternative basis agreed pursuant to Clause 5.8(a) above shall, with the prior consent of all the Lenders, be binding on all Parties.

5.9 Notice of prepayment. If the Borrowers do not agree with an interest rate set by the Agent under Clause 5.7, the Borrowers may give the Agent not less than 15 Business

- 21 -

Days' notice of their intention to prepay the Loan at the end of the relevant interest period.

5.10 Prepayment; termination of Commitments. A notice under Clause 5.9 shall be irrevocable; the Agent shall promptly notify the Lenders of the Borrowers' notice of intended prepayment; and:

(a) on the date on which the Agent serves that notice, the Total Commitments shall be cancelled; and

(b) on the last Business Day of the relevant interest period, the Borrowers shall prepay (without premium or penalty) the Loan together with accrued interest thereon at the applicable rate, plus the Margin and the Mandatory Costs (if any).

5.11 Application of prepayment. The provisions of Clause 8 shall apply in relation to the prepayment.

5.12 Interest Rate Hedging. The Borrowers shall sign a Master Agreement with ABN AMRO Bank N.V. as a Swap Bank on the date of this Agreement. At any time during the Security Period, the Borrowers may request such Swap Bank to conclude Designated Transactions to fix the interest rate for the Loan for more than 12 months, following drawdown of the Loan. Unless such Swap Bank agrees otherwise, any such hedging arrangements shall be from floating rate to fixed rate only and shall not (i) exceed the amount of the Loan or (ii) extend beyond the final Repayment Date. Signature of the said Master Agreement does not commit such Swap Bank to conclude Transactions, or even to offer terms for doing so, but does provide a contractual framework within which Designated Transactions may be concluded and secured, assuming that such Swap Bank is willing to conclude any Designated Transaction at the relevant time and that, if that is the case, mutually acceptable terms can then be agreed at the relevant time. If at any time the aggregate notional amount of the Designated Transactions exceeds the outstanding principal amount of the Loan, the notional amount of the Designated Transactions shall be reduced by way of termination notified by either party on or about the date the Designated Transactions exceed the amount of the Loan, so that the aggregate notional amount of the Designated Transactions reflect the then outstanding principal amount of the Loan. Such termination shall be treated under the said Master Agreement as an Additional Termination Event (as defined in section 14 of the Master Agreement) with the Borrowers as the sole Affected Party (as defined in section 14 of Master Agreement). The Borrowers' obligations under the said Master Agreement shall be secured on a pari passu basis with their obligations under this Agreement.

6. INTEREST PERIODS

6.1 Commencement of Interest Periods. The first Interest Period applicable to the Loan shall commence on the Drawdown Date of the Loan and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period applicable to it.

6.2 Duration of normal Interest Periods. Subject to Clauses 6.3 and 6.4, each Interest Period shall be:

(a) 3 months as notified by the Borrowers to the Agent not later than 11.00 am (Rotterdam time) 3 Business Days before the commencement of the Interest Period; or

(b) 3 months, if the Borrowers fail to notify the Agent by the time specified in paragraph (a); or

(c) such other period as the Agent may, with the Majority Lenders' authority, agree with the Borrowers.

- 22 -

6.3 Duration of Interest Periods for repayment instalments. In respect of an amount due to be repaid under Clause 7 on a particular Repayment Date, an Interest Period shall end on that Repayment Date. No Interest Period shall extend beyond the final Repayment Date.

6.4 Non-availability of matching deposits for Interest Period selected. If, after the Borrowers have selected and the Lenders have agreed to an Interest Period longer than 3 months, any Lender notifies the Agent by 11.00 a.m. (Rotterdam time) on the second 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 3 months.

7. DEFAULT INTEREST

7.1 Payment of default interest on overdue amounts. The Borrowers shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrowers under any Finance Document which the Agent, the Security Trustee or the other designated payee 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 19.4, the date on which it became immediately due and payable.

7.2 Default 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 Agent to be two per cent. (2%) above:

(a) in the case of an overdue amount of principal, the higher of the rates set out at paragraphs (a) and (b) of Clause 7.3; or

(b) in the case of any other overdue amount, the rate set out at paragraph (b) of Clause 7.3.

7.3 Calculation of default rate of interest. The rates referred to in Clause 7.2 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 Margin and the Mandatory Costs (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:

(i) LIBOR; or

(ii)           if the Agent determines that Dollar deposits for any such period are not being made available to a Lender or (as the case may be) Lenders by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Agent from such other sources as the Agent may from time to time determine.

7.4 Notification of interest periods and default rates. The Agent shall promptly notify the Lenders and the Borrowers of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the Agent for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrowers are liable to pay such interest only with effect from the date of the Agent's notification.

- 23 -

7.5 Payment 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; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.

7.6 Compounding 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.

7.7 Application to Master Agreements. For the avoidance of doubt, this Clause 7 does not apply to any amount payable under a Master Agreement in respect of any continuing Designated Transaction as to which section 9 (h) (Interest and Compensation) of that Master Agreement shall apply.

8. REPAYMENT AND PREPAYMENT

8.1 Amount of repayment instalments. The Borrowers shall repay the Loan by twenty four (24) equal consecutive quarterly instalments in the amount of $625,000 each, together with a balloon payment of $15,000,000. The first instalment shall be repaid on the date falling three (3) months after the Drawdown Date, each subsequent instalment shall be paid at three monthly intervals thereafter and the balloon payment shall be paid concurrently with the twenty fourth and final repayment instalment, which shall be repaid on the date falling on the earlier of (i) the sixth anniversary of the Drawdown Date and (ii) 31 March 2024.

Provided always that if the amount of the Loan drawndown hereunder is less than $30,000,000 then the amount of the repayment instalments and of the balloon payment shall be reduced on a pro rata basis.

8.2 Final Repayment Date. On the final Repayment Date for the Loan, the Borrowers shall additionally pay to the Lender all other sums then accrued or owing under any Finance Document.

8.3 Voluntary prepayment. Subject to the following conditions, the Borrowers may prepay the whole or any part of the Loan on the last day of an Interest Period.

8.4 Conditions for voluntary prepayment. The conditions referred to in Clause 8.3 are that:

(a) a partial prepayment shall be in the minimum amount of Five hundred thousand Dollars ($500,000) or a multiple thereof;

(b) the Agent has received from the Borrowers at least 5 Business Days prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made (such date shall be the last day of an Interest Period);

(c) the Borrowers have provided evidence satisfactory to the Agent that any consent required by any of the Borrowers or any Security Party in connection with the prepayment has been obtained and remains in force, and that any requirement relevant to this Agreement which affects any of the Borrowers or any Security Party has been complied with; and

(d) the Borrowers have complied with Clause 8.11 on or prior to the date of prepayment.

8.5 Effect of notice of prepayment. A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrowers on the date for prepayment specified in the prepayment notice.

- 24 -

8.6 Notification of notice of prepayment. The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the Borrowers under Clause 8.4(c).

8.7 Mandatory prepayment. The Borrowers shall be obliged to prepay the Relevant Portion of the Loan if a Ship is sold (which sale shall be subject to the prior written consent of the Lenders), refinanced by another bank or financial institution or becomes a Total Loss, or if there occurs a Change of Control in any of the Borrowers or the Corporate Guarantor:

(a) in the case of a sale of a Ship (whether for further trading or scrapping), on the earlier of the date on which the sale is completed by delivery of that Ship to the buyer and (ii) the date of receipt by the relevant Borrower of the sale proceeds; or

(b) in the case of a refinancing of a Ship, on or before the date on which the refinancing takes place; or

(c) in the case of a Total Loss of a Ship, on the earlier of (i) the date falling 120 days after the Total Loss Date and (ii) the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss; or

(d) in the case of a Change of Control in any of the Borrowers or the Corporate Guarantor, on the date falling 60 days from receipt of the Agent's notice of such Change of Control.

For the purposes of this Clause 8.7:

"Relevant Portion of the Loan"means:

(i) in relation to the sale, Total Loss or refinancing of a Ship, such amount as shall be necessary to ensure that following application of the mandatory prepayment amount, the outstanding amount of the Loan shall be no more than the lesser of (i) such amount as shall be necessary to maintain compliance with the provisions of Clause 15.1 following the sale, refinancing or loss (as the case may be) of the relevant Ship and (ii) such amount as shall be equal to the ratio of the Fair Market Value of the Ship sold, refinanced or lost to the aggregate Fair Market Values of all of the Ships subject to a Mortgage (together with accrued interest and costs) immediately prior to such sale, refinancing or loss of the relevant Ship. All amounts prepaid under this Clause 8.7 shall be applied pro rata against the remaining repayment instalments and the balloon payment for the Loan specified in Clause 8.1;

(ii) in relation to a Change of Control, the outstanding amount of the Loan;

"Change of Control"occurs if at any time without the prior written consent of the Majority Lenders:

(i) any Borrower ceases to be a direct or an indirect wholly-owned Subsidiary of the Corporate Guarantor; or

(ii) the Permitted Holders cease to control, directly or indirectly, the Corporate Guarantor; or

(iii) the Permitted Holders cease to own legally and beneficially, either directly or indirectly, at least 50% of either of (i) the issued and outstanding share capital, or (ii) the issued and outstanding voting share capital, of the Corporate Guarantor; or

(iv) a person or persons acting in concert (other than the Permitted Holders):

(aa) own legally and/or beneficially, either directly or indirectly, more than 50% of the aggregate issued share capital of, or more than 50% of the aggregate issued voting share capital of, the Corporate Guarantor; and/or

- 25 -

(bb) 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 Corporate Guarantor.

8.8 Amounts payable on prepayment. A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 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 Clause 21.1(b) but without premium or penalty (subject always to the provisions of Clause 20.1(c)).

8.9 Application of partial prepayment. Each partial prepayment of the Loan made pursuant to Clauses 8.3, 8.4 or any other provisions of this Agreement (including, for the avoidance of doubt, Clause 15.2) shall be in proportionate reduction of the remaining repayment instalments and the balloon payment for the Loan specified in Clause 8.1.

8.10 No reborrowing. No amount prepaid or repaid may be reborrowed.

8.11 Unwinding of Designated Transactions. On or prior to any repayment or prepayment of the Loan under this Clause 8 or any other provision of this Agreement, the Borrowers shall wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions so that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortisation) exceed the amount of the Loan as reducing from time to time thereafter pursuant to Clause 8.1.

8.12 Prepayment fee. If the Loan is fully prepaid (through any refinancing by another bank or financial institution) at any time during the period commencing on the Drawdown Date and ending on the date falling on the second anniversary thereof, the Borrowers shall pay to the Agent on the date on which they prepay the Loan a prepayment fee equal to zero point fifty per cent (0.50%) of the amount of the Loan outstanding at the time of such prepayment.

8.13 Mandatory repayment and cancellation of FATCA Protected Lenders. If on the date falling six months before the earliest FATCA Application Date for any payment by a Party to a FATCA Protected Lender (or to the Agent for the account of that Lender), that Lender is not a FATCA Exempt Party and, in the opinion of that Lender (acting reasonably), that party will, as a consequence, be required to make a FATCA Deduction from a payment to that Lender (or to the Agent for the account of that Lender) on or after that FATCA Application Date (a "FATCA Event"):

(a) that Lender shall, reasonably promptly after that date, notify the Agent of that FATCA Event and the relevant FATCA Application Date;

(b) if, on the date falling one month before such FATCA Application Date, that FATCA Event is continuing:

(i) that Lender may, at any time between one month and two weeks before such FATCA Application Date, notify the Agent;

(ii) upon the Agent notifying the Borrowers, the Commitment of that Lender will be immediately cancelled; and

(iii)           the Borrowers shall repay that Lender's participation in the Loan on the last day of the Interest Period for the Loan occurring after the Agent has notified the Borrower or, if earlier, the last Business Day before the relevant FATCA Application Date.

- 26 -

8.14 Right of repayment and cancellation in relation to a single Lender.

(a) If:

(i) any sum payable to any Lender by the Borrowers is required to be increased under Clause 22.2; or

(ii)           any Lender claims indemnification from the Borrowers under Clause 21.1 or Clause 24.2,

the Borrowers may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to replace that Lender in accordance with paragraph (b) below.

(b) The Borrowers may, in the circumstances set out in paragraph (a) above, on 5 Business Days' prior notice to the Agent and that Lender, replace that Lender by requesting that Lender to transfer pursuant to Clause 26 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 willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 26 for a purchase price in cash or other cash payment payable at the time of the transfer equal to the outstanding principal amount of the Loan relating to that Lender and all accrued interest, break costs and other amounts payable in relation thereto under the Finance Documents.

(c) The replacement of a Lender pursuant to paragraph (b) above shall be subject to the following conditions:

(i) the Borrowers shall have no right to replace the Agent;

(ii) neither the Agent nor any Lender shall have any obligation to find a replacement Lender;

(iii) in no event shall the Lender replaced under paragraph (b) above be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents; and

(iv) the Lender shall only be obliged to transfer its rights and obligations pursuant to paragraph (b) above once it is satisfied that the replacement Lender has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer.

(d) For the avoidance of doubt, the replacement of a Lender pursuant to paragraph (b) does not in any way prejudice the continued application of Clause 22.2, Clause 21.1 or Clause 24.2 and nothing in this Clause 8.14 shall remove the Borrowers' obligation to pay to any Lender any amounts payable to any Lender by the Borrowers pursuant to those Clauses.

(e) Any partial prepayment under this Clause 8.14 shall reduce pro rata the amount of each repayment instalment and the balloon payment for the Loan falling after that prepayment by the amount prepaid.

9. CONDITIONS PRECEDENT

9.1 Documents, fees and no default. Each Lender's obligation to contribute to the Loan is subject to the following conditions precedent:

- 27 -

(a) that, on or before the date of signing of this Agreement, the Agent receives the documents described in Part A of Schedule 4 in form and substance satisfactory to the Agent and its lawyers;

(b) that, on or before the date of drawdown of the Loan, the Agent receives the documents described in Part B of Schedule 4 in form and substance satisfactory to the Agent and its lawyers;

(c) that, on or before the service of the Drawdown Notice, the Agent receives the relevant fees payable pursuant to Clause 20.1 and has received payment of the expenses referred to in Clause 20.2;

(d) that at the date of the Drawdown Notice, at the Drawdown Date, on the first day of each Interest Period and on the date of each Compliance Certificate:

(i) no Event of Default or Potential Event of Default has occurred or is continuing or would result from the borrowing of the Loan;

(ii) the representations and warranties in Clause 10 and those of the Borrowers or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing;

(iii) none of the circumstances contemplated by Clause 5.5 has occurred and is continuing;

(iv) there has not been a Material Adverse Change in the financial positon or state of affairs of any of the Borrowers or the Corporate Guarantor from that disclosed to the Agent prior to the date of this Agreement;

(e) that, if the ratio set out in Clause 15.1 were applied immediately following the making of the Loan, the Borrowers would not be obliged to provide additional security or prepay part of the Loan under that Clause; and

(f) that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, request by notice to the Borrowers prior to the Drawdown Date.

10. REPRESENTATIONS AND WARRANTIES

10.1 General. Each of the Borrowers represents and warrants to each Creditor Party as follows.

10.2 Status. Each of the Borrowers, the Corporate Guarantor and the Shareholder is duly incorporated and validly existing and in good standing under the laws of the Republic of the Marshall Islands with registration number 39581 (in the case of Amathus), 88947 (in the case of Noufaro), 11911 (in the case of the Corporate Guarantor) and 88437 (in the case of the Shareholder); and none of the Borrowers nor the Corporate Guarantor nor any other Security Party is a FATCA FFI or a US Tax Obligor.

10.3 Share capital and ownership. Each of the Borrowers is authorised to issue 500 registered shares with par value of $20 per share, all of which shares have been issued; the legal title of all those shares is held, free of any Security Interest or other claim, by the Shareholder; the ultimate beneficial ownership of not less than 50% (in the case of the Corporate Guarantor) and not less than 100% (in the case of the Approved Manager) of the issued and outstanding voting share capital of the Corporate Guarantor and the Approved Manager (as the case may be) is held directly or indirectly by the Permitted Holders.

- 28 -

10.4 Corporate power. Each of the Borrowers has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:

(a) to keep its Ship registered in its name under the Approved Flag;

(b) to execute the Finance Documents to which it is a party; and

(c) to borrow under this Agreement, to enter into Designated Transactions under the Master Agreements and to make all the payments contemplated by, and to comply with, the Finance Documents to which that Borrower is a party.

10.5 Consents 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.

10.6 Legal validity; effective Security Interests. The Finance Documents to which each of the Borrowers 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 that Borrower's legal, valid and binding obligations enforceable against that Borrower 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.

10.7 No third party Security Interests. Without limiting the generality of Clause 10.6, at the time of the execution and delivery of each Finance Document:

(a) each 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.

10.8 No conflicts. The execution by each Borrower of each Finance Document to which it is a party, and the borrowing by each Borrower of the Loan, and its compliance with each Finance Document to which it is a party will not involve or lead to a contravention of:

(a) any law or regulation; or

(b) the constitutional documents of that Borrower; or

(c) any contractual or other obligation or restriction which is binding on that Borrower or any of its assets, and will not have a Material Adverse Effect.

10.9 No withholding taxes. All payments which each Borrower is liable to make under the Finance Documents to which it is a party may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.

10.10 No default. No Event of Default or Potential Event of Default has occurred and is continuing.

10.11 Information. All information which has been provided in writing by or on behalf of each Borrower or any Security Party to any Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.6; all audited and unaudited financial statements which have been so provided satisfied the requirements of Clause 11.7; and there has been no Material Adverse Change in the financial position or state of

- 29 -

affairs of any of the Borrowers or the Corporate Guarantor from that disclosed in the latest of those financial statements which constitutes a Material Adverse Effect.

10.12 No litigation. Other than as disclosed to the Lenders prior to the date of this Agreement, no legal or arbitral or administrative action involving any of the Borrowers or any Obligor (other than the Approved Manager) (including action relating to any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken or, to any Borrower's knowledge, is likely to be commenced or taken which, in either case and if determined adversely, would be likely to have a Material Adverse Effect.

10.13 Compliance with certain undertakings. At the date of this Agreement, each Borrower is in compliance with Clauses 11.2, 11.4, 11.8 and 11.12 and 11.19.

10.14 Taxes paid. Each of the Borrowers has paid all taxes applicable to, or imposed on or in relation to it, its business and the Ship owned by it.

10.15 ISM Code and ISPS Code compliance. All requirements of the ISM Code and the ISPS Code as they relate to each Borrower, the Approved Manager and the Ships have been complied with.

10.16 No Money Laundering. Without prejudice to the generality of Clause 2.3, in relation to the borrowing by the Borrowers of the Loan, the performance and discharge of their respective obligations and liabilities under the Finance Documents, and the transactions and other arrangements effected or contemplated by the Finance Documents to which each Borrower is a party, each of the Borrowers confirms that (i) it is acting for its own account, (ii) that 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 contravention of any law, official requirements 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).

10.17 No immunity. None of the Borrowers nor any of their respective assets is entitled to immunity on the grounds of sovereignity or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgement, execution or other enforcement).

10.18 PATRIOT Act. To the extent applicable each Borrower is in compliance with (i) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V) and any other enabling legislation or executive order relating thereto and (ii) the PATRIOT Act. No part of the proceeds of the Loan will be used, directly or indirectly, for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

10.19 Restricted Party. None of the Borrowers nor any Security Party, nor any of their respective directors, officers, agents, employees or any person acting on behalf of any of the Borrowers or any Security Party, is a Restricted Party nor acts directly or indirectly on behalf of a Restricted Party.

10.20 Legal opinions. The representations made or to be made by the Borrowers under or pursuant to this Clause 10 are and shall be construed as being made subject to the reservations or qualifications as to matters of law set forth in the legal opinions to be delivered to the Agent pursuant to Clause 9.

- 30 -

11. GENERAL UNDERTAKINGS

11.1 General. Each of the Borrowers undertakes with each Creditor Party to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.

11.2 Title; negative pledge; pari passu. Each of the Borrowers will:

(a) hold the legal title to, and own the entire beneficial interest in the Ship owned by it, the Insurances and 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;

(b) not create or permit to arise any Security Interest (except for Permitted Security Interests) over any asset, present or future (including, but not limited to, that Borrower's rights against a Swap Bank under a Master Agreement or all or any of that Borrower's interest in any amount payable to that Borrower by a Swap Bank under a Master Agreement); and

(c) procure that its liabilities under the Finance Documents to which it is a party to and will rank at least pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.

11.3 No disposal of assets. None of Borrowers will (without the prior written consent of the Lenders) 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.

11.4 No other liabilities or obligations to be incurred. No Borrower will incur any liability or obligation except (i) liabilities and obligations under the Finance Documents to which it is a party; (ii) liabilities or obligations reasonably incurred in the ordinary course of its business of operating and chartering the Ship owned by it; (iii) in respect of any Designated Transaction; and (iv) unsecured inter-group loans from the Corporate Guarantor or other Group Members, subject to the Corporate Guarantor or those other Group Members expressly and fully subordinating and assigning their rights to those of the Creditor Parties under the Finance Documents and executing such documents as may be required by the Agent to evidence such subordination and assignment.

11.5 Information provided to be accurate. All financial and other information which is provided in writing by or on behalf of each Borrower under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.

11.6 Provision of financial statements. Each of the Borrowers will send to the Agent:

(a) as soon as possible, but in no event later than 180 days after the end of each Financial Year (commencing with the Financial Year ended 31 December 2017), the annual audited consolidated financial statements of the Group for that Financial Year;

(b) as soon as possible, but in no event later than 90 days after the end of each three month period ending on 31 March, 30 June, 30 September and 31 December in each Financial Year (commencing with the three month period ending on 31 March 2018), the unaudited consolidated quarterly management prepared financial statements of the Group for that three month period and certified as to their correctness by a director or officer of the

- 31 -

Corporate Guarantor or Cby any other persons agreed in writing from time to time between the Borrowers and the Agent;

(c) together with the Accounting Information referred to in paragraphs (a) and (b) above, a Compliance Certificate;

(d) together with each set of annual financial statements and quarterly financial statements for the second quarter of each Financial Year, valuations of each Ship and of each other Fleet Vessel, each determined and obtained in accordance with the provisions of Clause 15, to be delivered together with each Compliance Certificate; and

(e) upon the Agent's demand, such further information about the financial condition, assets and operations of the Group and/or any Group Member as any Creditor Party may reasonably request.

11.7 Form of financial statements. All financial statements (audited and unaudited) delivered under Clause 11.5 will:

(a) be prepared in accordance with all applicable laws and GAAP consistently applied;

(b) include a profit and loss account, a balance sheet and a cash flow statement and shall (in the case of annual financial statements) be audited by the Auditors and without being subject to any qualification in such Auditor's opinion;

(c) give a true and fair view of (in the case of annual financial statements) or fairly represent (in other cases) the financial condition (consolidated where applicable) and operations of the Group as at the date at which those financial statements were drawn up; and

(d) fully disclose or provide for all significant liabilities of the Group.

11.8 Consents. Each Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:

(a) for that Borrower to perform its obligations under each of the Finance Documents to which it is party;

(b) for the validity or enforceability of each or any Finance Document to which it is party, and each Borrower will comply (and will ensure that the Corporate Guarantor complies) with the terms of all such consents.

11.9 Maintenance of Security Interests. Each of the Borrowers will:

(a) at its own cost, do all that is necessary 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), at its own cost, 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, in the opinion of the Majority Lenders, is or has 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.

11.10 Notification of litigation. Each of the Borrowers will provide the Agent with details of any legal, arbitral or administrative proceedings involving that Borrower, the Corporate Guarantor and any other Obligor (other than the Approved Manager) or Group Member, or the Ship owned by that Borrower, its Earnings or its Insurances as soon as such action is instituted or it becomes apparent to that Borrower that it is likely to be instituted,

- 32 -

provided that such proceedings (if adversely determined) might have a Material Adverse Effect or which would involve a liability (or a potential or alleged liability) exceeding $7,000,000 (or its equivalent in other currencies).

11.11 No amendment to Master Agreements. No Borrower will agree to any amendment or supplement to, or waive or fail to enforce, any Master Agreement or any of its provisions, or enter into any Transaction pursuant to any Master Agreement (except Designated Transactions).

11.12 Principal place of business. Each Borrower will maintain its place of business, and keep its corporate documents and records, at the address disclosed to the Lenders in writing on or prior to the date of this Agreement; and that Borrower will not establish, nor do anything as a result of which it would be deemed to have, a place of business in any other country.

11.13 Confirmation of no default. Each of the Borrowers will, within 2 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by the sole director of that 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.

The Agent may serve requests under this Clause 11.13 from time to time but only if asked to do so by a Lender or Lenders having Contributions exceeding 10 per cent of the Loan or (if the Loan has not been made) Commitments exceeding 10 per cent of the Total Commitments; and this Clause 11.13 does not affect the Borrowers' obligations under Clause 11.14.

11.14 Notification of default. Each of the Borrowers will notify the Agent as soon as that 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 thereafter keep the Agent fully up-to-date with all developments.

11.15 Provision of further information. Each of the Borrowers will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating to:

(a) that Borrower, the Ship owned by that Borrower, its Insurances or its Earnings; or

(b) any other matter relevant to, or to any provision of, a Finance Document (including, but not limited to, details of any claim, action, suit, proceeding or investigation with respect to Sanctions),   which may be requested by the Agent, the Security Trustee, any Lender or any Swap Bank at any time.

11.16 Provision of customer information.

(a) Each of the Borrowers will produce such documents and evidence as the Lenders shall from time to time require, based on applicable laws and regulations from time to time and the Lenders' own internal guidelines from time to time, relating to the Lenders' knowledge of its customers including (without limitation) obtaining, verifying and

- 33 -

recording certain information and documentation that will allow the Agent and each of the Lenders to identify each Borrower and each other Obligor in accordance with the requirements of the PATRIOT Act;

(b) 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 an Obligor or the composition of the shareholders of an Obligor, after the date of this Agreement;

(iii) a proposed assignment or transfer by a Lender of any of its rights and/or obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer; or

(iv) any anti-money laundering or anti-terrorism financing laws and regulations applicable to the Agent or any Lender,

obliges the Agent or any Lender (or, in the case of 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, each Obligor shall promptly upon the request of the Agent or any Lender 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 Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in 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.

11.17 Treasury Services. No Borrower shall enter into any treasury related contract with a bank or financial institution (other than pursuant to a Master Agreement) with the Agent or a Lender as swap bank, without the prior written consent of the Agent.

11.18 Shareholder and creditor notices. Each of the Borrowers will send to the Agent, at the same time as they are dispatched, copies of all material communications sent by either of the Borrowers or any of the other Obligors to its shareholders or its creditors (or any class of either of them).

11.19 Sanctions.

(a) Each Obligor shall (and the Corporate Guarantor shall procure that each member of the Group will) comply with all Sanctions.

(b) No Obligor shall (and the Corporate Guarantor shall procure that no member of the Group will) become a Restricted Party or act on behalf of, or as an agent of, a Restricted Party, to the extent this would lead to non-compliance by it or any other Party with any applicable Sanctions.

(c) No Obligor shall (and the Corporate Guarantor shall procure that no member of the Group will) use, lend, contribute or otherwise make available the proceeds of the Loan or other transaction contemplated by this Agreement directly or indirectly for the purpose of financing any trade, business or other activities with any Restricted Party, to the extent, in each case, such use, lending, contributing or otherwise making available the proceeds would lead to non-compliance by it or any other Party with any applicable Sanctions.

- 34 -

(d) No Obligor shall (and the Corporate Guarantor shall procure that no member of the Group will) use any revenue or benefit derived from any activity or dealing with a Restricted Party in discharging any obligation due or owing to the Creditor Parties to the extent such use would lead to non-compliance by it or any other Party with any applicable Sanctions.

(e) Each Obligor shall (and the Corporate Guarantor shall procure that each member of the Group will) procure that no proceeds from any activity or dealing with a Restricted Party are credited to any bank account held with any Creditor Party or any Affiliate of a Creditor Party, to the extent crediting such bank account would lead to non-compliance by it, any Creditor Party or any Affiliate of a Creditor Party with any applicable Sanctions.

(f) Each Obligor shall (and the Corporate Guarantor shall procure that each member of the Group will) to the extent permitted by law and promptly upon becoming aware of them, supply to the Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions by any Sanctions Authority.

11.20 Compliance with laws. Each Obligor shall (and the Corporate Guarantor shall procure that each member of the Group will) comply in all respects with all laws and regulations to which it may be subject including without limitation (i) the Trading with the Enemy Act and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V) and any other enabling legislation or executive order thereto and (ii) the PATRIOT Act.

11.21 Most favoured nation. In the event that and each time that any Borrower or the Corporate Guarantor or any other member of the Group agrees to, or grants, or agrees to grant, any financial covenants (but as long as such financial covenants relate to the Corporate Guarantor) to, for the benefit of, or in favour of, any lender or creditor of any indebtedness of any member of the Group (the "more favourable rights"), which are in any respect more favourable to such lender or creditor than the provisions of this Agreement and the Corporate Guarantee relating to the financial condition of any Borrower and the Corporate Guarantor (the "Financial Condition Provisions") are for the Creditor Parties, each Borrower undertakes and agrees with the Creditor Parties:

(a) to notify the Agent within five days after the granting of or any agreement to grant (as the case may be) such more favourable rights;

(b) without prejudice to paragraph (c) below, within thirty (30) days after the date when such more favourable rights have been agreed or granted, to agree to, provide and grant, such more favourable rights also in favour of the Agent under or in connection with this Agreement, by entering into (and/or by procuring that the Corporate Guarantor or any Security Party or any other person shall enter into) such documentation as the Agent shall reasonably require, immediately after the Creditor Parties' request to the Borrowers; and

(c) notwithstanding paragraph (b) above, that any such more favourable rights shall in any event apply to this Agreement and the other Finance Documents automatically from the time they are granted to the other lenders or creditors, and irrespective of whether the Borrowers and the Corporate Guarantor have complied with their obligations under the Financial Condition Provisions, except if the Agent at any time advises the Borrowers that such or certain of such more favourable rights will not so apply and always without prejudice to the terms and conditions of this Agreement and the other Finance Documents.

11.22 Financial 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 an Event of Default is continuing or may have occurred or may occur), the Borrowers shall procure that a representative of the Borrowers gives a presentation to the Creditor Parties

- 35 -

about the on-going business and financial performance of the Group and any other matter which a Creditor Party may reasonably request.

11.23 Provision of copies and translation of documents. Each of the Borrowers will supply the Agent with a sufficient number of copies of the documents referred to above to provide one (1) copy for each Creditor Party; and if the Agent, so requires in respect of any of those documents, the Borrowers will provide a certified English translation prepared by a translator approved by the Agent.

12. CORPORATE UNDERTAKINGS

12.1 General. Each of the Borrowers also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.

12.2 Maintenance of status. Each of the Borrowers will maintain its separate corporate existence and remain in good standing under the laws of the Republic of the Marshall Islands.

12.3 Negative undertakings. None of the Borrowers will:

(a) carry on any business other than the ownership, chartering and operation of the Ship owned by it; or

(b) make any form of distribution (other than payment of a dividend pursuant to Clause 12.4) or effect any form of redemption, purchase, reduction or return of share capital or issue, allot or grant any person a right to any shares in its capital; or

(c) without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), provide any form of credit or financial assistance (unless fully subordinated to the Loan and on terms otherwise acceptable to the Lenders) or issue any guarantee to any person, or enter into any transaction with or involving such a person, unless in the ordinary course of business; or

(d) without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), open or maintain any account with any bank or financial institution except accounts with the Agent for the purposes of the Finance Documents and accounts notified to the Agent prior to the date of this Agreement; or

(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 Designated Transaction); or

(f) enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation, or change its name; or

(g) purchase any further assets, either directly or indirectly (through subsidiaries); or

(h) without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), incur any other Financial Indebtedness (including, but not limited to, loans from the Shareholder or the Corporate Guarantor), other than trade debt incurred in the ordinary course of business. Any shareholder loans, inter company loans, affiliate loans and third party loans to any of the Borrowers shall be fully subordinated and assigned to the rights of the Creditor Parties under the Loan Agreement and the Finance Documents, on terms satisfactory to the Agent in its sole discretion.

- 36 -

12.4 Dividends. For the avoidance of doubt, the Borrowers may pay dividends during the Security Period provided that no Event of Default or Potential Event of Default has occurred or would occur as a result of any such payment.

12.5 Minimum liquidity. Each of the Borrowers shall ensure that, from the date of this Agreement and at all times thereafter during the Security Period, it maintains on each Operating Account a minimum daily cash balance of not less than $500,000 per Ship which amount is not subject to any Security Interest (other than pursuant to the Accounts Pledges).

12.6 Compliance Check. On each Compliance Date, compliance with the undertakings contained in Clauses 11.6, 12.5 and 15.1 shall be determined by reference to the Accounting Information for the first three quarterly periods in each Financial Year of each Borrower and the Corporate Guarantor (commencing with the three month period ending on 31 March 2018) and for the twelve month period in each Financial Year of each Borrower and the Corporate Guarantor (commencing with the twelve month period ended on 31 December 2017) delivered to the Agent pursuant to this Agreement and the Corporate Guarantee. At the same time as it delivers that Accounting Information, each Borrower and the Corporate Guarantor shall deliver to the Agent a Compliance Certificate signed by a director or officer of each Borrower and a director or officer of the Corporate Guarantor or by any other persons agreed in writing from time to time between the Borrowers and the Agent, together with (i) the relevant valuation certificates for the Ships (prepared in accordance with Clause 15.3) and (ii) the relevant valuation certificates for the other Fleet Vessels (prepared in accordance with Clause 15.3), setting out (in reasonable detail) computations as to compliance with Clauses 11.6, 12.5 and 15.1 of this Agreement and Clause 11.21 of the Corporate Guarantee, and including any supporting schedules or other information and evidence as the Agent may require. If, prior to the delivery of a Compliance Certificate, the Borrowers become aware that such undertakings will not be complied with, the Borrowers shall immediately notify the Agent thereof.

12.7 Application of FATCA

(a) None of the Borrowers shall become (and shall procure that no Security Party shall become) a FATCA FFI or a US Tax Obligor, without the prior written consent of the Lenders.

(b) If so directed by the Agent (acting on the instructions of the Majority Lenders), the Borrowers shall procure that any Borrower or any Security Party that does become a FATCA FFI or US Tax Obligor shall resign from its position as a Borrower or Security Party prior to the earliest FATCA Application Date relating to any payment by that Security Party (or any payment by the Agent which relates to a payment by that Borrower or that Security Party).

13. INSURANCE

13.1 General. Each of the Borrowers undertakes with each Creditor Party to comply with the following provisions of this Clause 13 at all times during the Security Period except as the Agent may (with the authorisation of the Majority Lenders) otherwise permit.

13.2 Maintenance of obligatory insurances. Each of the Borrowers shall keep the Ship owned by it insured at the expense of that Borrower against:

(a) fire and usual marine risks (including hull and machinery and excess risks);

(b) war risks (including war protection and indemnity risks liabilities); and

(c) protection and indemnity risks (including cover for oil pollution liability risks); and

- 37 -

(d) any other risks against which the Majority Lenders consider, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Majority Lenders be reasonable for that Borrower to insure and which are specified by the Security Trustee by notice to that Borrower.

13.3 Terms of obligatory insurances. Each of the Borrowers 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) the Fair Market Value of the Ship owned by it and (ii) an amount which, when aggregated with the insured value of the other Ships subject to a Mortgage, is equal to or greater than 120% of the amount of the Loan;

(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 (with the international group of protection and indemnity clubs) and the international marine insurance market (currently $1,000,000,000);

(d) in relation to protection and indemnity risks in respect of the full value and tonnage of the Ship;

(e) on approved terms; and

(f) through approved brokers and with approved insurance companies and/or underwriters and/or war risks and protection and indemnity risks associations.

13.4 Further protections for the Creditor Parties. In addition to the terms set out in Clause 13.3, each of the Borrowers shall procure that the obligatory insurances shall:

(a) subject always to paragraph (b), name the Borrowers as the main named assured unless the interest of every other named assured is limited:

(i) in respect of any obligatory insurances for hull and machinery and war risks;

(A) to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and

(B) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and

(ii) in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it,

and every other named assured has undertaken in writing to the Security Trustee (in such form as it requires) that any deductible shall be apportioned between the Borrowers and every other named assured in proportion to the gross claims made or paid by each of them and that it shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;

(b) name the Security Trustee as sole loss payee with such directions for payment as the Security Trustee may specify;

(c) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions for premiums due from other vessels;

- 38 -

(d) provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and

(e) provide that the Security Trustee may make proof of loss if the relevant Borrower fails to do so.

13.5 Renewal of obligatory insurances. Each of the Borrowers shall:

(a) at least 21 days before the expiry of any obligatory insurance:

(i) notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom that Borrower proposes to renew that insurance and of the proposed terms of renewal; and

(ii) in case of any substantial change in insurance cover, obtain the Security Trustee's approval to the matters referred to in paragraph (i) above;

(b) at least 14 days before the expiry of any obligatory insurance, renew the insurance in accordance with the Security Trustee's approval pursuant to paragraph (a); 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 before the expiry of the current insurances notify the Security Trustee in writing of the terms and conditions of the renewal.

13.6 Copies of policies; letters of undertaking. Each of the Borrowers shall ensure that all approved brokers provide the Security Trustee with copies of all policies relating to the obligatory insurances which they effect or renew and of a letter or letters or undertaking in a form required by the Security Trustee 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 13.4;

(b) they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;

(c) they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;

(d) they will notify the Security Trustee, 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 that Borrower or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and

(e) if the insurances form part of a fleet cover, they will not set off any claims on the Ship owned by that Borrower against premiums due for other vessels under the fleet cover or against premiums due for other insurances; neither will they cancel the insurance cover of that Ship for reason of non-payment of such premiums; and they will arrange for a separate policy to be issued in respect of that Ship forthwith upon being so requested by the Security Trustee.

13.7 Copies of certificates of entry. Each of the Borrowers shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by it is entered, provides the Security Trustee with:

(a) a certificate of entry for that Ship; and

- 39 -

(b) a letter or letters of undertaking in such form as may be required by the Security Trustee.

13.8 Deposit of original policies. Each of the Borrowers shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.

13.9 Payment of premiums. Each of the Borrowers 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 Security Trustee.

13.10 Guarantees. Each of the Borrowers 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.

13.11 Restrictions on employment. None of the Borrowers shall employ the Ship owned by it, nor permit her to be employed, outside the cover provided by any obligatory insurances unless the underwriters' consent has been obtained.

13.12 Compliance with terms of insurances. None of the Borrowers shall do or omit to do (or 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 thereunder repayable in whole or in part; and, in particular:

(a) each Borrower 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 13.7(c) above) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;

(b) no Borrower shall make any changes relating to the classification or classification society or manager or operator of the Ship owned by it approved by the underwriters of the obligatory insurances unless the underwriters' consent has been obtained; and

(c) no Borrower shall employ the Ship owned by it, 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.

13.13 Alteration to terms of insurances. None of the Borrowers shall make or agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance without the prior written consent of the Security Trustee.

13.14 Settlement of claims. None of the Borrowers shall 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 Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

13.15 Provision of copies of communications. Each of the Borrowers shall, if required by the Security Trustee, provide the Security Trustee, at the time of each such communication, copies of all material written communications between that Borrower 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:

- 40 -

(i) that Borrower'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 Borrower 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.

13.16 Provision of information. In addition, each of the Borrowers shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (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 13.17 below or dealing with or considering any matters relating to any such insurances,   and the Borrower shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a) above.

13.17 Mortgagees' interest, additional perils. The Lenders shall be entitled from time to time to effect, maintain and renew a mortgagee's interest additional perils pollution insurance and a mortgagee's interest insurance in an amount equal to 120% of the aggregate of the Loan and the Hedging Exposure and otherwise on such terms, through such insurers and generally in such manner as the Lenders may from time to time consider appropriate and each of the Borrowers shall upon demand fully indemnify the Creditor Parties in respect of all 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.

13.18 Review of insurance requirements. The Security Trustee shall be entitled to review the requirements of this Clause 13 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 Security Trustee, significant and capable of affecting any of the Borrowers or any of the Ships and its or their insurance (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which any of the Borrowers may be subject), and may appoint insurance consultants in relation to this review at the cost of the Borrowers.

13.19 Modification of insurance requirements. The Security Trustee shall notify the Borrowers of any reasonable proposed modification under Clause 13.18 to the requirements of this Clause 13 which the Security Trustee considers appropriate in the circumstances, and such modification shall take effect on and from the date it is notified in writing to the Borrowers as an amendment to this Clause 13 and shall bind the Borrowers accordingly.

13.20 Compliance with mortgagee's instructions. The Security Trustee 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 Ship to remain at any safe port or to proceed to and remain at any safe port designated by the Security Trustee until the Borrower owning 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 13.19.

14. SHIP COVENANTS

14.1 General. Each of the Borrowers also undertakes with each Creditor Party to comply with the following provisions of this Clause 14 at all times during the Security Period

- 41 -

except as the Agent (with the authorisation of the Majority Lenders) may otherwise permit.

14.2 Ship's name and registration. Each of the Borrowers shall keep the Ship owned by it registered in its name under the Approved Flag; 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 or flag of a Ship without the prior written consent of the Agent (acting on the authority of the Majority Lenders).

14.3 Repair and classification. Each of the Borrowers 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 that Ship with the highest classification available for vessels of the same age, type and specification as the Ship with Lloyd's Register of Shipping (or such other first class classification society being a member of IACS and as may be approved by the Security Trustee), free of outstanding recommendations and conditions affecting that Ship's class which continue unremedied after expiration of the allowance period set by the surveyor appointed by each classification society; and

(c) so as to comply with all laws and regulations applicable to vessels registered at ports in the Approved Flag State or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not limited to the ISM Code and the ISPS Code.

14.4 Modification. None of the Borrowers shall make any modification or repairs to, or replacement of, the Ship owned by it or equipment installed on her which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce her value.

14.5 Removal of parts. None of the Borrowers shall remove any material part of the Ship owned by it, or any item of equipment installed on, that 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 Lenders and becomes on installation on that Ship the property of the Borrower owning that Ship and subject to the security constituted by the relevant Mortgage Provided that a Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship owned by it.

14.6 Surveys. Each of the Borrowers shall submit the Ship owned by it regularly to all periodical or other surveys which may be required for classification purposes and at such other times as may be required by the Agent (in its sole discretion), at the cost and expense of the Borrowers, and (if so required by the Agent) provide the Agent with copies of all survey reports. The Agent shall have the right to request one or more technical survey reports of each Ship by surveyors appointed to by the Agent at the cost of the Borrowers, provided that the frequency of such reports shall be limited to one per year (unless an Event of Default shall have occurred).

14.7 Inspection. Each of the Borrowers shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board each Ship at all reasonable times to inspect her condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections, on condition that no interference with the day to day management and operation of that Ship will occur. Provided that a Ship is found to be in satisfactory condition, the cost of such inspections shall be borne by the Borrowers not more than once per year.

14.8 Prevention of and release from arrest. Each of the Borrowers shall promptly discharge:

- 42 -

(a) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship owned by it, the Earnings or the Insurances;

(b) all taxes, dues and other amounts charged in respect of the Ship owned by it, the Earnings or the Insurances; and

(c) all other outgoings whatsoever in respect of the Ship owned by it, the Earnings or the Insurances,

and, forthwith upon receiving notice of the arrest of a Ship, or of her detention in exercise or purported exercise of any lien or claim, the Borrower owning that Ship shall procure her release by providing bail or otherwise as the circumstances may require.

14.9 Compliance with laws etc. Each of the Borrowers 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 Borrower owning that Ship (including, without limitation, the obtaining of all relevant certificates of financial responsibility and any other matters required for entering United States territorial waters or calling at any United States Port);

(b) comply (and each other Obligor shall comply and the Corporate Guarantor shall procure that each member of the Group will comply) in all aspects with all Sanctions;

(c) not employ the Ship owned by it nor allow her employment in any manner contrary to any law or regulation in any relevant jurisdiction, including (but not limited to) concluding transactions with any entities or countries subject to sanctions imposed by OFAC in the US, the United Nations, the European Union or otherwise, or pursuant to the ISM Code and the ISPS Code;

(d) in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Ship owned by it to enter or trade to any zone which is declared a war zone by any government or by that Ship's war risks insurers unless the prior written consent of the Majority Lenders has been given and the Borrower owning that Ship has (at its expense) effected any special, additional or modified insurance cover which the Majority Lenders may require;

(e) adopt and comply with responsible ship recycling policies; and

(f) ensure that the Ship owned by it has, from the Drawdown Date (or by latest its next scheduled dry-dock), obtained an Inventory of Hazardous Materials which shall be maintained throughout the Security Period.

14.10 Provision of information. Each of the Borrowers shall promptly provide the Security Trustee with any information which the Majority Lenders request regarding:

(a) the Ship owned by it, her employment, position and engagements;

(b) the Earnings and payments and amounts due to the master and crew of the Ship owned by it;

(c) any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship owned by it and any payments made in respect of that Ship;

(d) any towages and salvages;

- 43 -

(e) its compliance, the Approved Manager's compliance or the compliance of the Ship owned by that Borrower with the ISM Code   and, upon the Security Trustee's request, provide copies of any current charter relating to that Ship and of any current charter guarantee, and copies of the ISM Code and ISPS Code documentation.

14.11 Notification of certain events. Each of the Borrowers shall immediately notify the Security Trustee 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 any withdrawal of class) or by any competent authority which is not immediately complied with;

(d) any arrest or detention of the Ship owned by it, any exercise or purported exercise of any lien on that Ship or her Earnings or any requisition of that Ship for hire;

(e) any intended dry-docking, cold lay-up or deactivation of a Ship;

(f) any Environmental Claim made against a Borrower or in connection with the Ship owned by it or any Environmental Incident;

(g) any claim for breach of the ISM Code or the ISPS Code being made against a Borrower, the Approved Manager or otherwise in connection with the Ship owned by that Borrower; 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 each Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of that Borrower's, the Approved Manager's or any other person's response to any of those events or matters.

14.12 Restrictions on chartering, appointment of managers, etc. None of the Borrowers shall without the prior written consent of the Agent (acting on the authority of the Majority Lenders):

(a) let a Ship on demise charter for any period;

(b) enter into any time or consecutive voyage charter in respect of the Ship owned by it 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 owned by it under which more than 2 months' hire (or the equivalent) is payable in advance;

(d) charter the Ship owned by it otherwise than on bona fide arm's length terms (including charter to an Affiliate or below market rate/terms) at the time when that Ship is fixed;

(e) appoint a commercial, technical or operational manager of the Ship owned by it (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 the Ship owned by it;

- 44 -

(g) change the legal or beneficial ownership of the shares in the Ship owned by it;

(h) put the Ship owned by it into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed Five hundred thousand United States Dollars ($500,000) (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or her Earnings for the cost of such work or otherwise; or

(i) change the classification society with which the Ship owned by it is classed.

14.13 Notice of Mortgage. Each of the Borrowers shall keep the Mortgage registered against the Ship owned by it as a valid first priority mortgage, carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of that Ship a framed printed notice stating that such Ship is mortgaged by that Borrower to the Security Trustee.

14.14 Sharing of Earnings.  None of the Borrowers shall enter into any agreement or arrangement for the sharing of any Earnings, except for customary profit sharing provisions usually included in pooling agreements or charterparties at the time the relevant Ship is fixed.

14.15 ISPS Code. Each of the Borrowers shall comply with the ISPS Code and in particular, without limitation, shall:

(a) procure that the Ship owned by it and the company responsible for such Ship's compliance with the ISPS Code, comply with the ISPS Code; and

(b) maintain for that Ship an ISSC; and

(c) notify the Lender immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.

14.16 Time Charter Assignment. If any Borrower (with the consent of the Agent pursuant to Clause 14.12 (b)) enters into any time charter or contract of affreightment in respect of a Ship which is in excess of twelve (12) months in duration, that Borrower shall execute in favour of the Security Trustee a Time Charter Assignment and notice of assignment (and the Borrower shall use its best efforts to procure that such notice is acknowledged by the relevant charterer) of such time charter or contract of affreightment in such form and on such terms as the Agent may require (subject to the relevant charterer accepting such form); and shall deliver to the Agent such other documents equivalent to those referred to at paragraphs 3, 4 and 5 of Schedule 4 hereof as the Agent may require.

14.17 Sustainable dismantling. Each of the Borrowers confirms that as long as it is in a lending relationship with ABN AMRO Bank N.V., it will ensure that any Ship controlled by it or sold to an intermediary with the intention of being scrapped, is recycled at a recycling yard which conducts its recycling business in a socially and environmentally responsible manner, in accordance with the provisions of The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 and/or EU Ship regulation.

15. SECURITY COVER

15.1 Minimum required security cover. Clause 15.2 applies if the Agent notifies the Borrowers that:

(a) the Fair Market Value (determined as provided below) of the Ships; plus

- 45 -

(b) the net realisable value of any additional security previously provided under this Clause 15,

is below one hundred and forty per cent (140%) of the aggregate amount of the Loan and the Hedging Exposure.

15.2 Provision of additional security; prepayment. If the Agent serves a notice on the Borrowers under Clause 15.1, the Borrowers shall prepay such part (at least) of the Loan as will eliminate the shortfall on or before the date falling 1 month after the date on which the Agent's notice is served under Clause 15.1 (the "Prepayment Date") unless at least 1 Business Day before the Prepayment Date they have provided, or ensured that a third party has provided, additional security which, in the opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and which has been documented in such terms as the Agent may, with the authorisation of the Majority Lenders, approve or require.

15.3 Valuation of Ships/Fleet Vessels. The Fair Market Value of a Ship or of another Fleet Vessel (as the case may be) shall be determined:

(a) in Dollars, as at the date of (or no earlier than 15 days prior to) such valuation, provided however that the valuations to be provided by the Borrowers to the Agent together with the Compliance Certificate will have the same date as the applicable Compliance Certificate;

(b) by taking the average of two written valuations prepared by any two of the Approved Brokers;

(c) with or without physical inspection of the relevant Ship or other Fleet Vessel (as the Agent may require), provided that no interference with the day to day management and operation of that Ship or that other Fleet Vessel occurs;

(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, free of any existing charter or other contract of employment;

(e) after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.

Provided that if, pursuant to Clause 15.3(b), one such valuation differs by more than 10 per cent. from the other valuation, then the Agent may select a third Approved Broker under Clause 15.3 (b) to provide a valuation of that Ship or that other Fleet Vessel (as the case may be) in accordance with this Clause 15.3 and the Market Value of that Ship or that other Fleet Vessel (as the case may be) shall be the arithmetic average of all three such valuations.

15.4 Value of additional vessel security. The net realisable value of any additional security which is provided under Clause 15.2 and which consists of a Security Interest over a vessel shall be that shown by way of a valuation complying with the requirements of Clause 15.3.

15.5 Valuations binding. Any valuation under Clause 15.3 or 15.4 shall be binding and conclusive as regards the Borrowers, as shall be any valuation which the Majority Lenders make of any additional security which does not consist of or include a Security Interest.

15.6 Provision of information. The Borrowers shall promptly provide the Agent and any shipbroker or expert acting under Clause 15.3 or 15.4 with any information which the Agent or the shipbroker or expert may request for the purposes of the valuation; and, if the Borrowers fail to provide the information by the date specified in the request, the

- 46 -

valuation may be made on any basis and assumptions which the shipbroker or the Majority Lenders (or the expert appointed by them) consider prudent.

15.7 Payment of valuation expenses. Without prejudice to the generality of the Borrowers' obligations under Clauses 20.2, 20.3 and 21.3, the Borrowers shall, on demand, pay the Agent the amount of the fees and expenses of any shipbrokers or experts instructed by the Agent under this Clause 15 and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause 15, provided that unless an Event of Default or a Potential Event of Default has occurred, the Borrowers shall only be obliged to pay the fees and expenses for two sets of valuations of each Ship carried out in each 12-month period pursuant to Clause 15.3.

15.8 Frequency of valuations. The Agent shall be entitled to obtain written valuations of each Ship and each other Fleet Vessel at drawdown of the Loan and any time during the Security Period, provided that after drawdown of the Loan the costs and expenses of such shall only be borne by the Borrowers twice per year (unless an Event of Default or a mandatory prepayment event under Clause 8.7 has occurred, in which case the Agent shall be entitled to obtain valuations at any time, at the cost and expense of the Borrowers). Such valuations at the time of drawdown of the Loan shall be in addition to the valuations to be provided by the Borrowers together with the Compliance Certificates pursuant to Clauses 11.6 and 15.3(a).

15.9 Application of prepayment. Clause 8 shall apply in relation to any prepayment pursuant to Clause 15.2.

15.10 Notification to Agent. Each of the Borrowers shall promptly notify the Agent of any indication that the asset cover ratio in Clause 15.1 may not be met.

16. PAYMENTS AND CALCULATIONS

16.1 Currency and method of payments. All payments to be made by the Lenders or by any of the Borrowers under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:

(i) by not later than 11.00 a.m. (New York City time) on the due date;

(ii) 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 Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);

(iii) if in Dollars, to the account of the Agent with such bank in New York as the Agent may from time to time notify to the Borrowers and the other Creditor Parties; and

(iv) (iv) in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrowers and the other Creditor Parties.

16.2 Payment on non-Business Day. If any payment by any of the Borrowers 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.

- 47 -

16.3 Basis for calculation of periodic payments. All interest and commitment fee 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.

16.4 Distribution of payments to Creditor Parties. Subject to Clauses 16.5, 16.6 and 16.7:

(a) any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, a Swap Bank or the Security Trustee shall be made available by the Agent to that Lender, that Swap Bank or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender or the Swap Bank or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and

(b) amounts to be applied in satisfying amounts of a particular category which are due to the Lenders or the Swap Banks generally shall be distributed by the Agent to each Lender and each Swap Bank pro rata to the amount in that category which is due to it.

16.5 Permitted deductions by Agent. Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender or a Swap Bank, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender or that Swap Bank under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender or that Swap Bank to pay on demand.

16.6 Agent only obliged to pay when monies received. Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to any of the Borrowers or any Lender or any Swap Bank any sum which the Agent is expecting to receive for remittance or distribution to any of the Borrowers or that Lender or that Swap Bank until the Agent has satisfied itself that it has received that sum.

16.7 Refund to Agent of monies not received. If and to the extent that the Agent makes available a sum to any of the Borrowers or a Lender or a Swap Bank, without first having received that sum, the Borrowers or (as the case may be) the Lender or the Swap Bank concerned shall, on demand:

(a) refund the sum in full to the Agent; and

(b) pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.

16.8 Agent may assume receipt. Clause 16.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.

16.9 Creditor Party accounts. Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.

16.10 Agent's memorandum account. The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.

- 48 -

16.11 Accounts prima facie evidence. If any accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by the Borrowers or a Security Party to a Creditor Party, those accounts shall, absent manifest error, be prima facie evidence that that amount is owing to that Creditor Party.

17. APPLICATION OF RECEIPTS

17.1 Normal order of application. Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party 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 in the following order and proportions:

(i) first, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents other than those amounts referred to at (ii) and (iii) below (including, but without limitation, all amounts payable by the Borrowers under Clauses 20, 21 and 22 of this Agreement or by any of the Borrowers or any Security Party under any corresponding or similar provision in any other Finance Document);

(ii) secondly, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Creditor Parties under the Finance Documents (and, for this purpose, the expression "interest" shall include any net amount which the Borrowers have become liable to pay or deliver under section 2(e) (Obligations) of a Master Agreement but shall have failed to pay or deliver to the Swap Bank at the time of application or distribution under this Clause 17); and

(iii) thirdly, in or towards satisfaction of the Loan and the Hedging Exposure (in the case of the latter, calculated as at the actual Early Termination Date applying to each particular Designated 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) on a pari passu basis;

(b) SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrowers, the Security Parties and the other Creditor 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 provisions of Clause 17.1(a); and

(c) THIRDLY: any surplus shall be paid to the Borrowers.

17.2 Variation of order of application. The Agent may, with the authorisation of the Majority Lenders and the Swap Banks by notice to the Borrowers, the Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 17.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.

17.3 Notice of variation of order of application. The Agent may give notices under Clause 17.2 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.

17.4 Appropriation rights overriden. This Clause 17 and any notice which the Agent gives under Clause 17.2 shall override any right of appropriation possessed, and any appropriation made, by the Borrowers or any Security Party.

- 49 -

18. APPLICATION OF EARNINGS

18.1 Payment and application of Earnings. Each of the Borrowers undertakes with each Creditor Party to ensure that, throughout the Security Period (and subject only to the provisions of each General Assignment), all the Earnings of each Ship are paid to the Operating Account for that Ship and shall be applied as follows:

(a) first, towards payment of all sums other than principal and interest due to the Lenders under this Agreement and the other Finance Documents;

(b) secondly, towards payment of the next instalment of principal and the next payment of interest due to the Lenders in accordance with the provisions of Clause 18.2, and towards payments due to a Swap Bank under a Master Agreement; and

(c) thirdly, any surplus shall (subject always to the other provisions of this Clause 18 and provided no Event of Default is continuing) be available to the Borrowers.

18.2 Monthly retentions. Each of the Borrowers undertakes with each Creditor Party to ensure that, in each calendar month of the Security Period commencing one month after the Drawdown Date, on such dates as the Agent may from time to time specify, there is transferred to the Retention Account out of the Earnings received in the Operating Accounts during the preceding calendar month:

(a) one-third of the amount of the repayment instalment falling due under Clause 8 on the next Repayment Date; and

(b) the relevant fraction of the aggregate amount of interest on the Loan which is payable on the next due date for payment of interest under this Agreement.

The "relevant fraction"is a fraction of which the numerator is 1 and the denominator the number of months comprised in the then current Interest Period (or, if the period is shorter, the number of months from the later of the commencement of the current Interest Period or the last due date for payment of interest to the next due date for payment of interest under this Agreement).

18.3 Shortfall in Earnings. If the aggregate Earnings received in the Operating Accounts are insufficient in any month for the required amount to be transferred to the Retention Account under Clause 18.2, the Borrowers shall make up the amount of the insufficiency on demand from the Agent; but, without thereby prejudicing the Agent's right to make such demand at any time, the Agent may, if so authorised by the Majority Lenders, permit the Borrowers to make up all or part of the insufficiency by increasing the amount of any transfer under Clause 18.2 from the Earnings received in the next or subsequent months.

18.4 Application of retentions. Until an Event of Default or a Potential Event of Default occurs, the Agent shall on each Repayment Date and on each due date for the payment of interest under this Agreement distribute to the Lenders in accordance with Clause 16.4 so much of the balance on the Retention Account as equals:

(a) the repayment instalment due on that Repayment Date; or

(b) the amount of interest payable on that interest payment date;

in discharge of the Borrowers' liability for that repayment instalment or that interest.

18.5 Designated Transactions. All payments by a Swap Bank to the Borrowers under each Designated Transaction shall be credited to the Operating Accounts.

18.6 Location of accounts. Each of the Borrowers shall promptly:

- 50 -

(a) comply with any requirement of the Agent as to the location or re-location of the Operating Accounts and the Retention Account (or any of them);

(b) execute any documents which the Agent specifies to create or maintain in favour of the Agent a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Operating Accounts and the Retention Account.

18.7 Debits for expenses etc. The Agent shall be entitled (but not obliged) from time to time to debit the Operating Accounts without prior notice in order to discharge any amount due and payable under Clause 20 or 21 to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clause 20 or 21.

18.8 Borrowers' obligations unaffected. The provisions of this Clause 18 (as distinct from a distribution effected under Clause 18.4) do not affect:

(a) the liability of the Borrowers to make payments of principal and interest on the due dates; or

(b) any other liability or obligation of the Borrowers or any Security Party under any Finance Document.

19. EVENTS OF DEFAULT

19.1 Events of Default. An Event of Default occurs if:

(a) any of the Borrowers or any Security Party (other than the Approved Manager) 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 unless such failure to pay is caused by an administrative or technical error or any disruption event in the payment/communication system which is beyond the control of the Borrowers, in which case the Borrowers shall rectify such error within three (3) Business Days; or

(b) any breach occurs of Clauses 11.2, 11.12, 11.19, 11.20, 11.21, 12.2, 12.3, 12.4, 12.5, 12.6, 13.2, 13.3, 15.1 or 15.2 of this Agreement or clause 11.21 of the Corporate Guarantee; or

(c) any breach by the Borrowers or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the opinion of the Majority Lenders, is capable of remedy, and such default continues unremedied 5 Business Days after written notice from the Agent requesting action to remedy the same; or

(d) (subject to any applicable grace period specified in the Finance Document) any breach by the Borrowers or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b) or (c); or

(e) any representation, warranty or statement made or repeated by, or by an officer of or by any other persons agreed in writing from time to time between the Borrowers and the Agent of, a Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made or repeated; or

(f) any of the following occurs in relation to any Financial Indebtedness of a Relevant Person which exceeds $7,000,000 (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

- 51 -

(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) the Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or

(ii) any assets of the Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $1,000,000 or more or the equivalent in another currency unless such execution, attachment, arrest, sequestration or distress is being contested in good faith and on substantial grounds and is discussed or withdrawn within thirty (30) days of the occurrence thereof; or

(iii) any administrative or other receiver is appointed over any asset of a Relevant Person; or

(iv) an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or

(v) any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer acting for a Relevant Person; or

(vi) a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or

(vii) a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view to the winding up of that or another Relevant Person, or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that another Relevant Person ceasing or suspending business operations or payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than a Borrower or the Corporate Guarantor which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or

- 52 -

(viii) an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb)within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or

(ix) a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise) with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value) of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or

(x) any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step be taken or should be taken if certain conditions materialise or fail to materialise; or

(xi) in a country other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or

(h) any of the Borrowers or the Corporate Guarantor or the Approved Manager ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement; or

(i) it becomes unlawful in any Pertinent Jurisdiction or impossible:

(i) for a Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or

(ii) for the Agent, the Security Trustee, the Lenders or the Swap Banks to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or (i)

(j) any consent necessary to enable any of the Borrowers to own, operate or charter the Ship owned by it or to enable any of the Borrowers or any Security Party to comply with any provision which the Majority Lenders consider 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

- 53 -

(k) any provision which the Majority Lenders consider 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

(l) the security constituted by a Finance Document is in any way materially imperilled or in jeopardy (including, but not limited to, termination of registration under the Approved Flag State or failure to renew same within 90 days, or failure to lift an arrest of a Ship within 30 days); or

(m) an Event of Default (as defined in section 14 of a Master Agreement) occurs; or

(n) a 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 Agent, acting with the authorisation of the Majority Lenders; or

(o) any other event occurs or any other circumstances arise or develop including, without limitation:

(i) a Material Adverse Effect; or

(ii) any accident or other event involving the Ship or another vessel owned, chartered or operated by a Relevant Person; or

(iii) political risks events in the Approved Flag State or other Pertinent Jurisdiction involving hostilities or civil war or seizure of power by unconstitutional means;

which, in the Agent's opinion, is likely to have a Material Adverse Effect and that any of the Borrowers has not taken such action as the Agent has specified within 14 days of the Agent's notice to so do.

19.2 Actions following an Event of Default. On, or at any time after, the occurrence of an Event of Default:

(a) the Agent may, and if so instructed by the Majority Lenders, the Agent shall:

(i) serve on the Borrowers a notice stating that all or part of the Commitments and of the other obligations of each Lender to the Borrowers under this Agreement are cancelled; and/or

(ii) serve on the Borrowers a notice stating that all or part of the Loan, together with 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

(iii) take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or

(b) the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or the Lenders and/or the Swap Banks are entitled to take under any Finance Document or any applicable law.

19.3 Termination of Commitments. On the service of a notice under paragraph (a)(i) of Clause 19.2, the Commitments and all other obligations of each Lender to the Borrowers under this Agreement shall be cancelled.

- 54 -

19.4 Acceleration of Loan. On the service of a notice under paragraph (a)(ii) of Clause 19.2, all or, as the case may be, the part of the Loan specified in the notice together with accrued interest and all other amounts accrued or owing from the Borrowers 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.

19.5 Multiple notices; action without notice. The Agent may serve notices under paragraphs (a) (i) and (ii) of Clause 19.2 simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in that Clause if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.

19.6 Notification of Creditor Parties and Security Parties. The Agent shall send to each Lender, each Swap Bank, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the Borrowers under Clause 19.2; but the notice shall become effective when it is served on the Borrowers, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide any of the Borrowers or any Security Party with any form of claim or defence.

19.7 Creditor Parties' rights unimpaired. Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders or Swap Banks under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1.

19.8 Exclusion of Creditor Party liability. No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to any of the Borrowers or a 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 a Creditor Party or a receiver or manager from liability for losses shown to have been directly and mainly caused by the gross negligence or the wilful misconduct of such Creditor Party's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.

19.9 Relevant Persons. In this Clause 19, a "Relevant Person" means each Borrower, the Corporate Guarantor, any other Security Party (other than the Approved Manager) and any other Group Member; but excluding any company which is dormant and the value of whose gross assets is $50,000 or less.

19.10 Interpretation. In Clause 19.1(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 19.1(g) "petition"includes an application.

19.11 Position of Swap Banks. Neither the Agent nor the Security Trustee shall be obliged, in connection with any action taken or proposed to be taken under or pursuant to the foregoing provisions of this Clause 19, to have any regard to the requirements of a Swap Bank except to the extent that such Swap Bank is also a Lender.

20. FEES AND EXPENSES

20.1 Arrangement, commitment, agency fees. The Borrowers shall pay to the Agent:

- 55 -

(a) a non-refundable arrangement fee for the account of the Arranger in the amount of $300,000 upon signing of this Agreement;

(b) quarterly in arrears during the period from (and including) 5 February 2018 (being the date on which the Borrowers and the Corporate Guarantor accepted the Arranger's offer letter in respect of the Loan) to the earlier of (i) the Drawdown Date and (ii) the last day of the Availability Period and on the last day of that period, for the account of the Lenders, a commitment fee at the rate of forty per cent (40%) per annum of the amount of the Margin, for distribution to the Lenders pro rata to their Commitments; and

(c) an agency fee if any part of the Loan is syndicated out to one or more financial institutions, in an amount to be set out in a separate fee letter between the Agent and the Borrowers.

20.2 Costs of negotiation, preparation etc. The Borrowers shall pay to the Agent on its demand the amount of all expenses (including, but not limited to, all legal expenses and VAT, if applicable) incurred by the Agent or the Security Trustee 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.

20.3 Costs of variations, amendments, enforcement etc. The Borrowers shall pay to the Agent, on the Agent's demand, for the account of the Creditor Party concerned, the amount of all expenses incurred by a Creditor Party 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 Lenders, the Swap Banks, the Majority Lenders or the Creditor Party 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 15 or any other matter relating to such security;

(d) where the Security Trustee, in its absolute opinion, considers that there has been a material change to the Insurances in respect of a Ship, the review of the Insurances of that Ship pursuant to Clause 13.18; and

(e) any step taken by the Creditor Party concerned 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 (e) 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.

20.4 Documentary taxes. The Borrowers shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent's demand, fully indemnify each Creditor Party against any claims, expenses, liabilities and losses resulting from any failure or delay by the Borrowers to pay such a tax.

20.5 Certification of amounts. A notice which is signed by two officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall, save for manifest error, be prima facie evidence that the amount, or aggregate amount, is due.

- 56 -

21. INDEMNITIES

21.1 Indemnities regarding borrowing and repayment of Loan. Each of the Borrowers shall fully indemnify the Agent and each Lender on the Agent's demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party 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 the Loan for any reason other than a default by the Lender claiming the indemnity;

(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 Borrowers 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 Borrowers on the amount concerned under Clause 7);

(d) the occurrence and/or continuance of an Event of Default or a Potential Event of Default (including, but not limited to, a breach of Clauses 11.20 or 11.21) and/or the acceleration of repayment of the Loan under Clause 19;   and in respect of any tax (other than an Excluded Tax) for which a Creditor Party is liable in connection with any amount paid or payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.

21.2 Breakage costs. Without limiting its generality, Clause 21.1 covers any claim, expense, liability or loss, incurred by a Lender:

(a) in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution 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 concerned) to hedge any exposure arising under this Agreement or that part which the Lender concerned determines is fairly attributable to this Agreement of the amount of the liabilities, expenses or losses incurred by it in terminating, or otherwise in connection with, a number of transactions of which this Agreement is one.

21.3 Miscellaneous indemnities. The Borrowers shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, demands, proceedings, liabilities, taxes, losses and expenses of every kind ("liability items") which may be made or brought against, or incurred by, a Creditor Party, 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 Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document;

(b) any breach of Sanctions;

(c) any other event, matter or question which occurs or arises at any time during the Security Period and which has any connection with, or any bearing on, any Finance Document, any payment or other transaction relating to a Finance Document or any asset covered (or

- 57 -

previously covered) by a Security Interest created (or intended to be created) by a Finance Document;

other than liability items which are shown to have been directly and mainly caused by the gross negligence or wilful misconduct of the officers or employees of the Creditor Party concerned.

Without prejudice to its generality, this Clause 21.3 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.

21.4 Currency indemnity. If any sum due from the Borrowers or any Security Party to a Creditor Party 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 any of the Borrowers 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 Borrowers shall indemnify the Creditor Party concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.

In this Clause 21.4, the "available rate of exchange"means the rate at which the Creditor Party concerned is able at the opening of business (Rotterdam time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

This Clause 21.4 creates a separate liability of the Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.

21.5 Application to Master Agreements. For the avoidance of doubt, Clause 21.4 does not apply in respect of sums due from the Borrowers to a Swap Bank under or in connection with a Master Agreement as to which sums the provisions of section 8 (Contractual Currency) of that Master Agreement shall apply.

21.6 Certification of amounts. A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall, save for manifest error, be prima facie evidence that the amount, or aggregate amount, is due.

21.7 Sums deemed due to a Lender. For the purposes of this Clause 21, a sum payable by the Borrowers to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.

21.8 Mandatory Costs. The Borrowers shall, on demand by the Agent, pay to the Agent for the account of the relevant Lender, such amount which any Lender certifies in a notice to the Agent against documentary evidence of the amount necessary to compensate it for complying with:

- 58 -

(a) in the case of a Lender lending from a lending 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 lending office; and

(b) in the case of any Lender lending from a lending 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.

22. NO SET-OFF OR TAX DEDUCTION

22.1 No deductions. All amounts due from the Borrowers 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 a Borrower is required by law to make.

22.2 Grossing-up for taxes. If a Borrower is required by law to make a tax deduction from any payment:

(a) that Borrower shall notify the Agent as soon as it becomes aware of the requirement;

(b) that 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 each Creditor Party 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;

(d) in the event that a Creditor Party receives a refund (whether in the form of cash or a reduction or offset of taxes) of a tax for which an additional amount was paid pursuant to sub-paragraph (c), the Creditor Party shall, within 30 days upon receiving or recognizing such refund, pay the amount of such refund to the Borrower.

22.3 Evidence of payment of taxes. Within 1 month after making any tax deduction, that Borrower shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.

22.4 Exclusion of tax on overall net income. In this Clause 22 "tax deduction"means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party's overall net income, a FATCA Deduction, or a tax imposed by a jurisdiction in which the Creditor Party is incorporated, organized or resident for such jurisdiction's income tax purposes (collectively, an "Excluded Tax").

22.5 Application to Master Agreements. For the avoidance of doubt, Clause 22 does not apply in respect of sums due from the Borrowers to a Swap Bank under or in connection with a Master Agreement as to which sums the provisions of section 2(d) (Deduction or Withholding for Tax) of that Master Agreement shall apply.

- 59 -

22.6 FATCA Information.

(a) Subject to paragraph (c) below, each Party shall, within ten (10) Business Days of a reasonable request by another Party:

(i) confirm to that other Party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party; and

(ii) supply to that other Party such forms, documentation and other information relating to its status under FATCA (including its applicable "passthru payment percentage" or other information required under the US Treasury regulations or other official guidance including intergovernmental agreements) as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA.

(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 Creditor Party to do anything which would or might in its reasonable opinion constitute a breach of any law or regulation, any policy of that party, any fiduciary duty or any duty of confidentiality, or to disclose any confidential information (including, without limitation, its tax returns and calculations); provided, however, that information required (or equivalent to the information so required) by United States Internal Revenue Service Forms W-8 or W-9 (or any successor forms) shall not be treated as confidential information of such party for purposes of this paragraph (c).

(d) If a Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then:

(i) if that Party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such Party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party; and

(ii) if that Party failed to confirm its applicable "passthru payment percentage" then such Party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable "passthru payment percentage" is 100%,

until (in each case) such time as the Party in question provides the requested confirmation, forms, documentation or other information.

22.7 FATCA Withholding.

(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, the Agent and the other Creditor Parties.

- 60 -

22.8 Contractual recognition of Bail-In.

Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

(a) any Bail-In Action in relation to any such liability, including (without limitation):

(i) a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

(ii) a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

(iii) a cancellation of any such liability; and

(b) a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.

23. ILLEGALITY, ETC

23.1 Illegality. This Clause 23 applies if a Lender (the "Notifying Lender") notifies the Agent that it has become, or will with effect from a specified date, become:

(a) unlawful or prohibited (including, without limitation, due to a breach of Clauses 11.20 or 11.21) 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 Notifying Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.

23.2 Notification of illegality. The Agent shall promptly notify the Borrowers, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 which the Agent receives from the Notifying Lender.

23.3 Prepayment; termination of Commitment. On the Agent notifying the Borrowers under Clause 23.2, the Notifying Lender's Commitment shall terminate; and thereupon or, if later, on the date specified in the Notifying Lender's notice under Clause 23.1 as the date on which the notified event would become effective the Borrowers shall prepay the Notifying Lender's Contribution in accordance with Clause 8.

23.4 Mitigation. If circumstances arise which would result in a notification under Clause 23.1 then, without in any way limiting the rights of the Notifying Lender under Clause 23.3, the Notifying 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 Notifying 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.

- 61 -

24. INCREASED COSTS

24.1 Increased costs. This Clause 24 applies if a Lender (the "Notifying Lender") notifies the Agent that the Notifying Lender 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 an Excluded Tax); or

(b) the effect of complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement (including, but not limited to, Basel III, CRR and CRD IV costs),

is that the Notifying Lender (or a parent company of it) has incurred or will incur an "increased cost", that is to say,:

(i) an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums; or

(ii) a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;

(iii) 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 Notifying Lender's Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or

(iv) a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement;

but not an item attributable to a change in the rate of an Excluded Tax of the Notifying Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause 21.1 or by Clause 22 or which is attributable to a FATCA Deduction.

For the purposes of this Clause 24.1 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class thereof) on such basis as it considers appropriate.

24.2 Notification to Borrowers of claim for increased costs. The Agent shall promptly notify the Borrowers and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1.

24.3 Payment of increased costs. The Borrowers shall pay to the Agent, on the Agent's demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrowers that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.

24.4 Notice of prepayment. If the Borrowers are not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.3, the Borrowers may give the Agent not less than 14 days' notice of their intention to prepay the Notifying Lender's Contribution at the end of an Interest Period.

- 62 -

24.5 Prepayment; termination of Commitment. A notice under Clause 24.4 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrowers' notice of intended prepayment; and:

(a) on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and

(b) on the date specified in its notice of intended prepayment, the Borrowers shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin.

24.6 Application of prepayment. Clause 8 shall apply in relation to the prepayment.

25. SET-OFF

25.1 Application of credit balances. Each Creditor Party 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 any of the Borrowers at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from any of the Borrowers to that Creditor Party 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 any of the Borrowers;

(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 Creditor Party concerned considers appropriate.

25.2 Existing rights unaffected. No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1; 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 a Creditor Party is entitled (whether under the general law or any document).

25.3 Sums deemed due to a Lender. For the purposes of this Clause 25, a sum payable by any of the Borrowers to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender's proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.

25.4 No Security Interest. This Clause 25 gives the Creditor Parties a contractual right of set off only, and does not create any equitable charge or other Security Interest over any credit balance of any of the Borrowers.

25.5 No Borrower set off. None of the Borrowers shall have a right of set off in relation to sums that may be due from any Creditor Party under this Agreement or any of the other Finance Documents.

26. TRANSFERS AND CHANGES IN LENDING OFFICES

26.1 Transfer by Borrowers. The Borrowers may not:

(a) without the prior written consent of the Agent (given on the instructions of all of the Lenders), transfer any of its rights or obligations under any Finance Document;

- 63 -

(b) without the prior written consent of the Agent (given on the instructions of all the Lenders), enter into any merger, de-merger or other reorganisation, or carry out any other act, as a result of which any of its rights or liabilities would vest in, or pass to, another person.

26.2 Transfer by a Lender. Subject to Clause 26.4, a Lender (the "Transferor Lender") may at any time cause:

(a) its rights in respect of all or part of its Contribution; or

(b) its obligations in respect of all or part of its Commitment; or

(c) a combination of (a) and (b);

to be (in the case of its rights) transferred to, or (in the case of its obligations) assumed by, another bank or financial institution or 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 (a "Transferee Lender") by delivering to the Agent a completed certificate in the form set out in Schedule 6 with any modifications approved or required by the Agent (a "Transfer Certificate") executed by the Transferor Lender and the Transferee Lender.

However any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee shall be dealt with separately in accordance with the Agency and Trust Deed.

A transfer pursuant to this Clause 26.2 shall:

(i) be effected without the consent of; but with notice to, the Borrowers;

(A) following the occurrence of an Event of Default;

(B) if such transfer is to a Subsidiary or any other company or financial institution which is in the same ownership or control as the Transferor Lender; or

(C) if such transfer is required by a banking authority; and

(ii) require the consent of the Borrowers (such consent not to be unreasonably withheld or delayed) in all other circumstances.

26.3 Transfer Certificate, delivery and notification. As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):

(a) sign the Transfer Certificate on behalf of itself, the Borrowers, the Security Parties, the Security Trustee, each of the other Lenders and each of the Swap Banks;

(b) on behalf of the Transferee Lender, send to the Borrowers and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;

(c) send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above,

but the Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Transferor Lender and the Transferee 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 that Transferee Lender.

- 64 -

26.4 Effective Date of Transfer Certificate. A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date Provided that it is signed by the Agent under Clause 26.3 on or before that date.

26.5 No transfer without Transfer Certificate. No assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrowers, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.

26.6 Lender re-organisation; waiver of Transfer Certificate. However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (the "successor"), the Agent may, if it sees fit, by notice to the successor and the Borrowers and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent's notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender. In addition, where security rights (such as pledge and mortgage rights) created in the interest of the Lender concerned were transferred to the successor as a result of such a merger, de-merger or other reorganisation, then such rights will serve as if they were created in the interest of the successor.

26.7 Effect of Transfer Certificate. A Transfer Certificate takes effect in accordance with English law as follows:

(a) to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which the Borrowers or any Security Party had against the Transferor Lender;

(b) the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate;

(c) the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;

(d) the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;

(e) any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of the Borrowers or any Security Party against the Transferor Lender had not existed;

(f) the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.7 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and

(g) 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, the Transferee Lender shall be entitled to recover damages by reference to the

- 65 -

loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.

The rights and equities of the Borrowers or any Security Party referred to above include, but are not limited to, any right of set off and any other kind of cross-claim.

26.8 Maintenance of register of Lenders. During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrowers during normal banking hours, subject to receiving at least 3 Business Days prior notice.

26.9 Reliance on register of Lenders. The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.

26.10 Authorisation of Agent to sign Transfer Certificates. Each of the Borrowers, the Security Trustee, each Lender and each Swap Bank irrevocably authorise the Agent to sign Transfer Certificates on its behalf.

26.11 Registration fee. In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $3,000 from the Transferor Lender or (at the Agent's option) the Transferee Lender.

26.12 Sub-participation; subrogation assignment. A 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 Borrowers, any Security Party, the Agent or the Security Trustee or any other Creditor Party; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them.

26.13 Disclosure of information. A Lender may disclose to a potential Transferee Lender or sub-participant any information necessary to effect the relevant transaction which the Lender has received in relation to any of the Borrowers, any Security Party or their affairs under or in connection with any Finance Document, provided that the potential Transferee Lender or sub-participant shall have first signed an adherence letter to that Lender's non disclosure agreement..

26.14 Change of lending office. A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:

(a) the date on which the Agent receives the notice; and

(b) the date, if any, specified in the notice as the date on which the change will come into effect.

26.15 Notification. On receiving such a notice, the Agent shall notify the Borrowers and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.

26.16 Security over Lenders' rights. In addition to the other rights provided to Lenders under this Clause 26, each Lender may without consulting with or obtaining consent from the Borrowers or any Security Party, 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

- 66 -

under any Finance Document to secure obligations of that Lender including, without limitation:

(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 Lender as a party to any of the Finance Documents; or

(ii) require any payments to be made by the Borrowers or any Security Party 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.

26.17 Consent to disclosure.  Each of the Borrowers authorises any of the Lenders to disclose all information related or connected to:

(a) the Ships or any other vessel owned or operated by a Security Party;

(b) the negotiation, drafting and content of this Agreement and the Finance Documents;

(c) the Loan; or

(d) any Security Party,

to any service provider (included but not limited to professional advisers, auditors, lawyers, accountants, surveyors, valuers, insurers, insurance advisers and brokers) which any of the Lenders may in its discretion deem necessary or desirable in connection with this Agreement or any other Finance Documents and/or the protection or enforcement of its rights thereunder.

27. VARIATIONS AND WAIVERS

27.1 Variations, waivers etc. by Majority Lenders. Subject to Clause 27.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party'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 Borrowers, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.

27.2 Variations, waivers etc. requiring agreement of all Lenders. However, as regards the following, Clause 27.1 applies as if the words "by the Agent on behalf of the Majority Lenders" were replaced by the words "by or on behalf of every Lender and each Swap Bank":

(a) a reduction in the Margin;

(b) a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees, or other sums payable under this Agreement;

(c) an increase in any Lender's Commitment;

- 67 -

(d) a change to the definition of "Majority Lenders", "Finance Documents", "Restricted Party", "Sanctions", "Sanctions Authority" or "Sanctions List";

(e) a change to the preamble or to Clause 2, 3, 4, 5.1, 11.19, 11.20, 11.21, 17, 19 or 30;

(f) a change to Clause 3 or this Clause 27;

(g) any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and

(h) any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required.

27.3 Exclusion of other or implied variations. Except for a document which satisfies the requirements of Clauses 27.1 and 27.2, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) 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 any of the Borrowers or a 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.

27.4 Notification of Variation or Waiver. No variation or waiver may be made before the date falling ten (10) Business Days after the terms of that variation or waiver have been notified by the Agent to the Lenders, unless each Lender is a FATCA Protected Lender. The Agent shall notify the Lenders reasonably promptly of any variations or waivers proposed by the Borrowers.

27.5 Variation or Waiver: FATCA.

(a) Notwithstanding the foregoing, if the Agent or a Lender reasonably believes that an amendment or waiver may constitute a "material modification" for the purposes of FATCA that may result (directly or indirectly) in a Party being required to make a FATCA Deduction and the Agent or that Lender (as the case may be) notifies the Borrower and the Agent accordingly, that amendment or waiver may, subject to paragraph (b) below, not be effected without the consent of the Agent or that Lender (as the case may be).

(b) The consent of a Lender shall not be required pursuant to paragraph (a) above if that Lender is a FATCA Protected Lender.

28. NOTICES

28.1 General. 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.

- 68 -

28.2 Addresses for communications. A notice by letter or fax shall be sent:

(a)	to a Borrower:	c/o TMS Bulkers Ltd.
		11 Fragoklissias Street
		151 24 Marousi
		Greece
		Email: finance@tms-management.org
(b)	to a Lender/Swap Bank:	At the address below its name in Schedule 1 or
		Schedule 2 or (as the case may require) in the relevant Transfer Certificate;
(c)	to the Arranger and	ABN AMRO Bank N.V.
	Security Trustee:	93 Coolsingel
		3012 AE
		Rotterdam
		The Netherlands
		Fax No: +31 10 401 5323
		Attn: Global Transportation and Logistics
(d)	to the Agent:	ABN AMRO Bank N.V.
		Daalsesingel 71
		3511 SW Utrecht
		The Netherlands, EA8550
		Fax: +31 20 628 6985
		Email: agency.shipping@nl.abnamro.com
		Attn: Agency Syndicated Loans (PAC EA 8550)

or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or the Security Trustee, the Borrowers, the Lenders, the Swap Banks and the Security Parties.

28.3 Effective date of notices. Subject to Clauses 28.4 and 28.5:

(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;

(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.

28.4 Service outside business hours. However, if under Clause 28.3 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 28.5) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.

28.5 Illegible notices. Clauses 28.3 and 28.4 do not apply if the recipient of a notice notifies the sender within one 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.

- 69 -

28.6 Valid 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.

28.7 Electronic communication.

(a) Any communication to be made between the Agent and a Lender or a Swap Bank under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Lender:

(i) agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

(ii) 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

(iii) notify each other of any change to their respective addresses or any other such information supplied to them.

(b) Any electronic communication made between the Agent and a Lender or a Swap Bank will be effective only when actually received in readable form and, in the case of any electronic communication made by a Creditor Party to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose

28.8 English language. Any notice under or in connection with a Finance Document shall be in English.

28.9 Meaning of "notice". In this Clause 28, "notice" includes any demand, consent, authorisation, approval, instruction, waiver or other communication.

28.10 Use of websites.

(a) 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 the Intralinks or Debt domain system or other electronic website designated by the Agent (the "Designated Website").

(b) The Agent shall supply each Lender and each Borrower 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.

(c) The Borrowers and the Lenders shall promptly upon any of them becoming aware of its occurrence notify the Agent if:

(i) the Designated Website cannot be accessed due to technical failure;

(ii) the password specifications for the Designated Website change;

- 70 -

(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) the Borrowers or any 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.

If the Agent is notified under paragraphs (i) or (v) above, and until the Agent and each Lender is satisfied that the circumstances giving rise to the notification are no longer continuing, (aa) 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 (bb) 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.

29. SUPPLEMENTAL

29.1 Rights cumulative, non-exclusive. The rights and remedies which the Finance Documents give to each Creditor Party 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.

29.2 Severability 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.

29.3 Third 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.

29.4 Counterparts. A Finance Document may be executed in any number of counterparts.

29.5 Parallel Debt.

(a) Each of the Borrowers irrevocably and unconditionally undertakes to pay to the Security Trustee amounts equal to, and in the currency or currencies of, its Corresponding Debt.

(b) The Parallel Debt of the Borrowers:

(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 29.5, the Security Trustee:

(i) is the independent and separate creditor of the Parallel Debt;

(ii) acts in its own name and not as agent, representative or trustee of the Creditor Parties and its claims in respect of the Parallel Debt shall not be held on trust; and

- 71 -

(iii) shall have the independent and separate right to demand payment of the 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 the Borrowers shall be (i) decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged and (ii) increased to the extent to that its Corresponding Debt has increased; and the Corresponding Debt of the Borrowers shall be (iii) decreased to the extent that its Parallel Debt has been irrevocably and unconditionally paid or discharged and (iv) increased to the extent that its Parallel Debt has increased, in each case provided that the Parallel Debt of the Borrowers shall never exceed its Corresponding Debt.

(e) All amounts received or recovered by the Security Trustee in connection with this Clause 29.5, to the extent permitted by applicable law, shall be applied in accordance with Clause 17 (Application of receipts).

(f) In this Clause 29.5:

(i) "Corresponding Debt"means any amount which each of the Borrowers owes to a Creditor Party under or in connection with the Finance Documents; and

(ii) "Parallel Debt"means any amount which each of the Borrowers owes to the Security Trustee under this Clause.

29.6 PATRIOT Act Notice.  Each of the Agent and the Lenders hereby notifies the Borrowers that pursuant to the requirements of the PATRIOT Act and the policies and practices of the Agent and each Lender, the Agent and each of the Lenders is required to obtain, verify and record certain information and documentation that identifies the Borrowers and each Security Party, which information includes the name and address of the Borrowers and each Security Party and such other information that will allow the Agent and each of the Lenders to identify the Borrowers and each Security Party in accordance with the PATRIOT Act.

30. JOINT AND SEVERAL LIABILITY

30.1 General. All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be joint and several.

30.2 No impairment of Borrowers' obligations. The liabilities and obligations of a Borrower shall not be impaired by:

(a) this Agreement being or later becoming void, unenforceable or illegal as regards any of the other Borrowers;

(b) any Lender or the Security Trustee entering into any rescheduling, refinancing or other arrangement of any kind with any of the other Borrowers;

(c) any Lender or the Security Trustee releasing any of the other Borrowers or any Security Interest created by a Finance Document; or

(d) any combination of the foregoing.

30.3 Principal debtors. Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no Borrower shall in any circumstances be construed to be a surety for the obligations of any of the other Borrowers under this Agreement.

- 72 -

30.4 Subordination. Subject to Clause 30.5, during the Security Period, none of the Borrowers shall:

(a) claim any amount which may be due to it from any other Borrower whether in respect of a payment made, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any Finance Document; or

(b) take or enforce any form of security from any other Borrower for such an amount, or in any other way seek to have recourse in respect of such an amount against any asset of any other Borrower; or

(c) set off such an amount against any sum due from it to any other Borrower; or

(d) prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving any other Borrower or other Security Party; or

(e) exercise or assert any combination of the foregoing.

30.5 Borrowers' required action. If during the Security Period, the Agent, by notice to a Borrower, requires it to take any action referred to in paragraphs (a) to (d) of Clause 30.4, in relation to any other Borrower, that Borrower shall take that action as soon as practicable after receiving the Agent's notice.

31. LAW AND JURISDICTION

31.1 English law. This Agreement (and any non-contractual obligations connected with it) shall be governed by, and construed in accordance with, English law.

31.2 Exclusive English jurisdiction. Subject to Clause 31.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement.

31.3 Choice of forum for the exclusive benefit of the Creditor Parties. Clause 31.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the right:

(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 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.

No Borrower shall commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with this Agreement.

31.4 Process agent. Each of the Borrowers irrevocably appoints Ince Process Agents Ltd at their registered office for the time being, presently at Aldgate Tower, 2 Leman Street, London El 8QN, 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.

31.5 Creditor Party rights unaffected. Nothing in this Clause 31 shall exclude or limit any right which any Creditor Party 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.

- 73 -

31.6 Meaning of "proceedings". In this Clause 31, "proceedings"means proceedings of any kind, including an application for a provisional or protective measure.

AS WITNESS the hands of the duly authorised officers or attorneys of the parties the day and year first before written.

- 74 -

SCHEDULE 1

LENDERS AND COMMITMENTS

Lender	Lending Office	Commitment
ABN AMRO Bank N.V.	93 Coolsingel 3012 AE Rotterdam The Netherlands Fax No: +31 10 401 5323 Attn: Global Transportation and Logistics	$30,000,000

- 75 -

SCHEDULE 2

SWAP BANKS

Swap Bank	Booking Office
ABN AMRO Bank N.V.	Gustav Mahlerlann 10, 1082 PP Amsterdam The Netherlands Fax No:- +31 10 459 05 38 Email: mdu@nl.abnamro.com

- 76 -

SCHEDULE 3

DRAWDOWN NOTICE

To:          ABN AMRO Bank N.V.

93 Coolsingel 3012 AE

Rotterdam

The Netherlands

Attention: Global Transportation and Logistics

2018

DRAWDOWN NOTICE

1. We refer to the loan agreement (the "Loan Agreement") dated                                     2018 and made between (1) ourselves as joint and several Borrowers, (2) the Lenders and the Swap Banks referred to therein and (3) yourselves as Arranger, Agent and as Security Trustee in connection with a senior secured term loan of up to US$30,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.

2.          We request to borrow as follows:

(a)          Amount: US$[                  ];

(b)          Drawdown Date: [                ] 2018;

(c)          Duration of the first Interest Period shall be [          ] months;

(d) Payment instructions : account of [                       ] and numbered [                   ] with [                 ] of [                ].

3. We represent and warrant that:

(a) the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing;

(b) no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.

4. This notice cannot be revoked without the prior consent of the Majority Lenders.

5. [We authorise you to deduct the arrangement fee and any accrued commitment fee referred to in Clause 20.1 from the amount of the Loan.]

________________________________________

Attorney-in-Factfor and on behalf ofAMATHUS OWNING COMPANY LIMITEDNOUFARO OWNERS INC.

- 77 -

SCHEDULE 4

CONDITION PRECEDENT DOCUMENTS

PART A

The following are the documents referred to in Clause 9.1(a):

1. A duly executed original of this Agreement, the Agency and Trust Deed, the Master Agreement, the Master Agreement Security Deed, the Corporate Guarantee, the Shares Pledges, [the Negative Pledge Letter] and the Accounts Pledges.

2. Copies of the certificate of incorporation and constitutional documents of each of the Borrowers, the Shareholder and the Corporate Guarantor, together with up to date evidence of the good standing of each of the Borrowers, the Shareholder and the Corporate Guarantor.

3. Originals of resolutions of the directors and (if required) shareholders of each of the Borrowers, the Shareholder and the Corporate Guarantor authorising the execution of each of the Finance Documents referred to at 1 above to which each of the Borrowers, the Shareholder and the Corporate Guarantor is a party and (in the case of the Borrowers) authorising named officers to give the Drawdown Notice and other notices under this Agreement.

4. The original of any power of attorney under which any Finance Document referred to at 1 above is executed on behalf of each of the Borrowers, the Shareholder and the Corporate Guarantor.

5. Copies of all consents which the Borrowers or any Security Party requires to enter into, or make any payment under, any Finance Document.

6. All documentation required by the Agent in respect of the Borrowers, the Shareholder and the Corporate Guarantor and any other Security Party pursuant to each Lender's "Know Your Customer" requirements, together with such other documents or evidence as the Lenders may reasonably require with respect to money laundering regulations and PATRIOT Act and OFAC compliance requirements, including (but not limited to) copies of the passports of the directors and officers of the Borrowers.

7. A copy of any Time Charter (and all addenda thereto), together with evidence of authorisation with respect to the execution thereof by the relevant Borrower and (if available) by the Time Charterer.

S. Documentary evidence that the agent for service of process named in Clause 30 of this Agreement has accepted its appointment.

9. 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.

10. The originals of any mandates or other documents required in connection with the opening and operation of the Operating Accounts and the Retention Account.

11. Receipt by the Agent and the Arranger of all fees and commitment commission due under Clause 20 of this Agreement.

12. If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.

- 78 -

PART B

The following are the documents referred to in Clause 9.1(b):

1. A duly executed original of the Mortgage, the Deed of Covenant and the General Assignment over "JUDD" (together with all notices of assignment and acknowledgements required thereunder), together with original resolutions of directors/shareholders and a power of attorney of Noufaro with respect to the execution of such Finance Documents by Noufaro.

2. Documentary evidence that:

(a) "JUDD" is definitively and permanently registered in the name of Noufaro under the Approved Flag;

(b) "JUDD" is in the absolute and unencumbered ownership of Noufaro save as contemplated by the Finance Documents relating to that Ship;

(c) "JUDD" is classed with the highest available class with Lloyd's Register of Shipping (or IACS equivalent) free of outstanding recommendations and conditions of such classification society in accordance with the provisions of Clause 14.3 (b);

(d) the Mortgage in respect of "JUDD" has been executed by Noufaro and has been, or will immediately following drawdown of the Loan be, registered against that Ship as a valid first priority ship mortgage in accordance with the laws of the Approved Flag State; and

(e) "JUDD" is insured in accordance with the provisions of this Agreement and all requirements therein in respect of Insurances shall have been complied with.

3. Documents establishing that "JUDD" is managed by the Approved Manager on terms acceptable to the Agent, together with:

(a) the Approved Manager's Undertaking in respect of that Ship, together with a copy of the ship management agreement for that Ship;

(b) copies of the Document of Compliance and Safety Management Certificate and ISSC;

(c) copies of such other ISM Code or ISPS Code documentation as the Agent may by written notice to Noufaro have requested not later than 2 days before the Drawdown Date;

(d) subordination letters from any other co-assureds named in the insurance policies for that Ship (other than Noufaro and the Approved Manager), in the form required by the Agent; and

(e) a copy of the Inventory of Hazardous Materials in respect of "JUDD" or, if no such copy is available, a letter issued by Noufaro in favour of the Agent undertaking to provide the Agent with a copy of such Inventory of Hazardous Materials at the time of the next scheduled dry-docking of "JUDD".

4. Two valuations of "JUDD" addressed to the Agent (at the cost and the expense of the Borrowers), prepared in accordance with Clause 15 of this Agreement and not older than fourteen (14) days prior to the Drawdown Date, in a form satisfactory to the Agent.

5. Evidence that the sum of US$500,000 is standing to the credit of the Operating Account held by Noufaro with the Agent, by way of required minimum free liquidity pursuant to the provisions of Clause 12.5 of this Agreement.

- 79 -

6. A favourable opinion from an independent insurance consultant appointed by the Agent on such matters relating to the Insurances for "JUDD" as the Agent may require, and at the cost and expense of the Borrowers.

7. A duly executed original of the Mortgage, the Deed of Covenant and the General Assignment over "RARAKA" (together with all notices of assignment and acknowledgements required thereunder), together with original resolutions of directors/shareholders and a power of attorney of Amathus with respect to the execution of such Finance Documents by Amathus.

8. Documentary evidence that:

(a) "RARAKA" is definitively and permanently registered in the name of Amathus under the Approved Flag;

(b) "RARAKA" is in the absolute and unencumbered ownership of Amathus save as contemplated by the Finance Documents relating to that Ship;

(c) "RARAKA" is classed with the highest available class with Lloyd's Register of Shipping (or IACS equivalent) free of outstanding recommendations and conditions of such classification society in accordance with the provisions of Clause 14.3 (b);

(d) the Mortgage in respect of "RARAKA" has been executed by Amathus and has been, or will immediately following drawdown of the Loan be, registered against that Ship as a valid first priority ship mortgage in accordance with the laws of the Approved Flag State; and

(e) "RARAKA" insured in accordance with the provisions of this Agreement and all requirements therein in respect of Insurances shall have been complied with.

9. Documents establishing that "RARAKA" is managed by the Approved Manager on terms acceptable to the Agent, together with:

(a) the Approved Manager's Undertaking in respect of that Ship and a copy of the ship management agreement for that Ship;

(b) copies of the Document of Compliance and Safety Management Certificate and ISSC;

(c) copies of such other ISM Code or ISPS Code documentation as the Lender may by written notice to Amathus have requested not later than 2 days before the Drawdown Date;

(d) subordination letters from any other co-assureds named in the insurance policies for that Ship (other than Amathus and the Approved Manager), in the form required by the Agent; and

(e) a copy of the inventory of hazardous materials in respect of "RARAKA".

10. Two valuations of "RARAKA" addressed to the Agent (at the cost and the expense of the Borrowers), prepared in accordance with Clause 15 of this Agreement and not older than fourteen (14) days prior to the Drawdown Date, in a form satisfactory to the Agent.

11. Evidence that the sum of US$500,000 is standing to the credit of the Operating Account held by Amathus with the Agent, by way of required minimum free liquidity pursuant to the provisions of Clause 12.5 of this Agreement.

12. A favourable opinion from an independent insurance consultant appointed by the Agent on such matters relating to the Insurances for "RARAKA" as the Agent may require, and at the cost and expense of the Borrowers.

- 80 -

13. Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Republic of Malta and such other relevant jurisdictions as the Agent may require.

14. Receipt by the Agent of all commitment commission and any other fees due under Clause 20 of this Agreement.

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 Borrowers.

- 81 -

SCHEDULE 5

DESIGNATION NOTICE

To:          ABN AMRO Bank N.V.

Daalsesingel 713511 SW UtrechtThe Netherlands, EA 8550 Attn: Agency Syndicated Loans (PAC EA 8550)

2018

Dear Sirs,

Loan Agreement dated                             2018 (the "Loan Agreement") and made between (i) Amathus Owning Company Limited and Noufaro Owners Inc. as joint and several Borrowers, (ii) the Lenders, (iii) the Swap Bank, (iv) and yourselves as Agent, Arranger, Swap Bank and Security Trustee

We refer to:

1 the Loan Agreement;

2 the Master Agreement dated as of                       2018 made between ourselves and ABN AMRO Bank N.V.; and

3 a Confirmation delivered pursuant to the said Master Agreement dated                            2018 and addressed by ABN AMRO Bank N.V. to us.

In accordance with the terms of the Loan Agreement, we hereby give you notice of the said Confirmation and hereby confirm that the Transaction evidenced by it will be designated as a "Designated Transaction" for the purposes of the Loan Agreement and the Finance Documents.

Yours faithfully,

____________________________________

for and on behalf of

AMATHUS OWNING COMPANY LIMITED

NOUFARO OWNERS INC.

- 82 -

SCHEDULE 6

TRANSFER CERTIFICATE

The Transferor and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.

To: ABN AMRO Bank N.V. for itself and for and on behalf of each Borrower, each Security Party, the Security Trustee, each Lender and each Swap Bank, as defined in the Loan Agreement referred to below.

1. This Certificate relates to a Loan Agreement (the "Loan Agreement") dated 2018 and made between (1) Amathus Owning Company Limited and Noufaro Owners Inc., as joint and several borrowers (together the "Borrowers"), (2) the banks and financial institutions named therein as Lenders, (3) the banks and financial institutions named therein as Swap Banks and (4) ABN AMRO Bank N.V. as Arranger, Agent and Security Trustee, for a secured term loan of up to US$30,000,000.

2. In this Certificate:

"the Relevant Parties"means the Agent, each Borrower, each Security Party, the Security Trustee, each Lender and each Swap Bank;

"the Transferor"means [full name] of [lending office];

"the Transferee"means [full name] of [lending office].

Terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings when used in this Certificate.

3. The effective date of this Certificate is                    Provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date.

4. The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document in relation to [         ] per cent. of the Contribution outstanding to the Transferor (or its predecessors in title) which is set out below:

Contribution                                                                                          Amount transferred

5. By virtue of this Transfer Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[         ]] [from [         ] per cent. of its Commitment, which percentage represents $[         ]] and the Transferee acquires a Commitment of $[         ].

6. The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents which Clause 26 of the Loan Agreement provides will become binding on it upon this Certificate taking effect.

- 83 -

7. The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 26 of the Loan Agreement.

8. The Transferor:

(a) warrants to the Transferee and each Relevant Party that:

(i) the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are required in connection with this transaction; and

(ii) this Certificate is valid and binding as regards the Transferor;

(b) warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4;

(c) undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose.

9. The Transferee:

(a) confirms that it has received a copy of the Loan Agreement and each other Finance Document;

(b) agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Arranger, the Security Trustee, any Lender or any Swap Bank in the event that:

(i) the Finance Documents prove to be invalid or ineffective,

(ii) any Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under the Finance Documents;

(iii) it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of any of the Borrowers or any Security Party under the Finance Documents;

(c) agrees that it will have no rights of recourse on any ground against the Agent, the Arranger, the Security Trustee, any Lender or any Swap Bank in the event that this Certificate proves to be invalid or ineffective;

(d) warrants to the Transferor and each Relevant Party (i) that it has full capacity to enter into this transaction and has taken all corporate action and obtained all official consents which it needs to take or obtain in connection with this transaction; and (ii) that this Certificate is valid and binding as regards the Transferee; and

(e) confirms the accuracy of the administrative details set out below regarding the Transferee.

10. The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent's or the Security Trustee's own officers or employees.

- 84 -

11. The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 above as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it.

[Name of Transferor]	[Name of Transferee]
By:	By:
Date:	Date:

Agent

Signed for itself and for and on behalf of itself as Agent and for every other Relevant Party

ABN AMRO Bank N.V.

By:

Date:

- 85 -

Administrative Details of Transferee

Name of Transferee:

Lending Office:

Contact Person (Loan Administration Department):

Telephone:

Telex:

Fax:

Contact Person (Credit Administration Department):

Telephone:

Telex:

Fax:

Account for payments:

Note: This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor's interest in the security constituted by the Finance Documents in the Transferor's or Transferee's jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.

- 86 -

SCHEDULE 7

FORM OF COMPLIANCE CERTIFICATE

To:          ABN AMRO Bank N.V

Daalsesingel 71

3511 SW Utrecht

The Netherlands, EA 8550

Attn: Loans Administration

2018

Dear Sirs,

Loan Agreement dated                       2018 (the "Loan Agreement") made between (i) Amathus Owning Company Limited and Noufaro Owners Inc. as joint and several Borrowers, (ii) the Lenders and the Swap Banks referred to therein and (iii) ABN AMRO Bank N.V. as Arranger, Agent and Security Trustee in connection with a loan facility of up to $30,000,000.

Guarantee dated          2018 (the "Guarantee") made beteween DryShips Inc. as Guarantor and the Security Trustee.

Terms defined in the Loan Agreement and the Guarantee have their defined meanings when used in this Compliance Certificate.

We enclose with this certificate a copy of the [quarterly unaudited consolidated management prepared financial statements of the Obligors for the 3 month period ending on [               ]/[the annual audited consolidated financial statements of the Obligors for the financial year ending on [        ]]. The financial statements (i) have been prepared in accordance with all applicable laws and GAAP consistently applied, (ii) give a true and fair view of the state of affairs of the Obligors at the date of the financial statements and of their respective profit for the period to which the financial statements relate and (iii) fully disclose or provide for all significant liabilities of the Obligors.

We also enclose copies of (i) the relevant valuation certificates for the Ships (prepared in accordance with Clause 15.3 of the Loan Agreement) and (ii) the relevant valuation certificates for the other Fleet Vessels (prepared in accordance with Clause 15.3 of the Loan Agreement), which are used in calculating the Total Market Value Adjusted Assets of the Guarantor and the Fair Market Value of the Ships and the other Fleet Vessels as at [                    ].

Each of the Borrowers and the Guarantor represents that no 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]).]

We now certify that, as at [                    ]:

(a) the asset cover ratio under Clause 15.1 of the Loan Agreement is [               ]%;

(b) a minimum daily cash balance of $500,000 was maintained on each Operating Account (free of any Security Interest other than the Accounts Pledges) throughout the [3] [12] months ending as at the date to which the enclosed accounts are prepared;

(c) the Consolidated Leverage Ratio under clause 11.21 (a) of the Guarantee is [                    ];

(d) the minimum liquidity under clause 11.21 (b) of the Guarantee is $[                    ];

(e) the Working Capital under clause 11.21 (c) of the Guarantee is $[                    ]; and

(f) The Market Adjusted Net Worth under clause 11.21 (d) of the Guarantee is $[                    ].

- 87 -

We hereby repeat the representations and warranties set out in Clause 10 of the Loan Agreement and Clause 10 of the Guarantee, and confirm that they remain true and correct by reference to the facts and circumstances existing on the date of this Compliance Certificate.

This certificate shall be governed by, and construed in accordance with, English law.

Signed

_________________________

[                         ]

for and on behalf of

Amathus Owning Company Limited

Noufaro Owners Inc.

_________________________

[                         ] for and on behalf of

DryShips Inc.

- 88 -

EXECUTION PAGES

BORROWERS

SIGNED by Savvas Tournis	)
for and on behalf of	)	/s/ Savvas Tournis
AMATHUS OWNING COMPANY LIMITED	)
in the presence of:	)
/s/ Anastasia G. Pavli
Anastasia G. Pavli
Attorney-at-Law
52 Ag. Konstantinou Street – 151 24 Marousi
Athens, Greece
Tel: +30 210 6140580
SIGNED by Savvas Tournis	)
for and on behalf of	)	/s/ Savvas Tournis
NOUFARO OWNERS INC.	)
in the presence of:	)
/s/ Anastasia G. Pavli
Anastasia G. Pavli
Attorney-at-Law
52 Ag. Konstantinou Street – 151 24 Marousi
Athens, Greece
Tel: +30 210 6140580
LENDERS
SIGNED by Stelios Andreiotis	)
for and on behalf of	)	/s/ Stelios Andreiotis
ABN AMRO BANK N.V.	)
in the presence of:	)
/s/ Anastasia G. Pavli
Anastasia G. Pavli
Attorney-at-Law
52 Ag. Konstantinou Street – 151 24 Marousi
Athens, Greece
Tel: +30 210 6140580
SWAP BANKS
SIGNED by Stelios Andreiotis	)
for and on behalf of	)	/s/ Stelios Andreiotis
ABN AMRO BANK N.V.	)
in the presence of:	)
/s/ Anastasia G. Pavli
Anastasia G. Pavli
Attorney-at-Law
52 Ag. Konstantinou Street – 151 24 Marousi
Athens, Greece
Tel: +30 210 6140580
ARRANGER
SIGNED by Stelios Andreiotis	)
for and on behalf of	)	/s/ Stelios Andreiotis
ABN AMRO BANK N.V.	)
in the presence of:	)
/s/ Anastasia G. Pavli
Anastasia G. Pavli
Attorney-at-Law
52 Ag. Konstantinou Street – 151 24 Marousi
Athens, Greece
Tel: +30 210 6140580
AGENT
SIGNED by Stelios Andreiotis	)
for and on behalf of	)	/s/ Stelios Andreiotis
ABN AMRO BANK N.V.	)
in the presence of:	)
/s/ Anastasia G. Pavli
Anastasia G. Pavli
Attorney-at-Law
52 Ag. Konstantinou Street – 151 24 Marousi
Athens, Greece
Tel: +30 210 6140580
SECURITY TRUSTEE
SIGNED by Stelios Andreiotis	)
for and on behalf of	)	/s/ Stelios Andreiotis
ABN AMRO BANK N.V.	)
in the presence of:	)
/s/ Anastasia G. Pavli
Anastasia G. Pavli
Attorney-at-Law
52 Ag. Konstantinou Street – 151 24 Marousi
Athens, Greece
Tel: +30 210 6140580

- 89 -

EX-4.80

Exhibit 4.80

SHARE PURCHASE AGREEMENT

This Share Purchase Agreement ("Agreement"), dated as of 15^th day of May 2017, is made by and between OIL TANKERS INVESTMENTS INC. of Marshall Islands (the "Buyer"), whose performance is hereby guaranteed by Dryships Inc. (the "Buyer's Guarantor") and CECILIA SHIPHOLDINGS LIMITED, a corporation organized under the laws of the Republic of the Marshall Islands (the "Seller") whose performance is hereby guaranteed by TMS Tankers Ltd. (the "Seller's Guarantor").

RECITALS

WHEREAS, the Seller directly owns shares, constituting all of the issued and outstanding capital stock of Cecilia Owning Company Limited, a corporation organized under the laws of the Republic of Marshall Islands (the "Owner");

WHEREAS, the Owner has entered into a Memorandum of Agreement dated 27^th April 2017 with China Shipbuilding Trading Company Limited ("CSTC") and Shanghai Waigaoqiao Shipbuilding Company Limited ("SWC") as sellers (the "MOA") for the acquisition of one crude oil tanker bearing Hull Number 1393 (the "Vessel").

WHEREAS, by a deed of agreement dated 10^th May 2017 and entered into by and among the Buyer's Guarantor, the Seller and the Seller's Guarantor (the "Sales Agreement"), it was agreed, inter alia, that the Buyer's Guarantor, will purchase the shares of the Owner for a price of United States Dollars Sixty Four Million (US$ 64,000,000.00) (the "Purchase Price") and charter back the Vessel to the Seller as per the terms referred at the Sales Agreement. As security for the performance of such transaction, the Seller shall hand over the share certificates of the Owner to the Buyer's Guarantor and the Buyer's Guarantor will pay out of the Purchase Price an amount of United States Dollars Forty Four Million (US$ 44,000,000.00) to a Seller's nominated bank account/beneficiary.

WHEREAS, the Buyer's Guarantor hereby designates the Buyer to become the buyer of all the issued and outstanding capital stock of the Owner and the Buyer and the Seller accept such designation.

WHEREAS, the Seller wishes to sell and Buyer wishes to buy, all of the issued outstanding capital stock of the Owner (the "Shares"), on the terms and conditions contained herein;

NOW, THEREFORE, in consideration of the premises and the respective representations, warranties, covenants and agreements stated herein, the parties agree as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used in this Agreement have the meanings specified in (a) the preamble, (b) the recitals, (c) this Article I or (d) elsewhere in this Agreement, as the case may be:

Banking Day means a day other than Saturday, Sunday or other day on which commercial banks located in London, Piraeus and New York City are authorized or required by applicable law to close.

Claim means any claim, demand, assessment, judgment, order, decree, action, cause of action, litigation, suit, investigation or other Proceeding.

Laws means all statutes, treaties, codes, ordinances, decrees, rules, regulations, municipal bylaws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards, policies, certificates, codes, licenses, permits, approvals, guidelines, voluntary restraints, inspection reports, or any provisions of such laws, including general principles of common law and equity and the requirements of all Governmental Bodies, binding or affecting the Person referred to in the context in which such word is used; and "Law" means any one of them.

Lien means (whether the same is consensual or nonconsensual or arises by contract, operation of law, legal process or otherwise): (i) any mortgage, lien, security interest, pledge, attachment, levy or other charge or encumbrance of any kind thereupon or in respect thereof; or (ii) any other arrangement under which the same is transferred, sequestered or otherwise identified with the intention of subjecting the same to, or making the same available for, the payment or performance of any liability in priority to the payment of the ordinary, unsecured creditors, and which under applicable law has the foregoing effect, including any adverse Claim.

Orders means judgments, writs, decrees, compliance agreements, injunctions, rules, awards, settlement agreements or orders of any governmental body or arbitrator.

Person means any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, government or agency or subdivision thereof or any other entity.

Proceeding means an action, suit, litigation, claim, investigation, legal, administrative or arbitration proceeding.

ARTICLE II

PURCHASE OF SHARES; CLOSING

Section 2.1          Purchase of Shares. Upon the terms and subject to the conditions of this Agreement, and on the basis of the representations and warranties hereinafter set forth, the Seller agrees to sell, transfer, convey, assign and deliver to the Buyer, and the Buyer agrees to acquire and buy from the Seller, the Shares.

Section 2.2          Closing. Against receipt of the Purchase Price for the Shares or upon such other date as may be agreed in writing by the parties hereto (the "Closing Date"), the transfer of the Shares shall take place and the Seller shall deliver to the Buyer original share certificates representing all the Shares of the Seller to the order of the Buyer.

Section 2.3          Purchase Price. The Purchase Price for the Shares that shall be paid by the Buyer to the Seller shall consist of an amount of United States Dollars Sixty Four Million (US$ 64,000,000.00), out of which an amount of United States Dollars Forty Four Million (US$ 44,000,000.00) of the Purchase Price has been paid to a Seller's nominated bank account/beneficiary pursuant to the Sales Agreement and the balance thereof will be paid by the Buyer to the Seller on the date of this Agreement. Any adjustment of the Purchase Price shall be mutually agreed by the Seller and the Buyer and the Purchase Price will be adjusted accordingly.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

The Seller hereby represents and warrants to the Buyer on the date hereof and as of the Closing Date as follows:

Section 3.1          Organization of the Seller. The Seller is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.

Section 3.2          Organization of the Owner. (a) The Owner is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted. (b) The Seller has heretofore delivered to the Buyer complete and correct copies of the constitutional documents of the Owner as currently in effect and the other corporate records. The corporate records are accurate in all material respects and all corporate proceedings and actions reflected therein have been conducted or taken in compliance with all applicable Laws and in compliance with the constitutional documents.

Section 3.3          Authority of the Seller. (a) The Seller has full legal capacity, right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; (b) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action taken on the part of the Seller and no other corporate proceedings on the part of the Seller is necessary to authorize this Agreement or to consummate the transactions contemplated hereby; and (c) that this Agreement has been duly and validly executed and delivered by the Seller and constitutes a valid and binding obligation of the Seller, enforceable against it in accordance with its terms.

Section 3.4          Capitalization.(a)Schedule 1 sets forth the amount of authorized capital stock and the amount of the issued and outstanding shares of capital stock of the Owner. The Shares constitute all of the issued and outstanding common shares of the Owner; all such common shares are duly authorized, validly issued, fully paid and non-assessable and are owned legally and beneficially by the Seller, as set forth on Schedule 1. Other than this Agreement, there is no subscription, option, warrant, preemptive right, call right or other right, agreement or commitment of any nature relating to the voting, issuance, sale, delivery or transfer (including any right of conversion or exchange under any outstanding security or other instruments) by the

Seller of the Shares, and there is no obligation on the part of the Seller to grant, extend or enter into any of the foregoing.

Section 3.5 Ownership of Purchased Shares. The Seller owns the Shares free and clear of all Liens or other limitations affecting the Seller's ability to vote such shares or to transfer such shares to the Buyer.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to the Sellers as of the date hereof and as of the Closing Date as follows:

Section 4.1          Organization. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the Republic the Marshall Islands and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now conducted.

Section 4.2          Authority. (a) Buyer has the full legal capacity, right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; (b) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action taken on the part of the Buyer and no other corporate proceedings on the part of the Buyer is necessary to authorize this Agreement or to consummate the transactions contemplated hereby; and (c) this Agreement has been duly and validly executed and delivered by the Buyer and constitutes a valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms.

ARTICLE V COVENANTS

Section 5.1          Conduct of Business Pending Closing. Buyer and Seller agree that between the date of the execution of this Agreement and the Closing Date, (i) the Seller shall conduct the business and maintain and preserve the assets of the Seller in the ordinary course of business; and (ii) the Buyer and the Seller shall use their reasonable efforts to cause all of the representations and warranties in Article III hereof to continue to be true and correct.

ARTICLE VI

CONDITIONS TO CLOSING

Section 6.1          Conditions to Obligations of Buyer. The obligations of the Buyer to consummate the transactions contemplated herein are subject to satisfaction of the following conditions:

(a)          Consents. All consents and approvals required in connection with the execution, delivery and performance of this Agreement shall have been obtained.

(b)          Compliance. The Seller shall have complied with its covenants and agreements contained herein, and the representations and warranties contained in Article III hereof shall be true and correct in all material respects (except those representations and warranties qualified by materiality shall be true and correct in all respects) on the date hereof and as of the Closing Date.

Section 6.2          Conditions to Obligations of the Seller. The obligations of the Seller to consummate the transactions contemplated herein are subject to satisfaction of the following conditions:

(a)          Purchase Price. Subject to the fulfillment of the conditions of Section 6.1, the Buyer shall advance to the Seller the Purchase Price under Section 2.3.

(b)          Corporate records. The Seller shall have delivered to the Buyer all resolutions passed by the Board of Directors since the incorporation.

(c)          Compliance. Buyer shall have complied with its covenants and agreements contained herein, and the representations and warranties contained in Article IV hereof shall be true and correct in all material respects (except those representations and warranties qualified by materiality shall be true and correct in all respects) on the date hereof and as of the Closing Date.

(d)          Consents. All consents and approvals required in connection with the execution, delivery and performance of this Agreement shall have been obtained.

ARTICLE VII

TERMINATION

Section 7.1          Grounds for Termination. This Agreement may be terminated at any time prior to the Closing Date:

(a)          By the mutual written agreement of the Buyer and the Seller;

(b)          By the Buyer if any of the conditions set forth in Section 6.1 hereof shall have become incapable of fulfillment and shall not have been waived by Buyer;

(c)          By the Seller if any of the conditions set forth in Section 6.2 hereof shall have become incapable of fulfillment and shall not have been waived by the Seller;

ARTICLE VIII

GENERAL PROVISIONS

Section 8.1          Entire Agreement This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof. This Agreement may not be modified, amended or terminated except by a written instrument specifically referring to this Agreement signed by all the parties hereto.

Section 8.2          Execution of Further Documents. Each party agrees to execute all documents necessary to carry out the purpose of this Agreement and to cooperate with each other for the expeditious fulfilment of the terms of this Agreement.

Section 8.3          Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been received only if and when (a) personally delivered, (b) on the fifth day after mailing, by mail, first class, postage prepaid or by certified mail return receipt requested, addressed in each case as follows (or to such other address as may be specified by like notice), (c) at the time receipt is acknowledged when delivered by private mail or courier service or (d) received by facsimile at the phone number listed below:

(a)          If to Buyer to:

c/o Dryships Inc.

Athens licensed shipping office

109 Kifissias Avenue and Sina street

GR 151 24, Marousi,Athens, Greece

(b)          If to Seller to:

c/o TMS Tankers Ltd.

Athens licensed shipping office

80 Kifisias Avenue

GR 151 25, Marousi, Athens, Greece

Section 8.4 Choice of Law; Resolution of Disputes. This Agreement shall be governed by and construed under the laws of England and Wales. All disputes, differences, controversies or claims arising out of or in connection with this Agreement shall be referred to arbitration in London, England in accordance with the rules of the London Maritime Arbitrators Association (LMAA).

Section 8.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

For the Buyer
By:	/s/ Dimitrios Dreliozis
Name:	Dimitrios Dreliozis
Title:	Attorney-in-fact

For the Seller
By:	/s/ Georgios Kourelis
Name:	Georgios Kourelis
Title:	Attorney-in-fact

For the Seller's guarantor
By:	/s/ Georgios Kourelis
Name:	Georgios Kourelis
Title:	Attorney-in-fact

For the Buyer's guarantor
By:	/s/ Dimitrios Dreliozis
Name:	Dimitrios Dreliozis
Title:	Vice President-Finance

Schedule 1

CAPITALIZATION

CECILIA OWNING COMPANY LIMITED

Total authorized share capital:

500 registered shares with par value $20.00 per share

Total issued and outstanding share capital:

500 common shares, par value $20.00 per share, registered in the name of CECILIA SHIPHOLDINGS LIMITED

EX-4.81

Exhibit 4.81

MEMORANDUM OF AGREEMENT

Norwegian Shipbrokers' Association's

Memorandum of Agreement  for sale and

purchase of ships. Adopted by BIMCO in 1956.

Code-name

SALEFORM 2012

Revised 1966, 1983 and 1986/87, 1993 and 2012

Dated:  2 April March2018

ORION OWNERS INC., a corporation incorporated and existing under the laws of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (Name of sellers), hereinafter called the "Sellers", have agreed to sell, and

SEA 46 LEASING CO. LIMITED, a company incorporated and existing under the laws of Hong Kong having its registered office at Room 1803-1804, 18F Bank of America Tower, 12 Harcourt Road, Central, Hong Kong (Name of buyers), hereinafter called the "Buyers", have agreed to buy:

Name of vessel:  KELLY

IMO Number:  9768227

Classification Society:  American Bureau of Shipping

Class Notation:  Al,Bulk Carrier, BC-A,ESP,AMS,ACCU,CSR,CPS UWILD, CRC(I), GRAB 20, TCM, BWT Unrestricted Service

Year of Build: 2017 Builder/Yard:  Hudong Zhonghua Shipbuilding & Shanghai Shipyard Co.

Flag:  Marshall Islands Place of Registration:  Majuro GT/NT:  43,301 / 27,348

hereinafter called the "Vessel", on the following terms and conditions:

Definitions – see also Clause 29

"Agreement'' means this memorandum of agreement which shall for the avoidance of doubt, include the rider provisions from Clauses 19 to 29.

"Banking Days" are days on which banks are open both in the country of the currency stipulated for the Purchase Price in Clause 1 (Purchase Price) and in the place of closing stipulated in Clause 8

(Documentation) and _____________(add additional jurisdictions as appropriate).

"Buyers' Nominated Flag State" means Marshall Islands (state flag state).

"Cancelling Date" has the meaning given to that term in Clause 5.

"Conditions Precedent" has the meaning given to that term in Clause 8(a).

"Class" means the class notation referred to above.

"Classification Society" means the Society referred to above.

 "Dollars" or "$" mean United States dollars, being the lawful currency of the United States of America.

"Deposit" shall have the meaning given in Clause 2 (Deposit)

"Deposit Holder" means _________(state name and location of Deposit Holder) or, if left blank, the Sellers' Bank, which shall hold and release the Deposit in accordance with this Agreement.

"In writing" or "written" means a letter handed over from the Sellers to the Buyers or vice versa, a registered letter, e-mail or telefax.

"Parties" means the Sellers and the Buyers.

"PDA" has the meaning given to that term in Clause 8(g).

"Scheduled Delivery Date" has the meaning given to that term in Clause 8(d).

"Purchase Price" means the price for the Vessel as stated in Clause 1 (Purchase Price).

"Sellers' Account" means __________________ (state details of bank account) at the Sellers' Bank.

"Sellers' Bank" means (state name of bank, branch and details) or, if left blank, the bank notified by the Sellers to the Buyers for receipt of the balance of the Purchase Price.

1.	Purchase Price
	See Clause 29The Purchase Price is ____________ (state currency and amount both in words and figures).
2.	Deposit – intentionally omitted

	As security for the correct fulfilment of this Agreement the Buyers shall lodge a deposit of __%(__ per cent) or, if left blank, 10% (ten per cent), of the Purchase Price (the "Deposit") in an interest bearing account for the Parties with the Deposit Holder within three (3) Banking Days after the date that:
	(i)	this Agreement has been signed by the Parties and exchanged in original or by e-mail or telefax; and
	(ii)	the Deposit Holder has confirmed in writing to the Parties that the account has been opened.
	The Deposit shall be released in accordance with joint written instructions of the Parties. Interest, if any, shall be credited to the Buyers. Any fee charged for holding and releasing the Deposit shall be borne equally by the Parties. The Parties shall provide to the Deposit Holder all necessary documentation to open and maintain the account without delay.
3.	Payment
	See Clause 19On delivery of the Vessel, but not later than three (3) Banking Days after the date that Notice of Readiness has been given in accordance with Clause 5(Time and place of delivery and notices):
	(i)	the Deposit shall be released to the Sellers; and
	(ii)	the balance of the Purchase Price and all other sums payable on delivery by the Buyers to the Sellers under this Agreement shall be paid in full free of bank charges to the Sellers' Account.
4.	Inspection – intentionally omitted
	(a)* The Buyers have inspected and accepted the Vessel's classification records. The Buyers have also inspected the Vessel at/in __________ (state place) on ___________ (state date) and have accepted the Vessel following this inspection and the sale is outright and definite, subject only to the terms and conditions of this Agreement.
	(b)* The Buyers shall have the right to inspect the Vessel's classification records and declare whether same are accepted or not within ____________ (state date/period).
	The Sellers shall make the Vessel available for inspection at/in ________ (state place/range) within _______ (state date/period).
	The Buyers shall undertake the inspection without undue delay to the Vessel. Should the Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.
	The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.
	During the inspection, the Vessel's dock and engine log books shall be made available for examination by the Buyers.
	The sale shall become outright and definite, subject only to the terms and conditions of this Agreement, provided that the Sellers receive written notice of acceptance of the Vessel from the Buyers within seventy two (72) hours after completion of such inspection or after the date/last day of the period stated in Line 59, whichever is earlier.
	Should the Buyers fail to undertake the inspection as scheduled and/or notice of acceptance of the Vessel's classification records and/or of the Vessel not be received by the Sellers as aforesaid, the Deposit together with interest earned, if any, shall be released immediately to the Buyers, whereafter this Agreement shall be null and void.
	*4(a) and 4(b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 4(a) shall apply.
5.	Time and place of delivery and notices
	(a)  The Vessel shall be delivered and taken over safely afloat at sea or at a safe and accessible berth or in drydock or anchorage at/in worldwide without restrictions save subject to the trading limits specified in the Bareboat Charter (state place/range) in the Sellers' option but subject to the delivery of the Vessel in such place not causing the Buyers to incur additional tax liabilities to those that the Buyers would have incurred had the sale been completed in international waters.
	Notice of Readiness shall not be tendered before: _______ (date)
	Cancelling Date (see Clauses 5(c), 6 (a)(i), 6 (a)(iii)and 14): 30 April 2018 (or such later date as may be agreed by the Sellers and the Buyers in writing (the "Cancelling Date")

2

	(b)  The Sellers shall keep the Buyers well informed of the Vessel's itinerary and shall provide the Buyers with twenty (20), ten (10), five (5) and three (3) days' notice of the date the Sellers intend to tender Notice of Readiness and of the intended place of delivery.
	When the Vessel is, on a day being a Business Day, at the place of delivery and physically ready for delivery in accordance with this Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery.
	(c)  If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the Vessel will not be ready for delivery by the Cancelling Date they may notify the Buyers in writing stating the date when they anticipate that the Vessel will be ready for delivery and proposing a new Cancelling Date. Upon receipt of such notification the Buyers shall have the option of either cancelling this Agreement in accordance with Clause 14 (Sellers' Default) within three (3) BankingBusiness Days of receipt of the notice or of accepting the new date as the new Cancelling Date. If the Buyers have not declared their option within three (3) BankingBusiness Days of receipt of the Sellers' notification or if the Buyers accept the new date, the date proposed in the Sellers' notification shall be deemed to be the new Cancelling Date and shall be substituted for the Cancelling Date stipulated in line 79.
	If this Agreement is maintained with thea new Cancelling Date all other terms and conditions hereof including those contained in Clauses 5(b) and 5(d) shall remain unaltered and in full force and effect.
	(d)  Cancellation, failure to cancel or acceptance of thea new Cancelling Date shall be entirely without prejudice to any claim for damages the Buyers may have under Clause 14 (Sellers' Default) for the Vessel not being ready by the original Cancelling Date.
	(e) Should the Vessel become an actual, constructive or compromised tTotal lLoss before delivery the Deposit together with interest earned, if any, shall be released immediately to the Buyers whereafter this Agreement shall be null and void terminate (provided that any provision hereof expressed to survive such termination shall so do in accordance with its terms).
6.	Divers Inspection / Drydocking – intentionally omitted
	(a)*
	(i)	The Buyers shall have the option at their cost and expense to arrange for an underwater inspection by a diver approved by the Classification Society prior to the delivery of the Vessel. Such option shall be declared latest nine (9) days prior to the Vessel's intended date of readiness for delivery as notified by the Sellers pursuant toClause 5(b)of this Agreement. The Sellers shall at their cost and expense make the Vessel available for such inspection. This inspection shall be carried out without undue delay and in the presence of a Classification Society surveyor arranged for by the Sellers and paid for by the Buyers. The Buyers' representative(s) shall have the right to be present at the diver's inspection as observer(s) only without interfering with the work or decisions of the Classification Society surveyor. The extent of the inspection and the conditions under which it is performed shall be to the satisfaction of the Classification Society. If the conditions at the place of delivery are unsuitable for such inspection, the Sellers shall at their cost and expense make the Vessel available at a suitable alternative place near to the delivery port, in which event the Cancelling Date shall be extended by the additional time required for such positioning and the subsequent re-positioning. The Sellers may not tender Notice of Readiness prior to completion of the underwater inspection.
	(ii)	If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel's class, then (1) unless repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers shall arrange for the Vessel to be drydocked at their expense for inspection by the Classification Society of the Vessel's underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society's rules (2) such defects shall be made good by the Sellers at their cost and expense to the  satisfaction of the Classification Society without condition/recommendation** and (3) the Sellers shall pay for underwater inspection and the Classification Society's attendance.
		Notwithstanding anything to the contrary in this Agreement, if the Classification Society do not require the aforementioned defects to be rectified before the next class  drydocking survey, the Sellers shall be entitled to deliver the Vessel with these defects against a deduction from the Purchase Price of the estimated direct cost (of labour and materials) of carrying out the repairs to the satisfaction of the Classification Society, whereafter the Buyers shall have no further rights whatsoever in respect of the defects

3

	and/or repairs. The estimated direct cost of the repairs shall be the average of quotes for the repair work obtained from two reputable independent shipyards at or in the vicinity of the port of delivery, one to be obtained by each of the Parties within two (2) Banking Days from the date of the imposition of the condition/recommendation, unless the Parties agree otherwise. Should either of the Parties fail to obtain such a quote within the stipulated time then the quote duly obtained by the other Party shall be the sole basis for the estimate of the direct repair costs. The Sellers may not tender Notice of Readiness prior to such estimate having been established.
(iii)	If the Vessel is to be drydocked pursuant to Clause 6(a)(ii) and no suitable dry-docking facilities are available at the port of delivery, the Sellers shall take the Vessel to a port where suitable drydocking facilities are available, whether within or outside the delivery range as per Clause 5(a). Once drydocking has taken place the Sellers shall deliver the Vessel at a port within the delivery range as per Clause 5(a) which shall, for the purpose of this Clause, become the new port of delivery. In such event the Cancelling Date shall be extended by the additional time required for the drydocking and extra steaming, but limited to a maximum of fourteen (14) days.
(b)* The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the Classification Society of the Vessel's underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society's rules. If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel's class, such defects shall be made good at the Sellers' cost and expense to the satisfaction of the Classification Society without condition/recommendation**. In such event the Sellers are also to pay for the costs and expenses in connection with putting the Vessel in and taking her out of drydock, including the drydock dues and the Classification Society's fees. The Sellers shall also pay for these costs and expenses if parts of the tailshaft system are condemned or found defective or broken so as to affect the Vessel's class. In all other cases, the Buyers shall pay the aforesaid costs and expenses, dues and fees.
(c)  If the Vessel is drydocked pursuant to Clause 6(a)(ii) or 6(b) above:
(i)	The Classification Society may require survey of the tailshaft system, the extent of the survey being to the satisfaction of the Classification surveyor. If such survey is not required by the Classification Society, the Buyers shall have the option to require the tailshaft to be drawn and surveyed by the Classification Society, the extent of the survey being in accordance with the Classification Society's rules for tailshaft survey and  consistent with the current stage of the Vessel's survey cycle. The Buyers shall declare whether they require the tailshaft to be drawn and surveyed not later than by the completion of the inspection by the Classification Society. The drawing and refitting of the tailshaft shall be arranged by the Sellers. Should any parts of the tailshaft system be condemned or found defective so as to affect the Vessel's class, those parts shall be renewed or made good at the Sellers' cost and expense to the satisfaction of Classification Society without condition/recommendation**.
(ii)	The costs and expenses relating to the survey of the tailshaft system shall be borne by the Buyers unless the Classification Society requires such survey to be carried out or if parts of the system are condemned or found defective or broken so as to affect the Vessel's class, in which case the Sellers shall pay these costs and expenses.
(iii)	The Buyers' representative(s) shall have the right to be present in the drydock, as observe(s) only without interfering with the work or decisions of the Classification Society surveyor.
(iv)	The Buyers shall have the right to have the underwater parts of the Vessel cleaned and painted at their risk, cost and expense without interfering with the Seller's or the Classification Society surveyor's work, if any, and without affecting the Vessel's timely delivery. If, however, the Buyers' work in drydock is still in progress when the Sellers have completed the work which the Sellers are required to do, the additional docking time needed to complete the Buyers' work shall be for the Buyers' risk, cost and expense. In the event that the Buyers' work required such additional time, the Sellers may upon completion of the Sellers' work tender Notice of Readiness for delivery whilst the Vessel is still in drydock and, notwithstanding Clause 5(a), the Buyers shall be obliged to take delivery in accordance with Clause 3 (Payment), whether the Vessel is in drydock or not.
* 6(a) and 6 (b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 6 (a) shall apply.

4

	**Notes or memoranda, if any, in the surveyor's report which are accepted by the Classification Society without condition/recommendation are not to be taken into account.
7.	Spares, bunkers and other items
	The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on shore. All spare parts and spare equipment including spare tail-end shaft(s) and/or spare propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspectiondelivery used or unused, whether on board or not shall become the Buyers' property, but spares on order are excluded. Forwarding charges, if any, shall be for the Buyers' account.The Sellers are not required to replace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out of spare and used as replacement prior to delivery, but the replaced items shall be the property of the Buyers. Unused stores and provisions shall be included in the sale and be taken over by the Buyers without extra payment.
	Library and forms exclusively for use in the Sellers' vessel(s) and captain's, officers' and crew's personal belongings including the slop chest are excluded from the sale without compensation, as well as the following additional items: _______ (include list)
	Items on board which are on hire or owned by third parties, listed as follows, are excluded from the sale without compensation: ________ (include list)
	Items on board at the time of inspection which are on hire or owned by third parties, not listed above, shall be replaced or procured by the Sellers prior to delivery at their cost and expense.
	The Buyers shall take over remaining bunkers and unused lubricating and hydraulic oils and greases in storage tanks and unopened drums at no extra cost.and pay either
	(a) *the actual net price (excluding barging expenses) as evidenced by invoices or vouchers; or
	(b) *the current net market price (excluding barging expenses) at the port and date of delivery of the Vessel or, if unavailable, at the nearest bunkering port.
	for the quantities taken over.
	Payment under this Clause shall be made at the same time and place and in the same currency as the Purchase Price.
	"inspection" in this Clause 7, shall mean the Buyers' inspection according to Clause 4(a) or 4(b) (Inspection), if applicable. If the Vessel is taken over without inspection, the date of this Agreement shall be the relevant date.
	*(a) and (b) are alternatives, delete whichever is not applicable. In the absence of deletions alternative (a) shall apply.
8.	Documentation
	The place of closing: The Athens Licensed Shipmanagement Office of TMS Bulkers Ltd. being 109 Kifisias Avenue amd Sina Street, GR 151 24 Marousi, Greece
	(a) In exchange forpPayment of the Purchase Price by the Buyers to the Sellers shall be subject to Clause 21 and conditional on the Buyers having on or prior to the Delivery Date received, or being satisfied as to,provide the Buyers with  the following delivery documentsitems:
	(i)	Legal Bill(s) of Sale in a form recordable in the Buyers' Nominated Flag State, transferring title of the Vessel and stating that the Vessel is free from all mortgages, encumbrances and maritimeliens (whether maritime or otherwise) or any other debts whatsoever, duly notarially attested and legalised or apostilled, as required by the Buyers' Nominated Flag State;
	(ii)	Evidence that all necessary corporate, shareholder and other action has been taken by the Sellers to authorise the execution, delivery and performance of this Agreement;
	(iii)	Power of Attorney of the Sellers appointing one or more representatives to act on behalf of the Sellers in the performance of this Agreement, duly notarially attested and legalised or apostilled (as appropriate);
	(iv)	Certificate or Transcript of Registry issued by the competent authorities of the flag state on the date of delivery evidencing the Sellers' ownership of the Vessel and that the Vessel is free from registered encumbrances and mortgages, to be faxed or e-mailed by such authority to the closing meeting with the original to be sent to the Buyers as soon as possible after delivery of the Vessel;
	(v)	Declaration of Class or (depending on the Classification Society) a Class Maintenance Certificate issued within three (3) Banking Days prior to delivery confirming that the

5

	Vessel is in Class free of condition/recommendation;
(vi)	Certificate of Deletion of the Vessel from the Vessel's registry or other official evidence of deletion appropriate to the Vessel's registry at the time of delivery, or, in the event that the registry does not as a matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect deletion from the Vessel's registry forthwith and provide a certificate or other official evidence of deletion to the Buyers promptly and latest within four (4) weeks after the Purchase Price has been paid and the Vessel has been delivered;
(vii)	A copy of the Vessel's Continuous Synopsis Record certifying the date on which the Vessel ceased to be registered with the Vessel's registry, or, in the event that the registry does not as a matter of practice issue such certificate immediately, a written undertaking from the Sellers to provide the copy of this certificate promptly upon it being issued together with evidence of submission by the Sellers of a duly executed Form 2 stating the date on which the Vessel shall cease to be registered with the Vessel's registry;
(viiivi)	Commercial Invoice for the Vessel;
(ixvii)	-(if requested by the Buyers) Commercial Invoice(s) for bunkers, lubricating and hydraulic oils and greases (which will be taken over by the Buyers at no extra cost in accordance with Clause 7);
(x)	A copy of the Sellers' letter to their satellite communication provider cancelling the Vessel's communications contract which is to be sent immediately after delivery of the Vessel;
(xiviii)	intentionally omittedAny additional documents as may reasonably be required by the competent authorities of the Buyers' Nominated Flag State for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any such documents as soon as possible after the date of this Agreement; and
(xiiix)	The Sellers' letter of confirmation that to the best of their knowledge, the Vessel is not black listed by any nation or international organisation.
(x)	The terms set out in Clause 20.
The items set out in this Clause 8(a) (together the "Conditions Precedent") are inserted for the sole benefit of the Buyers and may be waived in whole or in part with or without conditions by the Buyers.
(b) At the time of delivery the Buyers shall provide the Sellers with:
(i)	Evidence that all necessary corporate, shareholder and other action has been taken by the Buyers to authorise the execution, delivery and performance of this Agreement and the Bareboat Charter; and
(ii)	Power of Attorney of the Buyers appointing one or more representatives to act on behalf of the Buyers in the performance of this Agreement and the Bareboat Charter, duly notarially attested and legalised or apostilled (as appropriate); and.
(iii)	Certificate of Continuing Registration issued by the Hong Kong Companies Registry, Certificate of Goodstanding issued by the Marshall Islands Registry and a certificate of an authorized signatory of the Buyers: (i) certifying that each copy document relating provided by Buyers to Sellers pursuant to this Agreement is correct, complete and in full force and effect as at a date no earlier than the Delivery Date; and (ii) listing their directors and officers.
(c)  If any of the documents listed in Sub-clauses (a), and (b) or (c) above are not in the English language they shall be accompanied by an English translation by an authorised translator or certified by a lawyer qualified to practice in the country of the translated language.
(d)  The Parties shall to the extent possible exchange copies, drafts or samples of the documents listed in Sub-clause (a) and Sub-clause (b) above for review and comment by the other party not later than five (5) Business Days (or such later date as the Buyers may agree) prior to the Vessel's intended date of readiness for delivery as notified by the Sellers pursuant to the notice to be sent to the Buyers from the Sellers ten (10) days before delivery in accordance with Clause 5(b) (the "Scheduled Delivery Date") (state number of days), or if left blank, nine (9) days prior to the Vessel's intended date of readiness for delivery as notified by the Sellers pursuant to Clause 5(b) of this Agreement.

6

	(e)  On delivery, Concurrent with the exchange of documents in Sub-clause (a) and Sub-clause (b) above, the Buyers shall take ownership of Sellers shall also hand to the Buyers the classification certificate(s) as well as all plans, drawings and manuals, (excluding ISM/ISPS manuals), which are on board the Vesseland Oother certificates which are on board the Vessel,  but the foregoing shall for the duration of the Charter Period remain in the custody of the Sellers on board the Vessel as appropriate shall also be handed over to the Buyers unless the Sellers are required to retain same, in which case (but the Buyers have the right to take copies of the classification certificate(s) and, on request, such other documentation referred to in this Clause 8(e)).
	(f)  Other technical documentation which may be in the Sellers' possession shall promptly after delivery be forwarded to the Buyers at their Sellers' expense, if they so request. The Sellers may keep the Vessel's log books but the Buyers have the right to take copies of same.
	(g)  The Parties shall sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the Buyers (the "PDA").
9.	Encumbrances
	The Sellers warrant that the Vessel, at the time of delivery, is free from all charters (other than the Bareboat Charter and any time charter permitted by the terms of the Leasing Documents), encumbrances, mortgages and maritime liens (whether maritime or otherwise) or any other debts whatsoever, and is not subject to Port State or other administrative detentions. The Sellers hereby undertake to and hereby do so indemnify the Buyers against all consequences of claims made against the Vessel which have been incurred prior to the time of delivery.
10.	Taxes, fees and expenses
	Any taxes, fees and expenses in connection with the purchase of the Vessel and registration in the Buyers' Nominated Flag State shall be for the Buyers' account, whereas similar chargesand in connection with the closing of the Sellers' register shall be for the Sellers' account.
11.	Condition on delivery
	The Vessel with everything belonging to her shall be at the Sellers' risk and expense until she is delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be delivered and taken over as she was at the time of inspection, fair wear and tear excepteddelivery.
	However, the Vessel shall be delivered free of cargo and free of stowaways with her Class maintained without condition/recommendation*, free of average damage affecting the Vessel's class, and with her classification certificates and national certificates, as well as all other certificates the Vessel had at the time of inspectiondelivery, valid and unextended without condition/recommendation* by the Classification Society or the relevant authorities at the time of delivery.
	"inspection" in this Clause 11, shall mean the Buyers' inspection according to Clause 4(a) or 4(b) (Inspections), if applicable. If the Vessel is taken over without inspection, the date of this Agreement shall be the relevant date.
	*Notes and memoranda, if any, in the surveyor's report which are accepted by the Classification Society without condition/recommendation are not to be taken into account.
12.	Name/markings – intentionally omitted
	Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings.
13.	Buyers' default
	Should the Deposit not be lodged in accordance with Clause 2 (Deposit), the Sellers have the right to cancel this Agreement, and they shall be entitled to claim compensation for their losses and for all expenses incurred together with interest.
	Should the Purchase Price not be paid in accordance with Clause 3 (Payment)this Agreement, the Sellers have the right to cancel this Agreement, in which case it shall terminate whereupon all the Buyers' liabilities hereunder shall be extinguished.the Deposit together with interest earned, if any, shall be released to the Sellers. If the Deposit does not cover their loss, the Sellers shall be entitled to claim further compensation for their losses and for all expenses incurred together with interest.

7

14.	Sellers' default
	Should the Sellers fail to give Notice of Readiness in accordance with Clause 5(b) or fail to be ready to validly complete a legal transfer by the Cancelling Date the Buyers shall have the option of cancelling this Agreement. If after Notice of Readiness has been given but before the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not made physically ready again by the Cancelling Date and new Notice of Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel this Agreement, the Deposit together with interest earned, if any, shall be released to them immediately.
	Without prejudice to any of the rights the Buyers may have under the Leasing Documents, at law or otherwise, Sshould the Sellers fail to give Notice of Readiness by the Cancelling Date or fail to be ready to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for their loss and for all expenses together with interest if their failure is due to proven negligence and whether or not the Buyers cancel this Agreement.
15.	Buyers' representatives – intentionally omitted
	After this Agreement has been signed by the Parties and the Deposit has been lodged, the Buyers have the right to place two (2) representatives on board the Vessel at their sole risk and expense.
	These representatives are on board for the purpose of familiarisation and in the capacity of observers only, and they shall not interfere in any respect with the operation of the Vessel. The Buyers and the Buyers' representatives shall sign the Sellers' P&L Club's standard letter of indemnity prior to their embarkation.
16.	Law and Arbitration See Clause 25
	(a)*This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
	The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.
	The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both Parties as if the sole arbitrator had been appointed by agreement.
	In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.
	(b) *This Agreement shall be governed by and construed in accordance with Title 9 of the United States Code and the substantive law (not including the choice of law rules) of the State of New York and any dispute arising out of or in connection with this Agreement shall be referred to three (3) persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for the purposes of enforcing any award, judgement may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc.
	In cases where neither the claim nor any counterclaim exceeds the sum of US$ 100,000 the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators, Inc.
	(c) This Agreement shall be governed by and construed in accordance with the laws of __________ (state place) and any dispute arising out of or in connection with this Agreement shall be referred to arbitration at _________ (state place), subject to the procedures applicable there.
	*16(a), 16(b) and 16(c) are alternatives; delete whichever is not applicable, In the absence of

8

	deletions, alternative 16(a) shall apply.
17.	Notices  See Clause 27
	All notices to be provided under this Agreement shall be in writing.
	Contact details for recipients of notices are as follows:
	For the Buyers:
	For the Sellers:
18.	Entire Agreement
	The written terms of this Agreement (together with the other Leasing Documents) comprise the entire agreement between the Buyers and the Sellers in relation to the sale and purchase of the Vessel and supersede all previous agreements whether oral or written between the Parties in relation thereto.
	Each of the Parties acknowledges that in entering into this Agreement it has not relied on and shall have no right or remedy in respect of any statement, representation, assurance or warranty (whether or not made negligently) other than as is expressly set out in this Agreement.
	Any terms implied into this Agreement by any applicable statute or law are hereby excluded to the extent that such exclusion can legally be made. Nothing in this Clause shall limit or exclude any liability for fraud.

/s/ Savvas Tournis	/s/ Wang Wei
For and on behalf of the Sellers	For and on behalf of the Buyers
Name: Savvas Tournis	Name:  Wang Wei
Title:  Attorney-in-fact	Title:  Attorney-in-fact

9

Execution Version

RIDER CLAUSES TO

MEMORANDUM OF AGREEMENT

DATED 2 April 2018

Clause 19 - Payment of Purchase Price

(a) Subject always to Clause 21 and the Conditions Precedent having been satisfied, the Purchase Price of the Vessel shall be paid by the Buyers to the Sellers on the Delivery Date in the following manner:

(A) an amount of the Purchase Price corresponding to the amount of the Advance Charterhire payable by the Sellers as bareboat charterers of the Vessel to the Buyers as owners under the Bareboat Charter on the Delivery Date shall be set off against payment of such Advance Charterhire; and

(B) the balance of the Purchase Price (the "Balance") shall be paid free of bank charges into the Sellers' Account.

(b) The Buyers shall, one (1) Business Day prior to the Vessel's Scheduled Delivery Date (the "Preposition Date") and provided that all amounts due to the Buyers as owners under Clause 41.1 of the Bareboat Charter have been received in full in available funds by the Buyers as owners under the Bareboat Charter, deposit with the Sellers' Bank the Balance on an unallocated basis in an interest-bearing suspense account with a SWIFT MT103 and a SWIFT MT199 irrevocable conditional release instruction in a form to be agreed (the "SWIFT Payment Instructions"). The amount so deposited shall be transferable and payable to the Sellers or their designated nominee at the Sellers' Account upon the fulfilment of the conditions set out in the SWIFT Payment Instructions, which shall include the presentation by the Sellers to the Sellers' Bank of a copy of the duly executed, timed and dated PDA.

(c) interest at the rate of the Overnight USD LIBOR plus 300 basis points (the "Remittance Interest") shall:

(i) in the event that the Vessel is delivered to the Buyers on the Delivery Date, accrue as of the Preposition Date until the Delivery Date (both dates inclusive); and

(ii) in the event that the Vessel is not delivered to the Buyers on the Delivery Date, accrue as of the Preposition Date until the Balance is returned by the Sellers' Bank to the Buyers in accordance with the SWIFT Payment Instructions (both dates inclusive).

The Sellers shall pay to the Buyers the applicable amount of Remittance Interest as notified by the Buyers to the Sellers within three (3) Business Days of the Buyers' demand.

Clause 20 - Further conditions precedent

(a) The items referred to in Clause 8(a)(x) are:

(A) the certificate of incorporation, articles of association and (if any) by-laws or other constitutional documents of the Sellers along with an up-to-date certificate of goodstanding;

1

(B) a certificate of an authorized signatory of the Sellers certifying that each copy document provided by Sellers to Buyers pursuant to this Agreement is correct, complete and in full force and effect as at a date no earlier than the Delivery Date; and

(C) the Buyers being satisfied that the conditions precedent set out in the Bareboat Charter, have been, or will be capable of being, satisfied on the Delivery Date.

Clause 21 - Obligation to sell / purchase the Vessel

The Parties' obligation to sell / purchase the Vessel under this Agreement is conditional upon the simultaneous delivery to and acceptance by the Sellers as bareboat charterers of the Vessel under the Bareboat Charter and that no Potential Termination Event or Termination Event (each as defined in the Bareboat Charter) has occurred or will occur as a result of the performance by the Parties of their obligations under this Agreement.

Clause 22 - Physical Presence

If the Buyers' Nominated Flag State requires the Buyers to have a physical presence or office in the Buyers' Nominated Flag State, all fees, costs and expenses arising out of or in connection with the establishment and maintenance of such physical presence or office by the Buyers shall be borne by the Sellers.

Clause 23 - Costs and Expense

(a) The Sellers shall pay such amounts to the Buyers in respect of all properly documented costs, claims, expenses, liabilities, losses and fees (including but not limited to any legal fees, vessel registration and tonnage fees) suffered or incurred by or imposed on the Buyers arising from this Agreement or in connection with the delivery, registration and purchase of the Vessel by the Buyers whether prior to, during or after termination of this Agreement and whether or not the Vessel is in the possession of or the control of the Sellers or otherwise.

(b) Notwithstanding anything to the contrary under the Leasing Documents and without prejudice to any right to damages or other claim which the Buyers may have at any time against the Sellers under this Agreement, the indemnities provided by the Sellers in favour of the Buyers shall continue in full force and effect notwithstanding any breach of the terms of this Agreement or such Leasing Document or termination or cancellation of this Agreement or such Leasing Document pursuant to the terms hereof or thereof or termination of this Agreement or such Leasing Document by the Buyers.

Clause 24 - Sanctions

The Sellers represent and warrant to the Buyers as of the date hereof and at the Delivery Date that:

(a) they:

(i) are not a Restricted Person;

(ii) are not owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Restricted Person;

(iii) do not own or control a Restricted Person; or

(iv) do not have a Restricted Person serving as a director, officer or employee; and

2

(b) no proceeds of the Purchase Price 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.

Clause 25 - Governing Law and Jurisdiction

This Agreement and any non-contractual obligations arising under or in connection with it, shall be governed by and construed in accordance with English law.

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")) shall be referred to and finally resolved by arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause 25. The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association ("LMAA") Terms current at the time when the arbitration proceedings are commenced.

The reference shall be to three arbitrators. A party wishing to refer a Dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a Dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement. Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

Where the reference is to three arbitrators the procedure for making appointments shall be in accordance with the procedure for full arbitration stated above.

The language of the arbitration shall be English.

Clause 26 - Counterparts

This 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 Agreement.

Clause 27 - Notices

All notices to be provided under this Agreement shall be in writing.

Contact details for recipients of notices are as follows:

For the Sellers:

ORION OWNERS INC.

c/o TMS BULKERS LTD.

Attention: Mr. Dimitris Glynos

Email: finance@tms-management.org

Tel: +30 216 2006213

Fax: +30 210 8090205

and/or

ORION OWNERS INC.

c/o SHIPINVEST BROKERS LTD

Attention: Mr. George Kaklamanos

3

Email: SnP@shipinvest.gr

Tel: +30 210 8023341

Fax: +30 210 8023371

For the Buyers:

SEA 46 LEASING CO. LIMITED

c/o CMB FINANCIAL LEASING CO., LTD.

Attention: Wang Wei

Email: wangwei17@cmbchina.com

Tel: +8621 61061735

Fax: +8621 61059911*1735

Clause 28 - intentionally omitted

Clause 29 - Definitions

Unless otherwise specified herein, capitalised terms in this Agreement shall have the same meaning as in the Bareboat Charter. Furthermore, in this Agreement:

"Balance" has the meaning given to that term in Clause 19(a).

"Bareboat Charter" means the bareboat charter in respect of the Vessel dated on or about the date hereof and made between the Buyers as owners and the Sellers as bareboat charterers.

"Book Value" means, in relation to the Vessel, its value as written up:

(a) as at the Delivery Date, in the Original Financial Statements (the "Initial Book Value"); and

(b) as at any other relevant time, the then-latest documents delivered or to have been delivered to the Buyers as owners pursuant to Clause 46.1(a) of the Bareboat Charter.

"Delivery Date" means the date (being a Business Day) on which the Vessel is delivered to the Buyers pursuant to the terms of this Agreement and thereafter immediately delivered to the Sellers as bareboat charterers pursuant to the terms of the Bareboat Charter.

"Preposition Date" has the meaning given to that term in Clause 19(b).

"Purchase Price" means an amount equal to the lower of: (i) the Initial Market Value; and (ii) the Initial Book Value.

"Remittance Interest" has the meaning given to that term in Clause 19(c).

"Sellers' Account" means the account as notified to the Buyers in writing no later than ten (10) Business Days prior to the Delivery Date (or such later date as the Buyers may agree).

"Sellers' Bank" means the regulated financial institution acceptable to the Buyers with which the Sellers' Account is maintained.

"SWIFT Payment Instructions" has the meaning given to that term in Clause 19(b).

4

EXECUTION PAGE

SELLERS

/s/ Savvas Tournis

ORION OWNERS INC.

Name:  Savvas Tournis

Title: Attorney-in-fact

BUYERS

/s/ Wang Wei

SEA 46 LEASING CO. LIMITED

Name:  Wang Wei

Title: Attorney-in-fact

5

EX-99

Exhibit 4.82

1.	Shipbroker N/A		BIMCO STANDARD CHARTER CODE NAME: "BARECON 2011"
		2.	Place and date 2 April March 2018
3.	Owners/Place of business (Cl. 1)		4. Bareboat Charterers/Place of business (Cl. 1)
	SEA 46 LEASING CO. LIMITED, a company incorporated and existing under the laws of Hong Kong with its registered office at Room 1803-1804, 18F Bank of America Tower, 12 Harcourt Road, Central, Hong Kong		ORION OWNERS INC., a corporation incorporated and existing under the Marshall Islands with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
5.	Vessel's name, call sign and flag (Cl. 1 and 3)
	KELLY / V7MV5/ Marshall Islands or any other Flag State
6.	Type of Vessel	7.	GT/NT
	Kamearmax Bulker		43301 / 27348
8.	When/Where Built	9.	Total DWT (abt.) in metric tons on summer freeboard
	2017 / Hudong Zhonghua Shipbuilding & Shanghai Shipyard Co.		81198
10.	Classification Society (Cl. 3)	11.	Date of last special survey by the Vessel's classification society
	American Bureau of Shipping or any other Classificaiton Society		June 2017
12.	Further particulars of Vessel (also indicate minimum number of months' validity of class certificates agreed acc. to Cl. 3)
	IMO No.: 9768227 Length: 226.00m Breadth: 32.26m Depth: 20.05m
13.	Port or Place of delivery (Cl. 3) The place of delivery specified under Clause 5(a) of the MOA	14.	Time for delivery (Cl. 4) See Clause 34	15.	Cancelling date (Cl. 5) See Clause 33
16.	Port or Place of redelivery (Cl. 15)	17.	No. of months' validity of trading and class certificates upon redelivery (Cl. 15)
	At a safe and ice free port or place in such ready safe berth as the Owners may direct		See Clause 40
18.	Running days' nolice if other than stated in Cl. 4	19.	Frequency of dry-docking (Cl. 10(g))
	N/A		In accordance with Classification Society or Flag State requirements
20.	Trading limits (Cl. 6)
	Worldwide within Institute Warranty Limits, please also see Clauses 46.1(m), 46.1(n) and 46.1(o)
21.	Charter period (Cl. 2)	22.	Charter hire (Cl. 11)
	See Clause 32		See Clause 36
23.	New class and other safety requirements (state percentage of Vessel's insurance value acc. to Box 29) (Cl. 10(a)(ii))
	N/A
24.	Rate of interest payable acc. to Cl. 11 (f) and, if applicable, acc. to PART IV	25.	Currency and method of payment (Cl. 11)
	See Clause 36.11 – neither Clause 11(f) nor Part IV applies		Dollars/bank transfer

Copyright, published by

The Baltic and International Maritime Council (BIMCO). Copenhagen. Issued November 2001

Printed by BIMCO's idea

First Issued by

The Baltic and International Council (BIMCO), Copenhagen in 1974 as "Barecon A" and  "Barecon B". Revised and amalgamated 1989. Revised 2001

This document is a computer generated BARECON 2001 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible.  In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply.  BIMCO assumes no responsibility for any loss, damage or expense as a result of discrepancies between the original BIMCO approved document and this computer generated document.

"BARECON 2001" STANDARD BAREBOAT CHARTER

PART I

26.	Place of payment; also state beneficiary and bank account (Cl. 11)	27.	BankCorporate guarantee/bond (sum and place) (Cl. 24) (optional)
	ACCOUNT NAME: ACCOUNT NO: Bank:  Bank Swift Code: Bank Code: Branch Code: Address of Account Bank:  Correspondent Bank Name:  CHIPS UID: Correspondent Bank Swift Code: Correspondent Bank Account Number:		See Clause 24
28.	Mortgage(s), if any (state whether 12(a) or (b) applies; if 12(b) applies state date of Financial Instrument and name of Mortgagee(s)/Place of business) (Cl. 12)	29.	Insurance (hull and machinery and war risks) (state value acc. to Cl. 13(f) or, if applicable, acc. to Cl. 14(k)) (also state if Cl. 14 applies)
	See Clause 35		See Clause 38 – CLAUSE 14 DOES NOT APPLY
30.	Additional insurance cover, if any, for Owners' account limited to (Cl. 13(b) or, if applicable, Cl. 14(g))	31.	Additional insurance cover, if any, for Charterers' account limited to (Cl. 13(b) or, if applicable, Cl. 14(g))
	See Clause 38		See Clause 38
32.	Latent defects (only to be filled in if period other than stated in Cl. 3)	33.	Brokerage commission and to whom payable (Cl. 27)
	N/A		N/A
34.	Grace period (state number of clear banking days Business Days) (Cl. 28)	35.	Dispute Resolution (state 30(a), 30(b) or 30(c); if 30(c) agreed Place of Arbitration must be stated (Cl. 30)
	See Clause 44		See Clause 30(a)
36.	War cancellation (indicate countries agreed) (Cl. 26(f))
	N/A
37.	Newbuilding Vessel (indicate with "yes" or "no" whether PART III applies) (optional)	38.	Name and place of Builders (only to be filled in if PART III applies)
	No, Part III does not apply		N/A
39.	Vessel's Yard Building No. (only lo be filled in if PART III applies)	40.	Date of Building Contract (only to be filled in if PART III applies)
	N/A		N/A
41.	Liquidated damages and costs shall accrue to (state party acc. to Cl. 1)
	a)     N/A b)     N/A c)     N/A
42.	Hire/Purchase agreement (indicate with "yes" or "no" whether PART IV applies) (optional)	43.	Bareboat Charter Registry (indicate with "yes" or "no" whether PART V applies) (optional)
	No, Part IV does not apply		No, Part V does not apply
44.	Flag and Country of the Bareboat Charter Registry (only to be filled in if PART V applies)	45.	Country of the Underlying Registry (only to be filled in if PART V applies)
	N/A		N/A
46.	Number of additional clauses covering special provisions, if agreed
	Clause 32 to Clause 55

PREAMBLE – It is mutally agreed that this Contract shall be performed subject to the conditions contained in this Charter which shall include PART I and PART II.  In the event of a conflict of conditions, the provisions of PART I shall prevail over those of PART II to the extent of such conflict but no further.  If is further mutally agreed that PART III and/or PART IV and/or PART V shall only apply and only form part of this Charter if expressly agreed and stated in Boxes 34, 42 and 43. If PART III and/or PART IV and/or PART V apply, it is further agreed that in the event of a conflict of conditions, the provisions of PART I and PART II shall prevail over those of PART III and/or PART IV and/or PART V to the extent of such conflict but no further.

Signature (Owners)	Signature (Charterers)
For and on behalf of the Owners	For and on behalf of the Charterers
/s/ Wong Wei	/s/ Savvas Tournis
Name: Wong Wei	Name: Savvas Tournis
Title:  Attorney-in-fact	Title: Attorney-in-fact

This document is a computer generated BARECON 2001 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible.  In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original BIMCO approved document shall apply.  BIMCO assumes no responsibility for any loss, damage or expense as a result of discrepancies between the original BIMCO approved document and this computer generated document.

PART II "BARECON 2001" Standard Bareboat Charter

1. Definitions See also Clause 55

In this Charter, the following terms shall have the meanings hereby assigned to them:

"The Owners" shall mean the party identified in Box 3; "The Charterers" shall mean the party identified in Box 4;

"The Vessel" shall mean the vessel named in Box 5 and with particulars as stated in Boxes 6 to 12.

"Financial Instrument" means the mortgage, deed of covenant or other such financial security instrument as annexed to this Charter and stated in Box 28.

2. Charter Period

In consideration of the hire detailed in Box 22, the Owners have agreed to let and the Charterers have agreed to hire the Vessel for the period stated in Box 21 ("The Charter Period"). See also Clause 32 and Clause 36.

3. Delivery

(not applicable when Part III applies, as indicated in Box 37)

(a) The Owners shall before and at the time of delivery exercise due diligence to make the Vessel seaworthy

And in every respect ready in hull, machinery and equipment for service under this Charter.

The Vessel shall be delivered by the Owners and taken over by the Charterers at the port or place indicated in Box 13 in such ready safe berth as the Charterers may direct.

(b)          The Vessel shall be is properly documented on delivery in accordance with the laws of the Flag State indicated in Box 5 and the requirements of the cClassification sSociety stated in Box 10.  The Vessel upon delivery shall have her survey cycles up to date and trading and class certificates valid for at least the number of months agreed in Box 12.

(c)          The delivery of the Vessel by the Owners and the taking over of the Vessel by the Charterers shall constitute a full performance by the Owners of all the Owner's obligations under this Clause 3, and thereafter the Charterers shall not be entitled to make or assert any claim against the Owners on account of any conditions, representations or warranties expressed or implied with respect to the Vessel but the Owners shall be liable for the cost of but not the time for repairs or renewals occasioned by latent defects in the Vessel, her machinery or appurtenances, existing at the time of delivery under this Charter, provided such defects have manifested themselves within twelve (12) months after delivery unless otherwise provided in Box 32.

4. Time for Delivery See Clauses 32 and 34

(not applicable when Part III applies, as indicated in Box 37)

The Vessel shall not be delivered before the date indicated in Box 14 without the Charterers' consent and the Owners shall exercise due diligence to deliver the Vessel no later than the date indicated in Box 15 Unless otherwise agreed in Box 18.  The Owners shall give the Charterers not less than thirty (30) running days' preliminary and not less than fourteen (14) running days' definite notice of the date on which the Vessel is expected to be ready for delivery. 

The Owners shall keep the Charterers closely advised of possible changes in the Vessel's position.

5. Canceling See Clauses 33

(not applicable when Part III applies, as indicated in Box 37)

(a)          Should the Vessel not be delivered latest by the canceling date indicated in Box 15, the Charterers shall have the option of cancelling this Charter by giving the Owners notice of cancellation within thirty six (36) running hours after the cancelling date stated in Box 15, failing which this Charter shall remain in full force and effect.

(b)          If it appears that the Vessel will be delayed beyond the cancelling date, the Owners may, as soon as they are in a position to state with reasonable certainty the day on which the Vessel should be ready, give notice thereof to the Charterers asking whether they will exercise their option of cancelling, and the option must then be declared within one hundred and sixty eight (168) running hours of the receipt by the Charterers of such notice or within thirty six (36) running hours after the cancelling date, whichever is earlier.  If the Charterers do not then exercise their option of cancelling, the seventh day after the readiness date stated in the Owner's notice shall be substituted for cancelling date indicated in Box 15 for the purpose of this Clause 5.

(c)          Cancellation under this Clause 5 shall be without prejudice to any claim the Charterers may otherwise have on the Owners under this Charter.

6. Trading Restrictions See Clauses 46.1(m), 46.1(n) and 46.1(o)

The Vessel shall be employed in lawful trades for the carriage of suitable lawful merchandise within the trading limits indicated in Box 20.

The Charterers undertake not to employ the Vessel or suffer the Vessel to be employed otherwise than in conformity with the terms of the contracts of insurance (including any warranties expressed or implied therein) without first obtaining the consent of the insurers to such employment and complying with such requirements as to extra premium or otherwise as the insurers may prescribe.

The Charterers also undertake not to employ the Vessel or suffer her employment in any trade or business which is forbidden by the law of any country to which the Vessel may sail or is otherwise illicit or in carrying illicit or prohibited goods or in any manner whatsoever which may render her liable to condemnation, destruction, seizure or confiscation.

Notwithstanding any other provisions contained in this Charter it is agreed that nuclear fuels or radioactive products or waste are specifically excluded from the cargo permitted to be loaded or carried under this Charter.  This exclusion does not apply to radio-isotopes used or intended to be used for any industrial, commercial, agricultural, medical or scientific purposes provided the Owners' prior approval has been obtained to loading thereof.

7. Surveys on Delivery and Redelivery

(not applicable when Part III applies, as indicated in Box 37)

The Owners and Charterers shall each appoint surveyors for the purpose of determining and agreeing in writing the condition of the Vessel at the time of delivery and redelivery pursuant to Clause 40.3 (with the relevant costs paid by the Charterers), hereunder. The Owners shall bear all expenses of the On hire Survey including loss of time, if any, and the Charterers shall bear all expenses of the Off-hire Survery, including loss of time, if any, at the daily equivalent to the rate of hire or pro rata thereof.

8. Inspection

The Owners shall have the right at any time, (i) once every calendar year provided no Termination Event has occurred or (ii) at any time following the occurrence of a Termination Event and for as long as it is continuing, after giving reasonable notice (which must be reasonable where a Termination Event has not occurred and is continuing) to the Charterers to inspect or survey the Vessel or instruct a duly authorized surveyor to carry out such survey on their behalf (provided that, if no Termination Event has occurred or is continuing, it does not unduly interfere with or cause delay to the commercial operation of the Vessel):-

(a)          To ascertain the condition of the Vessel and satisfy themselves that the Vessel is being properly repaired and maintained.  The costs and fees for such inspection or survey shall be paid by the Charterers Owners unless

PART II "BARECON 2001" Standard Bareboat Charter

the Vessel is

found to require repairs or maintenance in order to achieve the condition so provided;

(b)          In dry-dock if the Charterers have not dry-docked Her in accordance with Clause 10(g).  The costs and fees for such inspection or survey shall be paid by the Charterers; and

(c)          for any other commercial reason they consider necessary (provided it does not unduly interfere with the commercial operation of the Vessel).  The costs and fees for such inspection and survey shall be paid by the Owners Charterers.

All time used in respect of inspection, survey or repairs shall be for the Charterers account and form part of the Charter Period.

The Charterers shall also permit the Owners to inspect the Vessel's log books whenever requested and shall whenever required by the Owners furnish them with full information regarding any casualties or other accidents or damage to the Vessel.

The Charterers shall provide such necessary assistance to the Owners, their representatives or agents in respect of any inspection hereunder.

9. Inventories, Oil and Stores See Clauses 34.6

A complete inventory of the Vessel's entire equipment, outfit including spare parts, appliances and of all consumable stores on board the Vessel shall be made by the Charterers in conjunction with the Owners on delivery and again on redelivery of the Vessel.  The Charterers and the Owners, respectively, shall at the time of delivery and redelivery take over and pay for all bunkers, lubricating oil, unbreached provisions, paints, ropes and other consumable stores (excluding spare parts) in the said Vessel at the then current market prices at the ports of delivery and redelivery, respectively.  The Charterers shall ensure that all spare parts listed in the inventory and used during the Charter Period are replaced at their expense prior to redelivery of the Vessel.

10. Maintenance and Operation

(a)(i) Maintenance and Repairs - During the Charter Period the Vessel shall be in the full possession and at the absolute disposal for all purposes of the Charterers and under their complete control in every respect.  The Charterers shall maintain the Vessel, her machinery, boilers, appurtenances and spare parts in a good state of repair, in efficient operating condition and in accordance with good commercial maintenance practice and, except as provided for in Clause 14(l), if applicable, at their own expense they shall at all times keep the Vessel's Class-classification fully up to date with the ClassificationSociety indicated in Box 10 and maintain all other necessary certificates in force at all items.

(ii) New Class and Other Safety Requirements- In the event of any improvement, structural changes or new equipment becoming necessary for the continued operation of the Vessel by reason of new class requirements or by compulsory legislation costing (excluding the Charterers' loss of time) more than the percentage stated in Box 23, or if Box 23 is left blank, 5 percent of the Vessel's insurance value as stated in Box 29, then the extent, if any, to which the rate of hire shall be varied and the ratio in which the cost of compliance shall be shared between the parties concerned in order to achieve a reasonable distribution thereof as between the Owners and the Charterers having regard, inter alia, to the length of the period remaining under this Charter shall, in the absence of agreement, be referred to the dispute resolution method agreed in Clause 30, the Charterers shall ensure that the same are complied with and the time and costs of compliance shall be for the Charterer's account.

(iii) Financial Security- The Charterers shall maintain financial security or responsibility in respect of third party liabilities as required by any government, including federal, state or municipal or other division or authority thereof, to enable the Vessel, without penalty or charge, lawfully to enter, remain at, or leave any port, place, territorial or contiguous waters of any country, state or municipality in performance of this Charter without any delay.  This obligation shall apply whether or not such requirements have been lawfully imposed by such government or division or authority thereof.

The Charterers shall make and maintain all arrangements by bond or otherwise as may be necessary to satisfy such requirements and the Charterers' sole expense and the Charterers shall indemnify the Owners against all consequences whatsoever (including loss of time) for any failure or inability to do so.

(b)  Operation of the Vessel- The Charterers shall at their own expense and by their own procurement man, victual, navigate, operate, supply, fuel and, whenever required, repair the Vessel during the Charter Period and they shall pay all charges and expenses of every kind and nature whatsoever incidental to their use and operation of the Vessel under this Charter, including annual flag Flag State fees and any foreign general municipality and/or state taxes. The Master, officers and crew of the Vessel shall be the servants of the Charterers for all purposes whatsoever, even if for any reason appointed by the Owners. Charterers shall comply with the regulations regarding officers and crew in force in the country of the Vessel's flag or any other applicable law.

(c)  The Charterers shall keep the Owners and the mortgagee(s) advised of the intended employment, planned dry-docking and major repairs of the Vessel, as reasonably required.

(d)  Flag and Name of Vessel- During the Charter Period, the Charterers shall have the liberty to paint the Vessel in their own colours, install and display their funnel insignia and fly their own house flag (with all fees, costs and expenses arising in relation thereto for the Charterers' account). The Charterers also have the liberty, with the Owners' consent, which shall not be unreasonably withheld, to change the flag of the Vessel to that of another Flag State (with all fees, costs and expenses arising in relation thereto for the Charterers' account) and/or with the Owners' consent (such consent not to be unreasonably withheld), the name of the Vessel (with all fees, costs and expenses arising in relation thereto for the Charterers account) during the Charter Period. Any Ppainting and re-painting, installment and re-installment, registration (including maintenance and renewal thereof) and re-registration, if required by the Owners, shall be at the Charterers' expense and time. If the Flag State requires the Owners to establish a physical presence or office in the jurisdiction of such Flag State, all fees, costs and expenses payable by the Owners to establish and maintain such physical presence or office shall be for the account of the Charterers.

(e)  Changes to the Vessel- Subject to Clause 10(a)(ii), the Charterers shall make no structural changes in the Vessel or changes in the machinery, boilers, appurtenances or spare parts thereof without in each instance first securing the Owners' approval thereof (which approval shall not be unreasonbly withheld if the proposed structural change will not adversely affect the value of the Vessel). If the Owners so agree, the Charterers shall, if the Owners so require,

PART II "BARECON 2001" Standard Bareboat Charter

restore the Vessel to its former condition before the termination of this Charter.

(f)  Use of the Vessel's Outfit, Equipment and Appliances - The Charterers shall have the use of all outfit, equipment, and appliances on board the Vessel at the time of delivery, provided the same or their substantially equivalent shall be returned to the Owners on redelivery (if redelivery is required pursuant to this Charter) in the same good order and condition as when received, ordinary wear and tear expected. The Charterers shall from time to time during the Charter Period replace such items of equipment as shall be so damaged or worn as to be unfit for use. The Charterers are to procure that all repairs to or replacement of any damaged, worn or lost parts or equipment be effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Vessel. Title of any equipment so replaced shall vest in and remain with the Owners. The Charterers have the right to fit additional equipment at their expense and risk (provided that no permanent structural damage is caused to the Vessel by reason of such instaliation) and the Charterers shall, at their expense, remove such equipment and make good any damage caused by the fitting or removal of such additional equipment before the Vessel is redelivered to the Owners pursuant to Clause 40.3, at the end of the period if requested by the Owners.  Any equipment including radio equipment on hire on the Vessel at time of delivery shall be kept and maintained by the Charterers and the Charterers shall assume the obligations and liabilities of the Owners under any lease contracts in connection therewith and shall reimburse the Owners for all expenses incurred in connection therewith, also for any new equipment required in order to comply with radio regulations.

(g)  Periodical Dry-Docking - The Charters shall dry-dock the Vessel and clean and paint her underwater parts whenever the same may be necessary, but not less than once during the period stated in Box 19 or, if Box 19 has been left blank, every sixty (60) calendar months after delivery or such other period as may be required by the Classification Society or flag State.

11. Hire See Clause 36

(a)  The Charterers shall pay hire due to the Owners punctuality in accordance with the terms of this Charter in respect of which time shall be of the essence.

(b)  The Charterers shall pay to the Owners for the hire of the Vessel a lump sum in the amount indicated in Box 22 which shall be payable not later than every thirty (30) running days in advance, the first lump sum being payable on the date and hour of the Vessel's delivery to the Charterers. Hire shall be paid continuously throughout the Charter Period.

(c)  Payment of hire shall be made in cash without discount in the currency and in the manner indicated in Box 25 and at the place mentioned in Box 26.

(d)  Final payment of hire, if for as period of less than thirty (30) running days, shall be calculated proportionally according to the number of days and hours remaining before redelivery and advance payment to be effected accordingly.

(e)  Should the Vessel be lost or missing, hire shall cease from the date and time when she was lost or last heard of. The date upon which the Vessel is to be treated as lost or missing shall be ten (10) days after the Vessel was last reported or when the Vessel is posted as missing by Lloyd's, whichever occurs first. Any hire paid in advance to be adjusted accordingly.

(f)  Any delay in payment of hire shall entitle the Owners to interest at the rate her and him as agreed in Box 24. If Box 24 has not been filled in, the three months interbank offered rate in London (LIBOR or its successor) for the currency stated in Box 25, as quoted by the British Bankers' Association (BBA) on the date when the hire fell due, increased by 2 per cent, shall apply.

(g)  Payment of interest due under sub-clause 11(f) shall be made within seven (7) running days of the date of the Owners invoice specifying the amount payable or, in the absence of an invoice, at the time of the next hire payment date.

12. Mortgage See Clause 35

(only to apply if Box 28 has been appropriately filled in)

*) (a)  The Owners warrant that they have not effected any mortgage(s) of the Vessel and that they shall not effect any mortgage(s) without the prior consent of the Charterers, which shall not be unreasonably withheld.

*) (b)  The Vessel chartered under this Charter is financed by a mortgage according to the Financial Instrument The Charterers undertake to comply, and provide such information and documents to enable the Owners to comply, with all such instructions or directions in regard to the employment, insurances, operation, repairs and maintenance of the Vessel as laid down in the Financial Instrument or as may be directed from time to time during the currency of the Charter by the mortgagee(s) in conformity with the Financial Instrument.  The Charterers confirm that, for this purpose, they have acquainted themselves with all relevant terms, conditions and provisions of the Financial Instrument and agree to acknowledge this in writing in any form that may be required by the mortgagee(s).  The Owners warrant that they have not effected any mortgage(s) other than stated in Box 28 and that they shall not agree to any amendment of the mortgage(s) referred to in Box 28 or effect any other mortgage(s) without the prior consent of the Charterers, which shall not be unreasonably withheld.

*) (Optional, Clauses 12(a) and 12(b) are alternatives; indicate alternative agreed in Box 28).

13. Insurance and Repairs  See also Clause 38

(a)  Subject and without prejudice to to Clause 38 Dduring the Charter Period the Vessel shall be kept insured by the Charterers at their expense against hull and machinery, marine and war (including blocking and trapping) and Protection and Indemnity risks and freight, demurrage and defence risks (and any risks against which it is compulsory to insure for the operation of the Vessel, including but not limited to maintaining financial security in accordance with sub-clause 10(a)(iii)) in such form as the Owners shall in writing approve, which approval shall not be unreasonably withheld. During the Charter Period the Charterers shall procure (at Charterers' expense) that there are in place innocent Owners' interest insurance, lessor's additional perils (pollution) insurance and if applicable Mortgagees' interest insurance and Mortgagees' additional perils (pollution) insurance.

Such insurances stated in this Clause 13 shall be arranged by the Charterers (except for the innocent Owners' interest insurance, lessor's additional perils (pollution) insurance and if applicable Mortgagees' interest insurance and Mortgagee's additional perils (pollution) insurance, which shall be arranged by the Owners through brokers appointed by it (in consultation with the Charterers)) to protect the interests of both the Owners and the Charterers and (without prejudice to Clauses 35.2(c) and (d)) the mortgageeMortgagee(s) (if any),.

and

The Charterers shall be at liberty to protect under such insurances the interests of any managers they may appoint. Insurance policies shall cover the Owners and the Charterers and the Mortgagees (if any) according to

PART II "BARECON 2001" Standard Bareboat Charter

their respective interests.

Subject to the provisions of the Financial Instruments (if any), if and the agreed loss payable clauses, and the approval of the Owners and the insurers, the Charterers shall effect all insured repairs and shall undertake settlement and reimbursement from the insurers of all costs in connection with such repairs as well as insured charges, expenses and liabilities to the extent of coverage under the insurances herein provided for

The Charterers also to remain responsible for and to effect repairs and settlement of costs and expenses incurred thereby in respect of all other repairs not covered by the insurances and/or not exceeding any possible franchise(s) or deductibles provided for in the insurance.

All time used for repairs under the provisions of sub-clause 13(a) and for repairs of latent defects according to Clause 3(c) above, including any deviation, shall be for the Charterers' account.

(b) If the conditions of the above insurances permit additional insurance to be placed by the parties, such cover shall be limited to the amount for each party set out in Box 30 and Box 31, respectively.  The Owners or the Charterers as the case may be shall immediately upon request furnish the other party Owners with particulars of any additional insurance effected, including copies of any cover notes or policies and the written consent of the insurers of any such required insurance in any case where the consent of such insurers are necessary.  The Charterers hereby undertake that any additional insurances that they arrange now or in the future will always be compliant with the terms of the underlying hull and machinery policies.  Subject to this Clause 13(b), the Charterers shall have the liberty to insure the Vessel for Charterers Interest Insurance which will be limited to Total Loss or constructive Total Loss of the Vessel including any excess liabilities.

(c) Subject to Clauses 35.2(c) and (d), the Charterers shall upon the request of the Owners, provide information and promptly execute such documents as may be required to enable the Owners to comply with the insurance provisions of the each Financial Instrument (if any).

(d) Subject to the provisions of the Financial Instruments, if any, and Clause 38 and Clause 40, should the Vessel become an actual, constructive, compromised or agreed a tTotal lLoss under the insurances required under sub-clause 13(a), all insurance payments for such loss shall be paid to the Owners (of if applicable, their financiers) in accordance with the agreed loss payable clauses who shall distribute the moneys between the Owners and the Charterers according to their respective interests.  The Charterers undertake to notify the Owners and the mortgagee(s), if any, of any occurrences in consequence of which the Vessel is likely to become a Ttotal Lloss as defined in this Clause.

(e) The Owners shall upon the request of the Charterers, promptly execute such documents as may be required to enable the Charterers to abandon the Vessel to insurers and claim a constructive total loss.

(f) For the purpose of insurance coverage against hull and machinery and war risks under the provisions of sub-clause 13(a), the value of the Vessel is the sum indicated in Box 29 Clause 38.

14. Insurance, Repairs and Classification - intentionally omitted

(Optional, only to apply of expressly agreed and stated in Box 29, in which event Clause 13 shall be considered deleted.)

(a)  During the Charter Period the Vessel shall be kept insured by the Owners at their expense against hull and machinery and war risks under the form of policy or policies attached hereto.  The Owners and/or insurers shall not have any right of recovery or subrogation against the Charterers on account of loss of or any damage to the Vessel or her machinery or appurtenances covered by such insurance, or on account of payments made to discharge claims against or liabilities of the Vessel or the Owners covered by such insurance.  Insurance policies shall cover the Owners and the Charterers according to their respective interests.

(b)  During the Charter Period the Vessel shall be kept insured by the Charterers at their expense against Protection and Indemnity risks (and any risks against which it is compulsory to insure for the operation of the Vessel, including maintaining financial security in accordance with sub-clause 10(a)(iii)) in such form as the Owners shall in writing approve which approval shall not be unreasonably withheld.

(c)  In the event that any act or negligence of the Charterers shall vitiate any of the insurance herein provided, the Charterers shall pay to the Owners all losses and indemnify the Owners against all claims and demands which would otherwise have been covered by such insurance.

(d)  The Charterers shall, subject to the approval of the Owners or Owners' Underwriters, effect all insured repairs, and the Charterers shall undertake settlement of all miscellaneous expenses in connection with such repairs as well as all insured charges, expenses and liabilities to the extent of coverage under the insurances provided for under the provisions of sub-clause 14(a).  The Charterers to be secured reimbursement through the Owners' Underwriters for such expenditures upon presentation of accounts.

(e)  The Charterers to remain responsible for and to effect repairs and settlement of costs and expenses incurred thereby in respect of all other repairs not covered by the insurances and/or not exceeding any possible franchise(s) or deductibles provided for in the insurances.

(f)  All time used for repairs under the provisions of sub-clauses 14(d) and 14(e) and for repairs of latent defects according to Clause 3 above, including any deviation, shall be for the Charterers' account and shall form part of the Charter Period.

The Owners shall not be responsible for any expenses as are incident to the use and operation of the Vessel for such time as may be required to make such repairs.

(g)  If the conditions of the above insurances permit additional insurance to be placed by the parties such cover shall be limited to the amount for each party set out in Box 30 and Box 31, respectively.  The Owners or the Charterers as the case may be shall immediately furnish the other party with particulars of any additional insurance effected, including copies of any cover notes or policies and the written consent of the insurers of any such required insurance in any case where the consent of such insurers is necessary.

(h)  Should the Vessel become an actual, constructive, compromised or agreed total loss under the insurances required under subclause 14(a), all insurance payments for such loss shall be paid to the Owners, who shall distribute the moneys between themselves and the Charterers according to their respective interests.

(i)  If the Vessel becomes an actual, constructive, compromised or agreed total loss under the insurances arranged by the Owners in accordance with sub-clause 14(a), this Charter shall terminate as of the date of such loss.

(j)  The Charterers shall upon the request of the Owners, promptly execute such documents as may be required to enable the Owners to abandon the Vessel to the insurers and claim a constructive total loss.

PART II "BARECON 2001" Standard Bareboat Charter

(k)  For the purpose of insurance coverage against hull and machinery and war risks under the provisions of sub-clause 14(a), the value of the Vessel is the sum indicated in Box 29.

(l)  Notwithstanding anything contained in sub-clause 10(a), it is agreed that under the provisions of Clause 14, if applicable, the Owners shall keep the Vessel's Class fully up to date with the Classification Society indicated in Box 10 and maintain all other necessary certificates in force at all times.

15. Redelivery See Clause 40

At the expiration of the Charter Period the Vessel shall be redelivered by the Charterers to the Owners at a safe and ice-free port or place as indicated in Box 16, in such ready safe berth as the Owners may direct.  The Charterers shall give the Owners not less than thirty (30) running days' preliminary notice of expected date, range of ports or redelivery or port or place of redelivery and not less than fourteen (14) running days' definite notice of expected date and port or place of redelivery.  Any changes thereafter in the Vessel's position shall be notified immediately to the Owners.

The Charterers warrant that they will not permit the Vessel to commence a voyage (including any preceding baliast voyage) which cannot reasonably be expected to be completed in time to allow redelivery of the Vessel within the Charter Period.  Notwithstanding the above, should the Charterers fail to redeliver the Vessel within The Charter Period, the Charterers shall pay the daily equivalent to the rate of hire stated in Box 22 plus 10 per cent. or to the market rate, whichever is the higher, for the number of days by which the Charter Period is exceeded.  All other terms, conditions and provisions of this Charter shall continue to apply.

Subject to the provisions of Clause 10, the Vessel shall be redelivered to the Owners in the same or as good structure, state, condition and class as that in which she was delivered, fair wear and tear not affecting class excepted.

The Vessel upon redelivery shall have her survey cycles up to date and trading and class certificates valid for at least the number of months agreed in Box 17.

16. Non-Lien

The Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their agents, which might have priority over the title and interest of the Owners in the Vessel.  The Charterers further agree to fasten to the Vessel in a conspicuous place and to keep so fastened during the Charter Period a notice reading as follows:

"This Vessel is the property of (name of Owners).  It is under charter to (name of Charterers) and by the terms of the Charter Party neither the Charterers nor the Master have any right, power or authority to create, incur or permit to be imposed on the Vessel any lien whatsoever."

or a notice in such anagalous form as required by any Mortgageee(s).

17. Indemnity See Clauses 37.3, 40.5, 41.2 and 50

(a)  The Charterers shall indemnify the Owners against any loss, damage or expense incurred by the Owners arising out of or in relation to the operation of the Vessel by the Charterers, and against any lien of whatsoever nature arising out of an event occurring during the Charter Period.  If the Vessel be arrested or otherwise detained by reason of claims or liens arising out of her operation hereunder by the Charterers, the Charterers shall at their own expense take all reasonable steps to secure that within a reasonable time the Vessel is released, including the provision of bail.

Without prejudice to the generality of the foregoing, the Charterers agree to indemnify the Owners against all consequences or liabilities arising from the Master, officers or agents signing Bills of Lading or other documents.

(b)  If the Vessel be arrested or otherwise detained by reason of a claim or claims against the Owners, the Owners shall at their own expense take all reasonable steps to secure that within a reasonable time the Vessel is released, including the provision of bail.

In such circumstances the Owners shall indemnify the Charterers against any loss, damage or expense incurred by the Charterers (including hire paid under this Charter) as a direct consequence of such arrest or detention.

18. Lien

The Owners to have a lien upon all cargoes, sub-hires and sub-freights belonging or due to the Charterers or any sub-charterers and any Bill of Lading freight for all claims under this Charter and the Charterers to have a lien on the Vessel for all moneys paid in advance and not earned.

19. Salvage

All salvage and towage performed by the Vessel shall be for the Charterers' benefit and the cost of repairing damage occasioned thereby shall be borne by the Charterers.

20. Wreck Removal

In the event of the Vessel becoming a wreck or obstruction to navigation the Charterers shall indemnify the Owners against any sums whatsoever which the Owners shall become liable to pay and shall pay in consequence of the Vessel becoming a wreck or obstruction to navigation.

21. General Average

The Owners shall not contribute to General Average.

22. Assignment, Sub-Charter and Sale

(a)  The Charterers shall not assign this Charter nor sub-charter the Vessel on a bareboat basis except with the prior consent in writing of the Owners, which shall not be unreasonably withheld, and subject to such terms and conditions as the Owners shall approve.

(b)  The Owners shall not sell the Vessel during the currency of this Charter except with the prior written consent of the Charterers, which shall not be unreasonably withheld, and subject to the buyer accepting an assignment of this Charter.

23.          Contracts of Carriage

*) (a)  The Charterers are to procure that all documents issued during the Charter Period evidencing the terms and conditions agreed in respect of carriage of goods shall contain a paramount clause incorporating any legislation relating to carrier's liability for cargo compulsory applicable in the trade; if no such legislation exists, the documents shall incorporate the Hague-Visby Rules.  The documents shall also contain the New Jason Clause and the Both-to-Blame Collision Clause.

*) (b)  The Charterers are to procure that all passenger tickets issued during the Charter Period for the carriage of passengers and their luggage under this Charter shall

PART II "BARECON 2001" Standard Bareboat Charter

contain a paramount clause incorporating any legislation

relating to carrier's liability for passengers and their luggage compulsorily applicable in the trade; if no such legislation exists, the passenger tickets shall incorporate the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974, and any protocol thereto.

*)          Delete as applicable.

24.          Bank Corporate Guarantee

(Optional, only to apply if Box 27 filled in)

The Charterers undertake to furnish, on or about the date of this Charter and on or prior to the completion of a-Change of Control or Change of Shareholder (as applicable) before delivery of the Vessel, a first class bank a corporate guarantee from the Guarantor or the New Guarantor(s) (as the case may be) or bond in the sum and at the place as indicated in Box 27 as guarantee, and on or about the date of this Charter and on or prior to the completion of a Change of Control or Change of Shareholder (as applicable) the other Security Documents (as the case may be) as security, in each case for full performance of their obligations under this Charter.

25.          Requisition/Acquisition

(a) Subject to the provisions of the Financial Instruments (if any) and the General Assignment (and without prejudice to Clauses 35.2(c) and (d)), IIn the event of the Requisition for Hire of the Vessel by any governmental or other competent authority (hereinafter referred to as "Requisition for Hire") irrespective of the date during the Charter Period when "Requisition for Hire" may occur and irrespective of the length thereof and whether or not it be for an indefinite or a limited period of time, and irrespective of whether it may or will remain in force for the remainder of the Charter Period, this Charter shall not be deemed thereby or thereupon to be frustrated or otherwise terminated and the Charterers shall continue to pay the stipulated hire in the manner provided by this Charter until the time when the Charter would have terminated pursuant to any of the provisions hereof always provided however that if all hire has been paid by the Charterers hereunder then in the event of "Requisition for Hire" any Requisition Hire or compensation Is received or receivable by the Owners, the same shall be payable to the Charterers during the remainder of the Charter Period or the period of the "Requisition for Hire" whichever be the shorter.

(b)  In the event of the Owners being deprived of their ownership in the Vessels by any Compulsory Acquisition of the Vessel or requisition for title by any governmental or other competent authority (hereinafter referred to as "Compulsory Acquisition"), then, irrespective of the date during the Charter Period when "Compulsory Acquisition" may occur, this Charter shall be deemed terminated as of the date of such "Compulsory Acquisition". In such event Charter Hire to be considered as earned and to be paid up to the date and time of such "Compulsory Acquisition".

26.          War

(a)  Subject to the provisions of the Financial instruments (if any) (and without prejudice to Clauses 35.2(c) and (d)), Ffor the purpose of this Clause the words "War Risks" shall include any war (whether actual or threatened), act of war, civil war, hostilities, revolution, rebellion, civil commotion, warlike operations, the laying of mines (whether actual or reported), acts of piracy, acts of terrorists, acts of hostility or malicious damage, blockades (whether imposed against all vessels or imposed selectively against vessels of certain flags or ownership, or against certain cargoes or crews, or otherwise howsoever), by any person, body, terrorist or political group, or the Government of any state whatsoever, which may be dangerous or are likely to be or to become dangerous to the Vessel, her cargo, crew or other persons on board the Vessel.

b)  The Vessel, unless the written consent of the Owners be first obtained and the Charterers have arranged for requisition insurance in respect of the

PART II "BARECON 2001" Standard Bareboat Charter

Vessel (and the same has been assigned to the Owners or at their direction), shall not continue to or go through any port, place, area or zone (whether of land or sea), or any waterway or canal, where it reasonably appears that the Vessel, her cargo, crew or other persons on board the Vessel, in the reasonable judgement of the Owners, may be, or are likely to be, exposed to War Risks (except in case of exposure only to acts of piracy, when the prior written consent of the Owners is not required provided the aforesaid insurances and assignments are in place). Should the Vessel be within any such place as aforesaid, which only becomes dangerous, or is reasonably likely to be or to become dangerous, after her entry into it, the Owners shall have the right to require the Vessel to leave such area.

(c)  The Vessel shall not load contraband cargo, or to pass through any blockade, whether such blockade be imposed on all vessels, or is imposed selectively in any way whatsoever against vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever, or to proceed to an area where she shall be subject, or is likely to be subject to a belligerent's right of search and/or confiscation.

(d)  If the insurers of the war risks insurance, when Clause 14 is applicable, should require payment of premiums and/or calls because, pursuant to the Charterers' orders, the Vessel is within, or is due to enter and remain within, any area or areas which are specified by such insurers as being subject to additional premiums because of War Risks, then such premiums and/or calls shall be reimbursed by the Charterers to the Owners at the same time as the next payment of hire is due.

(e)  The Charterers shall have the liberty:

(i)  to comply with all orders, directions, recommendations or advice as to departure, arrival, routes, sailing in convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any other way whatsoever, which are given by the Government of the Nation under whose flag the Vessel sails, or any other Government, body or group whatsoever acting with the power to compel compliance with their orders or directions;

(ii)  to comply with the orders, directions or recommendations of any war risks underwriters who have the authority to give the same under the terms of the war risks insurance;

(iii) to comply with the terms of any resolution of the Security Council of the United Nations, any directives of the European Community, the effective orders of any other Supranational body which has the right to issue and give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey the orders and directions of those who are charged with their enforcement.

(f)  In the event of outbreak of war (whether there be a declaration of war or not) (i) between any two or more of the following countries: the United States of America; Russia; the United Kingdom; France; and the People's Republic of China, (ii) between any two or more of the countries stated in Box 26, both the Owners and the Charterers shall have the right to cancel this Charter, whereupon the Charterers shall redeliver the Vessel to the Owners in accordance with Clause 15, if the Vessel has cargo on board after discharge thereof at destination, or if debarred under this Clause from reaching or entering it at a near, open and safe port as directed by the Owners, or if the Vessel has no cargo on board, at the port at which the Vessel then is or if at sea at a near, open and safe port as directed by the Owners.  In all cases hire shall continue to be paid in accordance with Clause 11 and except as aforesaid all other provisions of this Charter shall apply until redelivery the end of the Charter Period.

27.          Commission – Intentionally omitted

The Owners to pay a commission at the rate indicated in Box 33 to the Brokers named in Box 33 on any hire paid under the Charter.  If no rate is indicated in Box 33, the commission to be paid by the Owners shall cover the actual expenses of the Brokers and a reasonable fee for their work.

If the full hire is not paid owing to breach of the Charter by either of the parties the party liable therefor shall indemnify the Brokers against their loss of commission.  Should the parties agree to cancel the Charter, the Owners shall indemnify the Brokers against any loss of commission but in such case the commission shall not exceed the brokerage on one year's hire.

28.          Termination See Clauses 40 and 44

(a)Charterers' Default

The Owners shall be entitled to withdraw the Vessel from the service of the Charterers and terminate the Charter with immediate effect by written notice to the Charterers if:

(i)  the Charterers fail to pay hire in accordance with Clause 11.  However, where there is a failure to make punctual payment of hire due to oversight, negligence, errors or omissions on the part of the Charterers or their bankers, the Owners shall give the Charterers written notice of the number of clear banking days stated in Box 34 (as recognised at the agreed place of payment) in which to rectify the failure, and when so rectified within such number of days following the Owners' notice, the payment shall stand as regular and punctual.  Failure by the Charterers to pay hire within the number of days stated in Box 34 of their receiving the Owners' notice as provided herein, shall entitle the Owners to withdraw the Vessel from the service of the Charterers and terminate the Charter without further notice;

(ii)  the Charterers fail to comply with the requirements of:

(1)  Clause 6 (Trading Restrictions)

(2)  Clause 13(a) (Insurance and Repairs)

provided that the Owners shall have the option, by written notice to the Charterers, to give the Charterers a specified number of days grace within which to rectify the failure without prejudice to the Owners' right to withdraw and terminate under this Clause if the Charterers fail to comply with such notice;

(iii)  the Charterers fail to rectify any failure to comply with the requirements of sub-clause 10(a)(i) (Maintenance and Repairs) as soon as practically possible after the Owners have requested them in writing so to do and in any event so that the Vessel's insurance cover is not prejudiced.

(b) Owners Default

If the Owners shall by any act or omission be in breach of their obligations under this Charter to the extent that the Charterers are deprived of the use of the Vessel and such breach continues for a period of fourteen (14) running days after written notice thereof has been given by the Charterers to the Owners, the Charterers shall be entitled to terminate this Charter with immediate effect by written notice to the Owners.

(c)Loss of Vessel

This Charter shall be deemed to be terminated if the Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss. For the purpose of this sub-clause, the Vessel shall not be deemed to be lost unless she has either become an actual total loss or agreement has been reached with her underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with her underwriters is not reached it is adjudged by a competent tribunal that a constructive loss of the Vessel

PART II "BARECON 2001" Standard Bareboat Charter

has occurred.

(d)  Either party shall be entitled to terminate this Charter with immediate effect by written notice to the other party in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of the other party (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver is appointed, or if it suspends payment, ceases to carry on business or makes any special arrangement or composition with its creditors.

(e)  The termination of this Charter shall be without prejudice to all rights accrued due between the parties prior to the date of termination and to any claim that either party might have.

29.          Repossession

In the event the Owners have made a request for redelivery of the Vessel termination of this Charterin accordance with the applicable provisions of Clause 28Clause 40.3, the Owners shall in addition have the right to repossess the Vessel from the Charterers at her current or next port of call, or at a port or place convenient to them without hindrance or interference by the Charterers, courts or local authorities. Pending physical repossession of the Vessel in accordance with this Clause 29 and/or Clause 40, the Charterers shall hold the Vessel as gratuitous bailee only to the Owners and the Charterers shall procure that the master and crew follow the orders and directions of the Owners.

The Owners shall arrange for an authorised representative to board the Vessel as soon as reasonably practicable following the termination of the Charter.  The Vessel shall be deemed to be repossessed by the Owners from the Charterers upon the boarding of the Vessel by the Owners' representative.  All arrangements and expenses relating to the settling of wages, disembarkation and repatriation of the Charterers' Master, officers and crew shall be the sole responsibility of the Charterers.

30.          Dispute Resolution

*) (a) This ContractCharter and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this ContractCharter shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.

The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.

Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.  The language or any arbitration proceedings shall be in English.

*) (b)  This Contract shall be governed by and construed in accordance with Title 9 of the United States Code and the Maritime Law of the United States and any dispute arising out of or in connection with this Contract shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for the purposes of enforcing any award, judgement may be entered on an award by any court of competent jurisdiction.  The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc.

In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced.

*) (c)  This Contract shall be governed by and construed in accordance with the laws of the place mutually agreed by the parties and any dispute arising out of or in connection with this Contract shall be referred to arbitration at a mutually agreed place, subject to the procedures applicable there.

(d)  Notwithstanding (a), (b) or (c) above, the parties may agree at any time to refer to mediation any difference and/or dispute arising out of or in connection with this Contract.

In the case of a dispute in respect of which arbitration has been commenced under (a), (b) or (c) above, the following shall apply:-

(i)          Either party may at any time and from time to time elect to refer the dispute or part of the dispute to mediation by service on the other party of a written notice (the "Mediation Notice") calling on the other party to agree to mediation.

(ii)          The other party shall thereupon with 14 calendar days of receipt of the Mediation Notice confirm that they agree to mediation, in which case the parties shall thereafter agree a mediator within a further 14 calendar days, failing which on the application of either party a mediator will be appointed promptly by the Arbitration Tribunal ("the Tribunal") or such person as the Tribunal may designate for that purpose.  The mediation shall be conducted in such place and in accordance with such procedure and on such terms as the parties may agree or, in the event of disagreement, as may be set by the mediator.

(iii)          If the other party does not agree to mediate, that fact may be brought to the attention of the Tribunal and may be taken into account by the Tribunal when allocating the costs of the arbitration as between the parties.

(iv)          The mediation shall not affect the right of either party to seek such relief or take such steps as it considers necessary to protect its interest.

(v)          Either party may advise the Tribunal that they have agreed to mediation.  The arbitration procedure shall continue during the conduct of the mediation but the Tribunal may take the mediation timetable into account when setting the timetable for steps in the arbitration.

(vi)          Unless otherwise agreed or specified in the mediation terms, each party shall bear its own costs incurred in the mediation and the parties shall share

PART II "BARECON 2001" Standard Bareboat Charter

equally the mediator's costs and expenses.

(vii)          The mediation process shall be without prejudice and confidential and no information or documents disclosed during it shall be revealed to the Tribunal except to the extent that they are disclosable under the law and procedure governing the arbitration.

(Note:  The parties should be aware that the mediation process may not necessarily interrupt time limits.)

(e) If Box 35 in Part I is not appropriately filled in, sub-clause 30(a) of this Clause shall apply.  Sub-clause 30(d) shall apply in all cases.

*) Sub-clauses 30(a), 30(b) and 30(c) are alternatives; indicate alternative agreed in Box 35.

31.          Notices See Clause 43

(a)  Any notice to be given by either party to the other party shall be in writing and may be sent by fax, telex, registered or recorded mail or by personal service.

(b)  The address of the Parties for service of such communication shall be as stated in Boxes 3 and 4 respectively.

"BARECON 2001" Standard Bareboat Charter PART III OPTIONAL PART

PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY

(Optional, only to apply if expressly agreed and stated in Box 37)

1.          Specifications and Building Contract

(a)  The Vessel shall be constructed in accordance with the Building Contract (hereafter called "the Building Contract") as annexed to this Charter, made between the Builders and the Owners and in accordance with the specifications and plans annexed thereto, such Building Contract, specifications and plans annexed thereto, such Building Contract, specifications and plans having been counter-signed as approved by the Charterers.

(b)  No change shall be made in the Building Contract or in the specifications or plans of the Vessel as approved by the Charterers as aforesaid, without the Charterers' consent.

(c)  The Charterers shall have the right to send their representative of the Builders' Yard to inspect the Vessel during the course of her construction to satisfy themselves that construction is in accordance with such approved specifications and plans as referred to under sub-clause (a) of this Clause.

(d)  The Vessel shall be built in accordance with the Building Contract and shall be of the description set out therein.  Subject to the provisions of sub-clause 2(c)(ii) hereunder, the Charterers shall be bound to accept the Vessel from the Owners, completed and constructed in accordance with the Building Contract, on the date of delivery by the Builders.  The Charterers undertake that having accepted the Vessel they will not thereafter raise any claims against the Owners in respect of the Vessel's performance or specification or defects, if any.  Nevertheless, in respect of any repairs, replacement or defects which appear within the first 12 months from delivery by the Builders, the Owners shall endeavor to compel the Builders to repair, replace or remedy any defects or to recover from the Builders any expenditure incurred in carrying out such repairs, replacements or remedies.  However, the Owners' liability to the Charterers shall be limited to the extent the Owners have a valid claim against the Builders under the guarantee clause of the Building Contract (a copy whereof has been supplied to the Charterers).  The Charterers shall be bound to accept such sums as the Owners are reasonably able to recover under this Clause and shall make no further claim on the Owners for the difference between the amount(s) so recovered and the actual expenditure on repairs, replacement or remedying defects or for any loss of time incurred.

Any liquidated damages for physical defects or deficiencies shall accrue to the account of the party stated in Box 41(a) or if not filled in shall be shared equally between the parties.  The costs of pursuing a claim or claims against the Builders under this Clause (including any liability to the Builders) shall be borne by the party stated in Box 41(b) or if not filled in shall be shared equally between the parties.

2.          Time and Place of Delivery

(a)  Subject to the Vessel having completed her acceptance trials including trials of cargo equipment in accordance with the Building Contract and specifications to the satisfaction of the Charterers, the Owners shall give and the Charterers shall take delivery of the Vessel afloat when ready for delivery and properly documented at the Builders' Yard or some other safe and readily accessible dock, wharf or place as may be agreed between the parties hereto and the Builders.  Under the Building Contract the Builders have estimated that the Vessel will be ready for delivery to the Owners as therein provided but the delivery date for the purpose of this Charter shall be the date when the Vessel is in fact ready for delivery by the Builders after completion of trials whether that be before or after as indicated in the Building Contract.  The Charterers shall not be entitled to refuse acceptance of delivery of the Vessel and upon and after such acceptance, subject to Clause 1(d), the Charterers shall not be entitled to make any claim against the Owners in respect of any conditions, representations or warranties, whether express or implied, as to the seaworthiness of the Vessel or in respect of delay in delivery.

(b)  If for any reason other than a default by the Owners under the Building Contract, the Builders become entitled under that Contract not to deliver the Vessel to the Owners, the Owners shall upon giving to the Charterers written notice of Builders becoming so entitled, be excused from giving delivery of the Vessel to the Charterers and upon receipt of such notice by the Charterers this Charter shall cease to have effect.

(c)  If for any reason the Owners become entitled under the Building Contract to reject the Vessel the Owners shall, before exercising such right or rejection, consult the Charterers and thereupon

(i) if the Charterers do not wish to take delivery of the Vessel they shall inform the Owners within seven (7) running days by notice in writing and upon receipt by the Owners of such notice this Charter shall cease to have effect; or

(ii) if the Charterers wish to take delivery of the Vessel they may by notice in writing within seven (7) running days require the Owners to negotiate with the Builders as to the terms on which delivery should be taken and/or refrain from exercising their right to rejection and upon receipt of such notice the Owners shall commence such negotiations and/or take delivery of the Vessel from the Builders and deliver her to the Charterers;

(iii) in no circumstances shall the Charterers be entitled to reject the Vessel unless the Owners are able to reject the Vessel from the Builders;

(iv) if this Charter terminates under sub-clause (b) or (c) of this Clause, the Owners shall thereafter not be liable to the Charterers for any claim under or arising out of this Charter or its termination.

(d)  Any liquidated damages for delay in delivery under the Building Contract and any costs incurred in pursuing a claim therefor shall accrue to the account of the party stated in Box 41(c) or if not filled in shall be shared equally between the parties.

3.          Guarantee Works

If not otherwise agreed, the Owners authorise the Charterers to arrange for the guarantee works to be performed in accordance with the building contract terms, and hire to continue during the period of guarantee works.  The Charterers have to advise the Owners about the performance to the extent the Owners may request.

4.          Name of Vessel

The name of the Vessel shall be mutually agreed between the Owners and the Charterers and the Vessel shall be painted in the colours, display the funnel insignia and fly the house flag as required by the Charterers.

5.          Survey on Redelivery

The Owners and the Charterers shall appoint surveyors for the purpose of determining and agreeing in writing the condition of the Vessel at the time of re-delivery.

Without prejudice to Clause 15 (Part II), the Charterers shall bear all survey expenses and all other costs, if any, including the cost of docking and undocking, if required, as well as all repair costs incurred.  The Charterers shall also bear all loss of time spent in connection with any docking and undocking as well as repairs, which shall be paid at the rate of hire per day or pro rata.

"BARECON 2001" Standard Bareboat Charter PART IV OPTIONAL PART

HIRE/PURCHASE AGREEMENT

(Optional, only to apply if expressly agreed and stated in Box 42)

On expiration of this Charter and provided the Charterers have fulfilled their obligations according to Part I and II as well as Part III, if applicable, it is agreed, that on payment of the final payment of hire as per Clause 11 the Charterers have purchased the Vessel with everything belonging to her and the Vessel is fully paid for.

In the following paragraphs the Owners are referred to as the Sellers and the Charterers as the Buyers.

The Vessel shall be delivered by the Sellers and taken over by the Buyers on expiration of the Charter.

The Sellers guarantee that the Vessel, at the time of delivery, is free from all encumbrances and maritime liens or any debts whatsoever other than those arising from anything done or not done by the Buyers or any existing mortgage agreed not to be paid off by the time of delivery.  Should any claims, which have been incurred prior to the time of delivery be made against the Vessel, the Sellers hereby undertake to indemnify the Buyers against all consequences of such claims to the extent it can be proved that the Sellers are responsible for such claims.  Any taxes, notarial, consular and other charges and expenses connected with the purchase and registration under Buyers' flag, shall be for Buyers' account.  Any taxes, consular and other charges and expenses connected with closing of the Sellers' register, shall be for Sellers' account.

In exchange for payment of the last month's hire instalment the Sellers shall furnish the Buyers with a Bill of Sale duly attested and legalized, together with a certificate setting out the registered encumbrances, if any.  On delivery of the Vessel the Sellers shall provide for deletion of the Vessel from the Ship's Register and deliver a certificate of deletion to the Buyers.

The Sellers shall, at the time of delivery, hand to the Buyers all classification certificates (for hull, engines, anchors, chains, etc.) as well as all plans which may be in Sellers' possession.

The Wireless Instaliation and Nautical Instruments, unless on hire, shall be included in the sale without any extra payment.

The Vessel with everything belonging to her shall be at Sellers' risk and expense until she is delivered to the Buyers, subject to the conditions of this Contract and the Vessel with everything belonging to her shall be delivered and taken over as she is at the time of delivery, after which the Sellers shall have no responsibility for possible faults or deficiencies of any description.

The Buyers undertake to pay for the repatriation of the Master, officers and other personnel if appointed by the Sellers to the port where the Vessel entered the Bareboat Charter as per Clause 3 (Part II) or to pay the equivalent cost for their journey to any other place.

"BARECON 2001" Standard Bareboat Charter PART V OPTIONAL PART

PROVISIONS TO APPLY FOR VESSELS REGISTERED IN A BAREBOAT CHARTER REGISTRY

(Optional, only to apply if expressly agreed and stated in Box 43)

1.          Definitions

For the purpose of this PART V, the following terms shall have the meanings hereby assigned to them:

"The Bareboat Charter Registry" shall mean the registry of the State whose flag the Vessel will fly and in which the Charterers are registered as the bareboat charterers during the period of the Bareboat Charter.

"The Underlying Registry" shall mean the registry of the state in which the Owners of the Vessel are registered as Owners and to which jurisdiction and control of the Vessel will revert upon termination of the Bareboat Charter Registration.

2.          Mortgage

The Vessel chartered under this Charter is financed by a mortgage and the provisions of Clause 12(b) (Part II) shall apply.

3.          Termination of Charter by Default

If the Vessel chartered under this Charter is registered in a Bareboat Charter Registry as stated in Box 44, and if the Owners shall default in the payment of any amounts due under the mortgage(s) specified in Box 28, the Charterers shall, if so required by the mortgagee, direct the Owners to re-register the Vessel in the Underlying Registry as shown in Box 45.

In the event of the Vessel being deleted from the Bareboat Charter Registry as stated in Box 44, due to a default by the Owners in the payment of any amounts due under the mortgage(s), the Charterers shall have the right to terminate this Charter forthwith and without prejudice to any other claim they may have against the Owners under this Charter.
 

Execution Version

ADDITIONAL CLAUSES TO BARECON 2001 DATED 2 April 2018

CLAUSE 32  — CHARTER PERIOD

32.1 For the avoidance of doubt, notwithstanding the fact that the Charter Period shall commence on the Commencement Date, this Charter shall be:

(a) in full force and effect; and

(b) valid, binding and enforceable against the parties hereto,   with effect from the date of this Charter until the end of the Charter Period (subject to the terms of this Charter).

32.2 The Charter Period shall, subject to the terms of this Charter, continue for a period of one hundred and twenty (120) months from the Commencement Date.

CLAUSE 33  — CANCELLATION

33.1 If:

(a) a Termination Event occurs prior to the delivery of the Vessel by the Charterers as sellers to Owners as buyers under the MOA;

(b) it becomes unlawful for the Owners (as buyers) to perform or comply with any or all of their obligations under the MOA or any of the obligations of the Owners under the MOA are not or cease to be legal, valid, binding and enforceable; and/or

(c) the MOA expires, is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason,   then this Charter shall immediately terminate and be cancelled (provided that any provision hereof expressed to survive such termination or cancellation shall so do in accordance with its terms) without the need for either of the Owners or the Charterers to take any action whatsoever provided that the Owners shall be entitled to retain all fees paid by the Charterers pursuant to Clause 41.1 (and without prejudice to Clause 41.1 and if such fees have not been paid but are due and payable, the Charterers shall forthwith pay such fees to the Owners in accordance with Clause 41.1) and such payment and the payment of (i) all other amounts payable under this Charter which have fallen due on or prior to the date on which this Charter may be terminated pursuant to this Clause 33.1 but which remain unpaid together with any default interest thereon and (ii) any costs and expenses incurred by the Owners in collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest in relation thereto shall not be construed as a penalty but shall represent an agreed estimate of the loss and damage suffered by the Owners in entering into this Charter upon the terms and conditions contained herein and the MOA upon the terms and conditions contained therein, and shall therefore be paid as compensation to the Owners.

CLAUSE 34   — DELIVERY OF VESSEL

34.1

(a) This Charter is part of a transaction involving the sale, purchase and charter back of the Vessel and constitutes one of the Leasing Documents.

1

(b) The obligation of the Owners to charter the Vessel to the Charterers hereunder is subject to and conditional upon:

(i) the delivery of the Vessel to the Owners as buyers by the Charterers as sellers pursuant to the MOA and, for the purposes of this Charter, the Vessel shall be deemed delivered to the Charterers simultaneously with delivery of the Vessel to the Owners pursuant to the MOA and at delivery the Charterers shall, subject to Clause 34.7, keep all bunkers, lubrication oil, unbroached provisions, paints, ropes and other consumable stores in the Vessel which were delivered under the MOA;

(ii) no Potential Termination Event or Termination Event having occurred and being continuing as at the Commencement Date;

(iii) the representations and warranties contained in Clause 45 being true and correct on the date of this Charter and each day thereafter until and including the last day of the Charter Period;

(iv) Delivery occurring on or before the Cancelling Date; and

(v) the Owners having received from the Charterers on or prior to Delivery, the documents or evidence set out in Schedule II in form and substance satisfactory to them, and if any such documents are not in the English language then they shall be accompanied by an English translation.

34.2 The conditions precedent specified in Clause 34.1(b) are inserted for the sole benefit of the Owners and may be waived or deferred in whole or in part and with or without conditions by the Owners.

34.3 Upon the requirements of Clause 34.1(b) being fulfilled or waived to the satisfaction of the Owners, the Owners shall give notice thereof in writing to the Charterers.

34.4 On delivery to and acceptance by the Owners of the Vessel under the MOA from the Charterers as sellers and subject to the provisions of this Clause 34, the Vessel shall be deemed to have been delivered to, and accepted without reservation by, the Charterers under this Charter and the Charterers shall become and be entitled to the possession and use of the Vessel on and subject to the terms and conditions of this Charter.

34.5 On Delivery, as evidence of the commencement of the Charter Period the Charterers shall sign and deliver to the Owners the Acceptance Certificate. Without prejudice to this Clause 34.5, the Charterers shall be deemed to have accepted the Vessel under this Charter and the commencement of the Charter Period having started, on Delivery even if for whatever reason, the Acceptance Certificate is not signed and/or the Charterers do not take actual possession of the Vessel at that time.

34.6 The Charterers shall not be entitled for any reason whatsoever to refuse to accept delivery of the Vessel under this Charter once the Vessel has been delivered to and accepted by the Owners under the MOA from the Charterers as sellers, and the Owners shall not be liable for any losses, costs or expenses whatsoever or howsoever arising including, without limitation, any loss of profit or any loss or otherwise:

(i) resulting directly or indirectly from any defect or alleged defect in the Vessel or any failure of the Vessel; or

(ii) arising from any delay in the commencement of the Charter Period or any failure of the Charter Period to commence.

34.7 The Owners will not and shall not be obliged to deliver the Vessel to the Charterers with any bunkers and unused lubricating oils and greases (whether in storage tanks and unopened

2

drums or otherwise) except such items as are on the Vessel on Delivery which shall be taken over by the Charterers at no extra cost.

CLAUSE 35  — QUIET ENJOYMENT

35.1 Provided that the Charterers do not breach any terms of this Charter or any other Leasing Document, the Owners hereby agree: (i) not to disturb or interfere or do or cause any person claiming on behalf of the Owners to disturb or interfere with the Charterers' lawful use, possession and quiet enjoyment of the Vessel during the Charter Period (including its full, quiet and unfettered use, possession and employment of the Vessel subject to the terms of this Charter); and (ii) without limiting (i), not to take any steps to wind up, liquidate or place in administration or receivership of the Owners or commence or continue any analogous proceedings in any jurisdiction in respect of the Owners.

35.2 Subject to Clause 35.1 above, the Charterers acknowledge that, at any time during the Charter Period:

(a) the Owners are entitled to enter into certain funding arrangements with their financier(s), (the "Mortgagee"), in order to finance in part or in full the Financing Amount, which funding arrangements may be secured, inter alia, by the relevant Financial Instruments;

(b) the Owners may do any of the following as security for the funding arrangements referred to in paragraph (a) above:

(i) execute a ship mortgage over the Vessel or any other Financial Instrument in favour of a Mortgagee;

(ii) assign their rights and interests to, in or in connection with this Charter in favour of a Mortgagee;

(iii) assign their rights and. interests to, in or in connection with the Insurances, the Earnings and the Requisition Compensation of the Vessel in favour of the Mortgagee; and

(iv) enter into any other document or arrangement which is necessary to give effect to such financing arrangements;

(c) the Owners agree to use their commercially reasonable endeavours to procure that the provisions in the Financial Instruments relating to employment, insurances, operation, repairs and maintenance of the Vessel do not contradict in any material way the analogous provisions in this Charter and the other Leasing Documents; and

(d) the Charterers undertake to comply, and provide such information and documents commercially reasonably required to enable the Owners to comply, with all such instructions or directions in regard to the employment, insurances, operation, repairs and maintenance of the Vessel as laid down in any Financial Instrument or as may be directed from to time during the currency of this Charter by the Mortgagee in conformity with any Financial Instrument. The Charterers further agree and acknowledge all relevant terms, conditions and provisions of each Financial Instrument (if any) and agree to acknowledge this in writing in any form that may be commercially reasonably required by the Mortgagee.

35.3 The Owners shall procure that their financier(s) enter into a Quiet Enjoyment Agreement with the Charterers on terms acceptable to the Charterers, acting reasonably.

35.4 Subject to Clause 35.6, during the Charter Period any change in the registered or beneficial ownership of the Vessel or the Owners (by sale of shares in the Owners or other transactions having the same effect) shall require the Charterers' prior approval which shall not be unreasonably withheld or delayed, provided always that, notwithstanding such change, this

3

Charter would continue on identical terms (save for logical, consequential or mutually agreed amendments). The Guarantor (or New Guarantor, if applicable) and the Charterers shall (where applicable) remain jointly and severally liable to the aforesaid new owner of the Vessel for its performance of all obligations pursuant to this Charter after change of the registered and/or beneficial ownership of the Vessel or the Owners from the Owners to such new owner.

35.5 The Charterers agree and undertake to enter into any such usual documents as the Owners shall reasonably require to complete or perfect the transfer of the Vessel (with the benefit and burden of this Charter) pursuant to Clause 35.4, with any reasonable documented costs or expenses whatsoever arising in relation thereto to be borne by the Owners.

35.6 The Charterers' approval at Clause 35.4 shall not be required (i) in the event of a Termination Event which is continuing; and/or (ii) in circumstances where the Owners wish to transfer ownership of the Vessel or the Owners to an affiliate (including, without limitation, any member of the China Merchants group) or another lessor or financial institution or trust, fund, leasing company 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 (a "Permitted Transferee") and (if applicable) the Owners transfers its rights, title and interests and obligations to the Permitted Transferee to enable the Charter to continue pursuant to Clause 35.4 and Clause 35.5.

CLAUSE 36   — CHARTERHIRE

36.1 In consideration of the Owners agreeing to charter the Vessel to the Charterers under this Charter at the request of the Charterers, the Charterers hereby irrevocably and unconditionally agree to pay to the Owners, the Charterhire, the Advance Charterhire and the Purchase Obligation Price or, as the case may be, the Purchase Option Price.

36.2 The Charterers shall pay the Advance Charterhire to the Owners on the Commencement Date which amount shall be deemed paid on such date by it being set off against the corresponding portion of the Purchase Price payable by the Owners as buyers to the Charterers as sellers under the MOA on the Commencement Date pursuant to the terms thereof and which, for the avoidance of any doubt, shall be unsecured and non-refundable under all circumstances and no interest shall accrue on the Advance Charterhire.

36.3 Subject to the terms of this Clause 36, the Charterers shall pay the Charterhire quarterly in arrears in forty (40) consecutive instalments to the Owners under this Charter with the first instalment of the Charterhire payable on the date falling three months after the Commencement Date and the final instalment of the Charterhire payable on the fast day of the Charter Period.

36.4 The Vessel shall not at any time be deemed off-hire and the Charterers' obligation to pay all Charterhire, Advance Charterhire and other amounts payable under the Leasing Documents shall be absolute and unconditional under any and all circumstances and shall not be affected by any circumstances of any nature whatsoever including but not limited to:

(a) any set-off (except in the case of the Advance Charterhire which shall be set off in accordance with Clause 36.2), counterclaim, recoupment, defence, claim or other right which the Charterers may at any time have against the Owners or any other person for any reason whatsoever including, without limitation, any act, omission or breach on the part of the Owners under this Charter or any other agreement at any time existing between the Owners and the Charterers;

(b) any change, extension, indulgence or other act or omission in respect of any indebtedness or obligation of the Charterers, or any sale, exchange, release or surrender of, or other dealing in, any security for any such indebtedness or obligation;

4

(c) any title defect or encumbrance or any dispossession of the Vessel by title paramount or otherwise;

(d) any defect in the seaworthiness, condition, value, design, merchantability, operation or fitness for use of the Vessel or the ineligibility of the Vessel for any particular trade;

(e) the Total Loss or any damage to or forfeiture or court marshall's or other sale of the Vessel;

(f) any libel, attachment, levy, detention, sequestration or taking into custody of the Vessel or any restriction or prevention of or interference with or interruption or cessation in, the use or possession thereof by the Charterers;

(g) any insolvency, bankruptcy, reorganization, arrangement, readjustment, dissolution, liquidation or similar proceedings by or against the Charterers;

(h) any invalidity, unenforceability, lack of due authorization or other defects, or any failure or delay in performing or employing with any of the terms and provisions of this Charter or any of the Leasing Documents by any party to this Charter or any other person;

(i) any enforcement or attempted enforcement by the Owners of their rights under this Charter or any of the Leasing Documents executed or to be executed pursuant to this Charter; or

(j) any loss of use of the Vessel due to deficiency or default or strike of officers or crew, fire, breakdown, damage, accident, defective cargo or any other cause which would or might but for this provision have the effect of terminating or in any way affecting any obligation of the Charterers under this Charter.

36.5 Time of payment of the Charterhire, the Advance Charterhire and other payments by the Charterers shall be of the essence of this Charter and the other Leasing Documents.

36.6 All payments of the Charterhire, the Advance Charterhire and any other amounts payable under the Leasing Documents shall be made in Dollars, in same day available funds and by not later than 4:00pm (Shanghai time) on the due date therefor.

36.7 All Charterhire and any moneys payable hereunder shall be payable by the Charterers to the Owners to such account as the Owners may notify the Charterers in writing.

36.8 Payment of the Charterhire and the Advance Charterhire and other moneys hereunder shall be at the Charterers' risk until receipt by the Owners.

36.9 All stamp duty, value added tax, withholding or other taxes and import and export duties and all other similar types of charges which may be levied or assessed on or in connection with:

(a) the operation of this Charter in respect of the hire and all other payments to be made pursuant to this Charter and the remittance thereof to the Owners; and

(b) the import, export, purchase, delivery and re-delivery of the Vessel,

shall be borne by the Charterers. The Charterers shall pay, if applicable, value added tax and other similar tax levied on any Charterhire and Advance Charterhire and other payments payable under this Charter by addition to, and at the time of payment of, such amounts.

36.10 Any payment of the Charterer Termination Purchase Price, the Owner Termination Purchase Price, the Special Termination Purchase Price, the Purchase Obligation Price or the Purchase Option Price (as the case may be) shall be made together with any other amount payable under this Charter.

5

36.11 If the Charterers fail to make any payment due under this Charter on the due date, they shall pay interest on such late payment at the default rate of two per cent. (2%) per annum plus the Interest Rate from the date on which such payment became due until the date of payment thereof.

36.12 All default interest and any other payments under this Charter 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.

36.13 Any payment which is due to be made on a day which is not a Business Day, shall be made on the preceding Business Day in the same calendar month.

CLAUSE 37  — POSSESSION OF VESSEL

37.1 The Charterers shall not, without the prior written consent of the Owners, assign, mortgage or pledge the Vessel or any interest therein and shall not permit the creation of any Security Interest thereon other than the Permitted Security Interests.

37.2 The Charterers shall promptly notify any party (as the Owners may reasonably request), in writing that the Vessel is the property of the Owners and the Charterers shall provide the Owners with a copy of such written notification.

37.3 Other than in the circumstances specified in Clause 37.4, if the Vessel is arrested, seized, impounded, forfeited, detained or taken out of their possession or control (whether or not pursuant to any distress, execution or other legal process), the Charterers shall procure the immediate release of the Vessel (whether by providing bail or procuring the provision of security or otherwise do such lawful things as the circumstances may require) and shall (if such event will or is likely to exceed 20 days) immediately notify the Owners of such event and shall indemnify the Owners against all losses, costs or charges incurred by the Owners by reason thereof in re-taking possession or otherwise in re-acquiring the Vessel. Without prejudice to the generality of the foregoing, the Charterers agree to indemnify the Owners against all consequences or liabilities arising from the master, officers or agents signing bills of lading or other documents.

37.4 If the Vessel is arrested or otherwise detained solely because of the Owners' direct actions or omissions and for reasons which are not in any part a consequence of a Relevant Person's (or its affiliate's) contributory negligence and/or wilful misconduct, the Owners shall at their own expense take all reasonable steps to procure that within a reasonable time the Vessel is released, including the provision of bail.

37.5 The Charterers shall pay and discharge or cause any permitted sub-lessee of the Vessel, to pay and discharge all obligations and liabilities whatsoever which have given or may give rise to liens on or claims enforceable against the Vessel and take all steps to prevent an arrest (threatened or otherwise) of the Vessel.

CLAUSE 38   — INSURANCE

38.1 The Charterers shall procure that insurances are effected in form and substance satisfactory to the Owners:

(a) in Dollars;

(b) in the case of fire and usual hull and machinery, marine risks and war risks (including blocking and trapping), on an agreed value basis in an amount of at least the higher from time to time of one hundred and twenty per cent. (120%) of: (i) the aggregate of the then Outstanding Principal Balance; (ii) the Book Value; and (iii) the Market Value;

(c) in the case of oil pollution liability risks for the Vessel, for an aggregate amount equal to the highest level of cover from time to time available under protection and indemnity club entry

6

and in the international marine insurance market and for an amount of not less than $1,000,000,000;

(d) in relation to protection and indemnity risks in respect of the full tonnage of the Vessel;

(e) in the case of innocent Owners' interest insurance, lessor's additional perils (pollution) insurance, Mortgagees' interest insurance and Mortgages' additional perils (pollution) insurance, for an aggregate amount equal to at least the higher from time to time of one hundred and twenty percent. (120%) of: (i) the Outstanding Principal Balance; (ii) the Book Value; and (iii) the Market Value;

(f) on terms acceptable to the Owners; and

(g) through approved brokers and with first class international insurers and/or underwriters acceptable to the Owners (including having a Standard & Poor's rating of BBB+ or above, a Moody's rating of A or above or an AM Best rating of A- or above) or, in the case of war risks and protection and indemnity risks, in a war risks and protection and indemnity risks associations acceptable to the Owners (including being a member of the International Group of Protection and Indemnity Clubs).

38.2 In addition to the terms set out in Clause 13(a), the Charterers shall procure that the obligatory insurances shall:

(a) subject always to paragraph (ii), name the Owners (and if applicable its financiers), the Approved Manager and the Charterers as the only named assureds unless the interest of every other named assured or co-assured is limited:

(i) in respect of any obligatory insurances for hull and machinery and war risks;

(1) to any provable out-of-pocket expenses that they have incurred and which form part of any recoverable claim on underwriters; and

(2) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against them); and

(ii) in respect of any obligatory insurances for protection and indemnity risks, to any recoveries they are entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against them,

and every named assured or co-assured has undertaken in writing to the Owners or their financiers (in such form as they require) that any deductible shall be apportioned between the Charterers and every other named assured or co-assured in proportion to the gross claims made or paid by each of them and that they shall do all things necessary and provide all documents, evidence and information to enable the Owners and their financers (if any) in accordance with the terms of the loss payable clause, to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;

(b) whenever a financier of the Owners requires:

(i) in respect of fire and other usual marine risks and war risks, name (or be amended to name) the same as additional named assured for their rights and interests, warranted no operational interest and with full waiver of rights of subrogation against such financiers, but without such financiers thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;

7

(ii) in relation to protection and indemnity risks, name (or be amended to name) the same as additional insured or co-assured for their rights and interests to the extent permissible under the relevant protection and indemnity club rules; and

(iii) name the Owners' financiers (as applicable) and the Owners (as applicable) as the first ranking loss payee and the second ranking loss payee respectively (and in the absence of any financiers, the Owners as first ranking loss payee) in accordance with the terms of the relevant loss payable clauses approved by the Owners' financiers and the Owners with such directions for payment in accordance with the terms of such relevant loss payable clause, as the Owners and their financiers (if any) may specify;

(c) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Owners and/or their financiers (as applicable) shall be made without set-off, counterclaim or deductions;

(d) provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Owners or their financiers (if any);

(e) provide that the Owners and/or their financiers (if any) may make proof of loss if the Charterers fail to do so; and

(f) 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 Owners and/or their financiers (if or if any obligatory insurance is allowed to lapse for non-payment of premium, such cancellation, change or lapse shall not be effective with respect to the Owners and/or their financiers (if any) for thirty (30) days after receipt by the Owners and/or their financiers (if any) of prior written notice from the insurers of such cancellation, change or lapse.

38.3 The Charterers shall:

(a) at least fourteen (14) days prior to Delivery (or such shorter period agreed by the parties), notify in writing the Owners (copied to their financiers (if any)) of the terms and conditions of all Insurances;

(b) at least fourteen (14) days before the expiry of any obligatory insurance notify the Owners (copied to their financiers (if any)) of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the Charterers propose to renew that obligatory insurance and of the proposed terms of renewal and obtain the Owners' approval to such matters;

(c) at least seven (7) days before the expiry of any obligatory insurance, procure that such obligatory insurance is renewed or to be renewed on its expiry date in accordance with the provisions of this Charter;

(d) 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 or the effective date of the new insurance and protection and indemnity cover notify the Owners (copied to their financiers (if any)) in writing of the terms and conditions of the renewal; and

(e) as soon as practicable after the expiry of any obligatory insurance, deliver to the Owners a letter of undertaking as required by this Charter in respect of such Insurances for the Vessel as renewed pursuant to this Clause 38.3 together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Owners and/or their financiers (if any).

38.4 The Charterers shall ensure that all insurance companies and/or underwriters, and/or (if any) insurance brokers provide the Owners with all policies, cover notes and certificates of entry relating to the obligatory insurances which they are to effect or renew and of a letter or letters

8

or undertaking in a form required by the Owners and/or their financiers (if any) and including undertakings by the insurance companies and/or underwriters 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 this Charter and the Financial Instruments;

(b) they will hold the benefit of such policies and such insurances, to the order of the Owners and/or their financiers (if any) and/or such other party in accordance with the said loss payable clause;

(c) they will advise the Owners and their financiers (if any) promptly of any material change to the terms of the obligatory insurances of which they are aware;

(d) (i) they will indicate in the letters of undertaking that they will immediately notify the Owners and their financiers (if any) when any cancellation, charge or lapse of the relevant obligatory insurance occur and (ii) following a written application from the Owners and/or their financiers (if any) not later than one (1) month before the expiry of the obligatory insurances they will notify the Owners and their financiers (if any) not less than fourteen (14) days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the Charterers and, in the event of their receiving instructions to renew, they will promptly notify the Owners and their financiers (if any) of the terms of the instructions; and

(e) if any of the obligatory insurances form part of any fleet cover, the Charterers shall procure that the insurance broker(s), or leading insurer, as the case may be, undertakes to the Owners and their financiers (if any) that such insurance broker or insurer will not set off against any sum recoverable in respect of a claim relating to the Vessel under such obligatory insurances any premiums due in respect of any other vessel under any fleet cover of which the Vessel forms a part or any premium due for other insurances, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums, 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 Vessel forthwith upon being so requested by the Owners and/or their financiers (if any) and where practicable.

38.5 The Charterers shall ensure that any protection and indemnity and/or war risks associations in which the Vessel is entered provides the Owners and their financiers (if any) with:

(a) a copy of the certificate of entry for the Vessel as soon as such certificate of entry is issued;

(b) a letter or letters of undertaking in such form as may be required by the Owners and their financiers (if any) or in such association's standard form; and

(c) if applicable, 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 the Vessel.

38.6 The Charterers shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.

38.7 The Charterers shall procure that all premiums or other sums payable in respect of the obligatory insurances are punctually paid and produce all relevant receipts when so required by the Owners.

38.8 The Charterers 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.

9

38.9 The Charterers 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 Charterers shall procure that all necessary action is taken and all requirements are complied with which may from time to time be applicable to the obligatory insurances, and (without limiting the obligations contained in this Clause) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Owners have not given their prior approval (unless such exclusions or qualifications are made in accordance with the rules of a protection and indemnity association which is a member of the International Group of protection and indemnity associations);

(b) the Charterers shall not make or permit any changes relating to the classification or classification society or manager or operator of the Vessel unless such changes have first been approved by the underwriters of the obligatory insurances or the Owners;

(c) if applicable, the Charterers shall procure that all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Vessel is entered to maintain cover for trading 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) are made and the Charterers shall promptly provide the Owners with copies of such declarations and a copy of the certificate of financial responsibility; and

(d) the Charterers shall not employ the Vessel, 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.

38.10 The Charterers shall not make or agree to any alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance without the prior written consent of the Owners.

38.11 The Charterers shall not settle, compromise or abandon any claim under any obligatory insurance for a Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Owners to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

38.12 The Charterers shall provide the Owners, promptly upon the Owners' reasonable written request, copies of:

(a) all communications between the Charterers and:

(i) the approved brokers;

(ii) the approved protection and indemnity and/or war risks associations; and

(iii) the first class international insurers and/or underwriters, which relate directly or indirectly to:

(A) the Charterers' obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

(B) any credit arrangements made between the Charterers and any of the persons referred to in paragraphs (i) or (ii) relating wholly or partly to the effecting or maintenance of the obligatory insurances;

10

(b) any communication with all parties involved in case of a daim under any of the Vessel's insurances.

38.13 The Charterers shall promptly provide the Owners (or any persons which they may designate) with any information which the Owners (or any such designated person) request 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 13(a) or dealing with or considering any matters relating to any such insurances.

38.14 If one or more of the obligatory insurances are not effected and maintained with first class international insurers or are effected with an insurance or captive subsidiary of the Owners or the Charterers, then the Charterers shall procure, at their own expense, that the relevant insurers maintain in full force and effect facultative reinsurances with reinsurers and through brokers, in each case, of recognised standing and acceptable in all respects to the Owners. Any reinsurance policy shall include, if and when permitted by law, a cut-through clause in a form acceptable to the Owners. The Charterers shall procure that underwriters of the primary insurances assign each reinsurance to the relevant financiers in full, if required.

38.15 The Charterers shall be solely responsible for and indemnify the Owners in respect of all loss or damage to the Vessel (insofar as the Owners shall not be reimbursed by the proceeds of any insurance in respect thereof) however caused occurring at any time or times before physical possession thereof is retaken by the Owners, reasonable wear and tear to the Vessel only excepted.

38.16 The Charterers shall:

(a) reimburse the Owners any expenses incurred by the Owners in obtaining the reports described in Clause 38.13(a); and

(b) procure that there is delivered to the insurance brokers described in Clause 38.13(a) such information in relation to the Insurances as such brokers may require.

38.17 The Charterers shall keep the Vessel insured at their expense against such other risks which the Owners or their financiers (if any) consider reasonable for a prudent shipowner or operator to insure against at the relevant time (as notified by the Owners) and which are, at that time, generally insured against by owners or operators of vessels similar to the Vessel.

CLAUSE 39  — WARRANTIES RELATING TO VESSEL

39.1 It is expressly agreed and acknowledged that the Owners are not the manufacturer or original supplier of the Vessel which has been purchased by the Owners from the Charterers as sellers pursuant to the MOA for the purpose of then chartering the Vessel to the Charterers hereunder and that no condition, term, warranty or representation of any kind is or has been given to the Charterers by or on behalf of the Owners in respect of the Vessel (or any part thereof).

39.2 All conditions, terms or warranties express or implied by the law relating to the specifications, quality, description, merchantability or fitness for any purpose of the Vessel (or any part thereof) or otherwise are hereby expressly excluded.

39.3 The Charterers agree and acknowledge that the Owners shall not be liable for any claim, loss, damage, expense or other liability of any kind or nature caused directly or indirectly by the Vessel or by any inadequacy thereof or the use or performance thereof or any repairs thereto or servicing thereof and the Charterers shall not by reason thereof be released from any

11

liability to pay any Charterhire or the Advance Charterhire or other payment due under this Charter or the other Leasing Documents.

CLAUSE 40   — TERMINATION, REDELIVERY AND TOTAL LOSS

40.1 If:

(i) the Charterer Termination Purchase Price becomes payable in accordance with Clause 44.2 or Clause 44.3; or

(ii) the Owner Termination Purchase Price becomes payable in accordance with Clause 44A.1; or

(iii) the Special Termination Purchase Price becomes payable in accordance with Clause 44B.1 or 44B.2,

the same shall (in each such case) be payable in consideration of the purchase and transfer of the legal and beneficial title of the Vessel pursuant to Clause 40.4 and it is hereby agreed by the parties hereto that payment of the Charterer Termination Purchase Price, the Owner Termination Purchase Price or the Special Termination Purchase Price (as the case may be) shall not be construed as a penalty but shall represent an agreed estimate of the loss and damage suffered by the Owners in buying the Vessel and entering into this Charter upon the terms and conditions contained herein, in each case, at the request of the Charterers and shall therefore be paid as compensation to the Owners for early termination and acquisition of the Vessel by the Charterers.

40.2 Upon irrevocable receipt of the Charterer Termination Purchase Price, the Owner Termination Purchase Price or the Special Termination Purchase Price (as the case may be) by the Owners pursuant to Clause 40.1 in full, this Charter shall terminate.

40.3

(a) If the Charterers fail to make any payment of the Charterer Termination Purchase Price or the Special Termination Purchase Price (as the case may be) on the due date therefor:

(i) Clauses 36.11 and 36.12 shall apply; and

(ii) the Charterers' right to possess and operate the Vessel shall immediately cease and (without in any way affecting the Charterers' obligation to pay the Charterer Termination Purchase Price or the Special Termination Purchase Price (as the case may be)) the Charterers shall, upon the Owners' request (at Owners' sole discretion), be obliged to immediately (and at the Charterers' own cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require; further and for the avoidance of doubt, the Owners shall be entitled (at Owners' sole discretion) to operate the Vessel as they may require and may create whatsoever interests thereon, including without limitation charterparties or any other form of employment contracts ("Post-enforcement interests"); and

(iii) the Owners shall be entitled (at Owners' sole discretion) to sell the Vessel on terms they deem fit (an "Owners' Sale").

(b) Prior to effecting an Owners' Sale, the Owners shall notify the Charterers in writing and the Charterers may within seven (7) Business Days thereafter submit to the Owners evidence (to the satisfaction of the Owners, acting reasonably) of a purchaser offering by way of a firm offer (subject to customary closing conditions and Owners' KYC investigation) (a "Charterers' Offer") an amount at least equal to the higher of (i) the purchase price contemplated by the Owners' Sale and (ii) the then current amount of the Charterer Termination Purchase Price or the Special Termination Price (as the case may be), in which case the Owners will use

12

reasonable endeavours to enter into a memorandum of agreement (in a form acceptable to the Owners and the relevant counterparty buyer) pursuant to such Charterers' Offer.

(c) Without prejudice to the other provisions of this Clause 40.3, the Charterers may at any time following the occurrence of any event set out in Clause 44.2, Clause 44.3 or Clause 448.1 or Clause 44.28 (as the case may be) submit to the Owners evidence (to the satisfaction of the Owners, acting reasonably) of a Charterers' Offer in an amount at least equal to the then current amount of the Charterer Termination Purchase Price or the Special Termination Purchase Price (as the case may be), in which case the Owners will use reasonable endeavours to enter into a memorandum of agreement (in a form acceptable to the Owners and the relevant counterparty buyer) pursuant to such Charterers' Offer.

(d) The proceeds of any sale of the Vessel pursuant to Clause 40.3(a)(iii) or (b) or (c) shall be applied: (i) FIRSTLY, towards the Owners' direct costs incurred in relation to such sale; (ii) SECONDLY, towards payment of the outstanding Charterer Termination Purchase Price or Special Termination Purchase Price (as the case may be) and other sums then due and payable to the Owners under the Leasing Documents; and (iii) THIRDLY, any remaining balance to be paid to the Charterers subject to all actual and/or contingent liabilities incurred under any of the Leasing Documents being fully discharged; provided also in the case of an Owners' Sale that if such proceeds are not in an amount sufficient to discharge in full the aggregate amounts due to the Owners under (i) and (ii), the Charterers shall continue to be liable for the shortfall.

40.4 Concurrently with the Owners receiving irrevocable payment of the Charterer Termination Purchase Price, the Owner Termination Purchase Price or the Special Termination Purchase Price (as the case may be) in full pursuant to the terms of this Charter, the Owners shall (save in the event of Total Loss or where ownership has already been or agreed to be transferred pursuant to Clause 40.3) transfer the legal and beneficial ownership of the Vessel on an "as is where is" basis (and, for the avoidance of doubt but without prejudice to Clause 49.1(b), subject to any Post-enforcement Interests), and otherwise in accordance with the terms and conditions set out at Clause 49.1(a) and (b)), to the Charterers or their nominees and shall (at Charterers' cost) execute a bill of sale and a protocol of delivery and acceptance evidencing the same and any other document strictly necessary to transfer the title of the Vessel to the Charterers (and to the extent required for such purposes, the Vessel shall be deemed first to have been redelivered to the Owners).

40.5 The Charterers hereby undertake to indemnify the Owners against any claims incurred in relation to the Vessel as a result of the Charterers' action or performance prior to such transfer of ownership. Any taxes, notarial, consular and other costs, charges and expenses connected with closing of the Owners' register shall be for the Charterers' account.

40.6 If the Charterers are required to redeliver the Vessel to the Owners pursuant to Clause 40.3, the Charterers shall ensure that the Vessel shall, at the time of redelivery to the Owners (at Charterers' cost and expense):

(a) be in compliance with its Insurances;

(b) be in an equivalent classification as she was as at the Commencement Date without any recommendation or condition, and with valid, unextended certificates for not less than six (6) months and free of average damage affecting the Vessel's classification and in the same or as good structure, state, condition and classification as that in which she was deemed on the Commencement Date, fair wear and tear not affecting the Vessel's classification excepted;

(c) have passed her 5-year and if applicable, 10-year special surveys, and subsequent second intermediate surveys and drydock at the Charterers' time and expense without any condition or outstanding issue and to the satisfaction of the Classification Society and with all the Vessel's classification, trading, national and international certificates that the Vessel had when she was delivered under this Charter and the log book and whatsoever necessary relating to

13

the operation of the Vessel, valid and un-extended without conditions or recommendation falling due;

(d) have her survey cycles up to date and trading and classification certificate valid for at least six (6) months;

(e) be redelivered to the Owners together with all spare parts and spare equipment as were on board at the time of Delivery, and any such spare parts and spare equipment on board at the time of re-delivery shall be taken over by the Owners free of charge;

(f) be free of any cargo and Security Interest (save for the Security Interests granted pursuant to the Financial Instruments);

(g) be redelivered to the Owners together with all material information generated during the Charter Period in respect of the use, possession, operation, navigation and the physical condition of the Vessel, whether or not such information is contained in the Charterers' equipment, computer or property;

(h) be free of any charter (unless the Owners wish to retain the continuance of any then existing charter;

(i) be free of officers and crew (unless otherwise agreed by the Owners); and

(j) shall have had her underwater parts treated with ample anti-fouling to last for the ensuing period up to the next scheduled dry docking of the Vessel.

40.7 The Owners shall, at the time of the redelivery of the Vessel, take over all bunkers, lubricating oil, unbroached provisions, paints, ropes and other consumable stores in the Vessel at no cost to the Owners.

40.8 If the Vessel, for any reason, becomes a Total Loss after Delivery, the Charterers shall pay the Special Termination Purchase Price to the Owners on the earlier of:

(a) the date falling one hundred and twenty (120) days after such Total Loss has occurred; and

(b) the date of receipt by the Owners and/or their financers (if any), in accordance with the terms of the relevant loss payable clause, of the proceeds of insurance relating to such Total Loss,

provided that it is hereby agreed that any insurance proceeds in respect of the Vessel received by the Owners shall be applied in or towards discharging the Charterers' obligation to pay the Special Termination Purchase Price and any interest accrued thereon (and such application shall be deemed satisfaction of the Charterers' obligation to pay the Special Termination Purchase Price to the extent so satisfied) and in the event that the insurance proceeds received from the insurers exceed the Special Termination Purchase Price due (and any interest accrued thereon), the excess shall be paid to the Charterers by way of rebate of hire.

For the avoidance of doubt, in the event that the Vessel becomes a Total Loss:

(A) payment of the Charterhire and all other sums payable under the Leasing Documents during such period shall continue to be made by the Charterers in accordance with the terms thereof unless and until the Owners receive in full the Special Termination Purchase Price;

(B) should insurance proceeds be received by the Owners from the insurers, the Charterers' obligations to pay the Special Termination Purchase Price shall be accordingly reduced by an amount corresponding to such insurance proceeds but in the event that such insurance proceeds are less than the amount of the Special Termination Purchase Price together with any interest accrued thereon, the

14

Charterers shall remain obliged to pay to the Owners the balance so that the full amount of the Special Termination Purchase Price due together with any interest accrued thereon is received by the Owners; and

(C) the obligation of the Charterers to pay the Special Termination Purchase Price shall remain unaffected and exist regardless of whether any of the insurers have agreed or refused to meet or has disputed in good faith, the claim for Total Loss.

40.9 The Owners shall have no obligation to supply to the Charterers with a replacement vessel following the occurrence of a Total Loss.

CLAUSE 41  — FEES AND EXPENSES

41.1 In consideration of the Owners entering into this Charter, the Charterers shall pay to the Owners or their nominee a non-refundable arrangement fee equal to one per cent. (1%) of the Financing Amount which shall be payable on or before and actually received by the Owners or their nominee not later than two (2) Banking Days prior to the Preposition Date.

41.2 Without prejudice to any other rights of the Owners under this Agreement, the Charterers shall pay to the Owners within five (5) Business Days of written demand on a full indemnity basis:

(a) all properly documented costs, charges and expenses incurred by the Owners in collecting any Charterhire or Advance Charterhire or other payments not paid on the due date under this Charter and in remedying any other failure of the Charterers to observe the terms and conditions of this Charter; and

(b) all properly documented costs and expenses (including, but not limited to, legal costs) incurred by the Owners in the negotiation and execution of all documentation in relation to this Charter and the other Leasing Documents including, but not limited to, all costs incurred by the Owners and all legal costs, expenses and other disbursements incurred by the Owners' legal counsels in connection with the same (including in connection with the Relevant Transaction Amendments, the "Relevant Transaction Costs").

CLAUSE 42  —  NO WAIVER OF RIGHTS

42.1 No neglect, delay or indulgence on the part of either party in enforcing the terms and conditions of this Charter shall prejudice the strict rights of that party or be construed as a waiver thereof nor shall any single or partial exercise of any right of either party preclude any other or further exercise thereof.

42.2 No right or remedy conferred upon either party by this Charter shall be exclusive of any other right or remedy provided for herein or by law and all such rights and remedies shall be cumulative.

CLAUSE 43  —  NOTICES

43.1 Any notice, certificate, demand or other communication to be served, given made or sent under or in relation to this Charter shall be in English and in writing and (without prejudice to any other valid method or giving making or sending the same) shall be deemed sufficiently given or made or sent if sent by registered post, fax or by email to the following respective addresses:

15

(A)	to the Owners:	SEA 46 LEASING CO. LIMITEDc/o CMB FINANCIAL LEASING CO., LTD.Attention: Wang WeiEmail: wangwei17@cmbchina.comTel: +8621 61061735Fax:+8621 61059911*1735
(B)	to the Charterers:	ORION OWNERS INC.c/o TMS BULKERS LTD.Attention: Mr. Dimitris GlynosEmail: finance@tms-management.orgTel: +30 216 2006213Fax: +30 210 8090205

or, if a party hereto changes its address or fax number, to such other address or fax number as that party may notify to the other.

CLAUSE 44  — TERMINATION EVENTS

44.1 The Owners and the Charterers hereby agree that any of the following events shall constitute a Termination Event:

(a) the Charterers fail to make any payment on its due date under this Charter or any other Leasing Document to which they are a party or the Guarantor (or New Guarantor or New Shareholder, if applicable) fails to make any payment on its due date under the Leasing Documents to which it is a party and in each case, such non-payment fails to be rectified within five (5) Business Days of the relevant due date; or

(b) the Charterers breach or omit to observe or perform any of their undertakings in Clause Clause 46.1(j), Clause 46.1(m), Clause 46.1(n), Clause 46.1(o), Clause 46.1(r) or Clause 46.1(v) or the Guarantor breaches or omits to observe or perform its financial covenants contained in Clause 11.15 (or any New Guarantor so does in respect of any replacement thereof in accordance with Clause 14 of the Guarantee) of the Guarantee; or the Charterers fail to obtain and/or maintain the Insurances required under Clause 38 in accordance with the provisions thereof or any insurer in respect of such Insurances cancels the insurances or disclaims liability with respect thereto; or

(c) the Charterers and/or a Guarantor (or New Guarantor or New Shareholder, if applicable) commits any other breach of, or omits to observe or perform, any of their other obligations or undertakings in this Charter or any Leasing Document (other than a breach referred to in paragraph (a) or (b) above) unless such breach or omission is, in the opinion of the Owners (acting reasonably), remediable and the Charterers remedy and/or the Guarantor (or New Guarantor or New Shareholder, if applicable) remedies such breach or omission to the satisfaction of the Owners within twenty (20) Business Days of notice thereof from the or

(d) any breach by either the Charterers or the Guarantor (or New Guarantor or New Shareholder, if applicable) occurs of any provision of this Charter or any other Leasing Document (other than a breach falling within paragraph (a), (b) or (c)); or

(e) any representation or warranty made by the Charterers or the Guarantor (or New Guarantor or New Shareholder, if applicable) or the Approved Manager in or pursuant to any Leasing Document proves to be untrue or misleading; or

(f) any of the following occurs in relation to any Financial Indebtedness of a Relevant Person other than the Approved Manager:

16

(i) any Financial Indebtedness of such Relevant Person is not paid when due or, if so payable, on demand after any applicable grace period has expired; or

(ii) any Financial Indebtedness of such 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 and not as a consequence of the exercise of any voluntary right of prepayment; or

(iii) a lease, hire purchase agreement or charter creating any Financial Indebtedness of such Relevant Person is terminated by the lessor or owner as a consequence of any termination event or event of default (howsoever defined); 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 such Relevant Person ceases to be available or becomes capable of being terminated or declared due and payable or cash cover is required or becomes capable of being required, as a result of any termination event or event of default (howsoever defined),

provided that no Termination Event will occur under this paragraph (f) of Clause 44.1 in respect of the Guarantor if the aggregate amount of Financial Indebtedness falling within sub-paragraphs (i) to (iv) above is less than $7,000,000 (or its equivalent in any other currency); or

(g) any of the following occurs in relation to a Relevant Person other than the Approved Manager:

(i) such Relevant Person becomes, in the opinion of the Owners, unable to pay their debts as they fall due; or

(ii) the value of its assets is less than its liabilities (taking into account contingent and prospective liabilities); or

(iii) any assets of the Charterers or Guarantor (or New Guarantor or New Shareholder, if applicable) or the Vessel are subject to any form of execution, attachment, arrest, sequestration or distress which is not discharged within thirty (30) days (unless otherwise agreed by the Owners and the Charterers); or

(iv) any administrative or other receiver is appointed over all or a substantial part of the assets of such Relevant Person unless as part of a solvent reorganisation which has been approved by the Owners; or

(v) such Relevant Person makes any formal declaration of bankruptcy or any formal statement to the effect that they are insolvent or likely to become insolvent, or a winding up or administration order is made in relation to such Relevant Person, or the members or directors of such Relevant Person pass a resolution to the effect that they should be wound up, placed in administration or cease to carry on business; or

(vi) a petition is presented in any Relevant Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of such Relevant Person unless the petition is being contested in good faith and on substantial grounds and is dismissed or withdrawn within forty-five (45) days of the presentation of the petition; or

(vii) such Relevant Person petitions a court, or presents any proposal for, any form of judicial or non-judicial suspension or deferral of payments, reorganisation of their debt (or certain of their debt) or arrangement with all or a substantial proportion (by number or value) of their creditors or of any class of them or any such suspension or

17

deferral of payments, reorganisation or arrangement is effected by court order, contract or otherwise; or

(viii) any meeting of the members or directors of such Relevant Person is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraph (iii), (iv), (v) or (vi); or

(ix) in a country other than England and Wales, any event occurs or any procedure is commenced which, in the opinion of the Owners, is similar to any of the foregoing referred to in (ii) to (vii) above inclusive; or

(x) any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of such Relevant Person; or

(h) a Relevant Person suspends or ceases or threatens to suspend or cease carrying on its or

(i) any consent, approval, authorisation, license or permit necessary to enable the Charterers to operate or charter the Vessel to enable them to comply with any provision of any Leasing Document, as the case may be, to ensure that the obligations of the Charterers are legal, valid, binding or enforceable is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent, approval, authorisation, license or permit is not fulfilled; or

(j) any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect; or

(k) this Charter or any Leasing Document or any Security Interest created by a Leasing Document is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason or no longer constitutes valid, binding and enforceable obligations of any party to that document for any reason whatsoever; or

(l) a Relevant Person rescinds or purports to rescind or repudiates or purports to repudiate a Leasing Document; or

(m) the Security Interest constituted by any Leasing Document is in any way imperilled or in jeopardy; or

(n) the Vessel is not delivered latest by the Cancelling Date; or

(o) subject to Clause 14 of the Guarantee:

(i) there is a merger, amalgamation, demerger or corporate reconstruction of a Relevant Person; or

(ii) the Guarantor is de-listed from the NASDAQ Composite; or

(p) otherwise than in accordance with Clause 14 of the Guarantee, there is a Change of a Change of Shareholder or a Change of Control.

44.2 Subject to Clause 44.3 below, upon the occurrence of a Termination Event which is continuing (other than pursuant to Clause 44.1(g), in which case Clause 44.3 shall apply), the Owners shall notify the Charterers of occurrence of the same (the "Termination Event Notice") whereupon the Charterers may, within three (3) Business Days of the date of the Termination Event provide to the Owners a written notice advising the Owners of their intention to pay the Charterer Termination Purchase Price to the Owners and terminate this Charter in accordance with the procedures set out in Clause 40.

18

44.3 If the Charterers do not notify the Owners of their intention to terminate this Charter pursuant to Clause 44.2 within three (3) Business Days of the date of the Termination Event Notice, or a Termination Event is continuing pursuant to Clause 44.1(g), then the Owners shall be entitled, provided the Termination Event is continuing, by notice to the Charterers to require the Charterers to pay the Charterer Termination Purchase Price to the Owners and to terminate this Charter in accordance with the procedures set out in Clause 40.

44.4 For the avoidance of doubt, notwithstanding any action taken by the Owners following a Termination Event, the Charterers shall remain liable for the outstanding obligations on their part to be performed under this Charter.

44.5 Without limiting the generality of the foregoing or any other rights of the Owners, upon the occurrence of a Termination Event which is continuing, the Owners shall have the sole and exclusive right and power to (i) settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to or pertaining to the Vessel and this Charter, (ii) make proof of loss, appear in and prosecute any action arising from any policy or policies of insurance maintained pursuant to this Charter, and settle, adjust or compromise any claims for loss, damage or destruction under, or take any other action in respect of, any such policy or policies and (iii) change or appoint a new manager for the Vessel other than the Approved Manager and the appointment of the Approved Manager may be terminated immediately without any recourse to the Owners.

CLAUSE 44A — OWNERS' DEFAULT

44A.1 If an arrest or detention of the Vessel pursuant to Clause 37.4 exceeds forty-five (45) days, the Charterers may notify the Owners of their intention to pay the Owner Termination Purchase Price to the Owners and terminate this Charter in accordance with the procedures set out in Clause 40.

44A.2 Upon the termination of this Charter pursuant to the procedure set out in Clause 44A.1, any liabilities and obligations of the Owners to the Charterers under the Leasing Documents, at law or otherwise shall be extinguished and fully discharged and it is agreed between the parties hereto that the Charterers' remedies in respect of any breach by the Owners of the Leasing Documents shall be limited to those set out in this Clause 44A.

CLAUSE 44B — MANDATORY SALE

44B.1 If it becomes unlawful in any applicable jurisdiction for the Owners to perform any of their obligations as contemplated by this Charter or the MOA or the financiers to perform their obligations under the Financial Instruments, the Owners shall notify the Charterers of this event and the Charterers shall be required to pay the Special Termination Purchase Price to the Owners on the next Payment Date following such notice by the Owners or, if earlier, the date specified by the Owners in the notice delivered to the Charterers (being no earlier than the last day of any applicable grace period permitted by law), and this Charter shall terminate in accordance with the procedures set out in Clause 40.

44B.2 If it is or has become:

(i) unlawful or prohibited, whether 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

(ii) contrary to, or inconsistent with, any regulation,

for any Relevant Person to maintain or give effect to any of its obligations under this Charter or any of the other Leasing Documents to which it is a party in the manner it is contemplated under such Leasing Document or any of the obligations of such Relevant Person under any Leasing Document to which it is a party are not or cease to be legal, valid, binding and

19

enforceable, the Charterers shall be required to pay the Special Termination Purchase Price to the Owners on the next Payment Date following such occurrence or, if earlier, a date specified by the Owners (being no earlier than the last day of any applicable grace period permitted by law), and this Charter shall terminate in accordance with the procedures set out in Clause 40.

CLAUSE 45  — REPRESENTATIONS AND WARRANTIES

45.1 The Charterers represent and warrant to the Owners as of the date of this Charter, and on each day henceforth until the last day of the Security Period, as follows:

(a) subject to Clause 14 of the Guarantee, the Charterers are legally and beneficially wholly indirectly owned and controlled by the Guarantor;

(b) subject to Clause 14 of the Guarantee, the Guarantor is controlled by the Permitted Holders and is listed on the NASDAQ Composite and its shares are trading in accordance with all applicable laws and regulations;

(c) each Relevant Person is duly incorporated and validly existing under the laws of its jurisdiction of its incorporation;

(d) each Relevant Person has the corporate capacity, and has taken all corporate actions and obtained all consents, approvals, authorisations, licenses or permits necessary for it:

(i) to execute each of the Leasing Documents to which it is a party; and

(ii) to comply with and perform its obligations under each of the Leasing Documents to which it is a party;

(e) all the consents, approvals, authorisations, licenses or permits referred to in Clause 45.1(d) remain in force and nothing has occurred which makes any of them liable to revocation;

(f) each of the Leasing Documents to which a Relevant Person is a party constitutes such Relevant Person's legal, valid and binding obligations enforceable against such party in accordance with its respective terms and any relevant insolvency laws affecting creditors' rights generally;

(g) no third party has any Security Interest, other than the Permitted Security Interests, or any other interest, right or claim over, in or in relation to the Vessel, this Charter or any moneys payable hereunder and/or any of the other Leasing Documents;

(h) all payments which a Relevant Person is liable to make under any Leasing Document to which such Relevant Person is a party may be made by such party without deduction or withholding for or on account of any tax payable under the laws of the jurisdiction of incorporation;

(i) other than as disclosed in the public filings of the Guarantor (and, in the case of legal or administrative actions commenced or taken as at the date of the Guarantee, brought to the attention of the Owners) or otherwise notified to the Owner under Clause 46.1(c), no legal or administrative action involving a Relevant Person (other than the Approved Manager, except to the extent the same concerns the Vessel) has been commenced or taken which would have required notification to the Owners under Clause 46.1(c);

(j) each Relevant Person has paid all taxes applicable to, or imposed on or in relation to it, its business or if applicable, the Vessel, except for those being contested in good faith with adequate reserves;

(k) the choice of governing law as stated in each Leasing Document to which a Relevant Person is party to and the agreement by such party to refer disputes to the relevant courts or tribunals as stated in such Leasing Document are valid and binding against such Relevant Person;

20

(l) no Relevant Person nor any of their assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgment, execution or other enforcement);

(m) the obligations of each Relevant Person under each Leasing Document to which it is a party, are the direct, general and unconditional obligations of such Relevant Person and rank at least pari passu with all other present and future unsecured and unsubordinated creditors of such Relevant Person save for any obligation which is mandatorily preferred by law and not by virtue of any contract;

(n) no Relevant Person is a US Tax Obligor, and no Relevant Person has established a place of business in the United Kingdom or the United States of America;

(o) no Relevant Person nor any of their respective directors, officers, or employees is a Restricted Person;

(p)

(i) each Relevant Person and their respective directors, officers, and employees is in compliance with all Sanctions laws, and none of them have been or are currently being investigated on compliance with Sanctions, they have not received notice or are aware of any claim, action, suit or proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions;

(ii) no Relevant Person is in breach of any Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws and, to the extent required by applicable law, each Relevant Person has instituted and maintained systems, controls, policies and procedures designed to:

(A) prevent and detect incidences of bribery and corruption, money laundering and terrorism financing; and

(B) promote and achieve compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws including, but not limited to, ensuring thorough and accurate books and records, and utilization of best efforts to ensure that Affiliates acting on behalf of a Relevant Person shall act in compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;

(q) all Environmental Laws relating to the ownership, operation and management of the Vessel and the business of the each Relevant Person (as now conducted and as reasonably anticipated to be conducted in the future) have been complied with;

(r) no Environmental Claim has been made or threatened against any Relevant Person or otherwise in connection with the Vessel;

(s) no Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred;

(t) neither the Charterers nor the Guarantor (or New Guarantor ,or New Shareholder, if is insolvent or in liquidation or administration or subject to any other formal or informal insolvency procedure, and no receiver, administrative receiver, administrator, liquidator, trustee or analogous officer has been appointed in respect of the Charterers or the Guarantor (or New Guarantor or New Shareholder, if applicable) or all or material part of their assets;

(u) no Termination Event or Potential Termination Event is continuing or might reasonably be expected to result from the entry into and performance of this Charter or any other Leasing Document; and

21

(v) any factual information provided by the Charterers (or on their behalf) to the Owners was true and accurate in all material respects as at the date it was provided or as the date at which such information was stated.

45.2 The Owners represent and warrant to the Charterers as of the date of this Charter, and on each day henceforth until the last day of the Charter Period, as follows:

(a) the Owners are duly incorporated and validly existing under the laws of Hong Kong;

(b) the Owners have the corporate capacity, and have taken all corporate actions and obtained all consents, approvals, authorisations, licenses or permits necessary for them:

(i) to execute each of the Leasing Documents to which they are party; and

(ii) to comply with and perform their obligations under each of the Leasing Documents to which they are party;

(c) all the consents, approvals, authorisations, licenses or permits referred to in (b) remain in force and nothing has occurred which makes any of them liable to revocation;

(d) neither the Owners nor any of their assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (including, without limitation, set-off, suit, attachment prior to judgment, execution or other enforcement); and

(e) the Owners are not insolvent or in liquidation or administration or subject to any other formal or informal insolvency procedure, and no receiver, administrative receive, administrator, liquidator, trustee or analogous officer has been appointed in respect of the Owners or all or a material part of their assets.

CLAUSE 46  — CHARTERERS' UNDERTAKINGS

46.1 The Charterers undertake that they shall comply or procure compliance with the following undertakings commencing from the date of this Charter and up to the last day of the Security Period:

(a) there shall be sent to the Owners:

(i) as soon as possible, but in no event later than one hundred and twenty (120) days after the end of each financial year of the Charterers, the unaudited annual accounts of the Charterers; and

(ii) as soon as possible, but in no event later than ninety (90) days after the end of each financial half-year of the Charterers, the semi-annually accounts of the Charterers,   and the Charterers will procure that the Guarantor complies with Clause 11.3 of the Guarantee (and that any New Guarantor so does in respect of any replacement thereof in accordance with Clause 14 of the Guarantee);

(b) they will provide to the Owners, promptly at the Owners' request, copies of all notices and minutes relating to any of their extraordinary shareholders' meeting which are despatched to the Charterers' and a Guarantor's respective shareholders or creditors or any class of them;

(c) unless otherwise disclosed in the public filings of the Guarantor (and to the extent concerning the Vessel, brought to the attention of the Owner), they will provide or will procure that each other Relevant Person (other than the Approved Manager, except to the extent the same concerns the Vessel) provides the Owners with details of any legal or administrative action involving such Relevant Person or the Vessel that, if adversely determined, is likely to have a

22

Material Adverse Effect as soon as such action is instituted or it becomes apparent is likely to be instituted and is likely to have a Material Adverse Effect;

(d) they will, and will procure that each other Relevant Person obtains and promptly renews or procure the obtainment or renewal of and provide copies of, from time to time, any necessary consents, approvals, authorisations, licenses or permits of any regulatory body or authority for the transactions contemplated under each Leasing Document to which it is a party (including without limitation to sell, charter and operate the Vessel);

(e) they will not, and will procure that each other Relevant Person will not, create, assume or permit to exist any Security Interest of any kind upon any Leasing Document or any asset subject thereto to which such Relevant Person is a party, and if applicable, the Vessel, in each case other than the Permitted Security Interests;

(f) they will at their own cost, and will procure that each other Relevant Person will:

(i) do all that such Relevant Person reasonably can to ensure that any Leasing Document to which such Relevant Person is a party validly creates the obligations and the Security Interests which such Relevant Person purports to create; and

(ii) without limiting the generality of paragraph (i), promptly register, file, record or enrol any Leasing Document to which such Relevant Person is a party with any court or authority in all Relevant Jurisdictions, pay any stamp duty, registration or similar tax in all Relevant Jurisdictions in respect of any Leasing Document to which such Relevant Person is a party, give any notice or take any other step which, is or has become necessary or desirable for any such Leasing Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which such Relevant Person creates;

(g) they will, and will procure that each other Relevant Person will, notify the Owners immediately of the occurrence of:

(i) any damage and/or alteration caused to the Vessel by any reason whatsoever which results, or may be expected to result, in repairs on the Vessel which exceed $1,000,000; and

(ii) any Potential Termination Event or a Termination Event,   and will keep the Owners fully up-to-date with all developments and the Charterers will, if so requested by the Owners, provide any such certificate signed by its authorised signatory, confirming that there exists no Potential Termination Event or Termination Event;

(h) they will, and will procure that each other Relevant Person will, as soon as practicable after receiving the request, provide the Owners with any additional financial or other information relating:

(i) to themselves and/or the Vessel (including, but not limited to the condition and location of the Vessel); or

(ii) to any other matter relevant to, or to any provision of any Leasing Document to which it is a party,

which may be reasonably requested by the Owners at any time;

(i) without prejudice to Clause 46.1(m), comply, or procure compliance, and will procure that each other Relevant Person will comply or procure compliance, with all laws or regulations relating to the Vessel and its construction, ownership, employment, operation, management

23

and registration, including the ISM Code, the ISPS Code, all Environmental Laws and the laws of the Vessel's registry;

(j) the Vessel shall be classed with the Classification Society and shall be free of all overdue recommendations and requirements;

(k) they will ensure and procure that:

(i) the Market Value of the Vessel shall be ascertained from time to time in the following circumstances:

(aa) once every six-monthly period during a calendar year in the absence of a Termination Event;

(bb) upon the occurrence of a Potential Termination Event or a Termination Event which is continuing, at any time at the request of the Owners; and

(cc) at any time at the request of the Owners if, in the absence of a Termination Event, the Owners have determined that the Market Value of the Vessel falls below an amount equal to one hundred and twenty per cent. (120%) of the aggregate of the Outstanding Principal Balance,   with the Initial Market Value to be established no earlier than twenty (20) days prior to the Commencement Date; and

(ii) the Charterers shall pay the amount of the fees and expenses incurred by the Owners in connection with any matter arising out of this Clause;

(l) they will notify the Owners immediately of:

(i) any Environmental Claim made against the Charterers in connection with the Vessel, or any Environmental Incident (in excess of US$1,000,000), arrest or detention of the Vessel (that will or is likely to exceed 20 days), any exercise or purported exercise of any lien on that Vessel or its Earnings or any requisition of that Vessel for hire; and

(ii) any casualty or occurrence as a result of which the Vessel has become or is, by the passing of time or otherwise, likely to become, a Major Casualty;

(m) they shall comply, and shall procure that each other Relevant Person complies, with all laws and regulations in respect of Sanctions, and in particular, they shall ensure that the Charterers, shall effect and maintain a sanctions compliance policy to ensure compliance with all such laws and regulations implemented from time to time;

(n) the Vessel shall not be employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel shall not be used by or to benefit any party which is a target of Sanctions and/or is a Restricted Person or trade to any area or country where trading the Vessel to such area or country would constitute or reasonably be expected to constitute a breach of any Sanctions or published boycotts imposed by any of the United Nations, the European Union, the United States of America, the United Kingdom or the People's Republic of China; (ii) would result or reasonably be expected to result in any Relevant Person or the Owners becoming a Restricted Person; or (iii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation;

(o)

(i) they will, and will procure that each other Relevant Person will, promptly notify the Owners of any non-compliance by any Relevant Person or their respective officers, directors, or employees with all laws and regulations relating to Sanctions, Anti-

24

Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws (including but not limited to notifying the Owners in writing immediately upon being aware that any Relevant Person or their respective shareholders, directors, officers or employees is a Restricted Person or has otherwise become a target of Sanctions) as well as provide all information (once available) in relation to its business and operations which may be relevant for the purposes of ascertaining whether any of the aforesaid parties are in compliance with such laws;

(ii) they shall, and shall procure that each other Relevant Person and their respective officers, directors and employees, will:

(A) comply with all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;

(B) to the extent required by applicable law, maintain systems, controls, policies and procedures designed to promote and achieve ongoing compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;

(C) in respect of the Charterers, not use, or permit or authorize any person to directly or indirectly use, the Financing Amount for any purpose that would breach any Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws; and

(iii) not lend, invest, contribute or otherwise make available the Financing Amount to or for any other person in a manner which would result in a violation of Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws;

(p) they shall not appoint or permit to be appointed any manager of the Vessel unless it is the Approved Manager appointed on terms acceptable to the Owners and such Approved Manager has (prior to accepting its appointment) entered into a Manager's Undertaking;

(q) they shall ensure that:

(i) all Earnings and any other amounts received by them in connection with the Vessel are paid in accordance with Clause 4 of the General Assignment; and

(ii) all operating expenses in connection with the Vessel are paid from the Earnings Account;

(r) if at any time during the Security Period the Market Value of the Vessel falls below an amount equal to one hundred and twenty per cent. (120%) of the Outstanding Principal Balance the Charterers shall, upon request, promptly and in any event not later than the date falling thirty (30) days after the Owners notify them of such circumstance:

(i) prepay such part of the Charterhire Principal Balance and such prepayment should be applied pro rata against the Outstanding Principal Balance so as to eliminate the shortfall; and/or

(ii) provide, or ensure that a third party will provide, additional security which is acceptable to the Owners and has a net realisable value at least equal to the shortfall and which is documented in such terms as the Owners may approve or require;

(s) upon request, they will provide or they will procure to be provided to the Owners the report(s) of the survey(s) conducted pursuant to Clause 7 of this Charter in form and substance satisfactory to the Owners;

(t) they shall:

25

(i) only sub-charter the Vessel on a bareboat charter basis in accordance with Clause 22;

(ii) only sub-charter the Vessel on a time charter basis or enter the Vessel into a pooling arrangement or any other form of employment contract for a period not exceeding twelve (12) months (inclusive of options to renew) unless with the prior approval of the Owners and in which case on condition that any sub-charter or pooling arrangement or any other form of employment contract exceeding twelve (12) months (inclusive of options to renew) is assigned by the Charterers in favour of the Owners in form and substance satisfactory to the Owners (provided that in the case of a pooling arrangement it is not assignable and cannot be rendered so by commercially reasonable endeavours, an arrangement (in form and substance satisfactory to the Owners) conferring on the Owners similar rights in respect of the Earnings and employment of the Vessel may be entered into in substitute);

(u) subject to Clause 14 of the Guarantee and except as otherwise permitted by the Leasing Documents, they will not, and will procure that no Relevant Person (other than the Approved Manager) (except in the case of the Guarantor, unless it would not have a Material Adverse Effect) will:

(i) transfer, lease or otherwise dispose of all or a substantial part of their respective assets (or any of their assets, in the case of the Charterers), whether by one transaction or a number of transactions, whether related or not except in the usual course of their respective trading operations; or

(ii) make any substantial change (or any change, in the case of the Charterers) to the nature of their respective business or corporate structure from that existing as at the date of this Charter; and

(v) they will comply, and will procure that each other Relevant Person complies, with Clause 14 of the Guarantee and provide, and procure that each other Relevant Person provides, all information and documents specified therein.

CLAUSE 47  — PURCHASE OPTION

47.1 The Charterers shall have the option on and from the first anniversary of the Commencement Date (subject always to giving the Owners not less than sixty (60) Business Days' prior written notice to purchase the Vessel on any Payment Date (the "Purchase Option Date") specified in such notice (the "Purchase Option Notice") at a purchase price equal to the Purchase Option Price.

47.2 A Purchase Option Notice shall be signed by a duly authorised officer or attorney of the Charterers and, once delivered to the Owners, is irrevocable and the Charterers shall be bound to pay to the Owners the Purchase Option Price on the Purchase Option Date.

47.3 Only one Purchase Option Notice may be served throughout the duration of the Charter Period (unless otherwise agreed by the Owners in their absolute discretion).

47.4 Upon the Owners' receipt in full of the Purchase Option Price, the Owners shall (except in case of Total Loss) transfer the legal and beneficial ownership of the Vessel on an "as is where is" basis (and otherwise in accordance with the terms and conditions set out at Clause 49.1(a) and (b)) to the Charterers or their nominees and shall execute a bill of sale and a protocol of delivery and acceptance evidencing the same and any other document strictly necessary to transfer the title of the Vessel to the Charterers (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners).

26

CLAUSE 48  — PURCHASE OBLIGATION

48.1 Subject to other provisions of this Charter, in consideration of the Owners entering into this Charter, the Charterers shall, on the last day of the Charter Period, be obliged to purchase from the Owners all of the Owners' beneficial and legal right, title and interest in the Vessel and all belonging to her and the Owners and the Charterers shall perform their obligations referred to in Clause 49 and the Charterer shall pay the Purchase Obligation Price on the Purchase Obligation Date unless this Charter is terminated before the natural expiration of this Charter or the Owners and the Charterers agree otherwise.

CLAUSE 49  — SALE OF THE VESSEL BY PURCHASE OBLIGATION ETC.

49.1 Completion of the performance of the Purchase Obligation shall take place on the Purchase Obligation Date, whereupon the Owners will sell to the Charterers (or their nominee), and the Charterers (or their nominee) will purchase from the Owners, all the legal and beneficial interest and title in the Vessel, for the Purchase Obligation Price on an "as is where is" basis and on the following terms and conditions:

(a) the Charterers expressly agree and acknowledge that no condition, warranty or representation of any kind is or has been given by or on behalf of the Owners in respect of the Vessel or any part thereof, and accordingly the Charterers confirm that they have not, in entering into this Charter, relied on any condition, warranty or representation by the Owners or any person on the Owners' behalf, express or implied, whether arising by law or otherwise in relation to the Vessel or any part thereof, including, without limitation, warranties or representations as to the description, suitability, quality, merchantability, fitness for any purpose, value, state, condition, appearance, safety, durability, design or operation of any kind or nature of the Vessel or any part thereof, and the benefit of any such condition, warranty or representation by the Owners is hereby irrevocably and unconditionally waived by the Charterers to the extent permissible under applicable law, the Charterers hereby also waive any rights which they may have in tort in respect of any of the matters referred to above and irrevocably agree that the Owners shall have no greater liability in tort in respect of any such matter than they would have in contract after taking account of all of the foregoing exclusions. No third party making any representation or warranty relating to the Vessel or any part thereof is the agent of the Owners nor has any such third party authority to bind the Owners thereby. Notwithstanding anything contained above, nothing contained herein is intended to obviate, remove or waive any rights or warranties or other claims relating thereto which the Charterers (or their nominee) or the Owners may have against the manufacturer or supplier of the Vessel or any third party;

(b) the Vessel shall be free from any registered mortgages incurred by the Owners;

(c) the Purchase Obligation Price, shall be paid by (or on behalf of) the Charterers to the Owners on the Purchase Obligation Date, together with unpaid amounts of Charterhire and other moneys owing by or accrued or due from the Charterers under this Charter on or prior to the Purchase Obligation Date which remain unpaid; and

(d) concurrently with the Owners receiving irrevocable payment of the Purchase Obligation Price and all other moneys payable under this Charter in full pursuant to the terms of this Charter, the Owners shall (save in the event of Total Loss) transfer the legal and beneficial ownership of the Vessel on an "as is where is" basis (and otherwise in accordance with the terms and conditions set out at Clause 49.1(a) and (b)) to the Charterers or their nominees and shall (at Charterers' cost) execute a bill of sale and a protocol of delivery and acceptance evidencing the same and any other document strictly necessary to transfer the title of the Vessel to the Charterers (and to the extent required for such purposes, the Vessel shall be deemed first to have been redelivered to the Owners).

27

CLAUSE 50 —  INDEMNITIES

50.1 The Charterers shall pay such amounts to the Owners, on the Owners' demand, in respect of all claims, expenses, liabilities, losses, fees (including, but not limited to, any vessel registration and tonnage fees) suffered or incurred by or imposed on the Owners arising from this Charter and any Leasing Document or in connection with delivery, possession, performance, control, registration, repair, survey, insurance, maintenance, manufacture, purchase, ownership and operation of the Vessel by the Owners and the costs related to the prevention or release of liens or detention of or requisition, use, operation or redelivery, sale or disposal of the Vessel or any part of it and whether prior to, during or after termination of the leasing of this Charter and whether or not the Vessel is in the possession or the control of the Charterers or otherwise. Without prejudice to its generality, this Clause 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, the MARPOL Protocol, any Environmental Law or any Sanctions, Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws.

50.2 The obligations of the Charterers under Clause 50 and in respect of any Security Interest created pursuant to the Security Documents will not be affected or discharged by an act, omission, matter or thing which would reduce, release or prejudice any of its obligations under Clause 50 or in respect of any Security Interest created pursuant to the Security Documents (without limitation and whether or not known to it or any Relevant Person) including:

(a) any time, waiver or consent granted to, or composition with, any Relevant Person or other person;

(b) the release of any other Relevant Person or any other person under the terms of any composition or arrangement with any creditor of the Guarantor (or New Guarantor or New Shareholder, if applicable) or any of its affiliates;

(c) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or delay in perfecting, or refusal or neglect to take up or enforce, or delay in taking or enforcing any rights against, or security over assets of, any Relevant Person 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 a Relevant Person or any other person;

(e) any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Leasing Document or any other document or security;

(f) any unenforceability, illegality or invalidity of any obligation of any person under any Security Document or any other document or security; or

(g) any insolvency or similar proceedings.

50.3 Notwithstanding anything to the contrary under the Leasing Documents (but subject and without prejudice to Clause 33) and without prejudice to any right to damages or other claim which the Charterers may have at any time against the Owners under this Charter, the indemnities provided by the Charterers in favour of the Owners shall continue in full force and effect notwithstanding any breach of the terms of this Charter or such Leasing Document or termination or cancellation of this Charter or such Leasing Document pursuant to the terms hereof or thereof or termination of this Charter or such Leasing Document by the Owners.

28

CLAUSE 51  — NO SET-OFF OR TAX DEDUCTION

51.1 All Charterhire, Advance Charterhire or payment of the Purchase Obligation Price or the Purchase Option Price and any other payment made from the Charterers to enable the Owners to pay all amounts under a Leasing Document shall be paid punctually:

(a) without any form of set-off (except in the case of the Advance Charterhire which shall be set off in accordance with Clause 36.2), cross-claim or condition and in the case of Charterhire or Advance Charterhire, without previous demand unless otherwise agreed with the Owners; and

(b) free and clear of any tax deduction or withholding unless required by law.

51.2 Without prejudice to Clause 51.1, if the Owners are required by law to make a tax deduction from any payment:

(a) the Owners shall notify the Charterers as soon as they become aware of the requirement; and

(b) the amount due in respect of the payment shall be increased by the amount necessary to ensure that the Owners receive and retain (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which they would otherwise have received.

51.3 In this Clause "tax deduction" means any deduction or withholding for or on account of any present or future tax, other than a FATCA Deduction.

CLAUSE 52  — INCREASED COSTS

52.1 This Clause 52 applies if the Owners promptly notify the Charterers that they consider that as a result of:

(a) the introduction or alteration after the date of this Charter of a law or an alteration after the date of this Charter in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Charter of a tax on the Owners' overall net income); or

(b) complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Owners allocates capital resources to their obligations under this Charter) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Charter,   the Owners (or a parent company of them) has incurred or will incur an "increased cost".

52.2 In this Clause 52, "increased cost" means, in relation to the Owners:

(a) an additional or increased cost incurred as a result of, or in connection with, the Owners having entered into, or being a party to, this Charter, of funding the acquisition of the Vessel pursuant to the MOA or performing their obligations under this Charter;

(b) a reduction in the amount of any payment to the Owners under this Charter or in the effective return which such a payment represents to the Owners on their capital;

(c) an additional or increased cost of funding the acquisition of the Vessel pursuant to the MOA; 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 Owners under this Charter,

29

and for the purposes of this Clause 52.2 the Owners may in good faith allocate or spread costs and/or losses among their assets and liabilities (or any class of their assets and liabilities) on such basis as they consider appropriate.

52.3 Subject to the terms of Clause 52.1, the Charterers shall pay to the Owners, within three (3) Business Days of the Owners' demand, the amounts which the Owners from time to time promptly notify the Charterers to be necessary to compensate the Owners for the increased cost.

CLAUSE 53  — MISCELLANEOUS

53.1 The Charterers waive any rights of sovereign immunity which they or any of their properties may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to their obligations under this Charter.

53.2 No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not party to this Charter.

53.3 This Charter and each Leasing 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 this Charter or that Leasing Document, as the case may be.

53.4 Nothing in the Leasing Documents shall afford the Owners any wider exclusion of any liability of the Owners for death or personal injury than the Owners may effectively exclude under applicable law or having regard to the Unfair Contract Terms Act 1977,

53.5 These additional clauses shall be read together with the BARECON 2001 to constitute this Charter as a single instrument. However, in case of any conflict between these additional clauses and the BARECON 2001, the terms of these additional clauses shall prevail.

53.6 The parties hereto agree to keep the terms and conditions of this Charter and any other Leasing Documents (the "Confidential Information") strictly confidential, provided that such party may disclose Confidential Information in the following cases:

(a) as required in order for any Relevant Person to comply with statutory requirements for stock listed companies;

(b) it is already known to the public or becomes available to the public other than through the act or omission of the disclosing party;

(c) it is required to be disclosed under the applicable laws of any Relevant Jurisdiction or by a governmental order, decree, regulation or rule (provided that the disclosing party shall give written notice of such required disclosure to the other party prior to the disclosure);

(d) in filings with a court or arbitral body in proceedings in which the Confidential Information is relevant and in discovery arising out of such proceedings;

(e) to (or through) whom a party assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Leasing Document (as permitted by the terms thereof), provided that such person receiving Confidential Information shall undertake that it would not disclose Confidential Information to any other party save for circumstances arising which are similar to those described under this Clause 53.6 or such other circumstances as may be permitted by all parties hereto;

(f) to any sub-charterer provided that such person receiving Confidential Information shall undertake that it would not disclose Confidential information to any other party save for circumstances arising which are similar to those described under this Clause or such other circumstances as may be permitted by all parties hereto;

30

(g) to any of the following persons on a need to know basis:

(i) a shareholder or an Affiliate of either party hereto or a party referred to in either paragraph (d) or (e) (including the employees, officers and directors thereof);

(ii) professional advisers retained by a disclosing party; or

(iii) persons advising on, providing or considering the provision of financing to the disclosing party or an Affiliate,

provided that the disclosing party shall exercise due diligence to ensure that no such person shall disclose Confidential Information to any other party save for circumstances arising which are similar to those described under this Clause or such other circumstances as may be permitted by all parties hereto; or

(h) with the prior written consent of all parties hereto.

53.7 If, at any time, any provision of a Leasing Document 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.

53.8 Any settlement or discharge under any Leasing Document between the Owners and any Relevant Person shall be conditional upon no security or payment to the Owners by any Relevant Person or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

53.9 If the Owners consider that an amount paid or discharged by, or on behalf of, a Relevant Person or by any other person in purported payment or discharge of an obligation of that Relevant Person to the Owners under the Leasing Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Relevant Person or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Leasing Documents.

53.10 If any sum due from the Charterers to the Owners under this Charter or any other Leasing Document or under any order or judgment relating thereto has to be converted from the currency in which this Charter or such Leasing 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 Charterers, whether in their liquidation, any arrangement involving them or otherwise; or

(b) obtaining an order or judgment from any court or other tribunal; or

(c) enforcing any such order or judgment;

the Charterers shall indemnify the Owners against the loss arising when the amount of the payment actually received by the Owners is converted at the available rate of exchange into the Contractual Currency.

In this Clause 53.10, the "available rate of exchange" means the rate at which the Owner is able at the opening of business (Shanghai time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

31

CLAUSE 54 — FATCA

54.1 Defined terms. For the purposes of this Clause 54, the following terms shall have the following meanings:

"Code" means the United States Internal Revenue Code of 1986, as amended.

"FATCA" means sections 1471 through 1474 of the Code and any Treasury regulations thereunder.

"FATCA Deduction" means a deduction or withholding from a payment under this Charter or the Leasing Documents required by or under FATCA.

"FATCA Exempt Party" means a Relevant Party that is entitled under FATCA to receive payments free from any FATCA Deduction.

"FATCA FFI" means a foreign financial institution as defined in section 1471(d)(4) of the Code which, if a Relevant Party is not a FATCA Exempt Party, could be required to make a FATCA Deduction.

"FATCA Non-Exempt Party" means any Relevant Party who is not a FATCA Exempt Party.

"IRS" means the United States Internal Revenue Service or any successor taxing authority or agency of the United States government.

"Relevant Party" means any of the parties to this Charter and the Leasing Documents.

54.2 FATCA Information.

(a) Subject to paragraph (c) below, each Relevant Party shall, on the date of this Charter, and thereafter within ten Business Days of a reasonable request by another Relevant Party:

(i) confirm to that other party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party; and

(ii) supply to the requesting party (with a copy to all other Relevant Parties) such other form or forms (including IRS Form W-8 or Form W-9 or any successor or substitute form, as applicable) and any other documentation and other information relating to its status under FATCA (including its applicable "pass thru percentage" or other information required under FATCA or other official guidance including intergovernmental agreements) as the requesting party reasonably requests for the purpose of the requesting party's compliance with FATCA .

(b) If a Relevant Party confirms to any other Relevant Party that it is a FATCA Exempt Party or provides an IRS Form W-8 or W-9 showing 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 so notify all other Relevant Parties reasonably promptly.

(c) Nothing in this clause shall oblige any Relevant Party to do anything which would or, in its reasonable opinion, might constitute a breach of any law or regulation, any policy of that party, any fiduciary duty or any duty of confidentiality, or to disclose any confidential information (including, without limitation, its tax returns and calculations); provided, however, that nothing in this paragraph shall excuse any Relevant Party from providing a true, complete and correct IRS Form W-8 or W-9 (or any successor or substitute form where applicable). Any information provided on such IRS Form W-8 or W-9 (or any successor or substitute forms) shall not be treated as confidential information of such party for purposes of this paragraph.

32

(d) If a Relevant Party fails to confirm its status or to supply forms, documentation or other  information requested in accordance with the provisions of this Charter or the provided information is insufficient under FATCA, then:

(i) if that party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such party shall be treated for the purposes of this Charter and the Leasing Documents as if it is a FATCA Non-Exempt Party; and

(ii) if that party failed to confirm its applicable passthru percentage then such party shall be treated for the purposes of this Charter and the Leasing Documents (and payments made thereunder) as if its applicable passthru percentage is one hundred per cent. (100%),   until (in each case) such time as the party in question provides sufficient confirmation, forms, documentation or other information to establish the relevant facts.

54.3 FATCA Deduction and gross-up by Relevant Party

(a) If the representation made by the Charterers under Clause 45.1(n) proves to be untrue or misleading such that the Charterers are required to make a FATCA Deduction, the Charterers shall make the FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required by FATCA.

(b) If the Charterers are required to make a FATCA Deduction then the Charterers shall increase the payment due from them to the Owners to an amount which (after making any FATCA Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required.

(c) The Charterers shall promptly upon becoming aware that they must make a FATCA Deduction (or that there is any change in the rate or basis of a FATCA Deduction) notify the Owners accordingly. Within thirty (30) days of the Charterers making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Charterers shall deliver to the Owners evidence reasonably satisfactory to the Owners that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the relevant governmental or taxation authority.

54.4 FATCA Deduction by Owners

The Owners may make any FATCA Deduction they are required by FATCA to make, and any payment required in connection with that FATCA Deduction, and the Owners shall not be required to increase any payment in respect of which they make such a FATCA Deduction or otherwise compensate the recipient for that FATCA Deduction.

54.5 FATCA Mitigation

Notwithstanding any other provision to this Charter, if a FATCA Deduction is or will be required to be made by any party under Clause 54.3 in respect of a payment to the Owners as a result of the Owners not being a FATCA Exempt Party, the Owners shall have the right to transfer their interest in the Vessel (and this Charter) to any person nominated by the Owners and all costs in relation to such transfer shall be for the account of the Charterers.

CLAUSE 55 —   DEFINITIONS

55.1 In this Charter the following terms shall have the meanings ascribed to them below:

"Acceptance Certificate" means a certificate substantially in the form set out in Schedule Ito be signed by the Charterers at Delivery.

33

"Account Security" means the document creating security over the Earnings Account executed by the Charterers in favour of the Owners, in the agreed form.

"Advance Charterhire" means the amount by which the Purchase Price exceeds the Financing Amount.

"Anti-Money Laundering Laws" means all applicable financial record-keeping and reporting requirements, anti-money laundering statutes (including all applicable rules and regulations thereunder) and all applicable related or similar laws, rules, regulations or guidelines, of all jurisdictions including and without limitation, the United States of America , the European Union and the People's Republic of China and which in each case are (a) issued, administered or enforced by any governmental agency having jurisdiction over any Relevant Person or the Owners; (b) of any jurisdiction in which any Relevant Person or Owners conduct business; or (c) to which any Relevant Person or Owner is subjected or subject to.

"Anti-Terrorism Financing Laws" means all applicable anti-terrorism laws, rules, regulations or guidelines of any jurisdiction, including and not limited to the United States of America or the People's Republic of China which are: (a) issued, administered or enforced by any governmental agency, having jurisdiction over any Relevant Person or the Owners; (b) of any jurisdiction in which any Relevant Person or the Owners conduct business; or (c) to which any Relevant Person or the Owners are subjected or subject to.

"Approved Manager" means TMS Bulkers Ltd., a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 or any other management company in the same beneficial ownership as TMS Bulkers Ltd. as commercial manager and as technical manager or any other international and reputable manager who may, with the prior approval of the Owners be appointed as a manager of the Vessel.

"Approved Valuer" means Clarksons, Maersk Brokers, Fearnleys, Howe Robinson, Arrow, Lorentzen & Stemoco, SSY, Braemar Seascope or any other shipbroker nominated by the Charterers and approved by the Owners.

"Book Value" has the meaning given to that term in the MOA.

"Breakfunding Costs" means all breakfunding costs and expenses incurred or payable by the Owners pursuant to the relevant funding arrangement entered into by the Owners for the purpose of financing the Financing Amount as a result of the receipt of an amount pursuant to this Charter on a day other than a Payment Date. Such costs must be properly evidenced by the Owners to the reasonable satisfaction of the Charterers.

"Business Day" means a day on which banks are open for business in the principal business centres of Hong Kong, Shanghai, New York and Athens.

"Business Ethics Law" means any laws, regulations and/or other legally binding requirements or determinations in relation to corruption, fraud, collusion, bid-rigging or anti-trust, human rights violations (including forced labour and human trafficking) which are applicable to any Relevant Person or the Owners or to any jurisdiction where activities are performed and which shall include but not be limited to (i) the United Kingdom Bribery Act 2010 and (ii) the United States Foreign Corrupt Practices Act 1977 and all rules and regulations under each of (i) and (ii).

"Cancelling Date" has the meaning given to that term in the MOA.

"Change of Control" has the meaning given to that term in the Guarantee.

34

"Change of Ownership" has the meaning given to that term in the Guarantee.

"Change of Shareholder" has the meaning given to that term in the Guarantee.

"Charter Period" means the period commencing on the Commencement Date and described in Clause 32.2 unless it is either terminated earlier or extended in accordance with the provisions of this Charter.

"Charterer Termination Purchase Price" means, in respect of any date (for the purposes of this definition only, the "Relevant Date"), the Outstanding Principal Balance together with a fee calculated at the rate of one per cent. (1%) thereon and any accrued but unpaid Charterhire B, plus (i) any Breakfunding Costs, (ii) any documented costs and expenses incurred by the Owners (and their financiers (if any)) in locating, repossessing or recovering the Vessel or collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest in relation thereto and (iii) all amounts payable under this Charter together with any applicable interest thereon.

"Charterhire" means each of, as the context may require, all of the quarterly instalments of hire payable hereunder comprising in each case:

(a) a component of Charterhire A; and

(b) a component of Charterhire B.

"Charterhire A" means, in relation to a Payment Date, an amount equal to one fortieth (1/40) of the difference between the Financing Amount and the Purchase Obligation Price.

"Charterhire B" means, in relation to a Payment Date, the interest component calculated at the applicable Interest Rate for the Term commencing on that Payment Date on the Outstanding Principal Balance.

"Charterhire Principal" means the aggregate amount of Charterhire A payable under this Charter.

"Charterhire Principal Balance" means the Charterhire Principal outstanding under this Charter from time to time, as may be reduced by payments or prepayments by the Charterers to the Owners of Charterhire A under this Charter.

"Charterers' Offer" has the meaning given to that term in Clause 40.3(b).

"CISADA" means the United States Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 as it applies to non-US persons.

"Classification Society" means ABS or DNV GL or any classification society notified by the Charterers to the Owners which is a member of the International Association of Classification Societies and approved by the Owners.

"Commencement Date" means the date on which Delivery takes place.

"Delivery" means the delivery of the legal and beneficial interest in the Vessel from the Owners to the Charterers hereunder.

"Dollars" or "$" have the meanings given to those terms in the MOA.

"Earnings" means all moneys whatsoever which are now, or later become, payable (actually or contingently) and which arise out of the use or operation of the Vessel, including (but not limited to):

35

(a) all freight, hire and passage moneys, compensation payable in the event of requisition of the Vessel 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 the Vessel; and

(b) if and whenever the Vessel is employed on terms whereby any moneys falling within paragraph (a) 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 the Vessel;

"Earnings Account" means, an account in the name of the Charterers with ABN AMRO Bank N.V. in Amsterdam or such bank as the Owners may approve.

"Environmental Claim" means:

(a) any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or which relates to any Environmental Law; or

(b) any claim by any other person which relates to an Environmental Incident ,   and "claim" means a claim for damages, compensation, fines, penalties or any other payment; 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 the Vessel; or

(b) any incident in which Environmentally Sensitive Material is released from a vessel other than the Vessel and which involves a collision between the Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which the Vessel is actually liable to be arrested, attached, detained or injuncted and/or the Vessel and/or the Owners and/or the Charterers and/or any other operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action; or

(c) any other incident involving the Vessel in which Environmentally Sensitive Material is released otherwise than from the Vessel and in connection with which the Vessel is actually arrested and/or where the Owners and/or the Charterers and/or any other operator or manager of the Vessel is 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 or releases of Environmentally Sensitive Material.

"Environmentally Sensitive Material" means oil, oil products and any other substances (including any chemical, gas or other hazardous or noxious substance) which are (or are capable of being or becoming) polluting, toxic or hazardous.

"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;

36

(c) under any acceptance credit, guarantee or letter of credit facility made available to the debtor;

(d) under a lease, a deferred purchase consideration arrangement (other than deferred payments for assets or services obtained on normal commercial terms in the ordinary course of business) 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 paragraphs (a) to (e) if the references to the debtor referred to the other person.

"Financial Instruments" means the mortgage, deed of covenant, the general assignment or such other financial security instruments granted to the Owners' financiers as security for the obligations of the Owners in relation to the financing of the acquisition of the Vessel.

"Financing Amount" means an amount equal to fifty per cent. (50%) of the Purchase Price.

"Flag State" means the Marshall Islands, Malta, Hong Kong, Liberia, Greece or the Cayman Islands or any other flag state approved by the Owners.

"General Assignment" means the general assignment executed or to be executed between the Charterers and the Owners in respect of the Vessel, pursuant to which the Charterers shall, inter alia, assign their rights under the Insurances, Earnings and Requisition Compensation and any sub-charters or other form of employment contracts having a duration of at least twelve (12) months (or which are capable of exceeding twelve (12) months) in respect of the Vessel, in favour of the Owners and in the agreed form.

"Guarantor" means Dryships Inc., a corporation incorporated under the laws of the Marshall Islands with company number 11911 having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands.

"Guarantee" means a guarantee executed by the Guarantor in favour of the Owners in agreed form.

"IAPPC" means a valid international air pollution prevention certificate for the Vessel issued pursuant to the MARPOL Protocol.

"Initial Market Value" means, in relation to the Vessel, the Market Value of the Vessel as at a date no earlier than twenty (20) days prior to the Commencement Date.

"Insurances" means:

(a) all policies and contracts of insurance, including entries of the Vessel in any protection and indemnity or war risks association, which are effected in respect of the Vessel or otherwise in relation to it whether before, on or after the date of this Charter (excluding Charterers' Interest Insurances arranged pursuant to Clause 13(b)); 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 and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Charter.

37

"Interest Rate" means, in relation to Charterhire B, the rate of interest determined in accordance with Schedule III plus the Margin.

"ISM Code" means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation Assembly as Resolutions A.741 (18) and A.788 (19), as the same may be amended or supplemented from time to time (and the terms "safety management system", "Safety Management Certificate" and "Document of Compliance" have the same meanings as are given to them in the 15M Code).

"lSPS Code" means the International Ship and Port Security Code as adopted by the Conference of Contracting Governments to the Safety of Life at Sea Convention 1974 on 13 December 2002 and incorporated as Chapter XI-2 of the Safety of Life at Sea Convention 1974, as the same may be supplemented or amended from time to time.

"Leasing Documents" means this Charter, the MOA and the Security Documents.

"LIBOR" means, in relation to a Term, 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 ending on the first day of that Term displayed on page LIBOR 01 of the Thomson Reuters screen (or any replacement Thomson 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 Thomson Reuters, and if such page or service ceases to be available, LIBOR for such Term shall be the arithmetic (rounded upwards to four decimal places) of the rates quoted to the Owners by the Reference Banks at the request of the Owners as the Reference Banks' offered rates for deposits in US Dollars in an amount equal to the amount in relation to which LIBOR is to be determined and for a period equivalent to such period to prime banks in the London Interbank Market at or about 11.00 a.m. (London time) on the date of such LIBOR determination. If any such rate is below zero, LIBOR shall be deemed to be zero.

"Major Casualty" means any casualty to the Vessel in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $1,000,000 or the equivalent in any other currency.

"Manager's Undertaking" means, in relation to an Approved Manager, the letter of undertaking from the Approved Manager subordinating the rights of such Approved Manager against the Vessel and the Charterers to the rights of the Owners and their financiers (if any) in an agreed form.

"Margin" means three per cent. (3.00%) per annum.

"Market Value" means, in relation to the Vessel at any relevant time, the arithmetic mean of two (2) valuations, each prepared:

(a) on a date no earlier than fifteen (15) days previously (or, in the case of the Initial Market Value, twenty (20) days previously);

(b) with or without physical inspection of that Vessel;

(c) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing and a willing buyer, free of any existing charter or other contract of employment; and

(d) after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale,

and such valuations shall be prepared by one Approved Valuer selected and appointed by the Owners and one Approved Valuer selected by the Charterers (but appointed by the Owners)

38

provided that if the difference in the two valuations obtained is more than five per cent. (5%) of the lower valuation obtained, a third Approved Valuer shall be selected and appointed by the Owners and the Market Value shall be the arithmetic mean of such three valuations.

"MARPOL Protocol" means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 (as amended in 1978 and 1997).

"Material Adverse Effect" means, in the reasonable opinion of the Owners, a material adverse effect on:

(a) the business, operations, property, condition (financial or otherwise) or prospects of the Charterers or the Guarantor (or New Guarantor or New Shareholder, if applicable) and its subsidiaries as a whole; or

(b) the ability of any Relevant Person to perform its obligations under any Leasing Document to which it is a party; or

(c) the validity or enforceability of, or the effectiveness or ranking of any Security Interests granted pursuant to any of the Leasing Documents or the rights or remedies of the Owners under any of the Leasing Documents.

"MOA" means the memorandum of agreement entered into by the Charterers as sellers and the Owners as buyers dated on the date of this Charter in relation to the sale and purchase of the Vessel.

"Mortgagee" has the meaning given to that term in Clause 35.2.

"New Guarantee" has the meaning given to that term in the Guarantee.

"New Shareholder" has the meaning given to that term in the Guarantee.

"New Shares Security Deed" has the meaning given to that term in the Guarantee.

"Original Financial Statements" means, with respect to the Guarantor, its audited financial statements for the financial year ended 2016 and financial statements for the financial half year ended 2017.

"Original Jurisdiction" means, in relation to each of the Charterers and the Guarantors, the jurisdiction under whose laws they are incorporated as at the date of this Charter.

"Outstanding Principal Balance" means the aggregate of:

(a) the Charterhire Principal Balance; and

(b) the Purchase Obligation Price.

"Owner Termination Purchase Price" means, in respect of any date (for the purposes of this definition only, the "Relevant Date"), the Outstanding Principal Balance and any accrued but unpaid Charterhire B, plus all amounts payable under this Charter together with any applicable interest thereon.

"Owners' Sale" has the meaning given to that term in Clause 40.3(a)(iii).

"Payment Date" means each of the forty (40) dates upon which Charterhire is to be paid by the Charterers to the Owners pursuant to Clause 36.

"Permitted Holders" has the meaning given to that term in the Guarantee.

39

"Permitted Security Interests" means:

(a) Security Interests created by a Leasing Document or a Financial Instrument; and

(b) other Security Interests permitted by the Owners in writing.

"Post-enforcement interests" has the meaning given to that term in Clause 40.3(a)(ii).

"Potential Termination Event" means, an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Owners and/or the satisfaction of any other condition, would constitute a Termination Event.

"Preposition Date" has the meaning given to that term in the MOA.

"Purchase Obligation" means the purchase obligation referred to in Clause 48.1.

"Purchase Obligation Date" means the date on which the Owners shall transfer the legal and beneficial interest in the Vessel to the Charterers, and the Charterers shall purchase the Vessel, being the date falling on the last day of the Charter Period.

"Purchase Obligation Price" means an amount equal to thirty-three per cent. (33%) of the Financing Amount.

"Purchase Price" has the meaning given to that term in the MOA.

"Purchase Option" means the early termination option which the Charterers are entitled to pursuant to Clause 47.

"Purchase Option Date" has the meaning given to that term in Clause 47.1.

"Purchase Option Notice" has the meaning given to that term in Clause 47.1.

"Purchase Option Price" means the aggregate of: (i) the Outstanding Principal Balance as at the Purchase Option Date together with a fee calculated at the rate of one per cent. (1%) thereon; (ii) any Charterhire B accrued as at the Purchase Option Date; (iii) any Breakfunding Costs and (iv) all other amounts payable under this Charter and the other Leasing Documents together with any applicable interest thereon.

"Quiet Enjoyment Agreement" means the quiet enjoyment agreement executed or to be executed between, amongst others, the Charterers, the Owners and the Owners' financiers in the agreed form.

"Reference Bank" means the principal London offices of HSBC Bank plc, Citibank N.A. and China Merchants Bank (or the relevant affiliates thereof that provide reference rates), or such other banks as may be appointed by the Owners in consultation with the Charterers.

"Released Guarantee" has the meaning given to that term in the Guarantee.

"Released Guarantor" has the meaning given to that term in the Guarantee.

"Released Shares Security Deed" has the meaning given to that term in the Guarantee.

"Relevant Jurisdiction" means, in relation to a Relevant Person:

(a) its Original Jurisdiction;

(b) any jurisdiction where any property owned by it and charged under a Leasing Document is situated;

40

(c) any jurisdiction where it conducts its business; and

(d) any jurisdiction whose laws govern the perfection of any of the Leasing Documents entered into by it creating a Security Interest.

"Relevant Person" means the Charterers, the Guarantor (to the extent it has not become the Released Guarantor pursuant to Clause 14 of the Guarantee), any New Guarantor, the Shareholder (to the extent it has not become the Released Shareholder pursuant to Clause 14 of the Guarantee), any New Shareholder and the Approved Manager and such other party providing security to the Owners for the Charterers' obligations under this Charter pursuant to a Security Document or otherwise.

"Relevant Transaction Amendments" has the meaning given to that term in the Guarantee.

"Requisition Compensation" includes 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".

"Restricted Countries" means those countries subject to country-wide or territory-wide Sanctions and/or trade embargoes, in particular but not limited to pursuant to the U.S.'s Office of Foreign Asset Control of the U.S. Department of Treasury ("OFAC") or the United Nations, including at the date of this Charter, but without limitation, Iran, Iraq, North Korea, Sudan and Syria and any additional countries based on respective country-wide or territory-wide Sanctions being imposed by OFAC or any of the regulative bodies referred to in the definition of Restricted Persons.

"Restricted Person" means a person, entity or any other parties (i) located, domiciled, resident or incorporated in Restricted Countries, and/or (ii) subject to any sanction administrated by the United Nations, the European Union, Switzerland, the United States and the U.S. Department of Treasury's Office of Foreign Assets Control ("OFAC"), the United Kingdom, Her Majesty's Treasury ("HMT") and the Foreign and Commonwealth Office of the United Kingdom, the People's Republic of China and/or (iii) owned or controlled by or affiliated with persons, entities or any other parties as referred to in (i) and (ii).

"Sanctions" means any sanctions, embargoes, freezing provisions, prohibitions or other restrictions relating to trading, doing business, investment, exporting, financing or making assets available (or other activities similar to or connected with any of the foregoing) imposed by law or regulation of United Kingdom, the United States of America (including, without limitation, CISADA and OFAC), the United Nations, the People's Republic of China or the Council of the European Union.

"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 a Relevant Person to the Owner under or in connection with the Leasing Documents or any judgment relating to the Leasing Documents; 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 Documents" means the Guarantee (to the extent it has not become the Released Guarantee pursuant to Clause 14 of the Guarantee), any New Guarantee, the Account Security, the General Assignment, the Shares Security Deed (to the extent it has not become the Released Shares Security Deed pursuant to Clause 14 of the Guarantee), any New Shares Security Deed, the Manager's Undertaking and any other security documents granted as security for the obligations of the Charterers under or in connection with this Charter.

"Security Interest" means:

41

(a) a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien, assignment, hypothecation or any other security interest of any kind or any other agreement or arrangement having the effect of conferring a security interest;

(b) the security rights of a plaintiff under an action in rem; or

(c) any other right which confers on a creditor or potential creditor a right or privilege to receive the amount actually or contingently due to it ahead of the general unsecured creditors of the debtor concerned; however 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 Period" means the period commencing on the date hereof and ending on the date on which the Owner is satisfied that the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full.

"Shareholder" means Drybulk Investments Inc., a corporation incorporated under the laws of the Marshall Islands with company number 88437 having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands.

"Shares Security Deed" means the shares charge over the shares in the Charterers in agreed form.

"Special Termination Purchase Price" means, in respect of any date (for the purposes of this definition only, the "Relevant Date"), the Outstanding Principal Balance together with a fee calculated at the rate of one per cent. (1%) thereon and any accrued but unpaid Charterhire B, plus (i) any Breakfunding Costs, (ii) any costs incurred and expenses reasonably incurred by the Owners in locating, repossessing or recovering the Vessel or collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest in relation thereto and (iii) all amounts payable under this Charter together with any applicable interest thereon.

"Term" means, in relation to the definitions of "Charterhire A" and "Charterhire B", a period of three (3) month's duration provided that:

(a) the first Term shall commence on the Commencement Date;

(b) each subsequent Term shall commence on the last day of the preceding Term;

(c) any Term which would otherwise end on a non-Business Day shall instead end on the next following Business Day or, if that Business Day is in another calendar month, on the immediately preceding Business Day;

(d) if any Term commences on the last Business Day of a calendar month or on a day for which there is no numerically corresponding day in the calendar month three (3) months thereafter, as the case may be, that Term shall, subject to paragraphs (c), (e) and (f), end on the last Business Day of such later calendar month;

(e) any Term which would otherwise overrun a Payment Date shall instead end on that Payment Date; and

(f) any Term which would otherwise extend beyond the Charter Period shall instead end on the last day of the Charter Period.

"Termination Event" means any event described in Clause 44.

"Total Loss" means:

42

(a) actual, constructive, compromised, agreed or arranged total loss of the Vessel;

(b) any expropriation, confiscation, requisition or acquisition of the Vessel, 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 one (1) year without any right to an extension) unless it is redelivered within sixty (60) days to the full control of the Owners or the Charterers; or

(c) any arrest, capture, seizure or detention of the Vessel (including any hijacking or theft but excluding any event specified in paragraph (b) of this definition) unless it is redelivered within sixty (60) days to the full control of the Owners or the Charterers.

"US Tax Obligor" means (a) a person which is resident for tax purposes in the United States of America or (b) a person some or all of whose payments under the Leasing Documents are from sources within the United States for United States federal income tax purposes.

"Vessel" means the kamsarmax bulker m.v. "Kelly" with IMO No. 9768227 with particulars stated in Boxes 6 to 12 of this Charter and which is to be registered under the name of the Owners with the Marshall Islands registry upon Delivery.

55.2 In this Charter:

"agreed form" means, in relation to a document, such document in a form agreed in writing by the Owners;

"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;

"continuing" means, in relation to any Termination Event, a Termination Event which has not been waived by the Owners and in relation to any Potential Termination Event, a Potential Termination Event which has not been waived by the Owners or remedied to the satisfaction of the Owners;

"control" over a particular company means 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 per cent, of the maximum number of votes that might be cast at a general meeting of such company; or

(b) appoint or remove all, or the majority, of the directors or other equivalent officers of such company; or

(c) give directions with respect to the operating and financial policies of such company with which the directors or other equivalent officers of such company are obliged to comply;

"document" includes a deed; also a letter, fax or telex;

43

"expense" means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;

"gross negligence" means a form of negligence which is distinct from ordinary negligence, in which the due diligence and care which are generally to be exercised have been disregarded to a particularly high degree, in which the plainest deliberations have not been made and that which should be most obvious to everybody has not been followed.

"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 55.3;

"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 which is a member of the International Group of P&I Clubs including pollution risks, extended passenger cover 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 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 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 55.4; and

"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.

55.3 Meaning 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;

44

and "month" and "monthly" shall be construed accordingly.

55.4 Meaning 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

(e) any company of which S is a subsidiary is a parent company of S.

55.5 In this Charter:

(a) references to a Leasing Document or any other document being in the form of a particular appendix or to any document referred to in the recitals include references to that form with any modifications to that form which the Owners approve;

(b) references to, or to a provision of, a Leasing Document or any other document are references to it as amended or supplemented, whether before the date of this Charter 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 Charter or otherwise; and

(d) words denoting the singular number shall include the plural and vice versa.

55.6 Headings. In interpreting a Leasing Document or any provision of a Leasing Document, all clauses, sub-clauses and other headings in that and any other Leasing Document shall be entirely disregarded.

45

EXECUTION PAGE

OWNERS

/s/ Wang Wei

SEA 46 LEASING CO. LIMITED

Name: Wang Wei

Title: Attorney-in-fact

CHARTERERS

/s/ Savvas Tournis

ORION OWNERS INC.

Name: Savvas Tournis

Title: Attorney-in-fact

46

SCHEDULE I

ACCEPTANCE CERTIFICATE

ORION OWNERS INC. (the "Charterers") hereby acknowledges that at [·] hours on [·] 2018 ([·] time), there was delivered to, and accepted by, the Charterers the Vessel known as "KELLY", registered in the name of SEA 46 LEASING CO. LIMITED (the "Owners") under the Marshall Islands flag with IMO No. 9768227 under a charter dated [·] March 2018 (the "Charter") and made between the Owners and the Charterers and that Delivery (as defined in the Charter) thereupon took place and that, accordingly, the Vessel is and will be subject to all the terms and conditions contained in the Charter.

The Charterers warrant that the representations and warranties made by them in Clause 45 of the Charter remain correct and that no Termination Event (as defined in the Charter) has occurred and is continuing at the date of this Acceptance Certificate.

Name:

Title:

for and on behalf of

ORION OWNERS INC.

Dated:

47

SCHEDULE II

PART A

The following are the documents referred to in Clause 34.1(b)(v):

1 Relevant Person

1.1 To the extent not already provided under the MOA, a copy of the constitutional documents of each Relevant Person which is a party to a Leasing Document.

1.2 To the extent not already provided under the MOA, a copy of the resolutions of the board of directors (or equivalent) of each Relevant Person which is a party to a Leasing Document:

(a) approving the terms of, and the transactions contemplated by, the Leasing Documents to which it is a party and resolving that it execute the Leasing Documents to which it is a party;

(b) authorizing a specified person or persons to execute the Leasing Documents to which it is a party on its behalf; and

(c) authorizing a specified person or persons, on its behalf, to sign and/or dispatch all documents and notices to be signed and/or dispatched by it under, or in connection with, the Leasing Documents to which it is a party.

1.3 To the extent not already provided under the MOA, an original of the power of attorney of any Relevant Person which is a party to a Leasing Document authorizing a specified person or persons to execute the Leasing Documents to which it is a party.

1.4 A passport copy of each person (bearing that person's signature) authorized by the resolution referred to in paragraph 2.1 above.

1.5 If required and to the extent not already provided under the MOA, a copy of the resolutions signed by all the holder(s) of the issued shares of each Relevant Person other than the Guarantor which is a party to a Leasing Document, approving the terms of, and the transactions contemplated by, the Leasing Documents to which that Relevant Person is a party.

1.6 A certificate of an authorized signatory of each Relevant Person which is a party to a Leasing Document certifying that each copy document relating to it specified in this Schedule is correct, complete and in full force and effect as at a date no earlier than the date of this Charter.

2 Vessel and other security

2.1 A duly executed original of any Leasing Document.

2.2 A duly executed original of any other document required to be delivered by each Leasing Document.

2.3 Documentary evidence that the Security Interests intended to be created by each of the Security Documents have been duly perfected under applicable law.

48

2.4 Documents establishing that the Vessel will, as from the Commencement Date, be managed commercially and managed technically by the Approved Manager on terms acceptable to the Owners, together with:

(a) a Manager's Undertaking for the Approved Manager (and of each document to be delivered under such Manager's Undertaking); and

(b) copies of the Document of Compliance of the relevant Approved Manager acting as technical manager of the Vessel.

2.5 Documentary evidence that the Vessel

(a) is definitively and permanently registered in the name of the Owners under Marshall Islands flag;

(b) is in the absolute and unencumbered ownership of the Owners; and

(c) has been unconditionally delivered by the Charterers to the Owners pursuant to the terms of the MOA, where such documents shall include without limitation

(i) the original (if required by the Flag State) or a copy of the notarized and legalised copies of the bill of sale duly executed by the Charterers (and where executed by an attorney of the Charterers, together with such original notarized Charterers' power of attorney); and

(ii) the original (if required by the Flag State) or a copy of the protocol of delivery and acceptance duly executed by the Charterers and the Owners.

2.6 An insurance report by an insurance advisor appointed by the Owners (but at the cost of the Charterers) in form and substance acceptable to the Owners.

2.7 A copy of the Vessel's class certificate evidencing that the Vessel maintains its classification of "A1,Bulk Carrier, BC-A,ESP,AMS,ACCU,CSR,CPS UWILD, CRC(I), GRAB 20, TCM, BWT Unrestricted Service" with the Classification Society free of all recommendations and conditions.

2.8 Copies of the Vessel's Safety Management Certificate (together with any other details of the applicable Safety Management System which the Owners require) and of any other documents required under the ISM Code and the ISPS Code (including without limitation an ISSC and IAPPC).

2.9 Valuations of the Vessel indicating the Initial Market Value of the Vessel in an amount satisfactory to the Owners.

3 Legal opinions

3.1 A legal opinion of Watson Farley & Williams, legal advisers to the Owners on such matters on the laws of England in relation to the Leasing Documents in the form and substance acceptable to the Owners.

3.2 Favourable legal opinions by lawyers appointed by the Owners on such matters relating to a Leasing Document or a Relevant Person, concerning the laws of England, the Marshall Islands, the Netherlands and such other Relevant Jurisdictions as the Owners may require, in the form and substance acceptable to the Owners.

49

4 Miscellaneous

4.1 Documentary evidence that the Earnings Account has been opened.

4.2 The Original Financial Statements of the Guarantor.

4.3 Documentary evidence that the fees payable under Clause 41.1 have been paid.

4,4 Documentary evidence that all the conditions precedent under r the MOA have been satisfied and fulfilled.

4.5 Such evidence relating to a Relevant Person as the Owners may require for their (or their financiers) to be able to satisfy their "know your customer" or similar identification procedures in relation to the transactions contemplated by the Leasing Documents.

50

SCHEDULE III INTEREST RATE

1. Subject to the provisions of this Schedule, the rate of interest on the Outstanding Principal Balance in respect of a Term shall be LIBOR for a three (3) month period ending on the first day of that Term.

2. The Owners shall notify the Charterers of the rate of interest in respect of a Term as soon as reasonably practicable after such rate of interest is determined by the Owners no later than two (2) days prior to the relevant Payment Date.

3. Market Disruption

If, in relation to any Term:

 (i) no screen rate is available for the LIBOR determination and the Reference Banks (or if at any time there is only one Reference Bank) do not provide quotations to the Owners in order to fix LIBOR; and

 (ii) the Owners determine (which determination shall be conclusive and binding) that by reason of circumstances affecting the London interbank market generally, adequate and fair means do not or will not exist for ascertaining LIBOR at the beginning of that Term or the same does not reflect the cost of funding of the Owners; or

(iii) the Owners determine (which determination shall be conclusive and binding) that by reason of circumstances affecting the London interbank market generally, deposits in Dollars in the required amount for the 3-month period commencing on the first day of that Term are not available to it in the London interbank market or from whatever sources it may select to obtain funds for that Term,

the Owners shall promptly notify the Charterers accordingly.

4. Immediately following the notification referred to in paragraph 3 above, the Owners and the Charterers, shall negotiate in good faith with a view to agreeing upon a substitute basis for funding the Outstanding Principal Balance and determining the applicable rate of interest for that Term, within thirty (30) days after the Owner serves the notice to the Charterers.

5. If a substitute basis is not so agreed pursuant to paragraph 4 above, the Charterers shall pay the Owners an amount equal to the interest on the Outstanding Principal Balance for the relevant Term at the rate per annum equal to the cost certified to the Owners (expressed as an annual rate of interest) of funding an amount equal to the Outstanding Principal Balance during the relevant Term (as conclusively determined by the Owners and which shall be binding on the Charterers).

6. If a substitute basis is not so agreed pursuant to paragraph 4 above the Charterers may prepay in full the Outstanding Principal Balance, by giving written notice to the Owners specifying a prepayment date which is not less than fifteen (15) days after such notice is given. On the date specified in the notice the Charterers shall prepay the Outstanding Principal Balance in full together with interest thereon to the date of prepayment and all other sums payable under this Charter. For this purpose, the interest rate from time to time applicable to the Outstanding Principal Balance shall be the rate as ascertained in accordance with paragraph 5 above in relation to the relevant period.

7. Interest shall accrue from day to day, shall be calculated on the basis of the actual number of days elapsed and a 360 day year, including the first day of the period during which it accrues but excluding the last day.

51

EX-8.1

Exhibit 8.1

LIST OF DRYSHIPS SUBSIDIARIES

Name of Subsidiary	Jurisdiction of Incorporation
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
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
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
Lidman Maritime Co.	Marshall Islands
Amara Shipping Company	Marshall Islands
Tempo Marine Co.	Marshall Islands
Star Record Owning Company Limited	Marshall Islands
Argo Owning Company Limited	Marshall Islands
Rea Owning Company Limited	Marshall Islands
Dione Owning Company Limited	Marshall Islands
Phoebe Owning Company Limited	Marshall Islands
Uranus Owning Company Limited	Marshall Islands
Selene Owning Company Limited	Marshall Islands
Tethys Owning Company Limited	Marshall Islands
Roscoe Marine Ltd.	Marshall Islands
Ialysos Shareholders Limited	Marshall Islands
Faros Owners Inc.	Marshall Islands
Orion Owners Inc.	Marshall Islands
Phoenix Owners Inc.	Marshall Islands
Quora Owners Inc.	Marshall Islands
Serenity Owners Inc.	Marshall Islands
Marathi Owners Inc.	Marshall Islands
Meltemi Owners Inc.	Marshall Islands
Noufaro Owners Inc.	Marshall Islands
Aquarius Owners Inc.	Marshall Islands
Emerald Maritime Ltd.	Marshall Islands
Kahuna Owners Inc.	Marshall Islands
Cecilia Owning Company Limited	Marshall Islands
Gas Ships Management Limited	Marshall Islands

Name of Subsidiary	Jurisdiction of Incorporation
Amathus Owning Company Limited	Marshall Islands
Regina Owners Inc.	Marshall Islands
Oil Tankers Investments Inc.	Marshall Islands
Tortuga Owners Inc.	Marshall Islands
Gas Ships Limited	Marshall Islands
VLGC Alpha Owning Ltd	Marshall Islands
VLGC Beta Owning Ltd	Marshall Islands
VLGC Gamma Owning Ltd	Marshall Islands
VLGC Delta Owning Ltd.	Marshall Islands
Cardiff LNGShips Ltd.	Marshall Islands
Cardiff LPG Ships Ltd	Marshall Islands
Drybulk Investments Inc.	Marshall Islands
Dryships Management Services Inc.	Marshall Islands
Shipping Pool Investors Inc.	Marshall Islands
Oil and Gas Ships Investor Limited	Marshall Islands
Mezzanine Financing Investment III Ltd.	Marshall Islands
Nautilus Offshore Services Inc.	Marshall Islands
Nautilus Shareholdings Limited	Marshall Islands
Dianthus Maritime Ltd.	Marshall Islands
Fiore Shipping Inc.	Marshall Islands
Mellen Marine Co.	Marshall Islands
Darden Shipholding S.A.	Marshall Islands
Newmont Chartering Limited	Marshall Islands
Asstplus Limited	Cyprus
Vega Crusader AS	Norway
Vega Corona AS	Norway
Vega Juniz AS	Norway
Vega Offshore AS	Norway
Vega Emtoli AS	Norway
Vega Jaanca AS	Norway
Vega Inruda AS	Norway

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:  April 4, 2018

/s/ George Economou

George Economou

Chairman and Chief Executive Officer (Principal Executive Officer)

EX-12.2

Exhibit 12.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Anthony Kandylidis, 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: April 4, 2018

/s/ Anthony Kandylidis

Anthony Kandylidis

President and 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, 2017 as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, George Economou, Chairman and 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: April 4, 2018

/s/ George Economou

George Economou

Chairman and 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, 2017 as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Anthony Kandylidis, President and 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: April 4, 2018

/s/ Anthony Kandylidis

Anthony Kandylidis

President and 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 following Registration Statements:

1) Registration Statement (Form F-3 No. 333-216826, as amended) of DryShips Inc.; and

2) Registration Statement (Form F-3 No. 333-202821, as amended) of DryShips Inc.

of our reports dated April 4, 2018, with respect to the consolidated financial statements of DryShips Inc., and the effectiveness of internal control over financial reporting of DryShips Inc. included in this Annual Report (Form 20-F) of DryShips Inc. for the year ended December 31, 2017.

/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.

Athens, Greece

April 4, 2018

XML

Document and Entity Information	12 Months Ended
	Dec. 31, 2017 shares
Document and Entity Information [Abstract]
Document Type	20-F
Document Period End Date	Dec. 31, 2017
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	Accelerated Filer
Entity Well Known Seasoned Issuer	No
Entity Common Stock Shares Outstanding	104,274,708
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Trading Symbol	Drys

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 14,490	$ 76,414
Restricted cash (Note 2)	726	350
Trade accounts receivable, net of allowance for doubtful receivables of $11 and $96 at December 31, 2016 and 2017, respectively	14,526	7,528
Due from related parties (Note 3)	16,914	6,674
Above-market acquired time charter contracts (Note 7)	0	1,500
Prepayments and advances	1,125	1,158
Other current assets (Note 4)	12,279	4,546
Total current assets	60,060	98,170
FIXED ASSETS, NET:
Advances for vessels under construction and related costs (Note 5)	31,898	0
Vessels, net (Note 6)	749,088	95,550
Total fixed assets, net	780,986	95,550
OTHER NON-CURRENT ASSETS:
Investment in affiliate (Notes 9, 11)	34,000	0
Restricted cash (Note 2)	15,010	10
Other non-current assets (Note 8)	44,869	0
Total other non-current assets	93,879	10
Total assets	934,925	193,730
CURRENT LIABILITIES:
Current portion of long-term debt, net of deferred finance costs (Note 10)	11,635	16,811
Accounts payable and other current liabilities	5,225	1,179
Accrued liabilities (Note 3)	4,758	3,709
Due to related parties (Note 3)	72	5,033
Deferred revenue	865	607
Total current liabilities	22,555	27,339
NON-CURRENT LIABILITIES
Long-term debt, net of deferred finance costs (Note 10)	133,703	0
Due to related parties (Notes 3, 10)	71,631	116,617
Total non-current liabilities	205,334	116,617
COMMITMENTS AND CONTINGENCIES (Note 14)
STOCKHOLDERS' EQUITY:
Preferred stock (Note 1, 12)	0	0
Common stock, $0.01 par value; 1,000,000,000 shares authorized at December 31, 2016 and 2017; 4,711 and 104,274,708 shares issued and outstanding at December 31, 2016 and 2017, respectively (Notes 1, 12)	1,043	0
Treasury stock; $0.01 par value; 3 and 0 shares at December 31, 2016 and 2017 (Notes 1, 12)	0	0
Additional paid-in capital (Note 12)	4,066,083	3,360,124
Accumulated deficit	(3,360,090)	(3,310,350)
Total equity	707,036	49,774
Total liabilities and stockholders' equity	$ 934,925	$ 193,730

XML

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Consolidated Balance Sheets
Allowance for doubtful receivables	$ 96	$ 11
Preferred stock par value	$ 0.01	$ 0.01
Preferred stock shares authorized	500,000,000	500,000,000
Common stock par value	$ 0.01	$ 0.01
Common stock shares authorized	1,000,000,000	1,000,000,000
Common stock shares issued	104,274,708	4,711
Common stock shares outstanding	104,274,708	4,711
Treasury stock par value	$ 0.01	$ 0.01
Treasury stock, shares	0	3
Series A Convertible Preferred Stock
Preferred stock shares authorized	100,000,000	100,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Series B Convertible Preferred Stock
Preferred stock shares authorized	100,000,000	100,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Series C Convertible Preferred Stock
Preferred stock shares authorized	10,000	10,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Series D Convertible Preferred Stock
Preferred stock shares authorized	3,500,000	3,500,000
Preferred stock shares issued	0	29
Preferred stock shares outstanding	0	29
Series E-1 Convertible Preferred Stock
Preferred stock shares authorized	50,000	50,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Series E-2 Convertible Preferred Stock
Preferred stock shares authorized	50,000	50,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
REVENUES:
Voyage and time charter revenues (including amortization of market acquired time charters)	$ 100,716	$ 51,934	$ 244,020
Service revenues, net	0	0	725,805
Total Revenues (Note 3)	100,716	51,934	969,825
OPERATING EXPENSES/(INCOME):
Voyage expenses (Note 3)	19,704	9,209	65,286
Vessels and drilling units operating expenses	59,348	45,563	371,074
Depreciation and amortization (Note 6)	14,966	3,466	227,652
Loss on contract cancellation (Note 5 and 14.2)	0	0	28,241
Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other (Notes 3, 6, 7 and 11)	(4,125)	106,343	1,057,116
Impairment on goodwill (Notes 2c and 7)	0	7,002	0
General and administrative expenses (Note 3)	30,972	39,708	104,912
Legal settlements and other, net (Note 14.1)	900	(258)	(2,948)
Operating loss	(21,049)	(159,099)	(881,508)
OTHER INCOME / (EXPENSES):
Interest and finance costs (Notes 3 and 15)	(14,707)	(8,857)	(172,132)
Gain on debt restructuring (Note 10)	0	10,477	0
Interest income	1,365	81	527
Loss on Private Placement (Notes 3, 11)	(7,600)	0	0
Gain/(Loss) on interest rate swaps (Note 11)	0	403	(11,601)
Other, net	(401)	(199)	(9,275)
Total other income/(expenses), net	(21,343)	1,905	(192,481)
INCOME/(LOSS) BEFORE INCOME TAXES AND EARNINGS OF AFFILIATED COMPANIES	(42,392)	(157,194)	(1,073,989)
Loss due to deconsolidation of Ocean Rig (Notes 3, 11)	0	0	(1,347,106)
Income taxes (Note 18)	(152)	(38)	(37,119)
Losses of affiliated companies (Note 9)	0	(41,454)	(349,872)
NET LOSS	(42,544)	(198,686)	(2,808,086)
Less: Net income attributable to non-controlling interests	0	0	(38,975)
NET LOSS ATTRIBUTABLE TO DRYSHIPS INC.	(42,544)	(198,686)	(2,847,061)
NET LOSS ATTRIBUTABLE TO DRYSHIPS INC. COMMON STOCKHOLDERS (Note 17)	$ (39,739)	$ (206,381)	$ (2,847,631)
LOSS PER COMMON SHARE ATTRIBUTABLE TO DRYSHIPS INC. COMMON STOCKHOLDERS, BASIC AND DILUTED (Note 17)	$ (1.13)	$ (455,587.2)	$ (49,958,438.6)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES, BASIC AND DILUTED (Note 17)	35,225,784	453	57
Dividends declared per share (Note 17)	$ 26.85	$ 0	$ 0

XML

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Consolidated Statements of Comprehensive Loss
Net loss	$ (42,544)	$ (198,686)	$ (2,808,086)
Other comprehensive income/ (loss):
Reclassification of realized losses associated with capitalized interest to Consolidated Statement of Operations, net	0	110	466
Actuarial gains	0	0	50
Other comprehensive income	0	110	516
Comprehensive loss	(42,544)	(198,576)	(2,807,570)
Less: comprehensive income attributable to non-controlling interests	0	0	(39,090)
Comprehensive loss attributable to DryShips Inc.	$ (42,544)	$ (198,576)	$ (2,846,660)

XML

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Preferred stock	Treasury Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total DryShips Stockholders Equity	Non-controlling interests
BALANCE value, at Dec. 31, 2014	$ 4,290,388	$ 0			$ 3,256,075	$ (6,622)	$ (256,632)	$ 2,992,821	$ 1,297,567
BALANCE shares, at Dec. 31, 2014		60		(3)
Net income/(loss)	(2,808,086)						(2,847,061)	(2,847,061)	38,975
Issuance of common stock, value (Note 12)	(228)				(228)			(228)
Issuance of preferred stock, value (Note 12)	10,000				10,000			10,000
Issuance of preferred stock, shares (Note 12)			8
Issuance of non-vested shares, shares		0
Conversion of stock, shares converted (Note 12)				0
Issuance of subsidiary shares to non-controlling interest	1,266				(49,444)	169		(49,275)	50,541
Acquisition of Nautilus Offshore Services Inc.					222		(276)	(54)	54
Other comprehensive income	516					401		401	115
Amortization of stock based compensation (Note 13)	9,364				8,523			8,523	841
Deconsolidation of Ocean Rig	(1,361,282)					6,285		6,285	(1,367,567)
Dividends paid	(20,526)								$ (20,526)
BALANCE value, at Dec. 31, 2015	121,412	$ 0			3,225,148	233	(3,103,969)	121,412
BALANCE shares, at Dec. 31, 2015		60	8	(3)
Net income/(loss)	(198,686)						(198,686)	(198,686)
Issuance of common stock, value (Note 12)	14,434	$ 0			14,434			14,434
Issuance of common stock, shares (Note 12)		442
Issuance of preferred stock, value (Note 12)	117,981				117,981			117,981
Issuance of preferred stock, shares (Note 12)			42
Conversion of stock, amount issued (Note 12)	41	$ 0			41			41
Conversion of stock, shares issued (Note 12)		4,209
Conversion of stock, shares converted (Note 12)			(13)
Exchange of Revolving Facility with preferred shares, value (Note 3)	(8,750)				(8,750)			(8,750)
Exchange of Revolving Facility with preferred shares, shares (Note 3)			(8)
Sale of investment in Ocean Rig (Note 3)	(343)					(343)		(343)
Other comprehensive income	110					110		110
Amortization of stock based compensation (Note 13)	3,770				3,770			3,770
Gain/ (Loss) from common control transaction	(195)				(195)			(195)
Dividends paid	0				7,695		(7,695)
BALANCE value, at Dec. 31, 2016	49,774	$ 0			3,360,124	0	(3,310,350)	49,774
BALANCE shares, at Dec. 31, 2016		4,711	29	(3)
Net income/(loss)	(42,544)						(42,544)	(42,544)
Issuance of common stock, value (Note 12)	742,585	$ 1,043			741,542			742,585
Issuance of common stock, shares (Note 12)		104,270,000
Stockholders contribution (Note 12)	2,805						2,805	2,805
Cancellation of treasury shares (Note 12)		(3)		3
Cancellation of Series D Preferred shares (Note 12), value	(8,750)				(8,750)			(8,750)
Cancellation of Series D Preferred shares (Note 12), shares			(29)
Other comprehensive income	0
Premium paid on common control transaction	(29,001)				(29,001)			(29,001)
Amortization of stock based compensation (Note 13)	1,728				1,728			1,728
Gain/ (Loss) from common control transaction	440				440			440
Dividends paid	(10,001)						(10,001)	(10,001)
BALANCE value, at Dec. 31, 2017	$ 707,036	$ 1,043			$ 4,066,083	$ 0	$ (3,360,090)	$ 707,036
BALANCE shares, at Dec. 31, 2017		104,274,708	0	0

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash Flows from Operating Activities:
Net loss	$ (42,544)	$ (198,686)	$ (2,808,086)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	14,966	3,466	227,652
Amortization and write off of deferred financing fees	4,218	736	26,712
Amortization of fair value of acquired time charters	684	4,346	2,840
Impairment loss and (gain)/loss from sale of vessels and vessel owning companies and other	(4,125)	106,343	1,057,116
Impairment on goodwill	0	7,002	0
Net proceeds from sale in ownerships of subsidiary	0	0	1,266
Losses of affiliated company	0	41,454	349,872
Loss on change of control	0	0	1,347,106
Loss on Private Placement	7,600	0	0
Amortization of stock based compensation	1,728	3,580	7,806
Gain on debt restructuring	0	(8,652)	0
Change in fair value of derivatives	0	(2,193)	(10,848)
Changes in operating assets and liabilities:
Trade accounts receivable	(6,998)	2,531	(12,997)
Due from related parties	(10,240)	10,875	19,141
Other current and non-current assets	(7,700)	3,002	54,448
Accounts payable and other current and non-current liabilities	4,046	(1,434)	(25,263)
Accrued liabilities	1,049	(206)	(39,590)
Due to related parties	(961)	2,598	(10,261)
Deferred revenue	258	(118)	28,833
Net Cash Provided by/(Used in) Operating Activities	(38,019)	(25,356)	215,747
Cash Flows from Investing Activities:
Advance for fixed asset purchase	(44,869)	0	0
Investment in affiliates	0	49,911	0
Cash decrease due to deconsolidation of Ocean Rig	0	0	(621,615)
Acquisition of Nautilus, net of cash acquired	0	0	(78,203)
Short term investments	0	0	74
Fixed assets additions	(653,344)	0	(505,670)
Net proceeds from sale of vessels and vessel owning companies	8,221	5,141	673,850
(Increase)/Decrease in restricted cash	(15,376)	14,666	65,866
Net Cash Provided by/(Used in) Investing Activities	(705,368)	69,718	(465,698)
Cash Flows from Financing Activities:
Proceeds from short and long-term credit facilities, term loans and senior notes	150,000	28,000	492,000
Principal payments and repayments of long-term debt and senior notes	(18,780)	(119,758)	(782,366)
Net proceeds from stock issuance	568,883	123,810	0
Dividends paid	(10,001)	0	(20,526)
Payment of financing costs, net	(8,639)	0	(5,399)
Net Cash Provided by/(Used in) Financing Activities	681,463	32,052	(316,291)
Net increase/ (decrease) in cash and cash equivalents	(61,924)	76,414	(566,242)
Cash and cash equivalents at beginning of year	76,414	0	566,242
Cash and cash equivalents at end of year	14,490	76,414	0
Cash paid during the year for:
Interest, net of amount capitalized	13,225	5,516	135,954
Income taxes	125	58	20,830
Non cash investing activities:
Fixed Assets additions (Note 3)	(50,340)
Investment in affiliates (Notes 9, 11)	(34,000)
Non cash financing activities:
Repayment of credit loan facilities (Notes 3, 10)		151,510
Exchange of Preferred Stock into loan (Notes 3, 12)		8,750
Interest write off due to the debt restructuring		2,111
Preferred Shares forfeiture with common stock issuance (Notes 3, 12)	(8,750)
Stockholders' Contribution upon preferred shares forfeiture (Note 12)	2,805
Common stock issuance (Notes 3, 12)	173,704
Loan drawdown for vessels additions (Note 3)	79,000
Capital distribution for common control transaction (Note 5)	(28,560)
Preferred stock
Non cash financing activities:
Conversion of loan into Stock (Notes 3, 12)		$ (8,750)	$ (10,000)
Common Stock
Non cash financing activities:
Conversion of loan into Stock (Notes 3, 12)	$ (126,159)

XML

Basis of Presentation and General Information

12 Months Ended

Dec. 31, 2017

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. and its subsidiaries (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 diversified owner of ocean going cargo vessels and through June 8, 2015, also provided drilling services through Ocean Rig UDW Inc. (“Ocean Rig”) (Note 3).

From June 8, 2015 through April 5, 2016, Ocean Rig was considered as an affiliated entity and not as a controlled subsidiary of the Company. As a result, Ocean Rig was accounted for under the equity method and its assets and liabilities were not consolidated in the Company’s balance sheet as of December 31, 2015 and 2016. On April 5, 2016, the Company sold all of its shares in Ocean Rig, to a subsidiary of Ocean Rig and as of that date, the Company no longer holds any equity interest in Ocean Rig. Accordingly, additional disclosures for Ocean Rig have not been included, in the accompanying consolidated financial statements.

As of August 29, 2017, Heidmar Holdings LLC (“Heidmar”) was considered an affiliated entity following the Company’s acquisition of an entity that holds a 49% interest in Heidmar in connection with the Private Placement. Heidmar is one of the world’s leading commercial tanker pool operators (Notes 3, 9).

Customers individually accounting for more than 10% of the Company’s voyage revenues and drilling revenues during the years ended December 31, 2015, 2016 and 2017, were as follows:

	Year ended December 31,
	2015		2016		2017
Customer A - Drilling segment		12%		-		-
Customer B - Drilling segment		14%		-		-
Customer C - Drilling segment		11%		-		-
Customer D - Drilling segment		10%		-		-
Customer E - Drilling segment		10%		-		-
Customer F - Drilling segment		10%		-		-
Customer G – Offshore support segment		-		37%		-

On March 11, 2016, the Company effected a 1-for-25 reverse stock split of its issued common stock. In connection with the reverse stock split seven fractional shares were cashed out. On August 15, 2016, the Company effected a 1-for-4 reverse stock split of its issued common stock. In connection with the reverse stock split five fractional shares were cashed out. On November 1, 2016, the Company effected a 1-for-15 reverse stock split of its issued common stock. In connection with the reverse stock split nine fractional shares were cashed out. On January 23, 2017, the Company effected a 1-for-8 reverse stock split of its issued common stock. In connection with the reverse stock split fourfractional shares were cashed out. On April 11, 2017, the Company effected a 1-for-4 reverse stock split of its issued common stock. In connection with the reverse stock split two fractional shares were cashed out. On May 11, 2017, the Company effected a 1-for-7 reverse stock split of its issued common stock. In connection with the reverse stock split three fractional shares were cashed out. On June 22, 2017, the Company effected a 1-for-5 reverse stock split of its issued common stock. In connection with the reverse stock split two fractional shares were cashed out. Finally on July 21, 2017, the Company effected a 1-for-7 reverse stock split of its issued common stock. In connection with the reverse stock split two fractional shares were cashed out.

All share and per share amounts disclosed in the consolidated financial statements and notes give effect to these reverse stock splits retroactively, for all periods presented.

XML

Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

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 U.S. generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and include the accounts and operating results of DryShips, its wholly-owned subsidiaries and its affiliate.

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)Goodwill: Goodwill represents the excess of the purchase price over the estimated fair value of net assets acquired. Goodwill is reviewed for impairment whenever events or circumstances indicate possible impairment in accordance with Accounting Standard Codification (“ASC”) 350 “Goodwill and Other Intangible Assets”. This standard requires that goodwill and other intangible assets with an indefinite life not be amortized but instead tested for impairment at least annually. The Company tests goodwill for impairment each year on December 31. The Company tests goodwill at the reporting unit level, which is defined as an operating segment or a component of an operating segment that constitutes a business for which financial information is available and is regularly reviewed by management. The impairment of goodwill is tested by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and a second step is performed to measure the amount of the impairment loss, if any. To determine the fair value of each reporting unit, the Company uses the income approach, which is a generally accepted valuation methodology. For its offshore support reporting unit, the Company estimated the fair market value using estimated discounted cash flows. The Company discounts projected cash flows using a long-term weighted average cost of capital, which is based on the Company’s estimate of the investment returns that market participants would require for each of its reporting units. To develop the projected cash flows associated with the Company’s offshore support reporting unit, which are based on estimated future utilization and dayrates, the Company considered key factors that included assumptions regarding daily operating expenses, inflation and areas of future employment. For the year ended December 31, 2016, the Company concluded that the goodwill relating to its offshore support reporting unit was impaired and recorded a charge amounting to $7,002 included in “Impairment on goodwill” in the accompanying consolidated statement of operations (Note 7).

(d)Use of estimates: The preparation of consolidated financial statements in conformity with U.S. 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.

(e)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”.

The Company’s policy is in accordance with the requirements of Accounting Standard Update (“ASU”) 2013-02, “Comprehensive Income (Topic 220) - Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. Pursuant to ASU 2013-02, an entity should 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 U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts.

(f)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.

(g)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 and (iii) minimum liquidity collateral requirements or minimum required cash deposits, as defined in the Company’s loan agreements.

(h)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.

(i)Going concern:The Company has adopted the provisions of ASU No. 2014-15, “Presentation of Financial Statements - Going Concern”. ASU 2014-15 provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and on related required footnote disclosures. For each reporting period, management is required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. As of December 31, 2017, the Company reported a working capital surplus of $37,505 and had cash and cash equivalents including restricted cash amounted to $30,226. The Company also expects that it will fund its operations either with cash on hand, cash generated from operations, additional bank debt and equity offerings, or a combination thereof, in the twelve-month period ending one year after the financial statements’ issuance.

(j)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). 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’s major customers are well known companies, which reduce 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 makes advances for the construction of assets to the yards. The ownership of the assets is transferred from the yard to the Company at delivery. The credit risk of the advances was, to a large extent, reduced through refund guarantees issued by financial institutions.

(k)Advances for vessels under construction: This represents amounts expended by the Company in accordance with the terms of the construction contracts for vessels 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 under construction (“Newbuildings”) represents the accumulated costs at the balance sheet date. Cost components include payments for yard installments, acceptance tests’ consumption, commissions to related party, construction supervision, and capitalized interest.

(l)Capitalized interest: Interest expense is capitalized during the construction period of drilling units 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 and finance costs for the years ended December 31, 2015, 2016 and 2017, amounted to $12,060, $0 and $3,196 respectively (Note 15).

(m)Insurance claims: The Company records insurance claim recoveries for insured losses incurred on damages to fixed assets, 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, or loss due to the vessel 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.

(n)Inventories: Inventories consist of consumable bunkers (if any), propane heel (if any), lubricants and victualing stores, which were 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. Market could be the replacement cost, net realizable value or net realizable value less an approximately normal profit margin. In July 2015, the FASB issued ASU No. 2015-11 –Inventory. ASU 2015-11 is part of FASB Simplification Initiative, according to which the entities are required to measure inventory at the lower of cost or net realizable value. Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This update was effective for public entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years prospectively. During fiscal year 2017, the Company adopted the aforementioned update, which did not impact its results of operations, financial position or cash flows, in the current or previous interim and annual reporting periods.

(o)Foreign currency translation: The functional currency of the Company is the U.S. Dollar since the Company operates in international shipping and drilling markets (through June 8, 2015) 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. The Company recorded gain due to foreign currency differences amounting to $2,763, $745 and $335 included in the accompanying consolidated statement of operations as of December 31, 2015, 2016 and 2017, respectively.

(p)Fixed assets, net:

(i)Drybulk, tanker carrier, gas carrier and offshore support 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 drybulk and tanker carrier vessels to be 25 years, offshore support vessels 30 years and Very Large Gas Carriers (“VLGCs”) 35 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 units were stated at historical cost less accumulated depreciation. Such costs included the cost of adding or replacing parts of drilling unit machinery and equipment when the cost was incurred, if the recognition criteria were met. The recognition criteria require that the cost incurred extends the useful life of a drilling unit. The carrying amounts of those parts that were replaced were written off and the cost of the new parts was capitalized. Depreciation was 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 for the drilling units. The residual values of the drilling rigs and drillships were estimated at $35,000 and $50,000, respectively, for the year ended December 31, 2015.

(q)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.

If circumstances arise that previously were considered unlikely and, as a result, the Company decides not to sell a long-lived asset previously classified as held for sale, the asset shall be reclassified as held and used. A long-lived asset that is reclassified shall be measured individually at the lower of its carrying amount before the asset or disposal group was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the asset or disposal group been continuously classified as held and used and its fair value at the date of the subsequent decision not to sell.

When the Company concludes a Memorandum of Agreement for the disposal of a vesselwhich has yet to complete a time charter, it is considered that the held for sale criteria discussed in guidance are not met until the time charter has been completed as the vesselis not available for immediate sale. As a result, such vesselsare not classified as held for sale.

When the Company concludes a Memorandum of Agreement for the disposal of a vesselwhich has no time charter 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 vesselsare 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.

For the years ended December 31, 2015 and 2016, the Company recognized such charges amounting to $967,144 and $13,395 (including a gain of $1,851 due to the reclassification of the drybulk vessels as held and used, effective December 31, 2016), respectively, included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”, in the accompanying consolidated statement of operations (Notes 6 and 11). For the year ended December 31, 2017, the Company had its entire fleet as held and used.

(r)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 by obtaining vessel independent 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, vesselsales 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’future performance, with the significant assumptions being related to charter rates, fleet utilization, operating expenses, capital expenditures, residual value and the estimated remaining useful life of each vessel. 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 vesseland compares them to their carrying value. The projected net operating cash flows are determined by considering the charter revenues from existing time charters 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 of drybulk, tanker and gas carrier vessels based on the most recent ten year historical rates for similar vessels, adjusted for any outliers, and utilizing available market data for time charter and spot market rates and forward freight agreements and for offshore support vessels based on available market data, over the remaining estimated life of the vessel, net of brokerage commissions, expected outflows for vessels’maintenance and operating expenses (including planned drydocking and special survey expenditures), assuming an average annual inflation rate based on the global consumer price index (“CPI”) changes and fleet utilization of 99% decreasing by 1.5% every five years after the first ten years. The salvage value used in the impairment test is estimated to be $250 per light weight ton (LWT) for vessels, 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 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’scarrying value.

As a result of the impairment review performed during 2015 and prior to the entering into the agreements for the sale of the Company’s vessels and vessel owning companies, indicated that the carrying amount of one of its drybulk vessels was not recoverable and, therefore, a charge of $83,937 was recognized and included in “Impairment loss (gain)/loss from sale of vessels and vessel owning companies and other “, in the accompanying consolidated statement of operations.

Also, the impairment review for the year ended December 31, 2016, indicated that the carrying amount of the offshore support vessels’ was not recoverable and, therefore, a charge of $65,712 was recognized and included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”, in the accompanying consolidated statement of operations (Note 6). As a result of the impairment review for the year ended December 31, 2017, the Company determined that the carrying amounts of its vessels were recoverable and, therefore, concluded that no impairment loss was necessary for 2017.

(s)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 and drilling units.

(t)Class costs: The Company follows the direct expense method of accounting for periodic class costs incurred during special surveys of drilling units, normally every five years. Class costs and other maintenance costs are expensed in the period incurred and included in “Vessels’ and drilling units’ operating expenses”.

(u)Deferred financing costs: Deferred financing costs include fees, commissions and legal expenses associated with the Company’s long- term debt. The Company’s policy is in accordance with ASU 2015-03 “Simplifying the Presentation of Debt Issuance Costs”, issued in April 2015. The Company presents such costs in the balance sheet as a direct deduction from the related debt liability. 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. Amortization and write offs for each of the years ended December 31, 2015, 2016 and 2017, amounted to $23,834, $572 and $387 respectively (Note 15).

(v)Non-monetary transactions - Exchange of the capital stock of an entity for nonmonetary assets or services: Non-monetary transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any difference between the fair value and the transaction price is considered as gain or loss for the Company. The Company determines fair value of assets and liabilities given up or received in accordance with ASC 820 “Fair Value Measurement”. In cases of transactions related to an exchange of preferred shares with common ones, any difference between the fair value and the carrying value of the exchanged preferred shares is considered as shareholders dividend or capital contribution from/to the Company.

(w)Extinguishment of Preferred Stock: In case of preferred stock extinguishment, the difference between the fair value of the consideration transferred to the holders of the preferred stock and the carrying amount of the preferred stock in the Company’s balance sheet (net of issuance costs) should be subtracted from (or added to) net income/loss to arrive at income/loss available to common stockholders in the calculation of earnings/loss per share. The difference between the fair value of the consideration transferred to the holders of the preferred stock and the carrying amount of the preferred stock in the Company’s balance sheet represents a return to (from) the preferred stockholder that should be treated in a manner similar to the treatment of dividends paid on preferred stock.

(x)Revenue and related expenses:

(i)Drybulk carrier, tanker, gas carrier and offshore support 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. Revenues related to mobilization and direct incremental expenses of mobilization are initially deferred and recognized as revenues and expenses, over the duration of the time charter agreements, and to the extent that expenses exceed revenue to be recognized, they are expensed as incurred.

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.

Profit Sharing agreements: Profit-sharing revenues are calculated at an agreed percentage of the excess of the charterer’s average daily income over an agreed amount and accounted for on an accrual basis based on provisional amounts and for those contracts that provisional accruals cannot be made due to the nature of the profit share elements, these are accounted for on the actual cash settlement.

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. Commissions are either paid for by the Company or are deducted from the hire revenue. 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. 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 units:

Revenues: The Company’s services and deliverables, regarding its drilling units, were generally sold based upon contracts with its customers that included fixed or determinable prices. The Company recognized revenue when delivery occurred, as directed by its customer, and collectability was reasonably assured. The Company evaluated if there were multiple deliverables within its contracts and whether the agreement conveyed the right to use the drilling units for a stated period of time and met the criteria for lease accounting, in addition to providing a drilling services element, which was generally compensated for by day rates. In connection with drilling contracts, the Company could also receive revenues for preparation and mobilization of equipment and personnel or for capital improvements to the drilling units and day rate or fixed price mobilization and demobilization fees. Revenues were 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 was recognized in the period during which the services were rendered at the rates established in the contracts. All mobilization revenues, direct incremental expenses of mobilization and contributions from customers for capital improvements were initially deferred and recognized as revenues and expenses, as applicable, over the estimated duration of the drilling period. To the extent that mobilization expenses exceeded revenue to be recognized, they were expensed as incurred. Demobilization revenues and expenses were recognized over the demobilization period. All revenues for well contracts were 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 determined whether the arrangement was a multiple element arrangement containing both a lease element and drilling services element. For revenues derived from contracts that contained a lease, the lease elements were recognized as “Leasing revenues” in the consolidated statement of operations on a basis approximating straight line over the lease period. The drilling services element was recognized as “Service revenues” in the period in which the services were rendered at estimated fair value. Revenues related to the drilling element of mobilization and direct incremental expenses of drilling services were deferred and recognized over the estimated duration of the drilling period. To the extent that expenses exceeded revenue to be recognized, they were expensed as incurred. Demobilization fees and expenses were recognized over the demobilization period. Contributions from customers for capital improvements were initially deferred and recognized as revenues over the estimated duration of the drilling contract.

(y) 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.

(z)Segment reporting: The Company determined that currently it operates under four 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 offshore support services to the global offshore energy industry (offshore support segment), as a provider of transportation services for crude and refined petroleum cargoes (tanker segment) and as a provider of transportation services for liquefied gas cargoes (gas carrier segment). The Company operated also as a provider of ultra-deep water drilling services (drilling segment) until the deconsolidation of Ocean Rig on June 8, 2015. The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company’s consolidated financial statements.

(aa)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 was party to interest swap agreements where it received a floating interest rate and paid a fixed interest rate for a certain period. All of the Company’s interest swap agreements were either matured or terminated during the year ended December 31, 2016. 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.

(ab)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 11).

(ac)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 13). In March 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation – Improvements to Employee Share-Based Payment Accounting (Topic 718)” (“ASU 2016-09”), which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, all excess income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, however early adoption is permitted. The Company has adopted the provisions of ASU 2016-09, which did not impact its consolidated financial statements and notes disclosures.

(ad)Income taxes: Income taxes are provided for based upon the tax laws and rates in effect in the countries in which the Company’s drilling and ocean going cargo vessels’ operations were conducted and income was 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. For the taxable year ending December 31, 2017, the Company did not qualify for an exemption from United States taxation on its U.S. source shipping. As a result, its U.S. source shipping income is subject to a 2% - 4% tax impose without allowance for deductions (Note 18).

(ae)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.

(af)Investments in Affiliates: Affiliates are entities over which the Company generally has between 20% and 50% of the voting rights, or over which the Company has significant influence, but over which it does not exercise control. Investments in these entities are accounted for by the equity method of accounting. Under this method the Company records an investment in the stock of an affiliate at cost or at fair value in case of a retained investment in the common stock of an investee in a deconsolidation transaction, and adjusts the carrying amount for its share of the earnings or losses of the affiliate subsequent to the date of investment and reports the recognized earnings or losses in income. Dividends received from an affiliate reduce the carrying amount of the investment. When the Company’s share of losses in an affiliate equals or exceeds its interest in the affiliate, the Company does not recognize further losses, unless the Company has incurred obligations or made payments on behalf of the affiliate.

At each reporting date, the Company performs an assessment in order to identify and account for any other than temporary impairment in its investment in affiliates. Specifically, the Company assesses factors indicating that a decline in the value of an investment is other-than-temporary and that a write-down of the carrying amount is required and concludes whether the impairment is other than temporary and then measures and recognizes the respective impairment charge as the difference between the carrying value and the fair value of the equity investment. In accordance with ASC 825-10 entities are allowed to elect to measure certain financial assets and financial liabilities (as well as certain non-financial instruments that are similar to financial instruments) at fair value. Equity method investments are eligible for the fair value option.

If the fair value option is applied to an investment that would otherwise be accounted for under the equity method, ASC 825-10-25-7 requires that the fair value option be applied to all of the investor’s eligible interests in that investee. The fair value option election is non-revocable even if the Company loses significant influence over the investee. Under the fair value model, an investment in an affiliate is recognized initially at the fair value at the transaction date and at each reporting date, an investor shall measure its investments in affiliates at fair value, with changes recognized in profit or loss.

Affiliates included in the financial statements: In the Company’s consolidated financial statements, the following

1. Ocean Rig and its subsidiaries, accounted for under the equity method from June 8, 2015 through April 4, 2016, (ownership interest as of April 4, 2016, was 40.4%); and
2. Heidmar, a global tanker pool operator, accounted for under the fair value option from August 29, 2017 (ownership interest is 49%).

(ag)Accounting for transactions under common control: A common control transaction is any transfer of net assets or exchange of equity interests between entities or businesses that are under common control by an ultimate parent or controlling shareholder before and after the transaction. Common control transactions may have characteristics that are similar to business combinations but do not meet the requirements to be accounted for as business combinations because, from the perspective of the ultimate parent or controlling shareholder, there has not been a change in control over the acquiree. Due to the fact common control transactions do not result in a change in control at the ultimate parent or controlling shareholder level, the Company does not account for that at fair value. Rather, common control transactions are accounted for at the carrying amount of the net assets or equity interests transferred.

(ah)Troubled Debt Restructurings: A restructuring of a debt constitutes a troubled debt restructuring if the lender or creditor for economic or legal reasons related to the Company’s financial difficulties grants a concession to the Company that it would not otherwise consider. Troubled debt that is fully satisfied by foreclosure, repossession, or other transfer of assets or by grant of equity securities by the Company is included in the term troubled debt restructuring and is accounted as such.

The Company, when issuing or otherwise granting an equity interest to a lender or creditor to settle fully a payable or debt, accounts for the equity interest granted at its fair value. The difference between the fair value of the equity interest granted and the carrying amount of the payable or debt settled is recognized as a gain on restructuring of payables or debt. Legal fees and other direct costs incurred in granting an equity interest to a creditor reduce the fair value of the equity interest issued. All other direct costs incurred in connection with a troubled debt restructuring are charged to expense as incurred.

(ai)Recent accounting pronouncements:

Leases: In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842), which requires lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The Company is currently analyzing the impact of the adoption of this new standard.

Revenue from Contracts with Customers: In May 2016, the FASB issued their final standard on revenue from contracts with customers. The standard, which was issued as ASU 2014-09 (Topic 606) by the FASB, and as amended, outlines a single comprehensive model for entities to use in accounting for revenue from contracts with customers and supersedes most legacy revenue recognition guidance. The core principle of the guidance in Topic 606, is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services by applying the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in each contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in each contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The standard is effective for public business entities from annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The new revenue standard may be applied using either of the following transition methods: (1) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (2) a modified retrospective approach with the cumulative effect of initially adopting the standard recognized at the date of adoption (which includes additional footnote disclosures). Regarding the incremental costs of obtaining a contract with a customer and contract’s fulfilling costs, they should be capitalized and been amortized over the voyage duration, if certain criteria are met – for incremental costs if only they are chargeable to the customer and for contract’s fulfilling costs if each of the following criteria is met: (i) they relate directly to the contract, (ii) they generate or enhance entity’s resources that shall be used in performance obligation satisfaction and (iii) are expected to be recovered. Further, in case of incremental costs, entities may elect not to capitalize them in cases of amortization period (voyage period) is less than one year.

On January 1, 2018, the Company adopted the aforementioned ASU, using the modified retrospective method. As a result, the commencement date of each voyage charter shall deem to be upon the loading of the current cargo, decreasing the duration of the voyages. Further, the related incremental costs (i.e. commissions) shall continue to be expensed as incurred but over the new duration of each voyage, as Company’s voyages are less than one year. Regarding voyage expenses, either during the voyage or the ballast period, no change in Company’s accounting policy shall occur, as the three criteria are not met collectively. Regarding time charter and profit sharing contracts, no material changes related to Company’s accounting policies were identified. As of December 31, 2017, four of the Company’s vessels operate under voyage charter. The effect of the change in the voyage period due to the adoption of the new accounting standard will result to a cumulative adjustment of $1,264 in the opening balance of Company’s accumulated deficit for the fiscal year 2018.

Financial Instruments: In January 2016, the FASB issued ASU No. 2016-01– Financial Instruments - Overall (Subtopic 825-10). ASU 2016-01, changes how public companies will recognize, measure, present and make disclosures about certain financial assets and financial liabilities. For public business entities, ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted. The Company is evaluating the above pronouncement. The adoption of this pronouncement is not expected to have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13– Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities.For public entities, the amendments of this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.Early application is permitted. The Company is in the process of assessing the impact of the provisions of this guidance on the Company’s consolidated financial position and performance.

Statement of Cash Flows: In August 2016, the FASB issued ASU No. 2016-15- Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments which addresses certain cash flow issues with the objective of reducing the existing diversity in practice: ASU 2016-15 is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period, however early adoption is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on its consolidated financial statements and notes disclosures. In November 2016, the FASB issued ASU No. 2016-18—Statement of Cash Flows (Topic 230) - Restricted Cash, which addresses the requirement that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update apply to all entities that have restricted cash or restricted cash equivalents and are required to present a statement of cash flows under Topic 230. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period, however early adoption is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on its consolidated statement of cash flows.

Business combinations – Definition of a business:In January 2017, the FASB issued ASU No. 2017-01 – Business Combinations (Topic 805) – Clarifying the Definition of a Business which addresses business combination issues with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period. The Company is currently evaluating the provisions of this guidance and assessing its impact on its consolidated financial statements and notes disclosures.

XML

Transactions with Related Parties

12 Months Ended

Dec. 31, 2017

Related Party Transactions [Abstract]

Transactions with Related Parties:

3.Transactions with Related Parties:

The amounts included in the accompanying consolidated balance sheets and consolidated statements of operations are as follows:

		December 31,
		2016	2017
Balance Sheet
Due from related parties	$	6,674	$	16,914
Due from related parties (current) - Total		6,674		16,914
Due to related parties		(5,033)		(72)
Due to related parties (current) - Total	$	(5,033)	$	(72)
Due to related parties		(116,617)		(71,631)
Due to related parties (non - current) - Total	$	(116,617)	$	(71,631)
Advances for vessels under construction and related costs		-		1,004
Accrued liabilities	$	(1,082)	$	(350)

	Year ended December 31,
Statement of Operations	2015		2016		2017
Time charter & Service Revenues – commission fees	$	7,366	$	1,800	$	3,988
Voyage expenses		(4,521)		(390)		(1,526)
General and administrative expenses		(50,498)		(32,397)		(23,850)
Commissions for assets sold		(8,133)		(886)		(85)
Gain/(loss) from sale of vessel owning companies, net of commissions		-		(22,318)		-
Interest and finance costs		(3,679)	$	(1,789)		(13,070)
Loss on Private Placement	$	-		-	$	(7,600)

(Per day and per quarter information in the note below is expressed in United States Dollars/Euros)

TMS Bulkers Ltd. - TMS Offshore Services Ltd. - TMS Tankers Ltd. – TMS Cardiff Gas Ltd. (together the “TMS Entities”): Effective January 1, 2017, the Company entered into new agreements (the “New TMS Agreements”) with TMS Bulkers Ltd. (“TMS Bulkers”) and TMS Offshore Services Ltd. (“TMS Offshore Services”) to streamline the services offered by TMS Bulkers under the management agreements with each of the Company’s drybulk vessel-owning subsidiaries and by TMS Offshore Services, pursuant to the respective management agreements with the Company’s offshore support vessel–owning subsidiaries. The TMS Entities may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and Chief Executive Officer (“CEO”).

The Company also entered into new agreements with TMS Cardiff Gas Ltd. (“TMS Cardiff Gas”) and TMS Tankers Ltd. (“TMS Tankers”) regarding its newly acquired tanker and gas carrier vessels on similar terms as the New TMS Agreement (Notes 5 and 6). TMS Cardiff Gas and TMS Tankers may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO.

In connection with the New TMS Agreements that entail an increased scope of services, including executive management, commercial, accounting, reporting, financing, legal, manning, catering, IT, attendance, insurance, technical and operations services, the Company terminated the consulting agreements with Fabiana Services S.A. (“Fabiana”), Vivid Finance Limited (“Vivid”) and Basset Holdings Inc. (“Basset”), entities that may be deemed to be beneficially owned by the Company’s Chairman and CEO Mr. George Economou and by the President and Chief Financial Officer Mr. Anthony Kandylidis, effective as of December 31, 2016. The all-in base cost for providing the increased scope of services was reduced to $1,643/day per vessel, which is a 33% reduction from prior levels, based on a minimum of 20 vessels, decreasing thereafter to $1,500/day per vessel. The management fee 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%. The New TMS Agreements entitle the TMS Entities to an aggregate performance bonus for 2016 amounting to $6,000, as well as a one-time setup fee of $2,000.

Under the respective New TMS Agreements, the TMS Entities are also entitled to (i) a discretionary performance fee (up to $20,000, in either cash or common stock, at the discretion of the Company’s board of directors), (ii) a commission of 1.25% on charter hire agreements that are arranged by the TMS Entities, (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 TMS Entities, (iv) a financing and advisory commission of 0.50% and (v) reimbursement of out of pocket and travel expenses. The New TMS Agreements have terms of ten years.

Under both the New TMS Agreements and the agreements effective up to December 31, 2016, if the TMS Entities are requested to supervise the construction of a newbuilding vessel, in lieu of the management fee, the Company will pay the TMS Entities 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 $598 based on the Euro/U.S. Dollar exchange rate at December 31, 2017) per day.

Under both the New TMS Agreements and the agreements effective up to December 31, 2016, in the event that the management agreements are terminated for any reason other than a default by TMS Bulkers and TMS Offshore or change of control of the vessel owning companies’ ownership, the Company is 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 vessel owning companies’ ownership, the Company is required to pay TMS Bulkers and TMS Offshore a termination payment, representing an amount equal to the estimated remaining fees payable to TMS Bulkers and TMS Offshore under the 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 Company may terminate the agreement for a convenience at any time for a fee of $50,000.

Transactions with TMS Bulkers, TMS Offshore, TMS Tankers and TMS Cardiff Gas in Euros are settled on the basis of the average U.S. Dollar rate on the invoice date.

According to the agreements effective up to December 31, 2016, TMS Bulkers provided 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 included operations, chartering, sale and purchase, post-fixture administration, accounting, freight invoicing and insurance. According to the agreements effective up to December 31, 2016, TMS Offshore Services provided overall technical and crew management to the Company’s Platform Supply and Oil Spill Recovery vessels. According to the agreements effective up to certain dates in 2015, TMS Tankers provided 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 included operations, sale and purchase, post-fixture administration, accounting, freight invoicing and insurance.

Each management agreement had an initial term of five years and was eligible for automatic renewal after a five-year period and thereafter extended in five-year increments, unless the Company provided notice of termination in the fourth quarter of the year immediately preceding the end of the respective term.

Cardiff Drilling Inc.: Effective January 1, 2013,Ocean Rig Management Inc. (“Ocean Rig Management”), a wholly-owned subsidiary of Ocean Rig, entered into a Global Services Agreement with Cardiff Drilling Inc. (“Cardiff Drilling”) a company that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, 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. Costs from the Global Services Agreement were expensed in the consolidated statements of operations or capitalized as a component of “Advances for drilling units under construction and related costs” being a directly attributable cost to the construction, as applicable.

Cardiff Marine Inc: On January 2, 2014, the Company entered into an agreement with certain clients of Cardiff Marine Inc., a company that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, 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 could exercise any one, several or all of the rights. Each right was valid until one day before the contractual date of delivery of each vessel. The newbuildings were delivered during 2017 and none of the seven rights was exercised by the Company.

Cardiff Tankers Inc. – Cardiff Gas Ltd: Under certain charter agreements for the Company’s tankers and gas carrier vessels, Cardiff Tankers Inc. (“Cardiff Tankers”) and Cardiff Gas Ltd (“Cardiff Gas”), two Marshall Islands entities that may be deemed to be beneficially owned by the Company’s Chairman and CEO, Mr. George Economou, provide services related to the sourcing, negotiation and execution of charters, for which they are entitled to a 1.25% commission on charter hire earned by those vessels.

George Economou: As the Company’s Chairman, CEO and principal shareholder with a 69.5% shareholding of the Company’s common stock as of December 31, 2017 with his beneficially ownership of 72,421,515 common shares through: (i) 12,000,000 common shares owned by SPII Holdings Inc. (“SPII”), an entity that may be deemed to be beneficially owned by Mr. Economou; (ii) 45,876,061 common shares owned by Sierra Investments Inc. (“Sierra”), an entity that may be deemed to be beneficially owned by Mr. Economou; and (iii) 14,545,454 common shares owned by Mountain Investments Inc. (“Mountain”), an entity that may be deemed to be beneficially owned by Mr.Economou, Mr. George Economou has control over the actions of the Company.

Other: On April 30, 2015, the Company through its subsidiaries, entered into ten Memoranda of Agreements with entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for the sale of four Suezmax tankers and six Aframax tankers (Note 6). On September 9, 2015, the Company entered into sales agreements with entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for the sale of 14 vessel owning companies (owners of ten Capesize and four Panamax carriers) and three Capesize bulk carriers (Note 6).

On February 15, 2016, the Company announced that the sale of the vessel owning companies of its Capesize vessels, the Fakarava, Rangiroa and Negonego (included in the 14 vessel owning companies discussed above) to entities that may be deemed to be beneficially owned by its Chairman and CEO Mr. George Economou had failed and on March 24, 2016, entered into new sales agreement with entities that may be deemed to be beneficially owned by Mr. George Economou, for the sale of the shares in the above vessel owning companies (Note 6).

On September 16, 2016 and October 26, 2016, the Company also entered into sales agreements with entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for the sale of the shares of the owning companies of the Panamax vessel Oregon and the Panamax vessels Amalfi and Samatan, respectively (Note 6).

On January 12, 2017, the Company entered into a “zero cost” Option Agreement (the “LPG Option Agreement”), with companies that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for the purchase of the shares of four owning companies of four high specifications VLGCs capable of carrying liquefied petroleum gas (“LPG”) that were under construction at Hyundai Samho Heavy Industries Co., Ltd. (“HHI”) and have long-term time charter employment agreements with major oil companies and oil traders. Under the terms of the LPG Option Agreement, the Company had until April 4, 2017, to exercise four separate options to purchase up to the four VLGCs at a price of $83,500 per vessel. The transaction was approved by the independent directors of the Company’s board of directors based on third party broker valuations. On January 19, 2017 and March 10, 2017, the Company exercised the first two options and acquired two of the VLGCs under construction), and on April 6, 2017, exercised the remaining two options and acquired the two remaining VLGCs under construction. (Note 5)

On April 3, 2017, and in connection with the acquisition of the four VLGCs under construction, the Company acquired 100% of the shares of Cardiff LNG Ships Ltd. and Cardiff LPG Ships Ltd. without any cost or payment from entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO.

On May 15, 2017, the Company also entered into a purchase agreement with an entity that may be deemed to be beneficially owned by Mr. George Economou for the purchase of the shares of the owning company of the Suezmax newbuilding vessel Samsara. The transaction was approved by the audit committee of the Company’s Board of Directors taking into account independent third-party broker charter free valuations certificates and the long-term employment on a fixed rate basis plus profit share, provided by the seller. The vessel was time chartered back to the seller and employed from May 24, 2017 under a five year time charter plus optional periods in charterer’s option at a base rate plus profit share. The charterer was also granted purchase options at the end of each firm period. (Note 6)

Fabiana Services S.A.: On October 22, 2008, the Company entered into a consultancy agreement with Fabiana, a Marshall Islands entity that may be deemed to be beneficially owned by the Company’s Chairman and CEO, Mr. George Economou, with an effective date of February 3, 2008, as amended. Under the agreement, Fabiana provided the services of the Company’s Chairman and CEO. Effective December 31, 2016, the consultancy agreement with Fabiana was terminated at no cost by mutual agreement of the parties.

Azara Services S.A.: Effective from January 1, 2013, Ocean Rig entered through one of its wholly owned subsidiaries into a consultancy agreement with Azara Services S.A. (“Azara”), a Marshall Islands entity that may be deemed to be beneficially owned by our Chairman and Chief Executive Officer Mr. George Economou, for the provision of consultancy services relating to the services of Mr. George Economou in his capacity as CEO of Ocean Rig. Costs from Azara’s consultancy agreement were expensed in the consolidated statements of operations under general and administrative expenses.

Basset Holdings Inc.:Under the consultancy agreement effective from January 1, 2015, between the Company and Basset, a Marshall Islands company that may be deemed to be beneficially owned by the Company’s President and CEO, Basset provided consultancy services relating to the services of Mr. Anthony Kandylidis in his capacity as Executive Vice President, and since May 2016 President and since December 2016 Chief Financial Officer of the Company. Effective December 31, 2016, the consultancy agreement with Basset was terminated at no cost by mutual agreement of the parties.

Effective June 1, 2012, Ocean Rig entered through one of its wholly owned subsidiaries into a consultancy agreement with Basset, for the provision of the services of Mr. Antony Kandylidis in his capacity as President ofOcean Rig. Costs from Basset’s consultancy agreement with Ocean Rig were expensed in the consolidated statements of operations under general and administrative expenses.

Vivid Finance Limited: Under the consultancy agreement effective from September 1, 2010 between the Company and Vivid a company that may be deemed to be beneficially owned by the Chairman and CEO of the Company, Mr. George Economou, Vivid provided the Company with financing-related services. Effective January 1, 2013, the Company, amended the agreement with Vivid to limit the scope of the services provided under the agreement to DryShips and its subsidiaries or affiliates, except for Ocean Rig and its subsidiaries.

In essence, post-amendment, the consultancy agreement between DryShips and Vivid was in effect for the Company’s tanker, drybulk and offshore support shipping segments only. Effective December 31, 2016, the consultancy agreement with Vivid was terminated at no cost by mutual agreement of the parties.

Effective January 1, 2013, Ocean Rig Management, 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 the Company and Vivid, except that under the new agreement, Ocean Rig was obligated to pay directly to Vivid an amount in consideration of the services provided by Vivid in respect of Ocean Rig’s offshore drilling business, whereas under the consultancy agreement between the Company and Vivid, this fee was paid by the Company.

Ocean Rig UDW Inc.: During the year ended December 31, 2015, the Company incurred interest expense and amortization and write off of financing fees amounting to $3,281 under the $120,000 Exchangeable Promissory Note (the “Note”) with a subsidiary of its former subsidiary Ocean Rig, which was fully settled on August 13 2015.

On March 29, 2016, the Company entered into 60 day time charter agreements for the offshore support vessels Crescendo and Jubilee with a subsidiary of Ocean Rig to assist with the stacking of Ocean Rig’s drilling units in Las Palmas.

On April 5, 2016, the Company sold all of its shares in Ocean Rig to a subsidiary of Ocean Rig for total cash consideration of approximately $49,911. The sale proceeds were used to partly reduce the outstanding amount under the revolving credit facility provided to the Company by Sifnos Shareholders Inc. (“Sifnos”), an entity that may be deemed to be affiliated with the Company’s Chairman and CEO, Mr. George Economou and for general corporate purposes. In addition, the Company reached an agreement under the revolving credit facility with Sifnos whereby the lender agreed to, among other things release its lien over the Ocean Rig shares. This transaction was approved by the disinterested members of the Company’s Board of Directors on the basis of a fairness opinion. As of April 5, 2016, the Company no longer holds any equity interest in Ocean Rig.

Private Placement – Rights Offering: The Company’s independent members of the board in connection with a fairness opinion obtained on August 11, 2017 approved a transaction pursuant to which the Company sold 36,363,636 of the Company’s common shares to entities that may be deemed to be beneficially owned by its Chairman and CEO, Mr. George Economou, for an aggregate consideration of $100,000 at a price of $2.75 per share (the “Private Placement”). On August 11, 2017, the Company signed a binding term sheet (the “Term Sheet”) pursuant to the Private Placement terms. On August 29, 2017 and following the closing of the Private Placement: (i) 9,818,182 common shares were issued to Sierra Investments Inc. (“Sierra”) in exchange for the reduction of the principal outstanding balance by $27,000 of the Company’s unsecured credit facility with Sierra, (ii) 14,545,454 common shares were issued to Mountain as an exchange for the termination of the participation rights agreement dated May 23, 2017 ( the “Participation Rights Agreement”) and the forfeiture of all outstanding shares of Series D Preferred Stock (which carried 100,000 votes per share) and (iii) 12,000,000 common shares to SPII as consideration for the purchase of the 100% issued and outstanding equity interests of Shipping Pool Investors Inc. (“SPI”), which directly holds a 49% interest in Heidmar, a global tanker pool operator.

The Private Placement transaction was a non-cash transaction with a transfer of an exchange of assets and liabilities as a consideration for the common stock issued. The fair values of the non-cash transactions, as described above, are determined based on the fair values of assets and liabilities given up on the date that the transaction was concluded, or if more clearly evident, the fair value of the asset and liabilities received on the date that the respective transaction was concluded. The Company considered that the fair value of the shares issued as part of the transaction is considered more clearly evident and concluded that in this respect the aforementioned non-monetary transaction will be recorded based on the fair value of the shares issued as part of the Private Placement. The fair value of the Company’s exchanged capital stock was valued using the quoted market price available as of the closing of the transaction according to ASC 820 “Fair Value Measurement” (Notes 9, 11).

The transaction resulted in a total loss of $7,600, as the difference between the transaction price and the fair value price of $2.05 and is included in “Loss on Private Placement” in the accompanying consolidated statement of operations for the year ended December 31, 2017. In addition, an amount of $2,805 was classified under the respective “Stockholders’ Contribution” as the difference between the carrying value of the Series D Preferred Stock before its forfeiture and its fair value.

On August 11, 2017, in accordance with the Term Sheet, the Audit Committee also approved a rights offering (the “Rights Offering”) that commenced on August 31, 2017 and allowed the Company’s shareholders to purchase their pro rata portion of up to $100,000 of the Company’s common shares at a price of $2.75 per share. On August 29, 2017 and in connection with the Rights Offering, Sierra also entered into a backstop agreement (the “Backstop Agreement”) to purchase from the Company, at $2.75 per share, the number of shares of common stock offered under the Rights Offering that would not be issued to existing shareholders if these shareholders did not exercise their rights in full. On October 4, 2017 and following the closing of the Rights Offering, 36,057,876 common shares were issued to Sierra, representing the number of common shares not issued pursuant to the full exercise of rights from existing shareholders (Note 12).

Sifnos Shareholders Inc. – Sierra Investments Inc.: On October 21, 2015, as amended on November 11, 2015, the Company entered into a revolving credit facility (“Revolving Credit Facility”) of up to $60,000 with Sifnos, an entity that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for general working capital purposes. The Revolving Credit Facility was secured by the shares that the Company held in Nautilus Offshore Services Inc. and by a first priority mortgage over one Panamax dry-bulk carrier. The Revolving Credit Facility had a tenor of three years. Under this agreement, the lender had the right to convert a portion of the outstanding Revolving Credit Facility into shares of the Company’s common stock or into shares of common stock of Ocean Rig held by the Company. The conversion would be based on the volume weighted average price of either stock plus a premium. Furthermore, the Company, as the borrower under this agreement, had the right to convert $10,000 of the outstanding Revolving Credit Facility into 8 preferred shares (8,333 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) of the Company. On October 21, 2015 and December 22, 2015 the Company drew down the amounts of $20,000 and $10,000, respectively under the Revolving Credit Facility.

On December 30, 2015, the Company exercised its right to convert $10,000 of the outstanding principal amount of the Revolving Credit Facility into 8 shares (8,333 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) of Series B Convertible Preferred Stock of the Company. Each share of Series B Convertible Preferred Stock had the right to vote with the common shares on all matters on which the common shares were entitled to vote as a single class and the shares of Series B Convertible Preferred Stock had five votes per share. The shares of Series B Convertible Preferred Stock were to be mandatorily converted into common shares of DryShips on a one to one basis within three months after the issuance thereof or any earlier date selected by the Company in its sole discretion.

On March 24, 2016, the Company entered into an agreement to increase the Revolving Credit Facility. The Revolving Credit Facility was amended to increase the maximum available amount by $10,000 to $70,000, to give the Company an option to extend the maturity of the facility by 12 months to October 21, 2019 and to cancel the option of the lender to convert the outstanding Revolving Credit Facility to the Company’s common stock.

Additionally, subject to the lender’s prior written consent, the Company had the right to convert $8,750 of the outstanding balance of the Revolving Credit Facility into 29 preferred shares (29,166 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) of the Company, with a voting power of 5:1 (vis-à-vis common stock) and would mandatorily convert into common stock on a 1:1 basis within 3 months after such conversion. As part of the transaction the Company also entered into a Preferred Stock Exchange Agreement to exchange the 8 Series B Convertible Preferred Shares (8,333 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) held by the lender for $8,750. The Company subsequently cancelled the Series B Convertible Preferred Stock previously held by the lender effective March 24, 2016.

On March 29, 2016, the Company drew down the amount of $28,000 under the revolving credit facility.

On April 5, 2016, the Company sold all of its shares in Ocean Rig, to a subsidiary of Ocean Rig for total cash consideration of approximately $49,911 and used $45,000 from the proceeds, to partly reduce the outstanding amount under the Revolving Credit Facility. In addition, the Company reached an agreement under the Revolving Credit Facility whereby the lender agreed to, among other things (i) release its lien over the Ocean Rig shares and, (ii) waive any events of default, subject to a similar agreement being reached with the rest of the lenders to the Company, in exchange for a 40% loan to value maximum loan limit, being introduced under this facility. In addition, the interest rate under the loan was reduced to 4% plus LIBOR.

On September 9, 2016, the Company entered into an agreement to convert $8,750 of the outstanding balance of the Revolving Credit Facility into 29 Series D Preferred shares of the Company (29,166 shares before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits). Each preferred share had 100,000 votes and was not convertible into common stock of the Company. Also on September 21, 2016, the Company drew down the amount of $7,825 under the Revolving Credit Facility.

On October 31, 2016, the Company sold the shares of the owning companies of three Panamax vessels, Amalfi, Galveston and Samatan (Note 6), and as part of the transaction, entered into an agreement to increase the Revolving Credit Facility. The Revolving Credit Facility was amended to increase the maximum available amount by $5,000 to $75,000 and to give the Company an option within 365 days to convert $7,500 of the outstanding loan into the Company’s common shares. As part of the sale of the vessel owning companies, the Company paid the amount of $58,619 to the new owners, being the difference between the purchase price and the outstanding balance of the respective debt facility, by increasing by the same amount the outstanding balance of the Revolving Credit Facility. Therefore, following the above transaction, the outstanding principal amount under the Revolving Credit Facility was $69,444. This transaction was approved by the independent members of the Company’s Board of Directors on the basis of vessel valuations and a fairness opinion.

On November 30, 2016, Sifnos became the lender of record under two Syndicated Loans previously arranged by HSH Nordbank, with an outstanding balance of an aggregate of $85,066 under the ex-HSH syndicated facilities. (Note 10)

On December 15, 2016, the Company made a prepayment of $33,510 under the Revolving Credit Facility.

On December 30, 2016, the Company entered into a new senior secured revolving facility (“New Revolving Facility”) with Sifnos for the refinancing of its outstanding debt, amounted to a total of $121,000. Under the terms of the New Revolving Facility, Sifnos extended a new loan of up to $200,000 that was secured by all of the Company’s present and future assets except for the vessel Raraka. The New Revolving Facility carried an interest rate of Libor plus 5.5%, was non-amortizing, had a tenor of 3 years, had no financial covenants, was arranged with a fee of 2.0% and had a commitment fee of 1.0%. In addition, Sifnos had the ability to participate in realized asset value increases of the collateral base in a fixed percentage of 30%. The transaction was approved by the Company’s independent members of the board and a fairness opinion was obtained in connection with this transaction.

On January 19, 2017 and March 10, 2017, the Company acquired two VLGCs under construction and on April 6, 2017, acquired the two remaining VLGCs pursuant to the LPG Option Agreement and partially financed the closing price of the acquisition of the vessel-owning entities of the four vessels by using the then remaining undrawn liquidity of $79,000, under the New Revolving Facility. On May 23, 2017, the Company was released by all of its obligations and liabilities under the New Revolving Facility, as amended, through a Notice of Release from Sifnos, and entered into an unsecured revolving facility agreement (“Revolving Facility”) with Sierra and a separate Participation Rights Agreement with Mountain, both entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO. The Revolving Facility carried an interest rate of Libor plus 6.5%, was non-amortizing, had a tenor of 5 years, had no financial covenants and was arranged with a fee of 1.0%.

In addition, Mountain had the ability, through the Participation Rights Agreement, to participate in realized asset value increases of all of the Company’s present and future assets, except the vessel Samsara, in a fixed percentage of 30% in case of their sale and had a duration of up to the maturity of the Sierra Revolving Facility. The Participation Rights Agreement was terminated on August 29, 2017, along with the Private Placement discussed above (Note 12). The transaction was approved by the Company’s independent members of the board and a fairness opinion was obtained in connection with this transaction.

On August 29, 2017, following the closing of the Private Placement, 9,818,182 common shares were issued to Sierra in exchange for the reduction of the principal outstanding balance by $27,000 of the Sierra Revolving Facility (Note 12).

On October 2, 2017, after the closing of the Rights Offering, 36,057,876 common shares were issued to Sierra in exchange for the reduction of the principal outstanding balance by $99,159 of the Sierra Revolving Facility.

This exchange constitutes a common control transaction, as Mr. Economou was deemed to have controlling interests in the Company following the closing of the Private Placement. In this respect, the total exchanged consideration net of par value, was recognized and included in “Additional paid in capital”, in the accompanying consolidated balance sheet as at December 31, 2017, in accordance with the relevant U.S. GAAP guidance. 

On October 25, 2017, the Company entered into a new secured loan facility (“Loan Facility Agreement”) with Sierra for the refinancing of the outstanding debt under Revolving Facility, amounting to a total of $73,841. The Loan Facility Agreement carried an interest rate of LIBOR plus 4.5%, was non-amortizing, had a tenor of 5 years, had no arrangement or commitment fee and was secured by four Company’s vessels, two tanker vessels Samsara, Balla and two drybulk carrier vessels Judd, Castellani. Furthermore, it contained only one financial covenant, according to which the fair market values of mortgaged vessels should be at least 200% of the Loan Facility Agreement outstanding amount. The transaction was approved by the Company’s independent members of the board and a fairness opinion was obtained in connection with this transaction.

Further to the above, the outstanding balance under the above facilities as of December 31, 2016 and 2017 was $121,000 and $73,841, respectively, while the respective unamortized deferred finance costs amounted to $4,383 and $2,210, respectively. As of December 31, 2017, the Company is in compliance with the hull cover ration of the Loan Facility Agreement.

The aggregate available undrawn amount under the above outstanding facilities at December 31, 2016 and 2017 was $79,000 and $0, respectively. The weighted-average interest rates on the above outstanding facilities were: 7.24% and 8.08% for the years ended December 31, 2016 and 2017, respectively.

Dividends:On February 24, 2015, Ocean Rig’s Board of Directors declared its fourth 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. The dividend was paid in March 2015. On May 6, 2015, Ocean Rig’s Board of Directors declared its fifth quarterly cash dividend with respect to the quarter ended March 31, 2015, of $0.19 per common share, to Ocean Rig shareholders of record as of May 22, 2015. The dividend was paid in May 2015.

Ocean Rig paid dividends amounting to $20,526 to shareholders other than the Company during the year ended December 31, 2015.

On July 29, 2015, Ocean Rig’s Board of Directors decided to suspend its quarterly dividend until market conditions improve.

XML

Other Current assets

12 Months Ended

Dec. 31, 2017

Other Assets [Abstract]

Other Current Assets:

4.Other Current assets

The amount of other current assets shown in the accompanying consolidated balance sheets is analyzed as follows:

	December 31,
	2016		2017
Inventories	$	3,446	$	7,790
Insurance claims (Note 14)		1,071		3,044
Other		29		1,445
Other current assets	$	4,546	$	12,279

XML

Advances for Vessels under Construction

12 Months Ended

Dec. 31, 2017

Advances for Vessels under Construction [Abstract]

Advances for Vessels and Drilling Units under Construction and Acquisitions:

5.Advances for Vessels under Construction:

As of December 31, 2016 and 2017, the movement of the advances for vessels under construction and acquisitions are set forth below:

	December 31,
	2016		2017
Balance at beginning of year	$	-	$	-
Advances for vessels under construction and related costs		-		265,565
Vessels delivered		-		(233,667)
Balance at end of year	$	-	$	31,898

On January 19, 2017, the Company acquired the first VLGC, Anderida, pursuant to the exercise of the respective options as per the LPG Option Agreement (Note 3), which was under construction at the time of acquisition at HHI, for a purchase price of $83,500. The Company paid an amount of $21,850 of the total purchase price, by using part of the undrawn liquidity under the New Revolving Facility (Note 3). An amount of $6,500 of the total amount paid, representing the value of the time charter attached acquired, was classified in “Additional Paid-in Capital”, under the respective “Accounting for transactions under common control”. The $61,650 balance of the purchase price for the VLGC was paid in installments until the vessel’s delivery from HHI, using an amount of $37,500 under the secured credit facility dated June 22, 2017 (Note 10) and cash on hand. The Company took delivery of the vessel on June 28, 2017 while on June 29, 2017, Anderida commenced its time charter on a fixed rate with five years firm duration to an oil major company. The charterer has options to extend the firm employment period by up to three years.

On March 10, 2017, the Company acquired the second VLGC, Aisling, pursuant to the exercise of the respective option as per the LPG Option Agreement (Note 3), which was under construction at the time of acquisition at HHI, for a purchase price of $83,500. The Company paid an amount of $21,850 of the total purchase price, by using part of the undrawn liquidity under the New Revolving Facility (Note 3). An amount of $6,500 of the total amount paid, representing the value of the time charter attached acquired, was classified in “Additional Paid-in Capital”, under the respective “Accounting for transactions under common control”. The $61,650 balance of the purchase price for the VLGC was payable in installments until the vessel’s delivery from HHI, using an amount of $37,500 under the secured credit facility dated June 22, 2017 (Note 10) and cash on hand. The Company took delivery of the vessel on September 7, 2017 while on September 12, 2017, Aisling commenced its time charter on a fixed rate with five years firm duration to an oil major company. The charterer has options to extend the firm employment period by up to three years.

On April 6, 2017, the Company acquired the remaining two VLGCs under construction at HHI, Mont Fort and Mont Gelé, pursuant to the exercise of the respective options as per the LPG Option Agreement (Note 3), for a purchase price of $83,500 each.

The Company paid an amount of $46,700 of the total purchase price, by using part of the undrawn liquidity under the New Revolving Facility (Note 3) and cash on hand. An amount of $16,001 of the total amount paid, representing the value of the time charter attached acquired, was classified in “Additional Paid-in Capital”, under the respective “Accounting for transactions under common control”. The $120,300 balance of the total purchase price for the VLGCs was payable in installments until the vessels’ delivery from HHI, using an amount of $75,000 under the secured credit facility dated June 22, 2017 (Note 10) and cash on hand. As of January 4, 2018, the Company paid the last installment, including related costs of $44,869 using the $37,500 under the secured credit facility dated June 22, 2017 (Note 10) and cash on hand.

The Company took delivery of Mont Fort and Mont Gelé, on October 31, 2017 and on January 4, 2018, respectively, while on November 5, 2017 and on January 11, 2018 the vessels, respectively, commenced their time charter on a fixed rate with ten years firm duration to an oil major company (Note 19).

As of December 31, 2017, an amount of $428, relating to capitalized expenses and $770 relating to capitalized interest and finance costs, are included in the “Advances for vessels under construction and related costs”.

XML

Vessels, net

12 Months Ended

Dec. 31, 2017

Vessels, net [Abstract]

Vessels, net:

6.Vessels, net:

The amounts in the accompanying consolidated balance sheets are analyzed as follows:

	Cost		Accumulated Depreciation		Net Book Value
Balance, December 31, 2015	$	97,100		(672)	$	96,428
Vessels transferred from held for sale		66,449		-		66,449
Impairment loss		(67,999)		4,138		(63,861)
Depreciation		-		(3,466)		(3,466)
Balance, December 31, 2016	$	95,550		-	$	95,550
Additions		672,300		-		672,300
Vessels sold		(3,900)		104		(3,796)
Depreciation		-		(14,966)		(14,966)
Balance, December 31, 2017	$	763,950	$	(14,862)	$	749,088

On March 30, 2015, the Board of Directors of the Company approved the entering into sales agreements with entities that may be deemed to be beneficially owned by the Company’s Chairman and Chief Executive Officer, Mr. George Economou, to sell its four Suezmax tankers, Vilamoura, Lipari, Petalidi and Bordeira, for an en-bloc sales price of $245,000. In addition, it entered into agreements with entities that may be deemed to be beneficially owned by Mr. George Economou to potentially sell its six Aframax tankers, Belmar, Calida, Alicante, Mareta, Saga and Daytona, for an en-bloc sales price of $291,000, as long as they confirmed their unconditional acceptance by June 30, 2015. The Company classified the vessels as “held for sale” as at March 31, 2015, as all criteria required for their classification as “Vessels held for sale” were met and a charge of $56,631, included in “Impairment loss, gain/ loss from sale of vessels and vessel owning companies and other” in the accompanying consolidated statement of operations for the year ended December 31, 2015, was recognized as a result of the reduction of the vessels’ carrying amount to their fair value less cost to sell. On April 30, 2015, the Company concluded ten Memoranda of Agreements for an aggregate agreed sales price of $536,000.

On July 16, 2015, July 21, 2015, July 24, 2015, July 27, 2015, August 6, 2015, August 7, 2015, August 19, 2015, August 25, 2015, September 10, 2015 and October 29, 2015 the tankers Petalidi, Bordeira,Lipari,Belmar, Saga, Mareta, Vilamoura, Calida,Daytona and Alicante, respectively were delivered to their new owners, who paid the balance of the agreed sales prices to the Company.

As of June 30, 2015, the impairment review performed prior to the entering into the agreements for the sale of the Company’s drybulk vessels and vessel owning companies indicated that one of the Company’s vessels, with a carrying amount of $95,937, should be written down to its fair value as determined based on the valuations of the independent valuators, resulting in a charge of $83,937, which was included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other” in the accompanying consolidated statement of operations for the year ended December 31, 2015 (Note 11).

On September 9, 2015, the Company entered into sales agreements with entities that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for the sale of the vessel owning companies of 14 vessels (ten Capesize bulk carriers: Rangiroa, Negonego, Fakarava, Raiatea, Mystic, Robusto, Cohiba, Montecristo, Flecha andPartagas, and four Panamax bulk carriers: Woolloomooloo, Saldanha, Topeka and Helena) and the sale of three Capesize bulk carriers (Manasota, Alameda and Capri) for an aggregate price of $377,000, including their existing employment agreements and the assumption of $236,716 of debt, associated with some of the vessels. In this respect, a charge of $375,090, included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”, in the accompanying consolidated statement of operations for the year ended December 31, 2015 was recognized.

On September 17, 2015 and October 13, 2015, the shares of the vessel owning company of the vessel Mystic andthe shares of the shareholders of the vessel owning companies of ten vessels (Raiatea, Robusto, Cohiba, Montecristo, Flecha, Partagas,Woolloomooloo, Saldanha, Topeka and Helena), respectively were delivered to their new owners. On September 22, 2015, October 1, 2015 and December 11, 2015, the vessels Capri,Manasota and Alameda, respectively, were delivered to their new owners. The assets and liabilities of the remaining three vessel owning companies (Rangiroa, Negonego and Fakarava) remained classified as “held for sale” on December 31, 2015, as all criteria required for their classification as “held for sale” were met.

In addition, on September 30, 2015, the Company classified all the remaining vessels in its fleet, comprised of 20 Panamax and two Supramax bulk carriers, as held for sale, as all criteria required for their classification were met and recognized an additional charge of $422,404, included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other” in the accompanying consolidated statement of operations for the year ended December 31, 2015, as a result of the reduction of the vessels’ carrying amount to their fair value less cost to sell.

On November 2, 2015, the Company concluded two Memoranda of Agreement to sell its two Supramax vessels, Byron and Galveston, for an aggregate sales price of $12,300. The vessels were delivered to their new owners on November 25, 2015 and November 30, 2015, respectively. In this respect, a charge of $6,035 was recognized in the accompanying consolidated statement of operations for the year ended December 31, 2015, included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”.

Finally for the year ended December 31, 2015, an additional charge of $113,019 was recognized and included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”, in the accompanying consolidated statement of operations, due to the reduction of the vessels’ held for sale carrying amount to their fair value less cost to sell as of December 31, 2015 (Note 11).

On February 15, 2016, the Company announced that the prior sale of the vessel owning companies of its Capesize vessels, the Fakarava, Rangiroa and Negonego, to entities that may be deemed to be beneficially owned by its Chairman and CEO, Mr. George Economou, had failed. In addition, the Company reached a settlement agreement with the charterer of these vessels for an upfront lumpsum payment and the conversion of the daily rates to index-linked time charters. On March 24, 2016, the Company concluded a new sales agreement with entities that may be deemed to be beneficially owned by Mr. George Economou for the sale of the shares of the vessel owning companies of these Capesize vessels (Fakarava, Rangiroa and Negonego) for an aggregate price of $70,000, including their existing employment agreements and the assumption of the debt associated with the vessels with an outstanding balance of $102,070 at March 24, 2016. On March 30, 2016, the Company received the lender’s consent for the sale of the shares of the vessels’ owning companies and made a prepayment of $15,000, under the respective loan agreement dated February 14, 2012. As part of the transaction the Company also paid the amount of $12,060, being the difference between the purchase price and the outstanding balance of the respective debt facility, to the new owners. On March 31, 2016, the shares of the vessel owning companies were delivered to their new owners. In this respect, a charge of $23,018, was recognized and included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”, in the accompanying consolidated statement of operations for the year ended December 31, 2016.

On August 22, 2016, the Company concluded a Memorandum of Agreement with an unaffiliated third-party to sell its Panamax vessel, Coronado, for a gross price of $4,250. The vessel was delivered to its new owner on September 9, 2016. In this respect, a gain of $1,084 was recognized in the accompanying consolidated statement of operations for the year ended December 31, 2016, included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”.

On September 16, 2016, the Company entered into a sale agreement with an entity that may be deemed to be beneficially owned by Mr. George Economou, the Company’s Chairman and CEO, for the sale of the shares of the owning company of the Panamax vessel Oregon, including the associated bank debt, for a gross price of $4,675. As part of the transaction the Company also paid the amount of $7,825 to the new owners, being the difference between the purchase price and the outstanding balance of the respective debt facility. The Company drew down the respective amount under its Revolving Credit Facility (Note 3). The shares of the vessel owning company were delivered to the new owner on September 21, 2016. Due to the controlling interests of Mr. George Economou in the Company and the buyers, this sale constitutes a common control transaction. In this respect, a gain of $281 was recognized and included in “Additional paid in capital” in the accompanying consolidated balance sheet as at December 31, 2016, in accordance with the relevant U.S. GAAP guidance.

On September 27, 2016, October 5, 2016 and October 18, 2016, the Company also concluded Memoranda of Agreement with unaffiliated third-parties for the sale of its Panamax vessels, Ocean Crystal, Sonoma and Sorrento, respectively, for gross prices of $3,720, $3,950 and $6,700, respectively.

As a result of the concluded agreements, the Company revalued the Ocean Crystal, Sonoma and Sorrento as of September 30, 2016 to their fair values with reference to their purchase prices and a gain of $3,020 was recognized in the accompanying consolidated statement of operations for year ended December 31, 2016, included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”.On November 7, 2016, November 15, 2016 and November 22, 2016, the vessels OceanCrystal, Sonoma and Sorrento, respectively, were delivered to their new owners. In this respect, an aggregateloss of $641 was recognized in the accompanying consolidated statement of operations for the year ended December 31, 2016, included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”.

On October 26, 2016, the Company entered into sales agreement with entities that may be deemed to be beneficially owned by the Company’s Chairman and CEO, Mr. George Economou, for the sale of the owning companies of three Panamax vessels the Amalfi, Galveston (the vessel Galveston was sold and delivered to its owners on November 30, 2015) and Samatan, along with the associated bank debt for an aggregate gross price of $15,000. As part of the transaction, the Company also paid the amount of $58,619, being the difference between the purchase price and the outstanding balance of the respective debt facility, to the new owners. The Company drew down the respective amount under its New Revolving Facility (Note 3). The shares of the vessel owning companies were delivered to the new owners on October 31, 2016. Due to the controlling interests of Mr. George Economou in the Company and the buyers, the above sales constitute common control transaction. In this respect, an aggregate loss of $476 was recognized and included in “Additional paid in capital”, in the accompanying consolidated balance sheet as at December 31, 2016, in accordance with the relevant U.S. GAAP guidance.

During the year ended December 31, 2016, a charge of $18,266 was also recognized as “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other” due to the reduction of the vessels’ held for sale carrying amount to their fair value less cost to sell as of December 31, 2016.

As of December 30, 2016, and due to the improved financial condition of the Company, the Company’s Board of Directors decided that the remaining 13 drybulk vessels previously classified as held for sale will not be sold. Effective December 31, 2016, the Company reclassified its drybulk fleet as held and used and a gain of $1,851 was recognized and included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other” in the accompanying consolidated statement of operations. Also, the impairment review for the year ended December 31, 2016indicated that the carrying amount of the offshore support vessels’ was not recoverable and, therefore, a charge of $65,712 was recognized and included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other” in the accompanying consolidated statement of operations.

According to ASU 2014-08, “Presentation of Financial Statements and Property, Plant and Equipment”, the sale of the Company’s vessels and vessel owning companies did not represent a strategic shift, hence no presentation of discontinued operations was required.

During the year ended December 31, 2015 and 2016, substantially all of the Company’s net income, except for equity in losses in Ocean Rig and income from the offshore support segment, related to vessels sold or held for sale.

On February 10, 2017, the Company concluded a Memorandum of Agreement with an unaffiliated third party for the acquisition of one Aframax tanker under construction, Balla, for a purchase price of $44,500. The vessel was delivered on April 27, 2017.

On February 14, 2017, the Company concluded a Memorandum of Agreement with an unaffiliated third party for the acquisition of one second hand Very Large Crude Carrier, Shiraga, for a purchase price of $57,000. The Company took delivery of this vessel on June 9, 2017.

On March 1, 2017, the Company concluded a Memorandum of Agreement with an unaffiliated third party for the acquisition of one second hand Aframax tanker, Stamos, for a purchase price of $29,000. The Company took delivery of this vessel on May 15, 2017.

On March 24, 2017, the Company concluded four Memoranda of Agreement with unaffiliated third parties for the acquisition of four modern, second-hand Newcastlemax vessels Marini, Morandi, Bacon and Judd for a total purchase price of $120,540. The Company took delivery of the vessels on May 2, 2017, July 5, 2017, July 6, 2017 and July 13, 2017, respectively.

The Newcastlemax bulkers Bacon and Judd had attached to their Memoranda of Agreements time charter employment contracts until certain dates in 2018 and 2017, respectively. After determining the fair values of these time-chartered contracts as of the acquisition date, the Company recorded a liability of $516 in relation to the attached time charter employment contract of the vessel Judd on the consolidated balance sheet under “Fair value of below market acquired time charters”. This is amortized into revenues using the straight-line method over the respective contract period. As at December 31, 2017, it was fully amortized and included in “Voyage and time charter revenues” in the accompanying consolidated statement of operations for the year ended December 31, 2017. For the vessel Bacon, the fair value of the attached time charter employment contract was determined to be $0.

On March 31, 2017, the Company concluded three Memoranda of Agreement with unaffiliated third parties for the acquisition of three Kamsarmax drybulk vessels, two secondhand, Matisse and Valadon, and one under construction, Kelly, for a total purchase price of $71,000. The vessels Valadon, Matisse and Kelly were delivered on May 17, 2017, June 1, 2017 and June 14, 2017, respectively.

On April 12, 2017, the Company concluded a Memorandum of Agreement with an unaffiliated third party for the acquisition of one secondhand Kamsarmax drybulk carrier, Nasaka, for a purchase price of $22,000. The Company took delivery of this vessel on May 10, 2017.

On April 27, 2017, the Company concluded a Memorandum of Agreement with an unaffiliated third party for the acquisition of one second hand Kamsarmax drybulk vessel, Castellani, for a purchase price of $23,500. The Company took delivery of this vessel on June 6, 2017.

On May 15, 2017, the Company also entered into a purchase agreement with an entity that may be deemed to be beneficially owned by Mr. George Economou for the purchase of the shares of the owning company of the Suezmax newbuilding vessel Samsara for a purchase price of $64,000. The vessel was time chartered back to the seller and employed from May 24, 2017 under a five year time charter plus optional periods in charterer’s option at a base rate plus profit share and the charterer was also granted purchase options at the end of each firm period. An amount of $440 of the total amount paid, representing the excess of the carrying value of the assets of the vessel owning company acquired over the purchase price paid, was classified in “Additional Paid-in Capital”, under the respective “Accounting for transactions under common control”. The Company took delivery of this vessel on May 19, 2017 (Note 3). The Company accounts the abovementioned lease as an operating lease since none of the capital lease criteria are met.

On December 19, 2017, the Company concluded a Memorandum of Agreement with an unaffiliated third party to sell its Panamax vessel Ecola for a gross price of $8,500. The vessel was delivered to its new owner on December 29, 2017. In this respect, a gain of $4,425 was recognized in the accompanying consolidated statement of operations for the year ended December 31, 2017, included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”.

For the year ended December 31, 2017, an amount of $8,834 relating to capitalized expenses and $2,426 relating to capitalized interest are included in the “Vessels, net”.

The VLGCs Anderida, Aisling,Mont Fort and Mont Gelé are pledged as collateral to secure the Company’s long-term debt, while the vessels Samsara, Balla, Judd and Castellani are pledged as collateral to secure the Company’s Loan Facility Agreement (Notes 10 and 3 respectively).

XML

Acquisition of Nautilus Offshore Services Inc.

12 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

Acquisition of Nautilus Offshore Services Inc.:

7.Acquisition of Nautilus Offshore Services Inc.:

During 2015, the Company acquired, through the acquisition of Nautilus Offshore Services Inc. ("Nautilus"), six Offshore Supply Vessels, all of which were on time charters to Petroleo Brasileiro S.A. (Petrobras) until certain dates in 2017, and included fixed day rates that were above day rates available as of the acquisition date.

The acquisition of the common shares of Nautilus was accounted for under the acquisition method of accounting. The Company began consolidating Nautilus from October 21, 2015 (the date of acquisition), as of which date the results of operations of Nautilus are included in the accompanying consolidated statement of operations.

After determining the aggregate fair values of these time-chartered contracts as of the acquisition date, the Company recorded the respective contract fair values on the consolidated balance sheet under "Fair value of above market acquired time charters". These are amortized into revenues using the straight-line method over the respective contract periods (based on the respective contracts).

On February 15, 2016, March 3, 2016 and April 11, 2016, the Company announced that Petrobras had given notice of termination of the contracts for the vessels Crescendo, Jubilee and Indigo effective as of March 6, 2016, March 9, 2016 and April 6, 2016, respectively. The contracts of the vessels Crescendo, Jubilee and Indigo were to expire on January 8, 2017, April 25, 2017 and August 30, 2017, respectively. On December 27, 2016, and in accordance with the respective terms the contract of the vessel Colorado expired. Effective on May 3, 2017, Petrobras also gave notice of termination on the contract for the vessel Jacaranda that was expiring on July 3, 2017. On June 21, 2017, and in accordance with the respective terms, the contract of the vessel Emblem expired.

The amortization of the fair value of the above market acquired time charter contracts as of December 31, 2015, amounted to $1,467 and included to “Voyage and time charter revenue“, in the accompanying consolidated statement of operations for the year ended December 31, 2015.  The amortization and write offs of the fair value of the above market acquired time charter contracts as of December 31, 2016 amounted to $4,346 and $5,161 and are included to “Voyage and time charter revenue” and “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”, respectively, in the accompanying consolidated statement of operations for the year ended December 31, 2016. The amortization and write offs of the fair value of the above market acquired time charter contracts as of December 31, 2017, amounted to $1,200 and $300 and are included to “Voyage and time charter revenue” and “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”, respectively, in the accompanying consolidated statement of operations for the year ended December 31, 2017.

Goodwill included in the offshore support segment, amounted to $7,002, constituted a premium paid by the Company over the fair value of the net assets of Nautilus, which was attributable to anticipated benefits from Nautilus’s position to take advantage of the fundamentals of the offshore support market.

At December 31, 2016, the Company performed its impairment review for goodwill. As a result of its impairment testing, the Company determined that the goodwill associated with its offshore support reporting unit was impaired. Accordingly, the Company recognized an impairment charge for the full carrying amount of the goodwill associated with this reporting unit in the amount of $7,002, which had no tax effect.

XML

Other Non-Current Assets

12 Months Ended

Dec. 31, 2017

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,
	2016			2017
Other non-current assets		$	-		$	44,869
		$	-		$	44,869

As of December 31, 2017, an amount of $44,869 was recorded as “Other non-current assets” in the accompanying consolidated balance sheets regarding the last installment due to HHI for the delivery of the VLGC Mont Gelé. The last installment, including related costs, of $44,869 was held in an escrow account and released to the HHI on January 4, 2018 upon the delivery of the vessel to the Company (Notes 5, 19).

XML

Investment in an Affiliate

12 Months Ended

Dec. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

Investment in an Affiliate:

9.Investment in an Affiliate:

- Ocean Rig:

On June 8, 2015, following an equity offering of Ocean Rig, the Company's ownership decreased to 47.2% and accordingly, the Company lost its controlling financial interest and deconsolidated Ocean Rig from its financial statements. From that date onwards, Ocean Rig was considered as an affiliated entity and not as a controlled subsidiary of the Company and the investment in Ocean Rig was accounted for under the equity method due to the Company's significant influence over Ocean Rig.

On June 8, 2015, based on the equity method, the Company recorded an investment in Ocean Rig of $514,047, which represented the fair value of the common stock that was held by the Company on such date, with a closing market price of $6.96 per share. The Company calculated a loss due to deconsolidation of $1,347,106, which was calculated as the fair value of the Company's equity method investment in Ocean Rig less the Company's 47.2% interest in Ocean Rig's net assets on June 8, 2015.

On August 13, 2015, following the repayment of the outstanding balance of $80,000 owed to Ocean Rig under the $120,000 Note and the transfer of 17,777,778 shares of Ocean Rig previously owned by the Company to Ocean Rig as full payment of the outstanding balance, the Company's interest in Ocean Rig decreased to 40.4%.

The Company's equity in the losses and capital transactions of Ocean Rig is shown in the accompanying consolidated statements of income for the year ended December 31, 2015, as "Losses of affiliated companies" and amounted to $349,872, including $310,468 of impairment in Ocean Rig investment.

As at December 31, 2015, the Company's investment in Ocean Rig had a carrying value of $401,878, while the market value of the investment was $91,410. Based on the relevant guidance provided by U.S. GAAP, the Company concluded that the investment in Ocean Rig was impaired and that the impairment was other than temporary. Therefore the investment in Ocean Rig was written down to its fair value and a loss of $310,468 was recognized and included in the accompanying consolidated statement of operations for the year ended December 31, 2015.

As at March 31, 2016, the Company's investment in Ocean Rig had a carrying value of $208,176, while the market value of the investment was $45,985. Based on the relevant guidance provided by U.S. GAAP, the Company concluded that the investment in Ocean Rig was impaired and that the impairment was other than temporary. Therefore, the investment in Ocean Rig was written down to its fair value and a loss of $162,191 was recognized and included in the accompanying consolidated statement of operations for the year ended December 31, 2016.

On April 5, 2016, the Company sold all of its shares in Ocean Rig to a subsidiary of Ocean Rig for total cash consideration of approximately $49,911 and recognized a gain of $792 as a result of the above transaction, including $343 relating to accumulated other comprehensive income which is included in the accompanying consolidated statement of operations for the year ended December 31, 2016. As of April 5, 2016, the Company no longer holds any equity interest in Ocean Rig.

The Company's equity in the losses and capital transactions of Ocean Rig was 40.4% up to April 5, 2016 and is shown in the accompanying consolidated statement of operations for the year ended December 31, 2016, as "Losses of affiliated company" amounting to a loss of $41,454.

- Heidmar

On August 29, 2017, following the closing of the Private Placement (Note 3), the Company issued 12,000,000 common shares to SPII, an entity that may be deemed to be beneficially owned by Mr. George Economou, as a consideration for the purchase of the 100% issued and outstanding equity interests of SPI, which directly holds a 49% interest in Heidmar, a global tanker pool operator. SPI is a member of Heidmar, a Delaware limited liability company that directly owns 49% of the total issued equity interests of Heidmar. The fair value of the investment as of the acquisition date was $34,000 (Note 11).

Since August 29, 2017, Heidmar is considered an affiliated entity of the Company and qualifies as an equity method investment due to Company's significant influence over Heidmar. The Company elected to account for the investment in Heidmar under the fair value option in order to mitigate volatility in income that would affect the measurement of the investment under the equity method and achieve operational simplifications. The Company's investment in Heidmar was recorded at $34,000 upon the closing of the transaction. As of December 31, 2017, no change in the fair value of Company's investment in Heidmar was identified, as determined by third-party valuator, based on a valuation method that combines (weighs) the income and the market approach method and thus, no adjustment for the investment in Heidmar to its fair value was recognized in "Losses of affiliated companies" in the accompanying consolidated statement of operations for the year ended December 31, 2017.

The Company, considering that Heidmar is not substantially similar with the peer group, assessed as appropriate the weighing between the two approaches used in the valuation to be 80% for the income approach and 20% for the market approach. Specifically, the income approach employed in the valuation exercise is based on the discounted cash flow model that incorporates unobservable in the market place inputs (Level 3 inputs). The inputs that were used in estimating Heidmar's discounted cash flows include Heidmar's weighted average cost of capital, projected charter rates based on the most recent ten year historical rates for similar vessels as adjusted for any outliers, annual increase in Heidmar's historical wages-salaries and non-compensated general and administrative expenses, the number of vessels under management with existing fixed contracts, a long term growth factor, commission rates on projected charter rates and the number of employees as a ratio of the vessels historically managed per employee.

The market approach employed in the valuation exercise incorporates findings from utilizing adjusted data in an active marketplace for identical securities (Level 2 inputs). In particular, the market approach valuation method was based on peer group of companies which were considered fairly similar and comparable and was determined using multiples of Enterprise Value ("EV") / EBITDA of those peer group companies. Furthermore, a 10% control premium was assumed in order to factor to the valuation the control/significant influence that exits in Heidmar's equity value in comparison with minority shareholdings in peer group analysis.

Finally based on market available empirical evidences and methods, a discount factor representing the lack of marketability due to Heidmar's private status was used in estimating the total fair value of Heidmar's equity.

The significant assumptions used in the fair value measurement of the Company's investment in Heidmar are: (i) the discount factor due to lack of marketability (7.5%), (ii) the projected charter rates based on the most recent ten year historical rates for similar vessels as adjusted for any outliers, (iii) the long term growth factor (2.5%), (iv) the commission rates assumed over projected charter rates (2.5%), (v) the weighted average cost of capital (11.9%), (vi) the number of vessels under management with existing fixed contracts (80 vessels) and (vii) the weighting between the two approaches (80% and 20% for the income and market approach, respectively).

A change of: (i) discount factor due to lack of marketability by 5% would result in a change of Company's investment in Heidmar by $1,858, (ii) charter rates by 10% would result in an increase and decrease of Company's investment in Heidmar by $6,199 and $6,257, respectively, (iii) long term growth factor by 1%, would result in an increase and decrease of Company's investment in Heidmar by $1,787 and $1,443, respectively, (iv) commission rates by 0.5% would result in an increase and decrease of Company's investment in Heidmar by $10,880 and $11,418 , respectively (v) weighted average cost of capital by 1% would result in an increase and decrease of Company's investment in Heidmar by $2,014 and $2,493, respectively, (vi) the number of vessels under management by 4% per year would result in an increase and decrease of Company's investment in Heidmar by $7,790 and $6,805, respectively and (vii) weighting of market versus income approach by 10% would result in a change of Company's investment in Heidmar by $428 (Note 11).

XML

Long-term Debt

12 Months Ended

Dec. 31, 2017

Long-term Debt [Abstract]

Long-term Debt:

10.Long-term Debt:

The amount of long-term debt shown in the accompanying consolidated balance sheets is analyzed as follows:

	December 31,
	2016		2017
Secured Credit Facilities - Drybulk Segment	$	16,935	$	-
Secured Credit Facilities - Gas Carrier Segment		-		147,716
Less: Deferred financing costs		(124)		(2,378)
Total debt		16,811		145,338
Less: Current portion		(16,811)		(11,635)
Long-term portion	$	-	$	133,703

Term bank loans and credit facilities

The bank loans are payable in U.S. Dollars in quarterly installments with balloon payments due at maturity until December 2023. Interest rates on the outstanding loans as at December 31, 2017, are based on LIBOR plus a margin.

On November 18, 2016, the Company reached an agreement for the settlement of its outstanding obligation under a loan agreement dated June 20, 2008, with the respective lender. Under the terms of the agreement, the lending bank agreed to a write-off of almost half of the outstanding principal and interest due. A gain of $8,366 was recognized as part of the transaction included in “Gain on debt restructuring” in the accompanying consolidated statement of operations for the year ended December 31, 2016. On November 18, 2016, the Company repaid $8,200 of principal, as per agreement and during 2017, it fully repaid the outstanding amount totaling $2,000, according to the agreement concluded on November 18, 2016, under its loan agreement dated June 20, 2008.

As of December 31, 2016, the Company was in breach of certain financial covenants regarding its secured credit facility dated March 19, 2012 and had not made principal repayments and interest payments under this 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 classified the respective bank loan amounting to $14,935 as current liability at December 31, 2016. On April 24, 2017, the Company made a prepayment of $15,158 and repaid in full the outstanding amount and overdue interest under a loan agreement dated March 19, 2012.

On June 22, 2017, the Company entered into a secured credit facility of up to $150,000 to partially finance the construction costs relating to the four VLGCs Anderida, Aisling, Mont Fort and Mont Gelé. The facility bears interest at LIBOR plus a margin and is repayable in twenty-four quarterly installments. As of December 31, 2017, the Company drew the whole amount of $150,000, related to the delivery of the four VLGCs and made scheduled repayments amounted to $2,284.

The aggregate available undrawn amount under the Company’s facilities at December 31, 2016 and 2017 was $0.

The weighted-average interest rates on the above outstanding debt were: 4.98%, 3.15% and 3.37% for the years ended December 31, 2015, 2016 and 2017, respectively.

The table below presents the movement for bank loans throughout 2017:

Loan	Loan agreement date	Original Amount		December 31, 2016		New Loans		Repayments		December 31, 2017
Secured Credit Facility	March 19, 2012	$	19,065	$	14,935		-		(14,935)	$	-
Secured Credit Facility	June 20, 2008		103,200		2,000		-		(2,000)		-
Secured Credit Facility	June 22, 2017		150,000		-		150,000		(2,284)		147,716
				$	16,935		150,000		(19,219)	$	147,716

The Company’s secured credit facility dated June 22, 2017 is secured by first priority mortgage over the Company’s VLGCs, corporate guarantees, first priority assignments of all freights, earnings, insurances and requisition compensation. The loan contains customary financial 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. The loans also contain certain financial covenants relating to the Company’s financial position and operating performance, such as maintaining liquidity above a certain level. The Company’s secured credit facility imposes operating and negative covenants on the Company and its subsidiaries. These covenants may limit the ability of certain of the Company’s subsidiaries 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, 2017, the Company was in compliance with the covenants regarding its secured credit facilities.

Total interest incurred on long-term debt and amortization of debt issuance costs, including capitalized interest, for the years ended December 31, 2015, 2016 and 2017, amounted to $177,537, $8,299 and $17,125, 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, 2017, including balloon payments, totaling $147,716, are as follows:

Due through December 31, 2018	$	12,179
Due through December 31, 2019		12,179
Due through December 31, 2020		12,180
Due through December 31, 2021		12,180
Due through December 31, 2022		12,180
Thereafter		86,818
Total principal payments		147,716
Less: Financing fees		(2,378)
Total debt	$	145,338

The Loan Facility Agreement with Sierra is discussed in Note 3 herein.

XML

Financial Instruments and Fair Value Measurements

12 Months Ended

Dec. 31, 2017

Financial Instruments and Fair Value Measurements [Abstract]

Financial Instruments and Fair Value Measurements:

11.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 balance sheet.

The Company recognizes all derivative instruments as either assets or liabilities at fair value on its consolidated balance sheets.

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. All of the Company’s derivative transactions are entered into for risk management purposes.

Interest rate swaps, cap and floor agreements: All of the Company’s interest swap agreements were either matured or terminated during the year ended December 31, 2016. As of December 31, 2016 and December 31, 2017, the Company had no interest rate swap agreements outstanding.

Accumulated other comprehensive loss included realized losses on cash flow hedges associated with interest capitalized during prior years under “Advances for vessels under construction and related costs” 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, 2015 and 2016, the amounts of $466 and $110, respectively, were reclassified into the consolidated statement of operations.

The fair value of the interest rate swap 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 interest rate swap agreements that do not qualify for hedge accounting for the years ended December 31, 2015 and 2016 amounted to gains of $10,848 and $2,193, respectively, and are included in “Gain/ (Loss) on interest rate swaps” in the accompanying consolidated statement of operations.

		Amount of Gain/(Loss)
		Year Ended December 31,
Derivatives not designated as hedging instruments	Location of Gain or (Loss) Recognized	2015			2016			2017
Interest rate swaps	Gain/(Loss) on interest rate swaps		$	(11,601)		$	403		$	-
Total			$	(11,601)		$	403		$	-

The carrying amounts of cash and cash equivalents, restricted cash, trade accounts receivable, accounts payable, other current assets, other non-current assets and liabilities and due to/due from related parties reported in the consolidated balance sheets approximate their respective fair values because of the short term nature of these accounts. Assets and liabilities held for sale are stated at fair value less cost to sell. 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 fair value of the investment in Heidmar was determined based on a valuation method that combines (weighs) the income and the market approach using unobservable in the market place inputs (Level 3 inputs) and utilizing adjusted data in an active marketplace for identical securities (Level 2 inputs), respectively.

For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company has in place its valuation policies and procedures regarding the assessment of the significant inputs used for the determination of the fair value of its investment. The development and determination of the inputs for fair value measurements categorized within Level 3 and fair value calculations are the Company's responsibility with support from the third party valuator and which are approved by the Company's management.

Any changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions used by the third party valuator, assessed by the Company for accuracy and reasonability, and recorded as appropriate. The significant assumptions and valuation methods that the Company used to determine the initial fair value and any subsequent change in the fair value of the Company's investment in Heidmar are discussed below and in Note 9.

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 December 31, 2017.

	Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Recurring measurements:
Investment in affiliate – Heidmar (Note 9)	$	-	$	-	$	34,000
Total	$	-	$	-	$	34,000

The following table summarizes the valuation of assets measured at fair value on a non-recurring basis as of December 31, 2016.

	Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)			Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)
Non-Recurring measurements:
Long-lived assets held and used		$	-		$	95,550		$	-
Total		$	-		$	95,550		$	-

On June 8, 2015, the Company recognized a loss due to the deconsolidation of Ocean Rig of $1,347,106, which was calculated as the fair value of the Company’s equity method investment in Ocean Rig less the Company’s 47.2% interest in Ocean Rig’s net assets on June 8, 2015 (Note 9).

In accordance with the provisions of relevant guidance, ten tanker vessels held for sale with a carrying amount of $587,271 were written down to their fair value as determined based on the agreed sale prices, resulting in a charge of $56,631, which was included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other” in the accompanying consolidated statement of operations for the year ended December 31, 2015 (Note 6).

The impairment review performed as of June 30, 2015 indicated also that one of the Company’s vessels, with a carrying amount of $95,937, should be written down to its fair value as determined based on the valuations of the independent valuators, resulting in a charge of $83,937, which was included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”in the accompanying consolidated statement of operations for the year ended December 31, 2015 (Note 6).

Following the sale agreements for the sale of 14 vessel owning companies (and related vessels) and three vessels (Note 6), the associated 17 vessels held for sale with a carrying amount of $748,320 were written down to their fair values as determined based on the agreed sale prices, resulting in a charge of $375,090 included in “Impairment loss (gain)/loss from sale of vessels and vessel owning companies and other” in the accompanying consolidated statement of operations for the year ended December 31, 2015.

Furthermore due to their classification as held for sale (Note 6), 22 vessels were written down to their fair value as determined based on the valuations of the independent valuators, resulting in a charge of $422,404, which was included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other” in the accompanying consolidated statement of operations for the year ended December 31, 2015.

Following the sale agreements for two Supramax vessels (Note 6), the vessels, which had an aggregate carrying value of $17,820, were written down to their fair values as determined based on the agreed sale prices resulting in a charge of $6,035, included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other” in the accompanying consolidated statement of operations for the year ended December 31, 2015.

During the three month period ended December 31, 2015, an additional charge of $113,019 was recognized and included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other” in the accompanying consolidated statement of operations due to the reduction of the vessels’ held for sale carrying amount to their fair value less cost to sell (Note 6).

During 2016, the sale of the owning companies of the Capesize vessels Fakarava, Rangiroa and Negonego resulted in a charge of $23,018 and the sale of the vessel Coronado resulted into a gain of $1,084, both included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other” for the year ended December 31, 2016 (Note 6).

An additional charge of $18,266 was also recognized as “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other” due to the reduction of the vessels’ held for sale carrying amount to their fair value less cost to sell, as of March 31, 2016.

Due to the sale of the vessels Ocean Crystal, Sonoma and Sorrento (Note 6), the Company revalued the above vessels with reference to the purchase prices as concluded in the respective Memoranda of Agreement and recognized a gain amounting to $3,020 and included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other” for the year ended December 31, 2016.

Also, a loss of $641 was recognized in the accompanying consolidated statement of operations for the year ended December 31, 2016 included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" related to the delivery of those vessels to their new owners.

On December 30, 2016, the Company's Board of Directors resolved that the 13 drybulk vessels of the Company's fleet that were previously classified as held for sale will not be sold, effective December 31, 2016. Therefore, the vessels were reclassified as held and used and a gain of $1,851 was recognized and included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" based on the respective U.S. GAAP guidance, due to their measurement at their fair values as at December 31, 2016 as determined based on valuations of the independent valuators. Also, the impairment review for the year ended December 31, 2016 indicated that the carrying amount of the offshore support vessels was not recoverable and, therefore, a charge of $65,712 was recognized and included in "Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other" in the accompanying consolidated statement of operations (Note 6).

The Company's independent members of the board, following the receipt of a fairness opinion, on August 11, 2017 approved a transaction pursuant to which the Company sold 36,363,636 of the Company's common shares to entities that may be deemed to be beneficially owned by its Chairman and CEO, Mr. George Economou, for an aggregate consideration of $100,000 at a price of $2.75 per share (i.e., the Private Placement). The Private Placement transaction was a non-cash transaction with a transfer of an exchange of assets and liabilities from entities that may be deemed to be beneficially owned by the Company's Chairman and CEO, Mr. George Economou, as a consideration for the common stock issued. The fair values of the non-cash transactions, as described above, are determined based on the fair values of assets and liabilities given up on the date that the transaction was concluded, or if more clearly evident, the fair value of the asset and liabilities received on the date that the respective transaction was concluded. The Company considered that the fair value of the shares issued as part of the transaction is considered more clearly evident and concluded that in this respect the aforementioned non-monetary transaction will be recorded based on the fair value of the shares issued as part of the Private Placement. The fair value of the Company's exchanged capital stock was valued using the quoted market price available as of the closing of the transaction according to ASC 820 "Fair Value Measurement".

The Company issued an aggregate 36,363,636 shares of its common stock in the Private Placement to: (i) Sierra in exchange for the reduction of the principal outstanding balance by $27,000 of the Company's Revolving Facility (Note 3); (ii) SPII in exchange for the indirect purchase of the 49% equity interests in Heidmar that was measured at $34,000 (Note 9); and (iii) Mountain in exchange for the termination of the Participation Rights Agreement (Note 3) and the forfeiture of the Series D Preferred Shares. The transaction resulted in a total loss of $7,600, as the difference between the transaction price and the fair value price of $2.05 and is included in "Loss on Private Placement" in the accompanying consolidated statement of operations for the year ended December 31, 2017. In addition, an amount of $2,805 was classified under the respective "Stockholders' Contribution" as the difference between the carrying value of the Series D Preferred Stock before their forfeiture and their fair value.

On December 31, 2017, based on the valuation method that combines (weighs) the income and the market approach using unobservable in the market place inputs (Level 3 inputs) and utilizing adjusted data in an active marketplace for identical securities (Level 2 inputs), respectively, no change in the fair value of the Company's investment in Heidmar was identified and thus no adjustment in the fair value of the Company's investment in Heidmar was recorded in the accompanying consolidated statement of operations for the year ended December 31, 2017 as "Losses of affiliated companies" (Note 9).

XML

Common Stock and Additional Paid-in Capital

12 Months Ended

Dec. 31, 2017

Common Stock and Additional Paid-in Capital

Common Stock and Additional Paid-in Capital:

12.Common Stock and Additional Paid-in Capital:

Net Loss Attributable to Dryships Inc. and Transfers to the Non-controlling Interest

The following table represents the effects of any changes in Dryships’ ownership interest in a subsidiary on the equity attributable to the shareholders of Dryships.

	Year Ended December 31,
	2015		2016		2017
Net loss attributable to Dryships Inc.	$	(2,847,061)	$	(198,686)	$	(42,544)
Transfers to the non-controlling interest:
Decrease in Dryships Inc. equity for reduction in subsidiary ownership		(49,444)		-		-
Net transfers to the non-controlling interest		(49,444)		-		-
Net loss attributable to Dryships Inc. and transfers to/from the non-controlling interest	$	(2,896,505)	$	(198,686)	$	(42,544)

Issuance of common shares

On December 23, 2016, the Company entered into an agreement (the “2016 Purchase Agreement”) with Kalani Investments Limited (the “Investor”), an entity organized in the British Virgin Islands that is not affiliated with the Company, under which the Company could sell up to $200,000 of its common stock to Investor over a period of 24 months, subject to certain limitations, and receive up to an aggregate of $1,500 of shares of our common stock as a commitment fee in consideration for entering into the 2016 Purchase Agreement. Proceeds from any sales of common stock were used for general corporate purposes. Kalani had no right to require any sales and was obligated to purchase the common stock as directed by the Company, subject to certain limitations set forth in the agreement. As of January 31, 2017, the Company completed the sale to the Investor of the full $200,000 worth of shares of its common stock under the 2016 Purchase Agreement, which then automatically terminated in accordance with its terms. Between the date of the 2016 Purchase Agreement, December 23, 2016, and January 30, 2017, the Company sold an aggregate of 32,681 shares (71,864,590 before the effect of the reverse stock splits) of common stock to the Investor, out of which 263 common shares (844,335 before the effect of the reverse stock splits) were commitment fees for entering into the 2016 Purchase Agreement.

On February 17, 2017, the Company entered into a common stock purchase agreement (the “February 2017 Purchase Agreement”) with the Investor. The February 2017 Purchase Agreement provided that, upon the terms and subject to the conditions set forth therein, the Investor was committed to purchase up to $200,000 worth of shares of the Company’s common stock over the 24-month term of the purchase agreement and receive up to an aggregate of $1,500 of shares of our common stock as a commitment fee in consideration for entering into the February 2017 Purchase Agreement. As of March 17, 2017, the Company completed the sale to the Investor of the full $200,000 worth of shares of common stock under the February 2017 Purchase Agreement, which then automatically terminated in accordance with its terms. Between the date of the February 2017 Purchase Agreement, February 17, 2017, and March 16, 2017, the Company sold an aggregate 118,165 shares of its common stock (115,801,710 before the effect of the reverse stock splits) to the Investor, out of which 872 common shares (854,631 before the effect of the reverse stock splits) were commitment fees for entering into the February 2017 Purchase Agreement.

On April 3, 2017, the Company entered into a common stock purchase agreement (the “April 2017 Purchase Agreement”) with the Investor. The April 2017 Purchase Agreement provides that, upon the terms and subject to the conditions set forth therein, the Investor was committed to purchase up to $226,400 worth of shares of the Company’s common stock over the 24-month term of the April 2017 Purchase Agreement and receive up to an aggregate of $1,500 of shares of the Company’s common stock as a commitment fee in consideration for entering into the April 2017 Purchase Agreement.

On August 11, 2017, the Company terminated the April 2017 Purchase Agreement. Between the date of the April 2017 Purchase Agreement, April 3, 2017, and August 10, 2017, the Company has sold an aggregate of 31,392,280 shares of its common stock (123,998,456 before the effect of the reverse stock splits) to the Investor, out of which 42,630 common shares (879,711 before the effect of the reverse stock splits) were commitment fees for entering into the April 2017 Purchase Agreement for a total proceeds of $193,598.

On August 11, 2017, the Company’s Audit Committee approved a Term Sheet pursuant to which the Company sold 36,363,636 of the Company’s common shares to entities that may be deemed to be beneficially owned by its Chairman and CEO, Mr. George Economou, for an aggregate consideration of $100,000 at a price of $2.75 per share. The Private Placement closed on August 29, 2017, when the Company issued an aggregate 36,363,636 shares of its common stock to SPII, Sierra and Mountain, entities that may be deemed to be beneficially owned by Mr. Economou (Note 3). The Company did not receive cash proceeds from the Private Placement.

Pursuant to the Term Sheet, the Audit Committee also approved a Rights Offering that commenced on August 31, 2017 and allowed the Company’s shareholders to purchase their pro rata portion of up to $100,000 of the Company’s common shares at a price of $2.75 per share. In connection with the Rights Offering, on August 29, 2017, Sierra also entered into a Backstop Agreement to purchase from the Company, at $2.75 per share, the number of shares of common stock offered pursuant to the Rights Offering that were not issued pursuant to existing shareholders’ exercise in full of their rights. On October 4, 2017 and following the closing of the rights’ subscription, the Company issued 36,363,636 shares of its common stock, of which 305,760 shares were issued to existing eligible shareholders and 36,057,876 shares were issued to Sierra as per the Backstop Agreement. The Company received $841 from the subscribed shareholders. Regarding the common shares issued to Sierra, the Company did not receive any cash proceeds (Note 3).

Issuance of preferred shares

On June 8, 2016, the Company, entered into a Securities Purchase Agreement with an institutional investor for the sale of 5,000 newly designated Series C Convertible Preferred Shares, warrants to purchase 5,000 Series C Convertible Preferred Shares and 0 common shares (310 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits). The securities were issued to the investor through a registered direct offering. The total net proceeds from the offering, after deducting offering fees and expenses, were approximately $5,000. The Company further received $5,000 due to the exercise of all warrants, and the total proceeds were $10,000. The Series C Convertible Preferred Stock accrued cumulative dividends on a monthly basis at an annual rate of 8%. Such accrued dividends were payable in shares of common stock or in cash at the Company’s option, or in a combination of cash and common shares.

On July 6, 2016, August 3, 2016, September 1, 2016, October 5, 2016 and November 4, 2016, the Company issued 0 (70 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits), 0 (17 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits), 0 (278 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7reverse stock splits), 0 (328 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7reverse stock splits) and 0 (339 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7reverse stock splits) shares of Common stock, respectively, as dividend to the holders of our Series C Convertible Preferred shares.

As of November 18, 2016, the 5,000 Series C Convertible Preferred Shares issued on June 15, 2016 and their respective $400 dividends have been converted to 29 common shares (28,697 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) and, the 5,000 of the Series C Convertible Preferred Shares issued on August 10, 2016 due to the exercise of the respective warrants, and their respective $344 dividends have been converted to 152 common shares (149,187 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits).

On September 9, 2016, the Company entered into an agreement to convert $8,750 of the outstanding balance of the Revolving Credit Facility with Sifnos (Note 3) into 29 Series D Preferred shares (29,166 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) of the Company. Each preferred share had 100,000 votes and was not convertible into common stock of the Company. The 29 Series D Preferred shares (29,166 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) were issued on September 13, 2016.

On November 16, 2016, the Company entered into a Securities Purchase Agreement with the Investor for the sale of 20,000 newly designated Series E-1 Convertible Preferred Shares, preferred warrants to purchase 30,000 Series E-1 Convertible Preferred Shares, preferred warrants to purchase 50,000 newly designated Series E-2 Convertible Preferred Shares, prepaid warrants to initially purchase an aggregate of 47 common shares (46,609 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits - with the number of common shares issuable subject to adjustment as described therein), and 0 common shares (13 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits). The total gross proceeds from the sale of the securities and the exercise of the preferred warrants were $100,000. The Series E1 and E2 Convertible Preferred Shares were entitled to receive dividends which could be paid by the Company in shares of common stock or cash or a combination of cash and common shares and which were cumulative and accrued and compounded monthly.

As of December 31, 2016, the initial 20,000 Series E-1 Convertible Preferred Shares, which were issued on November 21, 2016, and their respective $1,400 dividends were converted to 873 common shares (856,352 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7reverse stock splits). Also, as of December 31, 2016, all preferred warrants were exercised and the 80,000 preferred shares were issued and together with their respective $5,551 dividends were converted to 3,153 common shares (3,090,405 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits). Finally, all prepaid warrants have been exercised and in this respect, 45 common shares (44,822 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) were issued.

On August 29, 2017, following the closing of the Private Placement, all outstanding shares of Series D Preferred Stock (which carried 100,000 votes per share) that Sifnos held were forfeited. An amount of $2,805, being the difference between the carrying value of the Series D Preferred Stock as of the forfeiture date and their fair value, was classified under the respective “Stockholders’ Contribution” (Note 3).

Treasury stock

On September 9, 2017, 3 shares (3,009 before the 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits) of the Company’s common stock, held as treasury stock, were retired. As of December 31, 2017, the Company did not hold any treasury stock.

Reverse stock splits

On February 22, 2016, the Reverse Stock Split Committee of the Company resolved to effect a 1-for-25 reverse stock split of its common shares. The reverse stock split occurred, and the Company’s common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on March 11, 2016.

On July 29, 2016, the Board of Directors of the Company also determined to effect a 1-for-4 reverse stock split of its common shares. The reverse stock split occurred, and the Company’s common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on August 15, 2016.

On October 27, 2016, the Reverse Stock Split Committee of the Company determined to effect a 1-for-15 reverse stock split of its common shares. The reverse stock split occurred, and the Company’s common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on November 1, 2016.

On January 18, 2017, the Board of Directors of the Company determined to effect a 1-for-8 reverse stock split of its common shares. The reverse stock split occurred, and the Company’s common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on January 23, 2017.

On April 6, 2017, the Company determined to effect a 1-for-4 reverse stock split of its common shares. The reverse stock split occurred, and the Company’s common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on April 11, 2017.

On May 2, 2017, the Company determined to effect a 1-for-7 reverse stock split of its common shares. The reverse stock split occurred, and the Company’s common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on May 11, 2017.

On June 16, 2017, the Company determined to effect a 1-for-5 reverse stock split of its common shares. The reverse stock split occurred, and the Company’s common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on June 22, 2017.

On July 18, 2017, the Company determined to effect a 1-for-7 reverse stock split of its common shares. The reverse stock split occurred, and the Company’s common stock began trading on a split adjusted basis on the Nasdaq Capital Market, as of the opening of trading on July 21, 2017.

All previously reported share and per share amounts have been restated to reflect the reverse stock splits.

Dividends

On February 27, 2017, the Company’s Board of Directors decided to initiate a new dividend policy. Under this policy, the Company expects to pay a regular fixed quarterly dividend of $2,500 to the holders of common stock. In addition, at its discretion, the Board may decide to pay additional amounts as dividends each quarter depending on market conditions and the Company’s financial performance, over and above the fixed amount.

On February 27, 2017, the Company’s Board of Directors declared a quarterly dividend of $2,500 with respect to the quarter ended December 31, 2016 to the shareholders of record as of March 15, 2017. The dividend was paid on March 30, 2017.

On April 11, 2017, the Company’s Board of Directors declared a quarterly dividend of $2,500 with respect to the quarter ended March 31, 2017 to the shareholders of record as of May 1, 2017. The dividend was paid on May 12, 2017.

On July 7, 2017, the Company’s Board of Directors declared a quarterly dividend of $2,500 with respect to the quarter ended June 30, 2017 to the shareholders of record as of July 20, 2017. The dividend was paid on August 2, 2017.

On October 16, 2017, the Company’s Board of Directors declared a quarterly dividend of $2,500 with respect to the quarter ended September 30, 2017 to the shareholders of record as of October 27, 2017. The dividend was paid on November 13, 2017.

On February 6, 2018, the Company’s Board of Directors declared a quarterly dividend of $2,500 with respect to the quarter ended December 31, 2017 to the shareholders of record as of February 20, 2018. The dividend was paid on March 6, 2018 (Note 19).

XML

Equity Incentive Plan

12 Months Ended

Dec. 31, 2017

Equity Incentive Plan [Abstract]

Equity Incentive Plan:

13.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. The Plan expired on January 16, 2018 in accordance with its terms.

On January 12, 2011, 9,000,000 shares (1 share after all reverse stock splits) 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 (1 share after all reverse stock splits) vesting on the grant date and 1,000,000 shares (0 share after all reverse stock splits) 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 (share price before reverse stock splits). As of December 31, 2017, 8,000,000 of these shares (1 share after all reverse stock splits) have vested.

On August 20, 2013, the Compensation Committee approved that a bonus in the form of 1,000,000 shares (1 share after all reverse stock splits) 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 vested over a period of two years with 333,334 shares (1 share after all reverse stock splits) vesting on the grant date, 333,333 shares (0 share after all reverse stock splits) vesting on August 20, 2014 and 333,333 shares (0 share after all reverse stock splits) on August 20, 2015, respectively. 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 $2.01 per share (share price before reverse stock splits). As of December 31, 2016, the shares have vested in full.

On August 19, 2014, the Compensation Committee approved that a bonus in the form of 1,200,000 shares (0 share after all reverse stock splits) 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 (0 share after all reverse stock splits) vesting on December 31, 2014, 400,000 shares (0 share after all reverse stock splits) vesting on December 31, 2015, and 400,000 shares (0 share after all reverse stock splits) vesting on December 31, 2016. 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 $3.26 per share (share price before reverse stock splits). As of December 31, 2016, these shares have vested in full.

On December 30, 2014, the Compensation Committee approved that a bonus in the form of 2,100,000 shares (0 share after all reverse stock splits) 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 (0 share after all reverse stock splits) vesting on December 31, 2015, 700,000 shares (0 share after all reverse stock splits) vesting on December 31, 2016 and 700,000 shares (0 share after all reverse stock splits) 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 (share price before reverse stock splits). As of December 31, 2017, the shares have vested in full.

As of December 31, 2015, 2016 and 2017, there was $5,999, $2,419 and $691, respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost at December 31, 2017 is expected to be recognized over the following year.

The amounts of $6,590, $3,580 and $1,728 represent the stock based compensation expense for the year ended December 31, 2015, 2016 and 2017, respectively, and are recorded in “General and administrative expenses” in the accompanying consolidated statements of operations for the years ended December 31, 2015, 2016 and 2017, respectively.

XML

Commitment and Contingencies

12 Months Ended

Dec. 31, 2017

Commitment and Contingencies [Abstract]

Commitment and Contingencies:

14.Commitment and contingencies:

14.1Legal proceedings

Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping 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.

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 through 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.

An investigation was carried out by the Chinese authorities in connection with an alleged collision of the vessel Catalina with a fishing boat while enroute to Indonesia on May 7, 2016. The vessel remained detained in Ningbo, China and was released during July 2016.

Following determination of the Chinese Maritime authorities on the apportionment of inter ship liability, the P&I Club proceeded with the settlement of the property damage claim of the owners of the fishing boat. Crew claims were separately settled by such club. The criminal proceedings in relation to such case are now closed.

HPOR Servicos De Consultaria Ltda ("HPOR") on September 1, 2016 commenced London arbitration references against, among others, the Company, seeking payment of certain commissions that HPOR is alleging were due by, amongst others, the Company for certain agency and marketing services provided for the Ocean Rig Mykonos and the Ocean Rig Corcovado drilling units. The Company is disputing such allegations and has counterclaimed repayment of the commission already paid to HPOR. On March 7, 2018, the Tribunal issued awards in each of the references disallowing HPOR’s claims and allowing the counterclaims brought by the Company, HPOR has since filed an application with the Court of Appeals in the UK for leave to appeal the arbitration awards.

On July 4, 2017, the Company announced that it and Mr. Economou had been named as defendants in a lawsuit filed in High Court of the Republic of the Marshall Islands (Civil Action No. 2017-131) by Michael Sammons alleging, in relevant part, breaches of fiduciary duty, unjust enrichment, and conflict of interest. The plaintiff sought, among other things, a temporary restraining order and preliminary injunction to suspend any further issuances of new shares of common stock by the Company at a price per share below the price specified by the plaintiff in the complaint, as well as certain other compensatory and punitive damages specified in the complaint. On July 24, 2017, the High Court of the Marshall Islands (the “Court”) issued an order denying plaintiff’s motion for a preliminary injunction. On August 10, 2017, the plaintiff filed a first amended complaint that added a new plaintiff, and was styled as a direct action only, alleging three new counts for breach of fiduciary duties and constructive fraud, and removing certain of the counts asserted in the original complaint. The plaintiffs requested to proceedpro seand on August 16, 2017, the Court granted a motion to withdraw filed by plaintiffs’ counsel. On August 22, 2017, now actingpro se, plaintiffs filed a motion for leave to file a second amended complaint, making certain changes to the allegations of the first amended complaint and propounding an additional count for breach of fiduciary duties.The most recent complaint seeks compensatory damages of $1.56 million and treble punitive damages of $4.68 million against Mr. Economou, and requests injunctive and equitable relief against the Company. The Company and Mr. Economou believe the complaint, as amended, to be without merit and filed motions to dismiss the second amended complaint. At the oral argument on defendants’ motions to dismiss, held on February 2, 2018, the Court announced that it was inclined to grant both motions to dismiss, and directed the parties to submit proposed orders on or before February 23, 2018. The Court stated that after the Court received and reviewed all timely proposed orders, it would issue final decisions in writing. On February 26, 2018, plaintiff filed a motion for voluntary dismissal without prejudice. On March 6, 2018, defendants filed a joint opposition to plaintiff’s motion for voluntary dismissal and moved to strike plaintiff’s notice of dismissal and for the entry of dismissal with prejudice, which plaintiff opposed.  The Court issued acknowledgement of voluntary dismissal without prejudice on March 8, 2018.  Plaintiff filed a new action in the Western District of Texas on February 27, 2018, styled as Sammons v. Economou, No. 5:18-cv-00194 (W.D. Tex.). The Company and Mr. Economou believe that the complaint is without merit and intend to contest the allegations in the Texas action.

On August 2, 2017, a purported class action complaint was filed in the United States District Court for the Eastern District of New York (No. 17-cv-04547) by Herbert Silverberg on behalf of himself and all others similarly situated against, among others, the Company and two of its executive officers. The complaint alleges that the Company and two of its executive officers violated Sections 9, 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Company will respond to the complaint by the appropriate deadline to be set in the future, which is presently set at May 25, 2018. The Company and its management believe that the complaint is without merit and plan to vigorously defend themselves against the allegations.

On August 31, 2017, a complaint was filed in the High Court of the Republic of the Marshall Islands (Civil Action No. 2017-198) by certain Ocean Rig creditors against, among others, the Company and two of its executive officers (who are currently directors) and TMS Offshore Services. The complaint purports to allege nine causes of action, including claims for avoidance and recovery of actual and/or constructive fraudulent conveyances under common law or 6 Del. Code §§ 1304(A)(1), 1305, 1307, and 1308; aiding and abetting fraudulent conveyances; and declaratory judgment under 30 MIRC § 202. The Company (and all other defendants) moved to dismiss the case on October 31, 2017 and the motion has been briefed. In a scheduling conference held on February 14, 2018 in the Marshall Islands, the Court scheduled oral argument to proceed on June 6, 2018. The Company is not in a position at this time to express an opinion as to the ultimate outcome of this matter, or to provide an estimate on the amount or range of any potential loss.

Ocean Rig has funded a preserved claims trust, or PCT. The PCT was established to preserve, for the benefit of scheme creditors, any causes of action held by Ocean Rig, Agon Shipping Inc. and/or Ocean Rig Investments Inc. arising from the facts and circumstances identified in the draft complaint prepared by certain of Ocean Rig’s creditors referenced above. If the trustees under the PCT determine that there is merit to any such claims, the trustees may take legal action for the benefit of all of the scheme creditors in the restructuring.

The Company received a subpoena from the SEC requesting certain documents and information from the Company in connection with offerings made by the Company between June 2016 and July 2017. The Company is providing the requested information to the SEC.

During September 2017, the vessels Majorca and Marbella experienced two grounding incidents with approximately total off-hire days of 82 days and 33 days, respectively, while the total recoverable cost is estimated to $1,828 and $641, respectively, which will be covered by the Company's H&M insurers.

Other than the cases mentioned above, the Company is not a party to any material litigation where claims or counterclaims have been filed against the Company other than routine legal proceedings incidental to its business.

14.2Contractual charter revenue

Future minimum contractual charter revenue, based on vessels committed to non-cancelable, long-term time contracts as of December 31, 2017, amounts to $47,507 for the twelve months ending December 31, 2018, $37,266 for the twelve months ending December 31, 2019, $37,284 for the twelve months ending December 31, 2020, $37,266 for the twelve months ending December 31, 2021 and $72,263 for the twelve months ending December 31, 2022 and after. These amounts do not include any assumed off-hire.

Under the June 25, 2015 agreement discussed below, the Company amended 11 charter agreements with significantly lower charter rates. Under seven of the Company’s charter agreements, the charterer had the option to (i) acquire the vessels at fair market value as determined by two independent brokers, at the date that the options were 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 would automatically be terminated on the date of completion of the current voyage. These options were exercisable beginning late March 2015 and throughout the term of the charter agreements, which were set to expire through 2020. On June 25, 2015, the Company concluded an agreement with the charterer under which the charterer agreed to forgo the exercise of the purchase option under the seven charter agreements in exchange for a reduction of $35,000 in overdue receivables, $5,000 cash payment to the Company and write off the remaining $16,471 in overdue receivables as of May 31, 2015 against “Voyage revenues”. Out of the $35,000, the $6,759 had been amortized, while the remaining $28,241 was written off as “Loss on contract cancellation”. As part of the transaction, new time charters were agreed for a period of over four years.

XML

Interest and Finance Costs

12 Months Ended

Dec. 31, 2017

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,
	2015		2016		2017
Interest incurred on long-term debt	$	150,061	$	6,164	$	1,499
Interest, amortization and write off of financing fees on loan from affiliate and related party		3,642		1,563		15,239
Amortization and write-off of financing fees		23,834		572		387
Discount on receivable from drilling contract		4,048		-		-
Commissions, commitment fees and other financial expenses and related party		2,607		558		778
Capitalized interest and finance costs		(12,060)		-		(3,196)
Total	$	172,132	$	8,857	$	14,707

XML

Segment Information

12 Months Ended

Dec. 31, 2017

Segment Information

Segment Information:

16.Segment information:

The Company has currently four reportable segments from which it derives its revenues: drybulk, offshore support, tanker and gas carrier segments. The Company, after selling its whole tanker fleet during 2015, re-entered the tanker market through the acquisition of four tanker vessels (Note 6) which were delivered during the six-month period ended June 30, 2017. The Company also entered during 2017 the gas carrier market through the acquisition of four VLGCs (Notes 5 and 6). Finally, the Company received earnings or losses from its investment in Ocean Rig up to April 5, 2016 (Notes 3 and 9). 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 offshore support business segment consists of offshore support services to the global offshore energy industry through the operation of a diversified fleet of offshore support vessels. The tanker business segment consists of vessels for the transportation of crude and refined petroleum cargoes. The gas carrier segment currently consists of vessels for the transportation of liquefied petroleum gas.

The tables below present information about the Company’s reportable segments as of and for the years ended December 31, 2015, 2016 and 2017 and the column “Other” relates to the Company’s investment in Heidmar. The years that the Company had no ownership in the drilling and gas carrier segments are not presented in the below table. 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 allocates general and administrative expenses of the parent company to its subsidiaries on a pro rata basis. The Company also measures segment performance based on net income. Summarized financial information concerning each of the Company’s reportable segments is as follows:

	Drybulk Segment			Offshore Support Segment					Drilling Segment	Tanker Segment				Gas Carrier Segment	Other	TOTAL
	2015	2016	2017		2015	2016	2017	2015		2015	2016	2017	2017		2017	2015		2016			2017
Revenues	$   115,598	$ 30,777	$ 65,723		$8,118	$21,157	$3,819	$725,805		$120,304	$   -	$20,858	$ 10,316		$    -		$969,825			$51,934		$100,716
Vessels and drilling units operating expenses	(87,704)	(30,969)	(40,024)		(3,977)	(14,587)	(4,749)	(259,623)		(19,770)	(7)	(8,830)	(5,745)		-		(371,074)			(45,563)		(59,348)
Depreciation and amortization	(65,607)	-	(7,326)		(672)	(3,466)	(950)	(155,352)		(6,021)	-	(4,652)	(2,038)		-		(227,652)			(3,466)		(14,966)
Goodwill impairment	-	-	-		-	(7,002)	-	-		-	-	-	-		-		-			(7,002)		-
Loss on contract cancellation	(28,241)	-	-		-	-	-	-		-	-	-	-		-		(28,241)			-		-
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other	(1,000,485)	(35,470)	4,425		-	(70,873)	(300)	-		(56,631)	-	-	-		-		(1,057,116)		(	106,343)		4,125
General and administrative expenses	(44,519)	(29,822)	(19,095)		(2,858)	(9,849)	(7,677)	(46,989)		(10,546)	(37)	(2,384)	(1,816)		-		(104,912)			(39,708)		(30,972)
Gain/(loss) on interest rate swaps	567	(917)	-		-	-	-	9,588		1,446	514	-	-		-		(11,601)			403		-
Gain on debt restructuring	-	10,477	-		-	-	-	-		-	-	-	-		-		-			10,477		-
Income taxes	-	-	(56)		(188)	(38)	(20)	(36,931)		-	-	-	(76)		-		(37,119)			(38)		(152)
Net income/(loss)	(1,180,056)	(69,966)	(23,676)		(2,711)	(86,553)	(13,322)	(1,601,451)		(23,868)	(713)	(4,492)	(1,054)		-		(2,808,086)			(198,686)		(42,544)
Net income/(loss) attributable to Dryships Inc.	(1,180,056)	(69,966)	(23,676)		(2,657)	(86,553)	(13,322)	(1,640,480)		(23,868)	(713)	(4,492)	(1,054)		-		(2,847,061)			(198,686)		(42,544)
Interest and finance cost	(45,321)	(8,706)	(13,476)		(105)	(93)	(24)	(123,463)		(8,766)	(58)	(4)	(1,203)		-		(177,655)			(8,857)		(14,707)
Interest income	76	66	1,310		2	13	25	5,954		18	2	-	30		-		6,050			81		1,365
Change in fair value of derivatives (gain)/loss	(10,768)	(1,957)	-		(6)	-	-	349		(422)	(236)	-	-		-		(10,848)			(2,193)		-
Total assets	$ 342,287	$ 162,532	$ 348,657		$ 131,124	$ 31,191	$ 26,871	$ -		$ 2,641	$ 7	$ 202,543	$322,854		$34,000		$ 476,052			$ 193,730		$934,925

A reconciliation of interest and finance costs with the consolidated amounts is as follows:

	December 31, 2015			December 31, 2016			December 31, 2017
Interest and finance costs
Interest for reportable segments			177,655			8,857		14,707
Elimination of intersegment interest			(5,523)			-		-
Total consolidated Interest and finance costs		$	172,132		$	8,857	$	14,707
Interest income
Interest for reportable segments			6,050			81		1,365
Elimination of intersegment interest			(5,523)			-		-
Total consolidated Interest income		$	527		$	81	$	1,365

The drilling revenue shown in the table below is analyzed by country based upon the location where the drilling takes place and up to deconsolidation of Ocean Rig at June 8, 2015:

Country	Year ended December 31, 2015
Congo	$	31,807
Norway		101,584
Brazil		253,283
Ivory Coast		12,065
Angola		275,410
Falkland		51,656
Total leasing and service revenues	$	725,805

The revenue shown in the table below is analyzed by country based upon the location where the operation of the offshore support vessels takes place:

	Year ended December 31,
Country			2015		2016		2017
Brazil			8,118		19,312		5,018
Europe			-		1,800		-
Total revenues		$	8,118	$	21,112	$	5,018

As of December 31, 2015, all of the Company’s offshore support vessels operated in Brazil while as of December 31, 2016, three of the offshore support vessels either operated or were idle in Brazil and the remaining offshore support vessels were laid up in Europe. As of December 31, 2017, all of the Company’s offshore support vessels were laid up.

The Company’s drybulk, tanker and gas carrier vessels operate on many trade routes throughout the world, and, therefore, the provision of geographic information is considered impractical by management.

XML

Losses per share

12 Months Ended

Dec. 31, 2017

Losses per Share [Abstract]

Losses per Share:

17.Losses per share:

	Year ended December 31,
	2015							2016									2017
	Loss (numerator)		Weighted- average number of outstanding shares (denominator)		Amount per share			Loss (numerator)		Weighted- average number of outstanding share (denominator)		Amount per share		Loss (numerator)			Weighted- average number of outstanding shares (denominator)		Amount per share
Net loss attributable to DryShips Inc.	$	(2,847,061)		-	$	-		$	(198,686)		-	$	-		$	(42,544)		-	$	-
Plus: Contribution from Series D Preferred Stock		-		-		-			-		-		-			2,805		-		-
-Less: Convertible Preferred stock dividends		-		-		-			(7,695)		-		-			-		-		-
-Less: Non-vested common stock dividends declared and undistributed earnings		(570)		-		-			-		-		-			-		-		-
Basic LPS
Loss available to common stockholders	$	(2,847,631)		57	$	(49,958,438.60	)	$	(206,381)		453	$	(455,587.20)		$	(39,739)		35,225,784	$	(1.13)
Dilutive effect of securities
Diluted LPS
Loss available to common stockholders	$	(2,847,631)		57	$	(49,958,438.60	)	$	(206,381)		453	$	(455,587.20)		$	(39,739)		35,225,784	$	(1.13)

For the years ended December 31, 2015, 2016 and 2017 and given that the Company incurred losses, the effect of including any potential common shares in the denominator of diluted per-share computations would have been anti-dilutive and therefore, basic and diluted losses per share are the same.

XML

Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation [Abstract]

Income Taxes:

18.Income Taxes:

18.1Drybulk, Offshore Support, Gas Carrier and Tanker Segments

None of the countries of incorporation of the Company and its subsidiaries impose 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 and Norway, the countries in which Dryships and the drybulk, offshore support, gas carrier and tanker 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 and Norway, 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 may be eligible to qualify for exemption from United States federal income taxation with respect to U.S. source shipping income if such companies satisfy certain ownership and documentation requirements under applicable U.S. federal income tax law and regulations. The ship-owning subsidiaries will be deemed to satisfy these certain requirements if the Company is able to satisfy such requirements.

The Company believes that it satisfied the Publicly-Traded Test for its 2015 and 2016 Taxable Years and, therefore, 100% of the stock of its Republic of the Marshall Islands and Malta ship-owning subsidiaries was treated as owned by individuals “resident” in the Republic of the Marshall Islands and Malta. However, the Company did not satisfy the ownership requirements to qualify for an exemption from United States taxation on its U.S. source shipping income for the taxable year ending December 31, 2017. Therefore, each of the Company's Republic of the Marshall Islands, Malta and Norway ship-owning subsidiaries are subject to U.S. federal income tax in respect of their U.S. source shipping income. As a result, the Company recognized the related tax expense amounted to $152, in the accompanying consolidated statement of operations for the year ended December 31, 2017.

18.2Drilling Segment (up to June 8, 2015 – date of deconsolidation):

Ocean Rig operated through its various subsidiaries in a number of countries throughout the world. Income taxes were provided based upon the tax laws and rates in the countries in which operations were conducted and income was earned. The countries in which Ocean Rig operated have taxation regimes with varying nominal rates, deductions, credits and other tax attributes. Consequently, there was not an expected relationship between the provision for/or benefit from income taxes and income or loss before income taxes.

The components of Ocean Rig’s income/ (losses) before taxes were as follows:

	Year ended December 31, 2015
Domestic income / (loss) (Republic of the Marshall Islands)	$               90,181
Foreign income	42,277
Total income before taxes	$              132,458

The components of the Company’s tax expense were as follows:

	Year ended December 31, 2015
Current Tax expense	$	37,119
Income taxes	$	37,119
Effective tax rate		28.0%

For fiscal year 2015, the current tax expense was mainly related to withholding tax based on total contract revenue or bareboat fees. In 2015, approximately 48% of the current tax expense was related to withholding taxes in Angola. For fiscal year 2017, the current tax expense is mainly related to U.S. federal income tax on its U.S. source shipping income.

Taxes have not been reflected in other comprehensive loss since the valuation allowances would result in no recognition of deferred tax.

Reconciliation of total tax expense:	Year ended December 31, 2015
Income tax		$	37,119
Taxes on litigation matters subject to statutory rates, including interest and penalties			-
Total		$	37,119

Ocean Rig had 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 2015, most of its activities were in the Republic of the Marshall Islands with tax rate of zero.

XML

Subsequent Events

12 Months Ended

Dec. 31, 2017

Subsequent Events

Subsequent Events:

19.Subsequent Events:

19.1 On January 4, 2018, the vessel Mont Gelé was delivered to the Company and the amount paid in the escrow account was released to the HHI. On January 11, 2018, Mont Gelé commenced its time charter on a fixed rate with ten years firm duration to an oil major trading company.

19.2 On January 24, 2018, the Company entered into a secured credit facility of up to $90,000. The facility has a tenor of five years, bears interest at LIBOR plus a margin, is repayable in twenty quarterly installments and balloon payments in maturity, has customary financial covenants and is secured by first priority mortgages over the Company’s four tankers. On January 26, 2018, the Company drew down the full amount of $90,000.

19.3 On January 29, 2018, the Company entered into a secured credit facility of up to $35,000. The facility has a tenor of six years, bears interest at LIBOR plus a margin, is repayable in twenty-four quarterly installments and balloon payments in maturity, has customary financial covenants and is secured by first priority mortgages over the vessels Valadon, Matisse and Rapallo. On March 7, 2018, the Company drew down the full amount of $35,000.

19.4 On February 1, 2018, the Company fully repaid the outstanding at that time balance of $73,841 under the Loan Facility Agreement with Sierra.

19.5 On February 6, 2018, the Company’s board of directors declared a quarterly dividend of $2,500 with respect to the quarter ended December 31, 2017, to the shareholders of record as of February 20, 2018. The dividend was paid on March 6, 2018.

19.6 On February 6, 2018, the Company’s board of directors approved a stock repurchase program under which the Company may repurchase up to $50,000 of its outstanding common shares for a period of 12 months. The Company may repurchase shares in privately negotiated or open-market purchases in accordance with applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. As of April 4, 2018, the Company has repurchased 2,816,445 shares of its common stock for a gross consideration of $11,282 including commission fees. As of April 4, 2018, the number of common shares outstanding is 101,458,263.

19.7 On February 8, 2018, the Company announced the planned spinoff of its gas carrier business. In the spinoff, the Company plans to distribute to holders of its common stock 49% of the issued and outstanding shares of Gas Ships Limited’s common stock, the Company’s wholly-owned subsidiary. Following the spinoff, Gas Ships Limited will be a publicly-traded company, and the Company will retain a 51% ownership interest in Gas Ships Limited. The spinoff is subject to certain conditions, including the effectiveness of Gas Ships Limited’s Form F-1 registration statement and final approval and declaration of the distribution by the Company’s board of directors.  The Company may, at any time until the closing of the spinoff, decide to abandon, modify or change the terms of the spinoff.

19.8 On March 8, 2018, the Company entered into a secured credit facility of up to $30,000. The facility has a tenor of six years, bears interest at LIBOR plus margin, is repayable in twenty-four quarterly installments and balloon payments in maturity, has customary financial covenants and is secured by first priority mortgage over the vessels Judd and Raraka. On March 13, 2018, the Company drew down the full amount of $30,000.

19.9 On April 2, 2018, the Company entered into a finance lease arrangement with a major Chinese leasing company, for its Kamsarmax drybulk vessel, the Kelly, pursuant to a memorandum of agreement and a bareboat charter agreement. The financing provides for the transfer of the Kelly to the buyer for 50% of the agreed purchase price, which will be calculated as the lower of (a) the vessel's net book value as of June 30, 2017 and (b) the vessel's fair value close to the delivery date, and as part of the agreement, the Company's wholly-owned subsidiary will bareboat charter the vessel back for a period of ten years (expiry in April 2028). Charterhire under the bareboat arrangement is comprised of a fixed, quarterly repayment amount corresponding to a 15-year amortization profile plus a variable component calculated at LIBOR plus margin. The Company has purchase options to reacquire the vessel during the bareboat charter period, with the first of such options exercisable on the first anniversary from the vessel's delivery date. There is also a purchase obligation upon the expiration of the agreement for 33% of the financing amount. The Company is a guarantor under the bareboat charter, which also includes customary terms, conditions and financial covenants. The vessel is expected to be delivered and leased back to the Company in April 2018.

XML

Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2017

Significant Accounting Policies [Abstract]

Principles of Consolidation

(a)Principles of consolidation: The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and include the accounts and operating results of DryShips, its wholly-owned subsidiaries and its affiliate.

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.

Goodwill

(c)Goodwill: Goodwill represents the excess of the purchase price over the estimated fair value of net assets acquired. Goodwill is reviewed for impairment whenever events or circumstances indicate possible impairment in accordance with Accounting Standard Codification (“ASC”) 350 “Goodwill and Other Intangible Assets”. This standard requires that goodwill and other intangible assets with an indefinite life not be amortized but instead tested for impairment at least annually. The Company tests goodwill for impairment each year on December 31. The Company tests goodwill at the reporting unit level, which is defined as an operating segment or a component of an operating segment that constitutes a business for which financial information is available and is regularly reviewed by management. The impairment of goodwill is tested by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and a second step is performed to measure the amount of the impairment loss, if any. To determine the fair value of each reporting unit, the Company uses the income approach, which is a generally accepted valuation methodology. For its offshore support reporting unit, the Company estimated the fair market value using estimated discounted cash flows. The Company discounts projected cash flows using a long-term weighted average cost of capital, which is based on the Company’s estimate of the investment returns that market participants would require for each of its reporting units. To develop the projected cash flows associated with the Company’s offshore support reporting unit, which are based on estimated future utilization and dayrates, the Company considered key factors that included assumptions regarding daily operating expenses, inflation and areas of future employment. For the year ended December 31, 2016, the Company concluded that the goodwill relating to its offshore support reporting unit was impaired and recorded a charge amounting to $7,002 included in “Impairment on goodwill” in the accompanying consolidated statement of operations (Note 7).

Use of Estimates

(d)Use of estimates: The preparation of consolidated financial statements in conformity with U.S. 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)

(e)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”.

The Company’s policy is in accordance with the requirements of Accounting Standard Update (“ASU”) 2013-02, “Comprehensive Income (Topic 220) - Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. Pursuant to ASU 2013-02, an entity should 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 U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts.

Cash and Cash Equivalents

(f)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

(g)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 and (iii) minimum liquidity collateral requirements or minimum required cash deposits, as defined in the Company’s loan agreements.

Trade Accounts Receivable net

(h)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.

Going Concern

(i)Going concern:The Company has adopted the provisions of ASU No. 2014-15, “Presentation of Financial Statements - Going Concern”. ASU 2014-15 provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and on related required footnote disclosures. For each reporting period, management is required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. As of December 31, 2017, the Company reported a working capital surplus of $37,505 and had cash and cash equivalents including restricted cash amounted to $30,226. The Company also expects that it will fund its operations either with cash on hand, cash generated from operations, additional bank debt and equity offerings, or a combination thereof, in the twelve-month period ending one year after the financial statements’ issuance.

Concentration of Credit Risk

(j)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). 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’s major customers are well known companies, which reduce 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 makes advances for the construction of assets to the yards. The ownership of the assets is transferred from the yard to the Company at delivery. The credit risk of the advances was, to a large extent, reduced through refund guarantees issued by financial institutions.

Advances for Vessels and Drilling Units under Construction

(k)Advances for vessels under construction: This represents amounts expended by the Company in accordance with the terms of the construction contracts for vessels 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 under construction (“Newbuildings”) represents the accumulated costs at the balance sheet date. Cost components include payments for yard installments, acceptance tests’ consumption, commissions to related party, construction supervision, and capitalized interest.

Capitalized Interest

(l)Capitalized interest: Interest expense is capitalized during the construction period of drilling units 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 and finance costs for the years ended December 31, 2015, 2016 and 2017, amounted to $12,060, $0 and $3,196 respectively (Note 15).

Insurance Claims

(m)Insurance claims: The Company records insurance claim recoveries for insured losses incurred on damages to fixed assets, 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, or loss due to the vessel 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

(n)Inventories: Inventories consist of consumable bunkers (if any), propane heel (if any), lubricants and victualing stores, which were 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. Market could be the replacement cost, net realizable value or net realizable value less an approximately normal profit margin. In July 2015, the FASB issued ASU No. 2015-11 –Inventory. ASU 2015-11 is part of FASB Simplification Initiative, according to which the entities are required to measure inventory at the lower of cost or net realizable value. Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This update was effective for public entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years prospectively. During fiscal year 2017, the Company adopted the aforementioned update, which did not impact its results of operations, financial position or cash flows, in the current or previous interim and annual reporting periods.

Foreign Currency Translation

(o)Foreign currency translation: The functional currency of the Company is the U.S. Dollar since the Company operates in international shipping and drilling markets (through June 8, 2015) 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. The Company recorded gain due to foreign currency differences amounting to $2,763, $745 and $335 included in the accompanying consolidated statement of operations as of December 31, 2015, 2016 and 2017, respectively.

Fixed Assets, Net

(p)Fixed assets, net:

(i)Drybulk, tanker carrier, gas carrier and offshore support 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 drybulk and tanker carrier vessels to be 25 years, offshore support vessels 30 years and Very Large Gas Carriers (“VLGCs”) 35 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 units were stated at historical cost less accumulated depreciation. Such costs included the cost of adding or replacing parts of drilling unit machinery and equipment when the cost was incurred, if the recognition criteria were met. The recognition criteria require that the cost incurred extends the useful life of a drilling unit. The carrying amounts of those parts that were replaced were written off and the cost of the new parts was capitalized. Depreciation was 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 for the drilling units. The residual values of the drilling rigs and drillships were estimated at $35,000 and $50,000, respectively, for the year ended December 31, 2015.

Long Lived Assets Held for Sale

(q)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.

If circumstances arise that previously were considered unlikely and, as a result, the Company decides not to sell a long-lived asset previously classified as held for sale, the asset shall be reclassified as held and used. A long-lived asset that is reclassified shall be measured individually at the lower of its carrying amount before the asset or disposal group was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the asset or disposal group been continuously classified as held and used and its fair value at the date of the subsequent decision not to sell.

When the Company concludes a Memorandum of Agreement for the disposal of a vesselwhich has yet to complete a time charter, it is considered that the held for sale criteria discussed in guidance are not met until the time charter has been completed as the vesselis not available for immediate sale. As a result, such vesselsare not classified as held for sale.

When the Company concludes a Memorandum of Agreement for the disposal of a vesselwhich has no time charter 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 vesselsare 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.

For the years ended December 31, 2015 and 2016, the Company recognized such charges amounting to $967,144 and $13,395 (including a gain of $1,851 due to the reclassification of the drybulk vessels as held and used, effective December 31, 2016), respectively, included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”, in the accompanying consolidated statement of operations (Notes 6 and 11). For the year ended December 31, 2017, the Company had its entire fleet as held and used.

Impairment of Long-Lived Assets

(r)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 by obtaining vessel independent 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, vesselsales 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’future performance, with the significant assumptions being related to charter rates, fleet utilization, operating expenses, capital expenditures, residual value and the estimated remaining useful life of each vessel. 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 vesseland compares them to their carrying value. The projected net operating cash flows are determined by considering the charter revenues from existing time charters 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 of drybulk, tanker and gas carrier vessels based on the most recent ten year historical rates for similar vessels, adjusted for any outliers, and utilizing available market data for time charter and spot market rates and forward freight agreements and for offshore support vessels based on available market data, over the remaining estimated life of the vessel, net of brokerage commissions, expected outflows for vessels’maintenance and operating expenses (including planned drydocking and special survey expenditures), assuming an average annual inflation rate based on the global consumer price index (“CPI”) changes and fleet utilization of 99% decreasing by 1.5% every five years after the first ten years. The salvage value used in the impairment test is estimated to be $250 per light weight ton (LWT) for vessels, 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 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’scarrying value.

As a result of the impairment review performed during 2015 and prior to the entering into the agreements for the sale of the Company’s vessels and vessel owning companies, indicated that the carrying amount of one of its drybulk vessels was not recoverable and, therefore, a charge of $83,937 was recognized and included in “Impairment loss (gain)/loss from sale of vessels and vessel owning companies and other “, in the accompanying consolidated statement of operations.

Also, the impairment review for the year ended December 31, 2016, indicated that the carrying amount of the offshore support vessels’ was not recoverable and, therefore, a charge of $65,712 was recognized and included in “Impairment loss, (gain)/loss from sale of vessels and vessel owning companies and other”, in the accompanying consolidated statement of operations (Note 6). As a result of the impairment review for the year ended December 31, 2017, the Company determined that the carrying amounts of its vessels were recoverable and, therefore, concluded that no impairment loss was necessary for 2017.

Dry-docking Costs

(s)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 and drilling units.

Class Costs

(t)Class costs: The Company follows the direct expense method of accounting for periodic class costs incurred during special surveys of drilling units, normally every five years. Class costs and other maintenance costs are expensed in the period incurred and included in “Vessels’ and drilling units’ operating expenses”.

Deferred Financing Costs

(u)Deferred financing costs: Deferred financing costs include fees, commissions and legal expenses associated with the Company’s long- term debt. The Company’s policy is in accordance with ASU 2015-03 “Simplifying the Presentation of Debt Issuance Costs”, issued in April 2015. The Company presents such costs in the balance sheet as a direct deduction from the related debt liability. 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. Amortization and write offs for each of the years ended December 31, 2015, 2016 and 2017, amounted to $23,834, $572 and $387 respectively (Note 15).

Non-monetary Transactions - Exchange of the capital stock of an entity for nonmonetary assets or services

(v)Non-monetary transactions - Exchange of the capital stock of an entity for nonmonetary assets or services: Non-monetary transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any difference between the fair value and the transaction price is considered as gain or loss for the Company. The Company determines fair value of assets and liabilities given up or received in accordance with ASC 820 “Fair Value Measurement”. In cases of transactions related to an exchange of preferred shares with common ones, any difference between the fair value and the carrying value of the exchanged preferred shares is considered as shareholders dividend or capital contribution from/to the Company.

Extinguishment of Preferred Stock

(w)Extinguishment of Preferred Stock: In case of preferred stock extinguishment, the difference between the fair value of the consideration transferred to the holders of the preferred stock and the carrying amount of the preferred stock in the Company’s balance sheet (net of issuance costs) should be subtracted from (or added to) net income/loss to arrive at income/loss available to common stockholders in the calculation of earnings/loss per share. The difference between the fair value of the consideration transferred to the holders of the preferred stock and the carrying amount of the preferred stock in the Company’s balance sheet represents a return to (from) the preferred stockholder that should be treated in a manner similar to the treatment of dividends paid on preferred stock.

Revenue and Related Expenses

(x)Revenue and related expenses:

(i)Drybulk carrier, tanker, gas carrier and offshore support 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. Revenues related to mobilization and direct incremental expenses of mobilization are initially deferred and recognized as revenues and expenses, over the duration of the time charter agreements, and to the extent that expenses exceed revenue to be recognized, they are expensed as incurred.

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.

Profit Sharing agreements: Profit-sharing revenues are calculated at an agreed percentage of the excess of the charterer’s average daily income over an agreed amount and accounted for on an accrual basis based on provisional amounts and for those contracts that provisional accruals cannot be made due to the nature of the profit share elements, these are accounted for on the actual cash settlement.

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. Commissions are either paid for by the Company or are deducted from the hire revenue. 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. 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 units:

Revenues: The Company’s services and deliverables, regarding its drilling units, were generally sold based upon contracts with its customers that included fixed or determinable prices. The Company recognized revenue when delivery occurred, as directed by its customer, and collectability was reasonably assured. The Company evaluated if there were multiple deliverables within its contracts and whether the agreement conveyed the right to use the drilling units for a stated period of time and met the criteria for lease accounting, in addition to providing a drilling services element, which was generally compensated for by day rates. In connection with drilling contracts, the Company could also receive revenues for preparation and mobilization of equipment and personnel or for capital improvements to the drilling units and day rate or fixed price mobilization and demobilization fees. Revenues were 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 was recognized in the period during which the services were rendered at the rates established in the contracts. All mobilization revenues, direct incremental expenses of mobilization and contributions from customers for capital improvements were initially deferred and recognized as revenues and expenses, as applicable, over the estimated duration of the drilling period. To the extent that mobilization expenses exceeded revenue to be recognized, they were expensed as incurred. Demobilization revenues and expenses were recognized over the demobilization period. All revenues for well contracts were 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 determined whether the arrangement was a multiple element arrangement containing both a lease element and drilling services element. For revenues derived from contracts that contained a lease, the lease elements were recognized as “Leasing revenues” in the consolidated statement of operations on a basis approximating straight line over the lease period. The drilling services element was recognized as “Service revenues” in the period in which the services were rendered at estimated fair value. Revenues related to the drilling element of mobilization and direct incremental expenses of drilling services were deferred and recognized over the estimated duration of the drilling period. To the extent that expenses exceeded revenue to be recognized, they were expensed as incurred. Demobilization fees and expenses were recognized over the demobilization period. Contributions from customers for capital improvements were initially deferred and recognized as revenues over the estimated duration of the drilling contract.

Earnings/(loss) per Common Share

(y) 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

(z)Segment reporting: The Company determined that currently it operates under four 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 offshore support services to the global offshore energy industry (offshore support segment), as a provider of transportation services for crude and refined petroleum cargoes (tanker segment) and as a provider of transportation services for liquefied gas cargoes (gas carrier segment). The Company operated also as a provider of ultra-deep water drilling services (drilling segment) until the deconsolidation of Ocean Rig on June 8, 2015. 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

(aa)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 was party to interest swap agreements where it received a floating interest rate and paid a fixed interest rate for a certain period. All of the Company’s interest swap agreements were either matured or terminated during the year ended December 31, 2016. 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

(ab)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 11).

Stock-based Compensation

(ac)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 13). In March 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation – Improvements to Employee Share-Based Payment Accounting (Topic 718)” (“ASU 2016-09”), which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, all excess income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, however early adoption is permitted. The Company has adopted the provisions of ASU 2016-09, which did not impact its consolidated financial statements and notes disclosures.

Income Taxes

(ad)Income taxes: Income taxes are provided for based upon the tax laws and rates in effect in the countries in which the Company’s drilling and ocean going cargo vessels’ operations were conducted and income was 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. For the taxable year ending December 31, 2017, the Company did not qualify for an exemption from United States taxation on its U.S. source shipping. As a result, its U.S. source shipping income is subject to a 2% - 4% tax impose without allowance for deductions (Note 18).

Commitments and Contingencies

(ae)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.

Investments in Affiliates

(af)Investments in Affiliates: Affiliates are entities over which the Company generally has between 20% and 50% of the voting rights, or over which the Company has significant influence, but over which it does not exercise control. Investments in these entities are accounted for by the equity method of accounting. Under this method the Company records an investment in the stock of an affiliate at cost or at fair value in case of a retained investment in the common stock of an investee in a deconsolidation transaction, and adjusts the carrying amount for its share of the earnings or losses of the affiliate subsequent to the date of investment and reports the recognized earnings or losses in income. Dividends received from an affiliate reduce the carrying amount of the investment. When the Company’s share of losses in an affiliate equals or exceeds its interest in the affiliate, the Company does not recognize further losses, unless the Company has incurred obligations or made payments on behalf of the affiliate.

At each reporting date, the Company performs an assessment in order to identify and account for any other than temporary impairment in its investment in affiliates. Specifically, the Company assesses factors indicating that a decline in the value of an investment is other-than-temporary and that a write-down of the carrying amount is required and concludes whether the impairment is other than temporary and then measures and recognizes the respective impairment charge as the difference between the carrying value and the fair value of the equity investment. In accordance with ASC 825-10 entities are allowed to elect to measure certain financial assets and financial liabilities (as well as certain non-financial instruments that are similar to financial instruments) at fair value. Equity method investments are eligible for the fair value option.

If the fair value option is applied to an investment that would otherwise be accounted for under the equity method, ASC 825-10-25-7 requires that the fair value option be applied to all of the investor’s eligible interests in that investee. The fair value option election is non-revocable even if the Company loses significant influence over the investee. Under the fair value model, an investment in an affiliate is recognized initially at the fair value at the transaction date and at each reporting date, an investor shall measure its investments in affiliates at fair value, with changes recognized in profit or loss.

Affiliates included in the financial statements: In the Company’s consolidated financial statements, the following

1. Ocean Rig and its subsidiaries, accounted for under the equity method from June 8, 2015 through April 4, 2016, (ownership interest as of April 4, 2016, was 40.4%); and
2. Heidmar, a global tanker pool operator, accounted for under the fair value option from August 29, 2017 (ownership interest is 49%).

Accounting for Transactions under Common Control

(ag)Accounting for transactions under common control: A common control transaction is any transfer of net assets or exchange of equity interests between entities or businesses that are under common control by an ultimate parent or controlling shareholder before and after the transaction. Common control transactions may have characteristics that are similar to business combinations but do not meet the requirements to be accounted for as business combinations because, from the perspective of the ultimate parent or controlling shareholder, there has not been a change in control over the acquiree. Due to the fact common control transactions do not result in a change in control at the ultimate parent or controlling shareholder level, the Company does not account for that at fair value. Rather, common control transactions are accounted for at the carrying amount of the net assets or equity interests transferred.

Troubled Debt Restructurings

(ah)Troubled Debt Restructurings: A restructuring of a debt constitutes a troubled debt restructuring if the lender or creditor for economic or legal reasons related to the Company’s financial difficulties grants a concession to the Company that it would not otherwise consider. Troubled debt that is fully satisfied by foreclosure, repossession, or other transfer of assets or by grant of equity securities by the Company is included in the term troubled debt restructuring and is accounted as such.

The Company, when issuing or otherwise granting an equity interest to a lender or creditor to settle fully a payable or debt, accounts for the equity interest granted at its fair value. The difference between the fair value of the equity interest granted and the carrying amount of the payable or debt settled is recognized as a gain on restructuring of payables or debt. Legal fees and other direct costs incurred in granting an equity interest to a creditor reduce the fair value of the equity interest issued. All other direct costs incurred in connection with a troubled debt restructuring are charged to expense as incurred.

Recent accounting pronouncements

(ai)Recent accounting pronouncements:

Leases: In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842), which requires lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The Company is currently analyzing the impact of the adoption of this new standard.

Revenue from Contracts with Customers: In May 2016, the FASB issued their final standard on revenue from contracts with customers. The standard, which was issued as ASU 2014-09 (Topic 606) by the FASB, and as amended, outlines a single comprehensive model for entities to use in accounting for revenue from contracts with customers and supersedes most legacy revenue recognition guidance. The core principle of the guidance in Topic 606, is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services by applying the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in each contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in each contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The standard is effective for public business entities from annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The new revenue standard may be applied using either of the following transition methods: (1) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (2) a modified retrospective approach with the cumulative effect of initially adopting the standard recognized at the date of adoption (which includes additional footnote disclosures). Regarding the incremental costs of obtaining a contract with a customer and contract’s fulfilling costs, they should be capitalized and been amortized over the voyage duration, if certain criteria are met – for incremental costs if only they are chargeable to the customer and for contract’s fulfilling costs if each of the following criteria is met: (i) they relate directly to the contract, (ii) they generate or enhance entity’s resources that shall be used in performance obligation satisfaction and (iii) are expected to be recovered. Further, in case of incremental costs, entities may elect not to capitalize them in cases of amortization period (voyage period) is less than one year.

On January 1, 2018, the Company adopted the aforementioned ASU, using the modified retrospective method. As a result, the commencement date of each voyage charter shall deem to be upon the loading of the current cargo, decreasing the duration of the voyages. Further, the related incremental costs (i.e. commissions) shall continue to be expensed as incurred but over the new duration of each voyage, as Company’s voyages are less than one year. Regarding voyage expenses, either during the voyage or the ballast period, no change in Company’s accounting policy shall occur, as the three criteria are not met collectively. Regarding time charter and profit sharing contracts, no material changes related to Company’s accounting policies were identified. As of December 31, 2017, four of the Company’s vessels operate under voyage charter. The effect of the change in the voyage period due to the adoption of the new accounting standard will result to a cumulative adjustment of $1,264 in the opening balance of Company’s accumulated deficit for the fiscal year 2018.

Financial Instruments: In January 2016, the FASB issued ASU No. 2016-01– Financial Instruments - Overall (Subtopic 825-10). ASU 2016-01, changes how public companies will recognize, measure, present and make disclosures about certain financial assets and financial liabilities. For public business entities, ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted. The Company is evaluating the above pronouncement. The adoption of this pronouncement is not expected to have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13– Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities.For public entities, the amendments of this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.Early application is permitted. The Company is in the process of assessing the impact of the provisions of this guidance on the Company’s consolidated financial position and performance.

Statement of Cash Flows: In August 2016, the FASB issued ASU No. 2016-15- Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments which addresses certain cash flow issues with the objective of reducing the existing diversity in practice: ASU 2016-15 is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period, however early adoption is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on its consolidated financial statements and notes disclosures. In November 2016, the FASB issued ASU No. 2016-18—Statement of Cash Flows (Topic 230) - Restricted Cash, which addresses the requirement that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update apply to all entities that have restricted cash or restricted cash equivalents and are required to present a statement of cash flows under Topic 230. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period, however early adoption is permitted. The Company is currently evaluating the provisions of this guidance and assessing its impact on its consolidated statement of cash flows.

Business combinations – Definition of a business:In January 2017, the FASB issued ASU No. 2017-01 – Business Combinations (Topic 805) – Clarifying the Definition of a Business which addresses business combination issues with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period. The Company is currently evaluating the provisions of this guidance and assessing its impact on its consolidated financial statements and notes disclosures.

XML

Basis of Presentation and General Information (Tables)

12 Months Ended

Dec. 31, 2017

Basis of Presentation and General Information

Schedule of Revenue by Major Charterer

	Year ended December 31,
	2015		2016		2017
Customer A - Drilling segment		12%		-		-
Customer B - Drilling segment		14%		-		-
Customer C - Drilling segment		11%		-		-
Customer D - Drilling segment		10%		-		-
Customer E - Drilling segment		10%		-		-
Customer F - Drilling segment		10%		-		-
Customer G – Offshore support segment		-		37%		-

XML

Transactions with Related Parties (Tables)

12 Months Ended

Dec. 31, 2017

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

		December 31,
		2016	2017
Balance Sheet
Due from related parties	$	6,674	$	16,914
Due from related parties (current) - Total		6,674		16,914
Due to related parties		(5,033)		(72)
Due to related parties (current) - Total	$	(5,033)	$	(72)
Due to related parties		(116,617)		(71,631)
Due to related parties (non - current) - Total	$	(116,617)	$	(71,631)
Advances for vessels under construction and related costs		-		1,004
Accrued liabilities	$	(1,082)	$	(350)

	Year ended December 31,
Statement of Operations	2015		2016		2017
Time charter & Service Revenues – commission fees	$	7,366	$	1,800	$	3,988
Voyage expenses		(4,521)		(390)		(1,526)
General and administrative expenses		(50,498)		(32,397)		(23,850)
Commissions for assets sold		(8,133)		(886)		(85)
Gain/(loss) from sale of vessel owning companies, net of commissions		-		(22,318)		-
Interest and finance costs		(3,679)	$	(1,789)		(13,070)
Loss on Private Placement	$	-		-	$	(7,600)

(Per day and per quarter information in the note below is expressed in United States Dollars/Euros)

XML

Other Current assets (Tables)

12 Months Ended

Dec. 31, 2017

Other Assets [Abstract]

Other Current Assets

	December 31,
	2016		2017
Inventories	$	3,446	$	7,790
Insurance claims (Note 14)		1,071		3,044
Other		29		1,445
Other current assets	$	4,546	$	12,279

XML

Advances for Vessels under Construction (Tables)

12 Months Ended

Dec. 31, 2017

Advances for Vessels under Construction [Abstract]

Advances for Vessels and Drilling Units under Construction and Acquisitions

	December 31,
	2016		2017
Balance at beginning of year	$	-	$	-
Advances for vessels under construction and related costs		-		265,565
Vessels delivered		-		(233,667)
Balance at end of year	$	-	$	31,898

XML

Vessels, net (Tables)

12 Months Ended

Dec. 31, 2017

Vessels, net [Abstract]

Vessels

	Cost		Accumulated Depreciation		Net Book Value
Balance, December 31, 2015	$	97,100		(672)	$	96,428
Vessels transferred from held for sale		66,449		-		66,449
Impairment loss		(67,999)		4,138		(63,861)
Depreciation		-		(3,466)		(3,466)
Balance, December 31, 2016	$	95,550		-	$	95,550
Additions		672,300		-		672,300
Vessels sold		(3,900)		104		(3,796)
Depreciation		-		(14,966)		(14,966)
Balance, December 31, 2017	$	763,950	$	(14,862)	$	749,088

XML

Other Non-Current Assets (Tables)

12 Months Ended

Dec. 31, 2017

Other Non-Current Assets [Abstract]

Other Non-Current Assets

	December 31,
	2016			2017
Other non-current assets		$	-		$	44,869
		$	-		$	44,869

XML

Long-term Debt (Tables)

12 Months Ended

Dec. 31, 2017

Long-term Debt [Abstract]

Long-term Debt

	December 31,
	2016		2017
Secured Credit Facilities - Drybulk Segment	$	16,935	$	-
Secured Credit Facilities - Gas Carrier Segment		-		147,716
Less: Deferred financing costs		(124)		(2,378)
Total debt		16,811		145,338
Less: Current portion		(16,811)		(11,635)
Long-term portion	$	-	$	133,703

Loan Movements for Credit Facilities and Term Loans Throughout the Year

Loan	Loan agreement date	Original Amount		December 31, 2016		New Loans		Repayments		December 31, 2017
Secured Credit Facility	March 19, 2012	$	19,065	$	14,935		-		(14,935)	$	-
Secured Credit Facility	June 20, 2008		103,200		2,000		-		(2,000)		-
Secured Credit Facility	June 22, 2017		150,000		-		150,000		(2,284)		147,716
				$	16,935		150,000		(19,219)	$	147,716

Principal Payments

Due through December 31, 2018	$	12,179
Due through December 31, 2019		12,179
Due through December 31, 2020		12,180
Due through December 31, 2021		12,180
Due through December 31, 2022		12,180
Thereafter		86,818
Total principal payments		147,716
Less: Financing fees		(2,378)
Total debt	$	145,338

XML

Financial Instruments and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2017

Financial Instruments and Fair Value Measurements [Abstract]

Effect of Derivative Instruments on the Consolidated Statements of Operations

		Amount of Gain/(Loss)
		Year Ended December 31,
Derivatives not designated as hedging instruments	Location of Gain or (Loss) Recognized	2015			2016			2017
Interest rate swaps	Gain/(Loss) on interest rate swaps		$	(11,601)		$	403		$	-
Total			$	(11,601)		$	403		$	-

Fair Value, Assets Measured on a Recurring and Non-Recurring Basis

The following table summarizes the valuation of assets and liabilities measured at fair value on a recurring basis as of December 31, 2017.

	Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Recurring measurements:
Investment in affiliate – Heidmar (Note 9)	$	-	$	-	$	34,000
Total	$	-	$	-	$	34,000

The following table summarizes the valuation of assets measured at fair value on a non-recurring basis as of December 31, 2016.

	Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1)			Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)
Non-Recurring measurements:
Long-lived assets held and used		$	-		$	95,550		$	-
Total		$	-		$	95,550		$	-

XML

Common Stock and Additional Paid-in Capital (Tables)

12 Months Ended

Dec. 31, 2017

Common Stock and Additional Paid-in Capital

Net Loss Attributable to Dryships Inc. and Transfers to the Non-controlling Interest

	Year Ended December 31,
	2015		2016		2017
Net loss attributable to Dryships Inc.	$	(2,847,061)	$	(198,686)	$	(42,544)
Transfers to the non-controlling interest:
Decrease in Dryships Inc. equity for reduction in subsidiary ownership		(49,444)		-		-
Net transfers to the non-controlling interest		(49,444)		-		-
Net loss attributable to Dryships Inc. and transfers to/from the non-controlling interest	$	(2,896,505)	$	(198,686)	$	(42,544)

XML

Interest and Finance Costs (Tables)

12 Months Ended

Dec. 31, 2017

Interest and Finance Costs [Abstract]

Interest and Finance Costs

	Year ended December 31,
	2015		2016		2017
Interest incurred on long-term debt	$	150,061	$	6,164	$	1,499
Interest, amortization and write off of financing fees on loan from affiliate and related party		3,642		1,563		15,239
Amortization and write-off of financing fees		23,834		572		387
Discount on receivable from drilling contract		4,048		-		-
Commissions, commitment fees and other financial expenses and related party		2,607		558		778
Capitalized interest and finance costs		(12,060)		-		(3,196)
Total	$	172,132	$	8,857	$	14,707

XML

Segment Information (Tables)

12 Months Ended

Dec. 31, 2017

Segment Information

Reporting Information by Segment

	Drybulk Segment			Offshore Support Segment					Drilling Segment	Tanker Segment				Gas Carrier Segment	Other	TOTAL
	2015	2016	2017		2015	2016	2017	2015		2015	2016	2017	2017		2017	2015		2016			2017
Revenues	$   115,598	$ 30,777	$ 65,723		$8,118	$21,157	$3,819	$725,805		$120,304	$   -	$20,858	$ 10,316		$    -		$969,825			$51,934		$100,716
Vessels and drilling units operating expenses	(87,704)	(30,969)	(40,024)		(3,977)	(14,587)	(4,749)	(259,623)		(19,770)	(7)	(8,830)	(5,745)		-		(371,074)			(45,563)		(59,348)
Depreciation and amortization	(65,607)	-	(7,326)		(672)	(3,466)	(950)	(155,352)		(6,021)	-	(4,652)	(2,038)		-		(227,652)			(3,466)		(14,966)
Goodwill impairment	-	-	-		-	(7,002)	-	-		-	-	-	-		-		-			(7,002)		-
Loss on contract cancellation	(28,241)	-	-		-	-	-	-		-	-	-	-		-		(28,241)			-		-
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other	(1,000,485)	(35,470)	4,425		-	(70,873)	(300)	-		(56,631)	-	-	-		-		(1,057,116)		(	106,343)		4,125
General and administrative expenses	(44,519)	(29,822)	(19,095)		(2,858)	(9,849)	(7,677)	(46,989)		(10,546)	(37)	(2,384)	(1,816)		-		(104,912)			(39,708)		(30,972)
Gain/(loss) on interest rate swaps	567	(917)	-		-	-	-	9,588		1,446	514	-	-		-		(11,601)			403		-
Gain on debt restructuring	-	10,477	-		-	-	-	-		-	-	-	-		-		-			10,477		-
Income taxes	-	-	(56)		(188)	(38)	(20)	(36,931)		-	-	-	(76)		-		(37,119)			(38)		(152)
Net income/(loss)	(1,180,056)	(69,966)	(23,676)		(2,711)	(86,553)	(13,322)	(1,601,451)		(23,868)	(713)	(4,492)	(1,054)		-		(2,808,086)			(198,686)		(42,544)
Net income/(loss) attributable to Dryships Inc.	(1,180,056)	(69,966)	(23,676)		(2,657)	(86,553)	(13,322)	(1,640,480)		(23,868)	(713)	(4,492)	(1,054)		-		(2,847,061)			(198,686)		(42,544)
Interest and finance cost	(45,321)	(8,706)	(13,476)		(105)	(93)	(24)	(123,463)		(8,766)	(58)	(4)	(1,203)		-		(177,655)			(8,857)		(14,707)
Interest income	76	66	1,310		2	13	25	5,954		18	2	-	30		-		6,050			81		1,365
Change in fair value of derivatives (gain)/loss	(10,768)	(1,957)	-		(6)	-	-	349		(422)	(236)	-	-		-		(10,848)			(2,193)		-
Total assets	$ 342,287	$ 162,532	$ 348,657		$ 131,124	$ 31,191	$ 26,871	$ -		$ 2,641	$ 7	$ 202,543	$322,854		$34,000		$ 476,052			$ 193,730		$934,925

Segment Information Reconciliation

	December 31, 2015			December 31, 2016			December 31, 2017
Interest and finance costs
Interest for reportable segments			177,655			8,857		14,707
Elimination of intersegment interest			(5,523)			-		-
Total consolidated Interest and finance costs		$	172,132		$	8,857	$	14,707
Interest income
Interest for reportable segments			6,050			81		1,365
Elimination of intersegment interest			(5,523)			-		-
Total consolidated Interest income		$	527		$	81	$	1,365

Revenue per Country

Country	Year ended December 31, 2015
Congo	$	31,807
Norway		101,584
Brazil		253,283
Ivory Coast		12,065
Angola		275,410
Falkland		51,656
Total leasing and service revenues	$	725,805

	Year ended December 31,
Country			2015		2016		2017
Brazil			8,118		19,312		5,018
Europe			-		1,800		-
Total revenues		$	8,118	$	21,112	$	5,018

XML

Losses per share (Tables)

12 Months Ended

Dec. 31, 2017

Losses per Share [Abstract]

Losses per Share

	Year ended December 31,
	2015							2016									2017
	Loss (numerator)		Weighted- average number of outstanding shares (denominator)		Amount per share			Loss (numerator)		Weighted- average number of outstanding share (denominator)		Amount per share		Loss (numerator)			Weighted- average number of outstanding shares (denominator)		Amount per share
Net loss attributable to DryShips Inc.	$	(2,847,061)		-	$	-		$	(198,686)		-	$	-		$	(42,544)		-	$	-
Plus: Contribution from Series D Preferred Stock		-		-		-			-		-		-			2,805		-		-
-Less: Convertible Preferred stock dividends		-		-		-			(7,695)		-		-			-		-		-
-Less: Non-vested common stock dividends declared and undistributed earnings		(570)		-		-			-		-		-			-		-		-
Basic LPS
Loss available to common stockholders	$	(2,847,631)		57	$	(49,958,438.60	)	$	(206,381)		453	$	(455,587.20)		$	(39,739)		35,225,784	$	(1.13)
Dilutive effect of securities
Diluted LPS
Loss available to common stockholders	$	(2,847,631)		57	$	(49,958,438.60	)	$	(206,381)		453	$	(455,587.20)		$	(39,739)		35,225,784	$	(1.13)

XML

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Taxes [Abstract]

Schedule of Income Before Income Tax Domestic and Foreign

	Year ended December 31, 2015
Domestic income / (loss) (Republic of the Marshall Islands)	$               90,181
Foreign income	42,277
Total income before taxes	$              132,458

Schedule of Components of Income Tax Expense Benefit

	Year ended December 31, 2015
Current Tax expense	$	37,119
Income taxes	$	37,119
Effective tax rate		28.0%

Schedule Reconciliation Total Tax Expense

Reconciliation of total tax expense:	Year ended December 31, 2015
Income tax		$	37,119
Taxes on litigation matters subject to statutory rates, including interest and penalties			-
Total		$	37,119

XML

Basis of Presentation and General Information (Table) (Details)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Customer A - Drilling segment
Major customer revenue percentage		12.00%
Customer B - Drilling segment
Major customer revenue percentage		14.00%
Customer C - Drilling segment
Major customer revenue percentage		11.00%
Customer D - Drilling segment
Major customer revenue percentage		10.00%
Customer E - Drilling segment
Major customer revenue percentage		10.00%
Customer F - Drilling segment
Major customer revenue percentage		10.00%
Customer G - Offshore support segment
Major customer revenue percentage	37.00%

XML

Basis of Presentation and General Information (Details)	1 Months Ended	2 Months Ended	3 Months Ended	4 Months Ended	6 Months Ended	7 Months Ended		10 Months Ended
	Jan. 23, 2017	Mar. 11, 2016	Apr. 11, 2017	May 11, 2017	Jun. 22, 2017	Jul. 21, 2017	Aug. 15, 2016	Nov. 01, 2016	Aug. 29, 2017	Apr. 05, 2016	Apr. 04, 2016	Jun. 08, 2015
Stockholders' Equity, Reverse Stock Split	1-for-8 reverse stock split of the Company's common shares, with which four fractional shares were cashed out	1-for-25 reverse stock split of the Company's common shares, with which seven fractional shares were cashed out	1-for-4 reverse stock split of the Company's common shares, with which two fractional shares were cashed out	1-for-7 reverse stock split of the Company's common shares, with which three fractional shares were cashed out	1-for-5 reverse stock split of the Company's common shares, with which two fractional shares were cashed out	1-for-7 reverse stock split of the Company's common shares, with which two fractional shares were cashed out	1-for-4 reverse stock split of the Company's common shares, with which five fractional shares were cashed out	1-for-15 reverse stock split of the Company's common shares, with which nine fractional shares were cashed out
Heidmar Holdings LLC
Ownership interest									49.00%
Ocean Rig
Ownership interest										0.00%	40.40%	47.20%

XML

Significant Accounting Policies (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Aug. 29, 2017	Apr. 05, 2016	Apr. 04, 2016	Jun. 08, 2015
Schedule of Equity Method Investments [Line Items]
Goodwill impairment			$ 0	$ (7,002,000)	$ 0
Capitalized interest and finance costs			$ 3,196,000	0	12,060,000
Depreciation method			straight-line
Estimated residual value of vessels per lightweight ton			$ 250
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other			$ 4,125,000	(106,343,000)	(1,057,116,000)
Fleet Utilization Assumption			99.00%
Decrease of Fleet utilization			1.50%
Amortization and write off of financing costs			$ 387,000	572,000	23,834,000
Number of Reportable Segments			4
Gain due to foreign currency differences			$ 335,000	745,000	2,763,000
Working capital surplus/ (deficit)			37,505,000
Cash and cash equivalents including restricted cash			30,226,000
Total revenues			100,716,000	51,934,000	969,825,000
Effect of the change in accounting estimate
Schedule of Equity Method Investments [Line Items]
Total revenues			$ (1,264,000)
Heidmar Holdings LLC
Schedule of Equity Method Investments [Line Items]
Ownership interest						49.00%
Voyage charter
Schedule of Equity Method Investments [Line Items]
Number of vessels			4
Offshore Support Segment
Schedule of Equity Method Investments [Line Items]
Goodwill impairment			$ 0	(7,002,000)	0
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other			$ (300,000)	(70,873,000)	0
Minimum
Schedule of Equity Method Investments [Line Items]
Effective tax rate			2.00%
Maximum
Schedule of Equity Method Investments [Line Items]
Effective tax rate			4.00%
Drybulk and Tanker Carrier Vessels
Schedule of Equity Method Investments [Line Items]
Useful life			25 years
Drybulk Carrier Vessels
Schedule of Equity Method Investments [Line Items]
Gain on reclassification of vessels				$ 1,851,000
Number of vessels				13
Offshore Support Vessels
Schedule of Equity Method Investments [Line Items]
Useful life			30 years
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other				$ (65,712,000)
Very Large Gas Carriers (VLGCs)
Schedule of Equity Method Investments [Line Items]
Useful life			35 years
Bare Deck
Schedule of Equity Method Investments [Line Items]
Useful life			30 years
Other Asset Parts | Minimum
Schedule of Equity Method Investments [Line Items]
Useful life			5 years
Other Asset Parts | Maximum
Schedule of Equity Method Investments [Line Items]
Useful life			15 years
One of its drybulk vessels
Schedule of Equity Method Investments [Line Items]
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other					(83,937,000)
Vessels held for sale
Schedule of Equity Method Investments [Line Items]
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other	$ (18,266,000)	$ (113,019,000)		$ (13,395,000)	(967,144,000)
Drilling rigs
Schedule of Equity Method Investments [Line Items]
Residual value		35,000,000			35,000,000
Drillships
Schedule of Equity Method Investments [Line Items]
Residual value		$ 50,000,000			$ 50,000,000
Ocean Rig
Schedule of Equity Method Investments [Line Items]
Ownership interest							0.00%	40.40%	47.20%

XML

Transactions with Related Parties - Balance Sheet (Table) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Due from related parties (current)	$ 16,914	$ 6,674
Due to related parties (current)	(72)	(5,033)
Due to related parties (non-current)	(71,631)	(116,617)
Advances for vessels under construction and related costs	31,898	0
Accrued liabilities	(4,758)	(3,709)
Related parties
Due from related parties (current)	16,914	6,674
Due to related parties (current)	(72)	(5,033)
Due to related parties (non-current)	(71,631)	(116,617)
Advances for vessels under construction and related costs	1,004	0
Accrued liabilities	$ (350)	$ (1,082)

XML

Transactions with Related Parties - Statement of Operations (Tables) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Voyage expenses	$ (19,704)	$ (9,209)	$ (65,286)
General and administrative expenses	(30,972)	(39,708)	(104,912)
Interest and finance costs	(15,239)	(1,563)	(3,642)
Loss on Private Placement	(7,600)	0	0
Related parties
Time charter & Service Revenues - commission fees	3,988	1,800	7,366
Voyage expenses	(1,526)	(390)	(4,521)
General and administrative expenses	(23,850)	(32,397)	(50,498)
Commissions for assets sold	(85)	(886)	(8,133)
Gain/(loss) from sale of vessel owning companies, net of commissions	0	(22,318)	0
Interest and finance costs	(13,070)	(1,789)	(3,679)
Loss on Private Placement	$ (7,600)	$ 0	$ 0

XML

Transactions with Related Parties - TMS Bulkers Ltd - TMS Offshore Services Ltd - TMS Tankers Ltd - TMS Cardiff Gas Ltd (Details)	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2017 EUR (€)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
General and administrative expenses	$ 30,972,000		$ 39,708,000	$ 104,912,000
Termination cost	$ 0		0	$ (28,241,000)
Management Agreement
Management agreement term	5 years	5 years
Termination cost	$ 50,000,000
Contract termination or Change of Control
Management fee extra period	3 months	3 months
Change of control | Minimum
Termination payment period of fees	36 months	36 months
Change of control | Maximum
Termination payment period of fees	48 months	48 months
Tms Bulkers and Tms Offshore | New TMS Agreement
Construction supervisory fee	10.00%	10.00%
Extra superintendents fee per day	$ 598	€ 500
Commissions on charter hire agreements	1.25%	1.25%
Commission on purchase or sale price of vessels	1.00%	1.00%
Performance Bonus			6,000,000
Setup Fee			$ 2,000,000
Financing and advisory commission	0.50%	0.50%
Consultancy agreement terms in year	10 years	10 years
Tms Bulkers and Tms Offshore | New TMS Agreement | Minimum
Annual management fee adjustment	3.00%	3.00%
Tms Bulkers and Tms Offshore | New TMS Agreement | Maximum
Annual management fee adjustment	5.00%	5.00%
Performance fees	$ 20,000,000
Tms Bulkers and Tms Offshore | New TMS Agreement | Up to 20 vessels
Management fixed fee per vessel per day	$ 1,643
Reduction in Management Fees	33.00%	33.00%
Tms Bulkers and Tms Offshore | New TMS Agreement | Above 20 vessels
Management fixed fee per vessel per day	$ 1,500
TMS Bulkers Ltd. | New TMS Agreement | Minimum
Number of vessels acquired	20	20

XML

Transactions with Related Parties - Economou and Other (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 shares	May 15, 2017 USD ($)	Apr. 06, 2017 USD ($)	Apr. 03, 2017	Mar. 10, 2017 USD ($)	Jan. 19, 2017 USD ($)	Jan. 12, 2017	Dec. 31, 2016 shares	Sep. 09, 2015	Apr. 30, 2015
Common stock shares outstanding | shares	104,274,708							4,711
Very Large Gas Carrier 1 (VLGC)
Time Charter Agreement Duration	5 years
Very Large Gas Carrier 2 (VLGC)
Time Charter Agreement Duration	5 years
Very Large Gas Carrier 3 (VLGC)
Time Charter Agreement Duration	10 years
Very Large Gas Carrier 4 (VLGC)
Time Charter Agreement Duration	10 years
Suezmax newbuilding vessel Samsara
Time Charter Agreement Duration	5 years
Purchase price | $		$ 64,000
Chairman and CEO
Common stock shares outstanding | shares	72,421,515
Percentage Of Shareholder	69.50%
Chairman and CEO | SPII Holdings Inc.
Common stock shares outstanding | shares	12,000,000
Chairman and CEO | Sierra Investments Inc.
Common stock shares outstanding | shares	45,876,061
Chairman and CEO | Mountain Investments Inc.
Common stock shares outstanding | shares	14,545,454
Cardiff LNG Ships Ltd.
Percentage Of Shareholder				100.00%
Cardiff LPG Ships Ltd.
Percentage Of Shareholder				100.00%
Ten Memoranda of Agreements | Suezmax tankers
Number of vessels										4
Ten Memoranda of Agreements | Aframax tankers
Number of vessels										6
Sales Agreements
Number of vessel owning companies									14
Sales Agreements | Capesize
Number of vessels									10
Sales Agreements | Panamax carriers
Number of vessels									4
Sales Agreements | Capesize bulk carriers
Number of vessels									3
LPG Option Agreement | Very Large Gas Carriers (VLGCs)
Number of options for purchase of vessels							4
LPG Option Agreement | Very Large Gas Carrier 1 (VLGC)
Number of vessels						1
Purchase price | $						$ 83,500
LPG Option Agreement | Very Large Gas Carrier 2 (VLGC)
Number of vessels					1
Purchase price | $					$ 83,500
LPG Option Agreement | Very Large Gas Carrier 3 (VLGC)
Number of vessels			1
Purchase price | $			$ 83,500
LPG Option Agreement | Very Large Gas Carrier 4 (VLGC)
Number of vessels			1
Purchase price | $			$ 83,500

XML

Transactions with Related Parties - Cardiff, Fabiana, Azara, Basset and Vivid (Details) $ in Thousands	12 Months Ended			24 Months Ended	47 Months Ended	48 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 USD ($)
Termination cost	$ 0	$ 0	$ (28,241)
Cardiff Marine Inc. | Agreement to acquire Newcastlemax newbuildings
Number of vessels	7
Cardiff Tankers Inc. and Cardiff Gas Ltd
Chartering commission	1.25%
Fabiana Services S.A. | Consultancy Agreement commencing on February 3, 2013
Termination cost					$ 0
Basset Holdings Inc. | Consultancy Agreement Effective 1 January 2015 between Company and Basset Holdings | Renewal
Termination cost				$ 0
Vivid Finance Limited | Consultancy Agreement Effective January 1, 2013 between Company and Vivid
Termination cost						$ 0

XML

Transactions with Related Parties - Ocean Rig - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands	2 Months Ended		3 Months Ended			4 Months Ended	6 Months Ended	10 Months Ended	12 Months Ended
	Feb. 27, 2017	Feb. 24, 2015	Apr. 11, 2017	Apr. 05, 2016	Mar. 29, 2016	May 06, 2015	Jul. 07, 2017	Oct. 16, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Apr. 04, 2016	Jun. 08, 2015
Interest, amortization and write off of financing fees on loan from affiliate and related party									$ 15,239	$ 1,563	$ 3,642
Date of dividend record	Mar. 15, 2017		May 01, 2017				Jul. 20, 2017	Oct. 27, 2017
Date of dividend payment	Mar. 30, 2017		May 12, 2017				Aug. 02, 2017	Nov. 13, 2017
Dividends paid to shareholders other than Dryships	$ 2,500		$ 2,500				$ 2,500	$ 2,500	10,001	0	20,526
Cash consideration from sale									$ 0	$ 49,911	0
Offshore support vessels Crescendo and Jubilee
Time Charter Agreement Duration					60 days
Ocean Rig UDW Inc.
Date of dividend record		Mar. 10, 2015				May 22, 2015
Date of dividend payment		Mar. 31, 2015				May 31, 2015
Dividend paid per share		$ 0.19				$ 0.19
Dividends paid to shareholders other than Dryships											20,526
Ocean Rig
Cash consideration from sale				$ 49,911
Ownership interest in Ocean Rig				0.00%								40.40%	47.20%
$120,000 unsecured facility | Loan from Affilliate | Ocean Rig
Interest, amortization and write off of financing fees on loan from affiliate and related party											$ 3,281

XML

Transactions with Related Parties - Private Placement - Rights Offering (Details) - USD ($) $ / shares in Units, $ in Thousands	8 Months Ended		9 Months Ended	12 Months Ended
	Aug. 31, 2017	Aug. 29, 2017	Oct. 04, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Related Party Transaction [Line Items]
Proceeds From Issuance Of Common Stock				$ 568,883	$ 123,810	$ 0
Amount converted					8,750
Loss on Private Placement				(7,600)	$ 0	$ 0
Stockholders' Contribution				$ 2,805
Series D Convertible Preferred Stock
Related Party Transaction [Line Items]
Preferred Stock, Voting Rights				100.000 votes
Private Placement
Related Party Transaction [Line Items]
Price per share		$ 2.75
Proceeds From Issuance Of Common Stock		$ 100,000
Number of shares issued		36,363,636
Loss on Private Placement				$ (7,600)
Share price				$ 2.05
Rights Offering
Related Party Transaction [Line Items]
Price per share	$ 2.75
Aggregate consideration	$ 100,000
Backstop Agreement
Related Party Transaction [Line Items]
Price per share			$ 2.75
Number of shares issued			36,363,636
SPII Holdings Inc. | Private Placement
Related Party Transaction [Line Items]
Number of shares issued		12,000,000
Sierra Investments Inc. | Private Placement
Related Party Transaction [Line Items]
Number of shares issued		9,818,182
Sierra Investments Inc. | Private Placement | Revolving Facility
Related Party Transaction [Line Items]
Amount converted		$ 27,000
Sierra Investments Inc. | Backstop Agreement
Related Party Transaction [Line Items]
Number of shares issued			36,057,876
Sierra Investments Inc. | Backstop Agreement | Revolving Facility
Related Party Transaction [Line Items]
Amount converted			$ 99,159
Mountain Investments Inc. | Private Placement
Related Party Transaction [Line Items]
Number of shares issued		14,545,454
Heidmar Holdings LLC | Private Placement
Related Party Transaction [Line Items]
Ownership percentage		49.00%
Shipping Pool Investors Inc. | Private Placement
Related Party Transaction [Line Items]
Ownership percentage		100.00%
Sifnos Shareholders Inc. | Series D Convertible Preferred Stock
Related Party Transaction [Line Items]
Stockholders' Contribution		$ 2,805

XML

Transactions with Related Parties - Sifnos Shareholders Inc. (Details) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended			8 Months Ended		9 Months Ended		10 Months Ended		12 Months Ended
	Jan. 19, 2017 USD ($)	Mar. 10, 2017 USD ($)	Apr. 05, 2016 USD ($)	Mar. 29, 2016 USD ($)	Mar. 24, 2016 USD ($) shares	Aug. 29, 2017 USD ($) shares	Sep. 13, 2016 USD ($) shares	Oct. 04, 2017 USD ($) shares	Sep. 21, 2016 USD ($)	Oct. 31, 2016 USD ($)	Oct. 21, 2015 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($) shares	Dec. 31, 2015 USD ($)	Dec. 30, 2015 USD ($) shares	Dec. 22, 2015 USD ($)	Apr. 06, 2017	Dec. 15, 2016 USD ($)	Nov. 30, 2016 USD ($)
Amount converted													$ 8,750
Amount drawn down												$ 79,000
Deferred finance costs												2,378	124
Line of Credit Facility, Increase (Decrease), Net												150,000
Proceeds from Sale of Equity Method Investments												0	49,911	$ 0
Repayments Of Debt												18,780	119,758	$ 782,366
Outstanding balance												$ 147,716	$ 16,935
Weighted Average Interest Rate												3.37%	3.15%	4.98%
Repurchase of shares													$ 8,750
Preferred stock
Number of shares exchanged and cancelled | shares													8
Amalfi, Galveston and Samatan
Amount tranferred to the new owners										$ 58,619
Very Large Gas Carrier 1 (VLGC) | LPG Option Agreement
Number of vessels	1
Very Large Gas Carrier 2 (VLGC) | LPG Option Agreement
Number of vessels		1
Very Large Gas Carrier 3 (VLGC) | LPG Option Agreement
Number of vessels																	1
Very Large Gas Carrier 4 (VLGC) | LPG Option Agreement
Number of vessels																	1
Ocean Rig
Proceeds from Sale of Equity Method Investments			$ 49,911
Private Placement
Number of shares issued | shares						36,363,636
Backstop Agreement
Number of shares issued | shares								36,363,636
Series D Preferred Stock
Preferred Stock, Voting Rights												100.000 votes
New Revolving Facility | Very Large Gas Carrier 1 (VLGC) | LPG Option Agreement
Amount drawn down	$ 21,850
New Revolving Facility | Very Large Gas Carrier 2 (VLGC) | LPG Option Agreement
Amount drawn down		$ 21,850
Sifnos Shareholders Inc.
Repurchase of shares					$ 8,750
Sifnos Shareholders Inc. | Two Syndicated Loans
Outstanding balance																			$ 85,066
Sifnos Shareholders Inc. | Series B Preferred Stock
Number of shares exchanged and cancelled | shares					8
Sifnos Shareholders Inc. | Series B Preferred Stock | Before 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits
Number of shares exchanged and cancelled | shares					8,333
Sifnos Shareholders Inc. | Revolving Credit Facility
Principal amount					$ 70,000					75,000		$ 60,000
Loan's tenor												3 years
Amount converted					8,750		$ 8,750			7,500					$ 10,000
First priority mortage												One Panamax dry-bulk carrier
Amount drawn down				$ 28,000					$ 7,825		$ 20,000					$ 10,000
Line of credit facility amount outstanding										69,444
Line of Credit Facility, Increase (Decrease), Net					$ 10,000					$ 5,000
Repayments Of Debt			$ 45,000
Variable rate basis												LIBOR
Spread on variable rate												4.00%
Cash prepayment																		$ 33,510
Sifnos Shareholders Inc. | Revolving Credit Facility | Preferred stock
Number of preferred shares converted | shares					29
Preferred Stock, Voting Rights												voting power of 5:1
Preferred Stock converted into Common Stock, Conversion Basis												On a 1:1 basis within 3 months
Sifnos Shareholders Inc. | Revolving Credit Facility | Preferred stock | Before 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits
Number of preferred shares converted | shares					29,166
Sifnos Shareholders Inc. | Revolving Credit Facility | Maximum
Loan To Value Ratio			40.00%
Sifnos Shareholders Inc. | Revolving Credit Facility | Series B Preferred Stock
Number of preferred shares converted | shares															8
Preferred Stock, Voting Rights												5 votes
Preferred Stock converted into Common Stock, Conversion Basis												On a one to one basis within three months
Sifnos Shareholders Inc. | Revolving Credit Facility | Series B Preferred Stock | Before 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits
Number of preferred shares converted | shares															8,333
Sifnos Shareholders Inc. | Revolving Credit Facility | Series D Preferred Stock
Number of preferred shares converted | shares							29
Sifnos Shareholders Inc. | Revolving Credit Facility | Series D Preferred Stock | Before 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits
Number of preferred shares converted | shares							29,166
Sifnos Shareholders Inc. | New Revolving Facility
Principal amount												$ 200,000
Loan's tenor												3 years
Line of credit facility amount outstanding												$ 121,000
Variable rate basis												LIBOR
Spread on variable rate												5.50%
Debt Instrument Fee												2.0%
Increase in collateral base												30.00%
Commitment fee												1.00%
Sifnos Shareholders Inc. | Revolving Credit Facilities
Line of credit facility amount outstanding												$ 73,841	$ 121,000
Deferred finance costs												$ 2,210	$ 4,383
Weighted Average Interest Rate												8.08%	7.24%
Available undrawn amount												$ 0	$ 79,000
Sierra Investments Inc. | Private Placement
Number of shares issued | shares						9,818,182
Sierra Investments Inc. | Backstop Agreement
Number of shares issued | shares								36,057,876
Sierra Investments Inc. | Revolving Facility
Loan's tenor												5 years
Line of credit facility amount outstanding												$ 200,000
Variable rate basis												LIBOR
Spread on variable rate												6.50%
Debt Instrument Fee												1.0%
Increase in collateral base												30.00%
Sierra Investments Inc. | Revolving Facility | Private Placement
Amount converted						$ 27,000
Sierra Investments Inc. | Revolving Facility | Backstop Agreement
Amount converted								$ 99,159
Sierra Investments Inc. | Loan Facility Agreement
Loan's tenor												5 years
Line of credit facility amount outstanding												$ 73,841
Variable rate basis												LIBOR
Spread on variable rate												4.50%
Debt instrument covenant description												Fair market values of mortgaged vessels should be at least 200% of the Loan Facility Agreement outstanding amount

XML

Other Current Assets (Tables) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Other Assets [Abstract]
Inventories	$ 7,790	$ 3,446
Insurance claims (Note 14)	3,044	1,071
Other	1,445	29
Other current assets	$ 12,279	$ 4,546

XML

Advances for Vessels under Construction (Table) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Balance at beginning of year	$ 0
Balance at end of year	31,898	$ 0
Advances for vessels under construction and acquisitions
Balance at beginning of year	0	0
Advances for vessels under construction and related costs	265,565	0
Vessels delivered	(233,667)	0
Balance at end of year	$ 31,898	$ 0

XML

Advances for Vessels and Drilling Units under Construction and Acquisitions (Details) $ in Thousands		1 Months Ended	2 Months Ended	3 Months Ended	12 Months Ended
	Jan. 04, 2018 USD ($)	Jan. 19, 2017 USD ($)	Mar. 10, 2017 USD ($)	Apr. 06, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Accounting for transactions under common control					$ 29,001
Payment of purchase price					653,344	$ 0	$ 505,670
Amount drawn down					$ 79,000
Anderida VLGC
Date of agreement					Jun. 29, 2017
Time Charter Agreement Duration					5 years
Maximum extension of time charter duration					3 years
Anderida VLGC | LPG Option Agreement
Number of vessels		1
Purchase price		$ 83,500
Accounting for transactions under common control		6,500
Delivery Date					Jun. 28, 2017
Payment of purchase price		61,650
Anderida VLGC | LPG Option Agreement | Secured credit facility dated June 22, 2017
Amount drawn down		37,500
Anderida VLGC | LPG Option Agreement | New Revolving Facility
Amount drawn down		$ 21,850
Aisling VLGC
Date of agreement					Sep. 12, 2017
Time Charter Agreement Duration					5 years
Maximum extension of time charter duration					3 years
Aisling VLGC | LPG Option Agreement
Number of vessels			1
Purchase price			$ 83,500
Accounting for transactions under common control			6,500
Delivery Date					Sep. 07, 2017
Payment of purchase price			61,650
Aisling VLGC | LPG Option Agreement | Secured credit facility dated June 22, 2017
Amount drawn down			37,500
Aisling VLGC | LPG Option Agreement | New Revolving Facility
Amount drawn down			$ 21,850
Mont Fort VLGC
Delivery Date					Oct. 31, 2017
Date of agreement					Nov. 05, 2017
Time Charter Agreement Duration					10 years
Mont Fort VLGC | LPG Option Agreement
Number of vessels				1
Purchase price				$ 83,500
Mont Gele VLGC
Delivery Date					Jan. 04, 2018
Date of agreement					Jan. 11, 2018
Time Charter Agreement Duration					10 years
Mont Gele VLGC | LPG Option Agreement
Number of vessels				1
Purchase price				$ 83,500
Mont Gele VLGC | LPG Option Agreement | Subsequent Event
Payment of purchase price	$ 44,869
Mont Gele VLGC | LPG Option Agreement | Secured credit facility dated June 22, 2017 | Subsequent Event
Amount drawn down	$ 37,500
Mont Fort and Mont Gele | LPG Option Agreement
Accounting for transactions under common control				16,001
Payment of purchase price				120,300
Mont Fort and Mont Gele | LPG Option Agreement | Secured credit facility dated June 22, 2017
Amount drawn down				75,000
Mont Fort and Mont Gele | LPG Option Agreement | New Revolving Facility
Amount drawn down				$ 46,700
Advances for vessels under construction and related costs
Capitalized expenses					$ 428
Interest Costs Capitalized					$ 770

XML

Vessels, net - Vessels (Tables) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Balance, at the beginning of period	$ 95,550
Balance, at the end of period	749,088	$ 95,550
Cost | Vessels
Balance, at the beginning of period	95,550	97,100
Acquisition of subsidiary	672,300
Vessels transferred from held for sale		66,449
Vessels sold	(3,900)
Impairment loss		(67,999)
Balance, at the end of period	763,950	95,550
Accumulated Depreciation | Vessels
Balance, at the beginning of period	0	(672)
Vessels sold	104
Impairment loss		4,138
Depreciation	(14,966)	(3,466)
Balance, at the end of period	(14,862)	0
Net Book Value | Vessels
Balance, at the beginning of period	95,550	96,428
Acquisition of subsidiary	672,300
Vessels transferred from held for sale		66,449
Vessels sold	(3,796)
Impairment loss		(63,861)
Depreciation	(14,966)	(3,466)
Balance, at the end of period	$ 749,088	$ 95,550

XML

Vessels, net - Additional information (Details) $ in Thousands	3 Months Ended				8 Months Ended	9 Months Ended		10 Months Ended	12 Months Ended
	Mar. 31, 2016 USD ($)	Mar. 30, 2016 USD ($)	Mar. 24, 2016 USD ($)	Dec. 31, 2015 USD ($)	Sep. 09, 2015 USD ($)	Sep. 30, 2016 USD ($)	Sep. 16, 2016 USD ($)	Oct. 31, 2016 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 19, 2017 USD ($)	May 15, 2017 USD ($)	Apr. 27, 2017 USD ($)	Apr. 12, 2017 USD ($)	Mar. 31, 2017 USD ($)	Mar. 24, 2017 USD ($)	Mar. 01, 2017 USD ($)	Feb. 14, 2017 USD ($)	Feb. 10, 2017 USD ($)	Oct. 26, 2016 USD ($)	Oct. 18, 2016 USD ($)	Oct. 05, 2016 USD ($)	Sep. 27, 2016 USD ($)	Aug. 22, 2016 USD ($)	Nov. 02, 2015 USD ($)	Apr. 30, 2015 USD ($)
Carrying amount									$ 749,088	$ 95,550
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other									4,125	(106,343)	$ (1,057,116)
Gain/ (Loss) from common control transaction									440	$ (195)
Vessels, net
Interest Costs Capitalized									2,426
Capitalized expenses									$ 8,834
Secured Credit Facility at February 14, 2012
Cash prepayment		$ 15,000
Vilamoura, Lipari, Petalidi and Bordeira | Ten Memoranda of Agreements
Number of vessels																											4
Vessels total sale price																											$ 245,000
Belmar, Calida, Alicante, Mareta, Saga and Daytona | Ten Memoranda of Agreements
Number of vessels																											6
Vessels total sale price																											$ 291,000
Vilamoura, Lipari, Petalidi, Bordeira, Belmar, Calida, Alicante, Mareta, Saga and Daytona
Number of vessels																											10
Vessels total sale price																											$ 536,000
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other											(56,631)
Petalidi Suezmax tanker
Disposal Date									Jul. 16, 2015
Bordeira Suezmax tanker
Disposal Date									Jul. 21, 2015
Lipari Suezmax tanker
Disposal Date									Jul. 24, 2015
Belmar Aframax tanker
Disposal Date									Jul. 27, 2015
Saga Aframax tanker
Disposal Date									Aug. 06, 2015
Mareta Aframax tanker
Disposal Date									Aug. 07, 2015
Vilamoura Suezmax tanker
Disposal Date									Aug. 19, 2015
Calida Aframax tanker
Disposal Date									Aug. 25, 2015
Daytona Aframax tanker
Disposal Date									Sep. 10, 2015
Alicante Tanker
Disposal Date									Oct. 29, 2015
14 vessel owning companies (10 Capesize bulk carriers, 4 Panamax bulk carriers) and 3 Capesize bulk carriers
Number of vessels					17
Vessels total sale price					$ 377,000
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other											(375,090)
14 vessel owning companies (10 Capesize bulk carriers, 4 Panamax bulk carriers) and 3 Capesize bulk carriers | Beneficially Owned Companies
Debt assumed					$ 236,716
Mystic Capesize bulk carrier
Disposal Date									Sep. 17, 2015
Raiatea, Robusto, Cohiba, Montecristo, Flecha, Partagas, Woolloomooloo, Saldanha, Topeka and Helena
Number of vessels									10
Disposal Date									Oct. 13, 2015
Capri Capesize bulk carrier
Disposal Date									Sep. 22, 2015
Manasota Capesize bulk carrier
Disposal Date									Oct. 01, 2015
Alameda Capesize bulk carrier
Disposal Date									Dec. 11, 2015
Rangiroa, Negonego and Fakarava
Number of vessels										3
Disposal Date									Mar. 31, 2016
Vessels total sale price			$ 70,000
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other										$ (23,018)
Amount tranferred to the new owners		$ 12,060
Rangiroa, Negonego and Fakarava | Beneficially Owned Companies
Debt assumed			$ 102,070
One of its drybulk vessels
Carrying amount				$ 95,937							95,937
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other											$ (83,937)
20 Panamax and 2 Supramax bulk carriers
Number of vessels				22							22
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other											$ (422,404)
Byron and Galveston Supramax Vessels
Number of vessels																										2
Vessels total sale price																										$ 12,300
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other											(6,035)
Byron Supramax Vessel
Disposal Date									Nov. 25, 2015
Galveston Supramax Vessel
Disposal Date									Nov. 30, 2015
Coronado Panamax vessel
Disposal Date									Sep. 09, 2016
Vessels total sale price																									$ 4,250
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other										1,084
Oregon Panamax vessel
Disposal Date									Sep. 21, 2016
Vessels total sale price							$ 4,675
Amount tranferred to the new owners							$ 7,825
Gain/ (Loss) from common control transaction										281
Ocean Crystal Panamax vessel
Disposal Date									Nov. 07, 2016
Vessels total sale price																								$ 3,720
Sonoma Panamax vessel
Disposal Date									Nov. 15, 2016
Vessels total sale price																							$ 3,950
Sorrento Panamax vessel
Disposal Date									Nov. 22, 2016
Vessels total sale price																						$ 6,700
Ocean Crystal, Sonoma and Sorreto Panamax vessels
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other						$ 3,020				(641)
Vessels held for sale
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other	$ (18,266)			$ (113,019)						(13,395)	$ (967,144)
Offshore Support Vessels
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other										$ (65,712)
Drybulk Carrier Vessels
Number of vessels										13
Gain on reclassification of vessels										$ 1,851
Amalfi, Galveston and Samatan
Disposal Date									Oct. 31, 2016
Vessels total sale price																					$ 15,000
Amount tranferred to the new owners								$ 58,619
Gain/ (Loss) from common control transaction										$ (476)
Aframax tanker under construction Balla
Delivery Date									April 27, 2017
Purchase price																				$ 44,500
Second hand Very Large Crude Carrier Shiraga
Delivery Date									June 9, 2017
Purchase price																			$ 57,000
Second hand Aframax Tanker Stamos
Delivery Date									May 15, 2017
Purchase price																		$ 29,000
Marini, Morandi, Bacon and Judd
Purchase price																	$ 120,540
Second-hand Newcastle drybulk vessel Marini
Delivery Date									May 2, 2017
Second-hand Newcastle drybulk vessel Morandi
Delivery Date									July 5, 2017
Second-hand Newcastle drybulk vessel Bacon
Delivery Date									July 6, 2017
Fair value of below market acquired time charters									$ 0
Second-hand Newcastle drybulk vessel Judd
Delivery Date									July 13, 2017
Fair value of below market acquired time charters									$ 516
Kelly, Matisse and Valadon drybulk vessels
Number of vessels																3
Purchase price																$ 71,000
Kamsarmax Drybulk secondhand vessel Valadon
Delivery Date									May 17, 2017
Kamsarmax Drybulk secondhand vessel Matisse
Delivery Date									June 1, 2017
Kamsarmax Drybulk vessel Kelly
Delivery Date									June 14, 2017
Secondhand Kamsarmax drybulk carrier Nasaka
Delivery Date									May 10, 2017
Purchase price															$ 22,000
Second hand Kamsarmax drybulk vessel Castellani
Delivery Date									June 6, 2017
Purchase price														$ 23,500
Suezmax newbuilding vessel Samsara
Delivery Date									May 19, 2017
Gain/ (Loss) from common control transaction									$ 440
Date of agreement									May 24, 2017
Time Charter Agreement Duration									5 years
Purchase price													$ 64,000
Panamax vessel Ecola
Delivery Date									Dec. 29, 2017
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other									$ 4,425
Purchase price												$ 8,500

XML

Acquisition Of Nautilus Offshore Services Inc. (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Amortization of fair value of acquired time charters	$ 684	$ 4,346	$ 2,840
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other	4,125	(106,343)	(1,057,116)
Goodwill impairment charge	$ 0	(7,002)	0
Crescendo vessel
Time charter contracts expiration date	Jan. 08, 2017
Jubilee vessel
Time charter contracts expiration date	Apr. 25, 2017
Indigo vessel
Time charter contracts expiration date	Aug. 30, 2017
Colorado vessel
Time charter contracts expiration date	Dec. 27, 2017
Jacaranda vessel
Time charter contracts expiration date	Jul. 03, 2017
Emblem vessel
Time charter contracts expiration date	Jun. 21, 2017
Nautilus
Amortization method of time-chartered contracts	straight-line
Amortization of fair value of acquired time charters	$ 1,200	4,346	$ 1,467
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other	$ (300)	(5,161)
Goodwill		7,002
Goodwill impairment charge		$ (7,002)
Nautilus | Offshore Support Vessels
Number of vessels	6

XML

Other Non-Current Assets (Table) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
OTHER NON-CURRENT ASSETS:
Other non-current assets	$ 44,869	$ 0
Total	$ 44,869	$ 0

XML

Other Non-Current Assets (Details) - USD ($) $ in Thousands		12 Months Ended
	Jan. 04, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Last installement held in escrow		$ 44,869	$ 0	$ 0
Payment of purchase price		$ 653,344	$ 0	$ 505,670
Mont Gele VLGC
Delivery Date		Jan. 04, 2018
Mont Gele VLGC | LPG Option Agreement
Last installement held in escrow		$ 44,869
Mont Gele VLGC | LPG Option Agreement | Subsequent Event
Payment of purchase price	$ 44,869

XML

Investment in an Affiliate - Participation Percentage (Table) (Details)	Apr. 05, 2016	Apr. 04, 2016	Jun. 08, 2015
Ocean Rig
Schedule of Equity Method Investments [Line Items]
Ownership interest	0.00%	40.40%	47.20%

XML

Investment in an Affiliate (Details) $ / shares in Units, $ in Thousands	3 Months Ended	5 Months Ended	7 Months Ended	8 Months Ended	12 Months Ended
	Apr. 05, 2016 USD ($)	Jun. 08, 2015 USD ($) $ / shares	Aug. 13, 2015 USD ($) shares	Aug. 29, 2017 USD ($) shares	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Apr. 04, 2016	Mar. 31, 2016 USD ($)
Schedule of Equity Method Investments [Line Items]
Carrying value of the investment					$ 34,000	$ 0
Gain/(loss) due to deconsolidation					0	0	$ (1,347,106)
Losses of affiliated company					0	41,454	349,872
Cash consideration from sale					$ 0	49,911	0
Private Placement
Schedule of Equity Method Investments [Line Items]
Number of shares issued | shares				36,363,636
SPII Holdings Inc. | Private Placement
Schedule of Equity Method Investments [Line Items]
Number of shares issued | shares				12,000,000
Heidmar Holdings LLC
Schedule of Equity Method Investments [Line Items]
Ownership interest in Ocean Rig				49.00%
Carrying value of the investment				$ 34,000
Heidmar Holdings LLC | Private Placement
Schedule of Equity Method Investments [Line Items]
Ownership percentage				49.00%
Shipping Pool Investors Inc. | Private Placement
Schedule of Equity Method Investments [Line Items]
Ownership percentage				100.00%
Significant assumptions | Heidmar Holdings LLC
Schedule of Equity Method Investments [Line Items]
Discount factor					7.50%
Long-term growth rate					2.50%
Number of vessels					80
Weighted average cost of capital					11.90%
Commission rates					2.50%
Change in fair value measurements | Weighting of market versus income approach | Heidmar Holdings LLC
Schedule of Equity Method Investments [Line Items]
Weighting rate					10.00%
Increase in fair value					$ 428
Change in fair value measurements | Discount factor | Heidmar Holdings LLC
Schedule of Equity Method Investments [Line Items]
Discount factor					5.00%
Increase in fair value					$ 1,858
Change in fair value measurements | Charter rates | Heidmar Holdings LLC
Schedule of Equity Method Investments [Line Items]
Charter rates					10.00%
Increase in fair value					$ 6,199
Decrease in fair value					$ 6,257
Change in fair value measurements | Long term growth factor | Heidmar Holdings LLC
Schedule of Equity Method Investments [Line Items]
Long-term growth rate					1.00%
Increase in fair value					$ 1,787
Decrease in fair value					$ 1,443
Change in fair value measurements | Commission rates | Heidmar Holdings LLC
Schedule of Equity Method Investments [Line Items]
Commission rates					0.50%
Increase in fair value					$ 10,880
Decrease in fair value					$ 11,418
Change in fair value measurements | Number of vessels | Heidmar Holdings LLC
Schedule of Equity Method Investments [Line Items]
Number of vessels under management					4.00%
Increase in fair value					$ 7,790
Decrease in fair value					$ 6,805
Change in fair value measurements | Weighted average cost of capital | Heidmar Holdings LLC
Schedule of Equity Method Investments [Line Items]
Weighted average cost of capital					1.00%
Increase in fair value					$ 2,014
Decrease in fair value					$ 2,493
Market approach valuation technique | Heidmar Holdings LLC
Schedule of Equity Method Investments [Line Items]
Weighting rate					20.00%
Control premium					10.00%
Income approach valuation technique | Heidmar Holdings LLC
Schedule of Equity Method Investments [Line Items]
Weighting rate					80.00%
Ocean Rig
Schedule of Equity Method Investments [Line Items]
Ownership interest in Ocean Rig	0.00%	47.20%						40.40%
Carrying value of the investment							401,878		$ 208,176
Market value of the investment		$ 514,047					91,410		$ 45,985
Share Price | $ / shares		$ 6.96
Gain/(loss) due to deconsolidation		$ (1,347,106)
Losses of affiliated company						41,454	349,872
Loss recognized due to impairment						$ 162,191	$ 310,468
Cash consideration from sale	$ 49,911
Gain on sale	792
Ocean Rig | Other comprehensive income
Schedule of Equity Method Investments [Line Items]
Gain on sale	$ 343
Ocean Rig | $120,000 Note | Loan from Affilliate
Schedule of Equity Method Investments [Line Items]
Debt facility amount exchanged			$ 80,000
Number Of Shares Exchanged To Repay Debt | shares			17,777,778

XML

Long-term Debt (Table) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Less: Deferred financing costs	$ (2,378)	$ (124)
Total debt	145,338	16,811
Less: Current portion	(11,635)	(16,811)
Long-term portion	133,703	0
Secured Credit Facilities | Drybulk Segment
Debt Instrument [Line Items]
Secured Debt		$ 16,935
Secured Credit Facilities | Gas Carrier Segment
Debt Instrument [Line Items]
Secured Debt	$ 147,716

XML

Long-term Debt - Loan Movements (Table) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)
Debt Instrument [Line Items]
December 31, 2016	$ 16,935
New Loans/ Interest capitalized	150,000
Repayments/ Transfers/ Write offs	(19,219)
December 31, 2017	$ 147,716
Secured Credit Facility
Debt Instrument [Line Items]
Loan agreement date	Mar. 19, 2012
Original Amount	$ 19,065
December 31, 2016	14,935
New Loans/ Interest capitalized	0
Repayments/ Transfers/ Write offs	(14,935)
December 31, 2017	$ 0
Secured Credit Facility
Debt Instrument [Line Items]
Loan agreement date	Jun. 20, 2008
Original Amount	$ 103,200
December 31, 2016	2,000
New Loans/ Interest capitalized	0
Repayments/ Transfers/ Write offs	(2,000)
December 31, 2017	$ 0
Secured Credit Facility
Debt Instrument [Line Items]
Loan agreement date	Jun. 22, 2017
Original Amount	$ 150,000
December 31, 2016	0
New Loans/ Interest capitalized	150,000
Repayments/ Transfers/ Write offs	(2,284)
December 31, 2017	$ 147,716

XML

Long-term Debt - Principal Payments (Tables) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Long-term Debt, by Maturity [Abstract]
Due through December 31, 2018	$ 12,179
Due through December 31, 2019	12,179
Due through December 31, 2020	12,180
Due through December 31, 2021	12,180
Due through December 31, 2022	12,180
Thereafter	86,818
Total principal payments	147,716	$ 16,935
Less: Financing fees	(2,378)	(124)
Total debt	$ 145,338	$ 16,811

XML

Long-term Debt - Term Bank Loans and Credit Facilities (Details) $ in Thousands	4 Months Ended	11 Months Ended	12 Months Ended
	Apr. 24, 2017 USD ($)	Nov. 18, 2016 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
Amount used for repayment of debt			$ 18,780	$ 119,758	$ 782,366
Aggregate available undrawn amount			$ 0	$ 0
Weighted Average Interest Rate			3.37%	3.15%	4.98%
Interest expense and debt amortization cost			$ 17,125	$ 8,299	$ 177,537
Amount drawn down			79,000
Gain on debt restructuring			$ 0	10,477	$ 0
Term bank loans and credit facilities
Debt Instrument [Line Items]
Maturity Date			Dec. 31, 2023
Payment terms			quarterly installments
Variable rate basis			LIBOR
Secured Credit Facility at June 20, 2008
Debt Instrument [Line Items]
Line Of Credit Facility Maximum Borrowing Capacity			$ 103,200
Amount used for repayment of debt		$ 8,200
Gain on debt restructuring				8,366
Cash repayment in full			2,000
Secured Credit Facility at March 19, 2012
Debt Instrument [Line Items]
Line Of Credit Facility Maximum Borrowing Capacity			19,065
Loan agreements reclassified as current				$ 14,935
Cash repayment in full	$ 15,158
Secured Credit Facility at June 22, 2017
Debt Instrument [Line Items]
Line Of Credit Facility Maximum Borrowing Capacity			$ 150,000
Line of credit facilities number of installments			24
Amount used for repayment of debt			$ 2,284
Amount drawn down			$ 150,000
Interest rate description			LIBOR
Frequency of payments			quarterly

XML

Long-Term Debt - Covenant Description and Compliance (Details)	12 Months Ended
	Dec. 31, 2017
Debt instrument covenant compliance	As of December 31, 2017, the Company was in compliance with the covenants regarding its secured credit facilities.
Secured Credit Facility at March 19, 2012
Debt instrument covenant compliance	As of December 31, 2016, the Company was in breach of certain financial covenants regarding its secured credit facility dated March 19, 2012 and had not made principal repayments and interest payments under this 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 classified the respective bank loan amounting to $14,935 as current liability at December 31, 2016.
Secured Credit Facility at June 22, 2017
Debt instrument covenant description	The Company's secured credit facility dated June 22, 2017 is secured by first priority mortgage over the Company's VLGCs, corporate guarantees, first priority assignments of all freights, earnings, insurances and requisition compensation. The loan contains customary financial 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. The loans also contain certain financial covenants relating to the Company's financial position and operating performance, such as maintaining liquidity above a certain level. The Company's secured credit facility imposes operating and negative covenants on the Company and its subsidiaries. These covenants may limit the ability of certain of the Company's subsidiaries 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.

XML

Financial Instruments and Fair Value Measurements - Derivatives not Designated as Hedging Instruments (Table) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Derivative Not Designated as Hedging Instruments
Interest rate swaps	$ 0	$ 403	$ (11,601)
Not Designated as Hedging Instrument
Derivative Not Designated as Hedging Instruments
Total	0	403	(11,601)
Gain/(Loss) on interest rate swaps | Not Designated as Hedging Instrument
Derivative Not Designated as Hedging Instruments
Interest rate swaps	$ 0	$ 403	$ (11,601)

XML

Financial Instruments and Fair Value Measurements - Recurring Measurements (Table) (Details) - On recurring basis - Unobservable Inputs (Level 3) $ in Thousands	Dec. 31, 2017 USD ($)
Non-Recurring measurements:
Investment in affiliate - Heidmar (Note 9)	$ 34,000
Total	$ 34,000

XML

Financial Instruments and Fair Value Measurements - Non-Recurring Measurements for Long-lived Assets (Table) (Details) - On nonrecuring basis - Significant Other Observable Inputs (Level 2) $ in Thousands	Dec. 31, 2016 USD ($)
Non-Recurring measurements:
Long-lived assets held and used	$ 95,550
Total	$ 95,550

XML

Financial Instruments And Fair Value Measurements - Interest Rate Swaps (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2010 USD ($)
Interest Rate Derivatives [Abstract]
Number of interest rate swaps agreements	0	0
Reclassification of losses on previously designated cash flow hedges associated with capitalized interest to Depreciation and amortization	$ 0	$ (110)	$ (466)
Gain / (Loss) on interest rate swaps	$ 0	403	(11,601)
Cash flow hedge realized
Interest Rate Derivatives [Abstract]
(Unrealized)/ realized losses on cash flow hedges accumulated in other comprehensive income / loss				$ (16,463)
Cash flow hedge unrealized
Interest Rate Derivatives [Abstract]
Gain / (Loss) on interest rate swaps		$ 2,193	$ 10,848

XML

Financial Instruments and Fair Value Measurements - Senior Notes, Credit Facilities and Additional Information (Details) $ / shares in Units, $ in Thousands	3 Months Ended		5 Months Ended	8 Months Ended	9 Months Ended	12 Months Ended
	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Jun. 08, 2015 USD ($)	Aug. 29, 2017 USD ($) $ / shares shares	Sep. 30, 2016 USD ($)	Dec. 31, 2017 USD ($) $ / shares	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Apr. 05, 2016	Apr. 04, 2016	Sep. 09, 2015	Apr. 30, 2015
Gain/(loss) due to deconsolidation						$ 0	$ 0	$ (1,347,106)
Vessels, net						749,088	95,550
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other						4,125	(106,343)	(1,057,116)
Proceeds From Issuance Of Common Stock						568,883	123,810	0
Amount converted							8,750
Carrying value of the investment						34,000	0
Loss on Private Placement						(7,600)	$ 0	0
Stockholders' Contribution						2,805
Heidmar Holdings LLC
Equity Method Investment Ownership Percentage				49.00%
Carrying value of the investment				$ 34,000
Sifnos Shareholders Inc. | Series D Convertible Preferred Stock
Stockholders' Contribution				$ 2,805
Private Placement
Number of shares issued | shares				36,363,636
Price per share | $ / shares				$ 2.75
Proceeds From Issuance Of Common Stock				$ 100,000
Loss on Private Placement						$ (7,600)
Share price | $ / shares						$ 2.05
Private Placement | Sierra Investments Inc.
Number of shares issued | shares				9,818,182
Private Placement | Sierra Investments Inc. | Revolving Facility
Amount converted				$ 27,000
Private Placement | Heidmar Holdings LLC
Ownership percentage				49.00%
One of its drybulk vessels
Vessels, net		$ 95,937						95,937
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other								(83,937)
Tankers
Number of vessels												10
Vessels Held For Sale Including Impairment		587,271						587,271
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other								(56,631)
10 Capesize bulk carriers, 4 Panamax bulk carriers and 3 Capesize bulk carriers
Number of vessels											17
Vessels Held For Sale Including Impairment		$ 748,320						748,320
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other								$ (375,090)
20 Panamax and 2 Supramax bulk carriers
Number of vessels		22						22
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other								$ (422,404)
Supramax
Number of vessels		2						2
Vessels, net		$ 17,820						$ 17,820
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other								(6,035)
Rangiroa, Negonego and Fakarava
Number of vessels							3
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other							$ (23,018)
Coronado Panamax vessel
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other							1,084
Ocean Crystal, Sonoma and Sorreto Panamax vessels
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other					$ 3,020		$ (641)
Drybulk Carrier Vessels
Number of vessels							13
Gain on reclassification of vessels							$ 1,851
Offshore Support Vessels
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other							(65,712)
Vessels held for sale
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other	$ (18,266)	(113,019)					$ (13,395)	(967,144)
Ocean Rig
Gain/(loss) due to deconsolidation			$ (1,347,106)
Equity Method Investment Ownership Percentage			47.20%						0.00%	40.40%
Carrying value of the investment	$ 208,176	$ 401,878						$ 401,878

XML

Common Stock and Additional Paid-in Capital - Net loss Attributable to DryShips and Transfers to the Non-controlling Interest (Table) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net Loss Attributable To DryShips Inc And Transfers To Noncontrolling Interest [Abstract]
Net loss attributable to Dryships Inc.	$ (42,544)	$ (198,686)	$ (2,847,061)
Transfers to the non-controlling interest:
Decrease in Dryships Inc. equity for reduction in subsidiary ownership	0	0	(49,444)
Net transfers to the non-controlling interest	0	0	(49,444)
Net loss attributable to Dryships Inc. and transfers to/from the non-controlling interest	$ (42,544)	$ (198,686)	$ (2,896,505)

XML

Common Stock and Additional Paid-in Capital - Issuance of common shares (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		2 Months Ended	3 Months Ended			7 Months Ended	8 Months Ended		9 Months Ended	12 Months Ended
	Jan. 31, 2017	Jan. 30, 2017	Feb. 17, 2017	Apr. 03, 2017	Mar. 17, 2017	Mar. 16, 2017	Aug. 10, 2017	Aug. 31, 2017	Aug. 29, 2017	Oct. 04, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 23, 2016	Dec. 31, 2015
Net proceeds from stock issuance											$ 568,883	$ 123,810		$ 0
Value of shares issued											$ 742,585	$ 14,434		$ (228)
Private Placement
Price per share									$ 2.75
Net proceeds from stock issuance									$ 100,000
Number of shares issued									36,363,636
Private Placement | Sierra Investments Inc.
Number of shares issued									9,818,182
Rights Offering
Price per share								$ 2.75
Aggregate consideration								$ 100,000
Backstop Agreement
Price per share										$ 2.75
Number of shares issued										36,363,636
Backstop Agreement | Sierra Investments Inc.
Number of shares issued										36,057,876
Backstop Agreement | Existing shareholders
Net proceeds from stock issuance										$ 841
Number of shares issued										305,760
2016 Purchase Agreement
Number of shares issued		32,681
Maximum value of shares to be sold within 24 months													$ 200,000
Amount of common stock as commitment fee													$ 1,500
Value of shares issued	$ 200,000
2016 Purchase Agreement | Commitment Fee
Number of shares issued		263
2016 Purchase Agreement | Before reverse stock splits
Number of shares issued		71,864,590
2016 Purchase Agreement | Before reverse stock splits | Commitment Fee
Number of shares issued		844,335
February 2017 Purchase Agreement
Number of shares issued						118,165
Maximum value of shares to be sold within 24 months			$ 200,000
Amount of common stock as commitment fee			$ 1,500
Value of shares issued					$ 200,000
February 2017 Purchase Agreement | Commitment Fee
Number of shares issued						872
February 2017 Purchase Agreement | Before reverse stock splits
Number of shares issued						115,801,710
February 2017 Purchase Agreement | Before reverse stock splits | Commitment Fee
Number of shares issued						854,631
April 2017 Purchase Agreement
Net proceeds from stock issuance							$ 193,598
Number of shares issued							31,392,280
Maximum value of shares to be sold within 24 months				$ 226,400
Amount of common stock as commitment fee				$ 1,500
April 2017 Purchase Agreement | Commitment Fee
Number of shares issued							42,630
April 2017 Purchase Agreement | Before reverse stock splits
Number of shares issued							123,998,456
April 2017 Purchase Agreement | Before reverse stock splits | Commitment Fee
Number of shares issued							879,711

XML

Common Stock and Additional Paid-in Capital - Issuance of preferred shares and Treasury stock (Details) - USD ($) $ in Thousands	3 Months Ended		5 Months Ended		6 Months Ended	7 Months Ended	8 Months Ended				9 Months Ended	10 Months Ended		11 Months Ended	12 Months Ended
	Nov. 18, 2016	Mar. 24, 2016	Nov. 18, 2016	Jun. 08, 2016	Jul. 06, 2016	Aug. 03, 2016	Sep. 09, 2017	Aug. 29, 2017	Sep. 13, 2016	Sep. 01, 2016	Oct. 05, 2016	Nov. 04, 2016	Oct. 31, 2016	Nov. 16, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 30, 2015
Debt Conversion, Amount																$ 8,750
Stockholders' Contribution															$ 2,805
Treasury stock retired							3
Convertible preferred shares
Number of shares issued																873
Preferred warrants
Number of shares issued																3,153
Prepaid warrants
Number of shares issued																45
Preferred stock
Issuance of preferred stock, shares																42	8
Shares converted																13
Preferred stock | Preferred warrants
Dividends on preferred stock converted																$ 5,551
Shares converted																80,000
Sifnos Shareholders Inc. | Revolving Credit Facility
Debt Conversion, Amount		$ 8,750							$ 8,750				$ 7,500					$ 10,000
Sifnos Shareholders Inc. | Revolving Credit Facility | Preferred stock
Preferred Stock, Voting Rights															voting power of 5:1
Number of preferred shares converted		29
Before 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits
Treasury stock retired							3,009
Before 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits | Convertible preferred shares
Number of shares issued																856,352
Before 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits | Preferred warrants
Number of shares issued																3,090,405
Before 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits | Prepaid warrants
Number of shares issued																44,822
Before 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits | Sifnos Shareholders Inc. | Revolving Credit Facility | Preferred stock
Number of preferred shares converted		29,166
Series C Convertible Preferred Stock
Preferred shares annual rate															8.00%
Series D Convertible Preferred Stock
Preferred Stock, Voting Rights															100.000 votes
Series D Convertible Preferred Stock | Sifnos Shareholders Inc.
Stockholders' Contribution								$ 2,805
Series D Convertible Preferred Stock | Sifnos Shareholders Inc. | Revolving Credit Facility
Number of preferred shares converted									29
Series D Convertible Preferred Stock | Before 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits | Sifnos Shareholders Inc. | Revolving Credit Facility
Number of preferred shares converted									29,166
Series E-1 Convertible Preferred Stock | Convertible preferred shares
Dividends on preferred stock converted																$ 1,400
Shares converted																20,000
Securities Purchase Agreement
Number of shares issued	152		29
Number of shares issued				0
Common stock issued as dividend					0	0				0	0	0
Securities Purchase Agreement | Before 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits
Number of shares issued	149,187		28,697
Number of shares issued				310
Common stock issued as dividend					70	17				278	328	339
Securities Purchase Agreement | Series C Convertible Preferred Stock
Dividends on preferred stock converted	$ 344		$ 400
Proceeds from the offering of preferred shares				$ 5,000
Proceeds from warrants				$ 5,000
Issuance of preferred stock, shares				5,000
Number of warrants				5,000
Total proceeds				$ 10,000
Shares converted	5,000		5,000
Securities Purchase Agreement with Kalani
Number of shares issued														0
Total proceeds														$ 100,000
Securities Purchase Agreement with Kalani | Subject to adjustment
Number of shares issued														47
Securities Purchase Agreement with Kalani | Before 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits
Number of shares issued														13
Securities Purchase Agreement with Kalani | Before 1-for-4, 1-for-7, 1-for-5 and 1-for-7 reverse stock splits | Subject to adjustment
Number of shares issued														46,609
Securities Purchase Agreement with Kalani | Series E-1 Convertible Preferred Stock
Issuance of preferred stock, shares														20,000
Number of warrants														30,000
Securities Purchase Agreement with Kalani | Series E-2 Convertible Preferred Stock
Number of warrants														50,000

XML

Common Stock and Additional Paid-in Capital - Reverse stock splits (Details)	1 Months Ended	2 Months Ended	3 Months Ended	4 Months Ended	6 Months Ended	7 Months Ended		10 Months Ended
	Jan. 23, 2017	Mar. 11, 2016	Apr. 11, 2017	May 11, 2017	Jun. 22, 2017	Jul. 21, 2017	Aug. 15, 2016	Nov. 01, 2016
Common Stock and Additional Paid-in Capital
Reverse Stock Split	1-for-8 reverse stock split of the Company's common shares, with which four fractional shares were cashed out	1-for-25 reverse stock split of the Company's common shares, with which seven fractional shares were cashed out	1-for-4 reverse stock split of the Company's common shares, with which two fractional shares were cashed out	1-for-7 reverse stock split of the Company's common shares, with which three fractional shares were cashed out	1-for-5 reverse stock split of the Company's common shares, with which two fractional shares were cashed out	1-for-7 reverse stock split of the Company's common shares, with which two fractional shares were cashed out	1-for-4 reverse stock split of the Company's common shares, with which five fractional shares were cashed out	1-for-15 reverse stock split of the Company's common shares, with which nine fractional shares were cashed out

XML

Common Stock and Additional Paid-in Capital - Dividends (Details) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	6 Months Ended	10 Months Ended	12 Months Ended
	Feb. 06, 2018	Feb. 27, 2017	Apr. 11, 2017	Jul. 07, 2017	Oct. 16, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Dividends Payable [Line Items]
Payment of dividends		$ 2,500	$ 2,500	$ 2,500	$ 2,500	$ 10,001	$ 0	$ 20,526
Date of dividend record		Mar. 15, 2017	May 01, 2017	Jul. 20, 2017	Oct. 27, 2017
Date of dividend payment		Mar. 30, 2017	May 12, 2017	Aug. 02, 2017	Nov. 13, 2017
Subsequent Event
Dividends Payable [Line Items]
Payment of dividends	$ 2,500
Date of dividend record	Feb. 20, 2018
Date of dividend payment	Mar. 06, 2018

XML

Equity Incentive Plan - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		8 Months Ended		12 Months Ended
	Jan. 12, 2011	Aug. 19, 2014	Aug. 20, 2013	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 30, 2014	Jan. 25, 2010
Common stock par value				$ 0.01	$ 0.01
Unrecognized compensation cost related to non-vested share-based compensation arrangements granted				$ 691	$ 2,419	$ 5,999
Allocated Share-based Compensation Expense				$ 1,728	$ 3,580	$ 6,590
Equity Incentive Plan 2008
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized								21,834,055
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011
Ocean Rig's shares granted	1
Vesting period	8 years
Vested number of shares				1
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Before reverse stock splits
Ocean Rig's shares granted	9,000,000
Grant date fair value	$ 5.5
Vested number of shares				8,000,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share-based Compensation Award, Tranche One
Vested number of shares on grant date	1
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share-based Compensation Award, Tranche One | Before reverse stock splits
Vested number of shares on grant date	1,000,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share-based Compensation Award, Tranche Two
Rights exercise period	11 months 18 days
Vested in period	0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share-based Compensation Award, Tranche Two | Before reverse stock splits
Vested in period	1,000,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share-based Compensation Award, Tranche Three
Rights exercise period	1 year 11 months 18 days
Vested in period	0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share-based Compensation Award, Tranche Three | Before reverse stock splits
Vested in period	1,000,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share Based Compensation Award, Tranche Four
Rights exercise period	2 years 11 months 18 days
Vested in period	0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share Based Compensation Award, Tranche Four | Before reverse stock splits
Vested in period	1,000,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share Based Compensation Award, Tranche Five
Rights exercise period	3 years 11 months 18 days
Vested in period	0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share Based Compensation Award, Tranche Five | Before reverse stock splits
Vested in period	1,000,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share Based Compensation Award, Tranche Six
Rights exercise period	4 years 11 months 18 days
Vested in period	0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share Based Compensation Award, Tranche Six | Before reverse stock splits
Vested in period	1,000,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share Based Compensation Award, Tranche Seven
Rights exercise period	5 years 11 months 18 days
Vested in period	0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share Based Compensation Award, Tranche Seven | Before reverse stock splits
Vested in period	1,000,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share Based Compensation Award, Tranche Eight
Rights exercise period	6 years 11 months 18 days
Vested in period	0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share Based Compensation Award, Tranche Eight | Before reverse stock splits
Vested in period	1,000,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share Based Compensation Award, Tranche Nine
Rights exercise period	7 years 11 months 18 days
Vested in period	0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 12 January 2011 | Share Based Compensation Award, Tranche Nine | Before reverse stock splits
Vested in period	1,000,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 20 August 2013
Ocean Rig's shares granted			1
Vesting period			2 years
Common stock par value			$ 0.01
Vested number of shares					1
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 20 August 2013 | Before reverse stock splits
Ocean Rig's shares granted			1,000,000
Grant date fair value			$ 2.01
Vested number of shares					1,000,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 20 August 2013 | Share-based Compensation Award, Tranche One
Vested number of shares on grant date			1
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 20 August 2013 | Share-based Compensation Award, Tranche One | Before reverse stock splits
Vested number of shares on grant date			333,334
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 20 August 2013 | Share-based Compensation Award, Tranche Two
Rights exercise period			1 year
Vested in period			0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 20 August 2013 | Share-based Compensation Award, Tranche Two | Before reverse stock splits
Vested in period			333,333
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 20 August 2013 | Share-based Compensation Award, Tranche Three
Rights exercise period			2 years
Vested in period			0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee approval on 20 August 2013 | Share-based Compensation Award, Tranche Three | Before reverse stock splits
Vested in period			333,333
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 19 August 2014
Ocean Rig's shares granted		0
Vesting period		3 years
Common stock par value		$ 0.01
Vested number of shares					0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 19 August 2014 | Before reverse stock splits
Ocean Rig's shares granted		1,200,000
Grant date fair value		$ 3.26
Vested number of shares					1,200,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 19 August 2014 | Share-based Compensation Award, Tranche One
Rights exercise period		4 months 13 days
Vested in period		0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 19 August 2014 | Share-based Compensation Award, Tranche One | Before reverse stock splits
Vested in period		400,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 19 August 2014 | Share-based Compensation Award, Tranche Two
Rights exercise period		1 year 4 months 13 days
Vested in period		0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 19 August 2014 | Share-based Compensation Award, Tranche Two | Before reverse stock splits
Vested in period		400,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 19 August 2014 | Share-based Compensation Award, Tranche Three
Rights exercise period		2 years 4 months 13 days
Vested in period		0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 19 August 2014 | Share-based Compensation Award, Tranche Three | Before reverse stock splits
Vested in period		400,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 30 December 2014
Ocean Rig's shares granted							0
Vesting period							3 years
Common stock par value							$ 0.01
Vested number of shares				0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 30 December 2014 | Before reverse stock splits
Ocean Rig's shares granted							2,100,000
Grant date fair value							$ 1.07
Vested number of shares				2,100,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 30 December 2014 | Share-based Compensation Award, Tranche One
Rights exercise period							1 year 1 day
Vested in period							0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 30 December 2014 | Share-based Compensation Award, Tranche One | Before reverse stock splits
Vested in period							700,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 30 December 2014 | Share-based Compensation Award, Tranche Two
Rights exercise period							2 years 1 day
Vested in period							0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 30 December 2014 | Share-based Compensation Award, Tranche Two | Before reverse stock splits
Vested in period							700,000
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 30 December 2014 | Share-based Compensation Award, Tranche Three
Rights exercise period							3 years 1 day
Vested in period							0
Fabiana Services S.A. | Consultancy Agreement Compensation Committee Approval On 30 December 2014 | Share-based Compensation Award, Tranche Three | Before reverse stock splits
Vested in period							700,000

XML

Commitments and Contingencies - Contractual Charter Revenue (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Unbilled Receivables, Not Billable at Balance Sheet Date [Abstract]
Twelve months ending December 31, 2018	$ 47,507
Twelve months ending December 31, 2019	37,266
Twelve months ending December 31, 2020	37,284
Twelve months ending December 31, 2021	37,266
Twelve months ending December 31, 2022 and after	$ 72,263

XML

Commitment and Contingencies - Additional Information (Details) $ in Thousands	8 Months Ended	12 Months Ended
	Aug. 22, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Jun. 25, 2015
Loss Contingencies [Line Items]
Number Charter Agreements Amended					11
Number Of Charter Agreements		7
Gain/ (Loss) on contract termination		$ 0	$ 0	$ (28,241)
Increase (Decrease) in Contract Receivables, Net				(35,000)
Cash Received Under Charter Agreement				5,000
Allowance for Doubtful Accounts Receivable, Write-offs				16,471
Amount of receivables amortized				$ (6,759)
Minimum
Loss Contingencies [Line Items]
Time Charter Agreement Duration		4 years
Sale of vessel
Loss Contingencies [Line Items]
Sales Discounts Vessels		$ 5,000
Termination of contract
Loss Contingencies [Line Items]
Gain/ (Loss) on contract termination		$ 5,000
Compensatory damages | Sammon v. Ecomomou
Loss Contingencies [Line Items]
Loss Contingency, Damages Sought, Value	$ 1,560
Treble punitive damages | Sammon v. Ecomomou
Loss Contingencies [Line Items]
Loss Contingency, Damages Sought, Value	$ 4,680
Majorca vessel
Loss Contingencies [Line Items]
Total off-hire days		82 days
Estimated loss		$ 1,828
Marbella vessel
Loss Contingencies [Line Items]
Total off-hire days		33 days
Estimated loss		$ 641

XML

Interest and Finance Costs (Table) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Interest and Finance Costs [Abstract]
Interest incurred on long-term debt	$ 1,499	$ 6,164	$ 150,061
Interest, amortization and write off of financing fees on loan from affiliate and related party	15,239	1,563	3,642
Amortization and write-off of financing fees	387	572	23,834
Discount on receivable from drilling contract	0	0	4,048
Commissions, commitment fees and other financial expenses and related party	778	558	2,607
Capitalized interest and finance costs	(3,196)	0	(12,060)
Total	$ 14,707	$ 8,857	$ 172,132

XML

Segment Information (Table) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Voyage revenues, net	$ 100,716	$ 51,934	$ 244,020
Service revenues, net	0	0	725,805
Revenues	100,716	51,934	969,825
Vessels and drilling units operating expenses	(59,348)	(45,563)	(371,074)
Depreciation and amortization	(14,966)	(3,466)	(227,652)
Goodwill impairment	0	(7,002)	0
Loss on contract cancellation	0	0	(28,241)
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other	4,125	(106,343)	(1,057,116)
General and administrative expenses	(30,972)	(39,708)	(104,912)
Gain/(loss) on interest rate swaps	0	(403)	11,601
Gain on debt restructuring	0	10,477	0
Income taxes	(152)	(38)	(37,119)
Net income/(loss)	(42,544)	(198,686)	(2,808,086)
Net income/(loss) attributable to Dryships Inc.	(42,544)	(198,686)	(2,847,061)
Interest and finance cost	(14,707)	(8,857)	(177,655)
Interest income	1,365	81	6,050
Change in fair value of derivatives (gain)/loss	0	(2,193)	(10,848)
Total assets	900,925	193,730	476,052
Drybulk Segment
Voyage revenues, net	65,723	30,777	115,598
Vessels and drilling units operating expenses	(40,024)	(30,969)	(87,704)
Depreciation and amortization	(7,326)	0	(65,607)
Loss on contract cancellation	0	0	(28,241)
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other	4,425	(35,470)	(1,000,485)
General and administrative expenses	(19,095)	(29,822)	(44,519)
Gain/(loss) on interest rate swaps	0	(917)	567
Gain on debt restructuring	0	10,477	0
Income taxes	(56)	0	0
Net income/(loss)	(23,676)	(69,966)	(1,180,056)
Net income/(loss) attributable to Dryships Inc.	(23,676)	(69,966)	(1,180,056)
Interest and finance cost	(13,476)	(8,706)	(45,321)
Interest income	1,310	66	76
Change in fair value of derivatives (gain)/loss	0	(1,957)	(10,768)
Total assets	348,657	162,532	342,287
Offshore Support Segment
Voyage revenues, net	3,819	21,157	8,118
Vessels and drilling units operating expenses	(4,749)	(14,587)	(3,977)
Depreciation and amortization	(950)	(3,466)	(672)
Goodwill impairment	0	(7,002)	0
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other	(300)	(70,873)	0
General and administrative expenses	(7,677)	(9,849)	(2,858)
Income taxes	(20)	(38)	(188)
Net income/(loss)	(13,322)	(86,553)	(2,711)
Net income/(loss) attributable to Dryships Inc.	(13,322)	(86,553)	(2,657)
Interest and finance cost	(24)	(93)	(105)
Interest income	25	13	2
Change in fair value of derivatives (gain)/loss	0	0	(6)
Total assets	26,871	31,191	131,124
Drilling Segment
Service revenues, net			725,805
Vessels and drilling units operating expenses			(259,623)
Depreciation and amortization			(155,352)
General and administrative expenses			(46,989)
Gain/(loss) on interest rate swaps			9,588
Income taxes			(36,931)
Net income/(loss)			(1,601,451)
Net income/(loss) attributable to Dryships Inc.			(1,640,480)
Interest and finance cost			(123,463)
Interest income			5,954
Change in fair value of derivatives (gain)/loss			349
Total assets			0
Tanker Segment
Voyage revenues, net	20,858	0	120,304
Vessels and drilling units operating expenses	(8,830)	(7)	(19,770)
Depreciation and amortization	(4,652)	0	(6,021)
Impairment loss, gain/(loss) from sale of vessels and vessel owning companies and other	0	0	(56,631)
General and administrative expenses	(2,384)	(37)	(10,546)
Gain/(loss) on interest rate swaps	0	514	1,446
Net income/(loss)	(4,492)	(713)	(23,868)
Net income/(loss) attributable to Dryships Inc.	(4,492)	(713)	(23,868)
Interest and finance cost	(4)	(58)	(8,766)
Interest income	0	2	18
Change in fair value of derivatives (gain)/loss	0	(236)	(422)
Total assets	202,543	$ 7	$ 2,641
Gas Carrier Segment
Voyage revenues, net	10,316
Vessels and drilling units operating expenses	(5,745)
Depreciation and amortization	(2,038)
General and administrative expenses	(1,816)
Income taxes	(76)
Net income/(loss)	(1,054)
Net income/(loss) attributable to Dryships Inc.	(1,054)
Interest and finance cost	(1,203)
Interest income	30
Total assets	322,854
Other
Total assets	$ 34,000

XML

Segment Information - Reconciliation of Interest and Finance Costs (Table) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Interest and finance costs	$ 14,707	$ 8,857	$ 172,132
Interest income	1,365	81	527
Interest for reportable segments
Segment Reporting Information [Line Items]
Interest and finance costs	14,707	8,857	177,655
Interest income	1,365	81	6,050
Elimination of intersegment interest
Segment Reporting Information [Line Items]
Interest and finance costs	0	0	(5,523)
Interest income	$ 0	$ 0	$ (5,523)

XML

Segment Information - Revenue per country - Drilling Segment (Table) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Total leasing and service revenues	$ 0	$ 0	$ 725,805
Congo
Total leasing and service revenues			31,807
Norway
Total leasing and service revenues			101,584
Brazil
Total leasing and service revenues			253,283
Ivory Coast
Total leasing and service revenues			12,065
Angola
Total leasing and service revenues			275,410
Falkland
Total leasing and service revenues			$ 51,656

XML

Segment Information Revenue per country - Offshore Vessels (Table) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Total revenues	$ 100,716	$ 51,934	$ 244,020
Offshore Support Vessels
Total revenues	5,018	21,112	8,118
Brazil | Offshore Support Vessels
Total revenues	5,018	19,312	8,118
Europe | Offshore Support Vessels
Total revenues	$ 0	$ 1,800	$ 0

XML

Segment Information (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Number of Reportable Segments	4
Tanker Segment
Number of vessels	4
Gas Carrier Segment
Number of vessels	4
Offshore Support Vessels | Brazil
Number of vessels		3

XML

Losses per share (Table) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Earnings per Share Reconciliation [Abstract]
Net loss attributable to DryShips Inc.	$ (42,544)	$ (198,686)	$ (2,847,061)
Plus: Contribution from Series D Preferred Stock	2,805
Less: Convertible Preferred stock dividends		(7,695)
Less: Non-vested common stock dividends declared and undistributed earnings			(570)
Basic LPS
Loss available to common stockholders	$ (39,739)	$ (206,381)	$ (2,847,631)
Weighted-average number of outstanding shares (denominator)	35,225,784	453	57
Amount per share	$ (1.13)	$ (455,587.20)	$ (49,958,438.60)
Diluted LPS
Loss available to common stockholders	$ (39,739)	$ (206,381)	$ (2,847,631)
Weighted-average number of outstanding shares (denominator)	35,225,784	453	57
Amount per share	$ (1.13)	$ (455,587.20)	$ (49,958,438.60)

XML

Income Taxes - Ocean Rig Income/(Losses) Before Taxes by Country (Table) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Total income before taxes	$ (42,392)	$ (157,194)	$ (1,073,989)
Drilling Segment
Domestic income / (loss) (Republic of the Marshall Islands)			90,181
Foreign income			42,277
Total income before taxes			$ 132,458

XML

Income Taxes - Entity's Total Income Tax Expense for the Period and Statutory Tax Rate (Table) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income taxes	$ 152	$ 38	$ 37,119
Drilling Segment
Current Tax expense			37,119
Income taxes			$ 37,119
Effective tax rate			28.00%

XML

Income Taxes - Reconciliation of Total Tax Expense (Table) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Total	$ 152	$ 38	$ 37,119
Drilling Segment
Income tax			37,119
Taxes on litigation matters subject to statutory rates, including interest and penalties			0
Total			$ 37,119

XML

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2015	Dec. 31, 2016
Angola
Withholding Tax as a percentage of Current Tax Expense		48.00%
Republic of the Marshall Islands
Tax rate		0.00%
Republic of the Marshall Islands and Malta
Percentage of Marshall Islands and Malta subsidiaries stock treated as owned by individuals resident in Marshall Islands and Malta		100.00%	100.00%
Republic of the Marshall Islands, Malta and Norway
Federal tax expense	$ 152

XML

Subsequent Events - Additional Information (Details) $ in Thousands	1 Months Ended						2 Months Ended				3 Months Ended			6 Months Ended	10 Months Ended	12 Months Ended
	Feb. 08, 2018	Feb. 06, 2018 USD ($)	Feb. 01, 2018 USD ($)	Jan. 29, 2018 USD ($)	Jan. 26, 2018 USD ($)	Jan. 24, 2018 USD ($)	Mar. 13, 2018 USD ($)	Mar. 08, 2018 USD ($)	Mar. 07, 2018 USD ($)	Feb. 27, 2017 USD ($)	Apr. 04, 2018 USD ($) shares	Apr. 02, 2018	Apr. 11, 2017 USD ($)	Jul. 07, 2017 USD ($)	Oct. 16, 2017 USD ($)	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($) shares	Dec. 31, 2015 USD ($)
Amount drawn down																$ 79,000
Payment of dividends										$ 2,500			$ 2,500	$ 2,500	$ 2,500	$ 10,001	$ 0	$ 20,526
Date of dividend record										Mar. 15, 2017			May 01, 2017	Jul. 20, 2017	Oct. 27, 2017
Date of dividend payment										Mar. 30, 2017			May 12, 2017	Aug. 02, 2017	Nov. 13, 2017
Common stock shares outstanding | shares																104,274,708	4,711
Sierra Investments Inc. | Loan Facility Agreement
Loan's tenor																5 years
Mont Gele VLGC
Delivery Date																Jan. 04, 2018
Date of agreement																Jan. 11, 2018
Time Charter Agreement Duration																10 years
Kamsarmax Drybulk vessel Kelly
Delivery Date																June 14, 2017
Subsequent Event
Payment of dividends		$ 2,500
Date of dividend record		Feb. 20, 2018
Date of dividend payment		Mar. 06, 2018
Subsequent Event | Stock Repurchase Program
Stock repurchase program, authorized amount for a period of 12 months		$ 50,000
Common shares repurchased | shares											2,816,445
Gross consideration of common stock acquired											$ 11,282
Common stock shares outstanding | shares											101,458,263
Subsequent Event | Gas Ships Limited
Percentage distributed to the Company's stockholders	49.00%
Ownership interest	51.00%
Subsequent Event | Sierra Investments Inc. | Loan Facility Agreement
Cash repayment in full			$ 73,841
Subsequent Event | Secured Credit Facility at January 24, 2018
Line Of Credit Facility Maximum Borrowing Capacity						$ 90,000
Loan's tenor						5 years
Interest rate description						LIBOR
Frequency of payments						quarterly
Line of credit facilities number of installments						20
First priority mortage						Four tankers
Amount drawn down					$ 90,000
Subsequent Event | Secured Credit Facility at January 29, 2018
Line Of Credit Facility Maximum Borrowing Capacity				$ 35,000
Loan's tenor				6 years
Interest rate description				LIBOR
Frequency of payments				quarterly
Line of credit facilities number of installments				24
First priority mortage				Vessels Valadon, Matisse and Rapallo
Amount drawn down									$ 35,000
Subsequent Event | Secured Credit Facility at March 12, 2018
Line Of Credit Facility Maximum Borrowing Capacity								$ 30,000
Loan's tenor								6 years
Interest rate description								LIBOR
Frequency of payments								quarterly
Line of credit facilities number of installments								24
First priority mortage								Vessels Judd and Raraka
Amount drawn down							$ 30,000
Subsequent Event | Kamsarmax Drybulk vessel Kelly
Financing as percentage of purchase price												50.00%
Duration of bareboat charter												10 years
Bareboat agreement, description												charterhire under the bareboat arrangement is comprised of a fixed, quarterly repayment amount corresponding to a 15-year amortization profile plus a variable component calculated at LIBOR plus margin
Purchase obligation, percentage												33.00%